Legislature(1999 - 2000)
04/10/2000 04:10 PM House RLS
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 418-INSURANCE AND OCCUPATIONAL LICENSE FEES CHAIRMAN COWDERY announced that the next order of business would be HOUSE BILL NO. 418, "An Act relating to program receipts collected by the division of insurance and to program receipts collected by the Department of Community and Economic Development for occupational licenses; and providing for an effective date." REPRESENTATIVE ROKEBERG pointed out that there is a committee substitute (CS), version M, for the committee's consideration. Number 0259 REPRESENTATIVE PORTER moved to adopt CSHB 418, version LS1500\M, Utermohle, 4/4/00, as the working document before the committee. There being no objection, it was so ordered. REPRESENTATIVE ROKEBERG explained that this bill intends to correct some of the problems with certain areas of the state government being included in the general fund (GF) category. This bill provides for the inclusion as designated program receipts of occupational licensing, the Alaska Seafood Marketing Institute (ASMI) programs and adds the receipts from the dive fishery management and those charges and income from the community development quota program (CDQ). [The bill] provides for a program in which the costs of the administration under the CDQ program will be reimbursed to the state. Representative Rokeberg specified that this would combine three bills into one: HB 333, the dive fishery bill; HB 334, the CDQ program; [and HB 418]. Number 0413 REPRESENTATIVE PHILLIPS noted that when this bill was heard in House Finance, it was very important to keep the language for the dive fishery management assessment in the title in order to assure that funding is protected. She inquired as to why it was not included in this version. REPRESENTATIVE ROKEBERG remarked, "This particular piece of legislation is the brain child of the [House] Finance committee." Therefore, he did not know how to respond. REPRESENTATIVE BERKOWITZ offered to make a conceptual amendment to reinsert the [dive fishery management assessment] language. REPRESENTATIVE ROKEBERG suggested that the language was not left in the title in order to provide flexibility for future "Christmas tree ornaments." There was discussion regarding the need to have House Finance staff before the committee for questions on HB 418. REPRESENTATIVE BERKOWITZ turned to the sections referring to the receipts of the Department of Community & Economic Development (DCED) and mentioned making it effective immediately. Number 0685 CATHERINE REARDON, Director, Division of Occupational Licensing, Department of Community & Economic Development, suggested that portion be effective immediately in order to provide latitude for "our" budget for fiscal year 2000. REPRESENTATIVE PHILLIPS stated that she did not recall that being presented in the House Finance Committee. If it was not important enough to be brought before House Finance Committee, why is it before the House Rules Committee? The proper place to have put such an amendment in would have been the House Finance Committee. REPRESENTATIVE ROKEBERG related his understanding, "It's my particular understanding that this particular bill will ameliorate the problems necessary to have additional appropriations in the supplemental budget to keep Occupational Licensing operating in this current fiscal year." Therefore, making it effective immediately will eliminate that problem. He noted that was [his understanding] from the Chairman of the House Finance Committee. REPRESENTATIVE PHILLIPS reiterated the need for such to have been raised in the House Finance Committee. REPRESENTATIVE PORTER indicated agreement, but pointed out that it is not unusual for oversights to be brought before the House Rules Committee for correction. Number 0890 ANNALEE McCONNELL, Director, Office of Management & Budget (OMB), Office of the Governor, mentioned that she had discussed this issue of an immediate effective date with Representatives Mulder and Therriault when the bill was in the House Finance Committee. She had thought there would be an amendment to deal with this issue at that time. REPRESENTATIVE MULDER, Chair, House Finance Standing Committee, Alaska State Legislature, explained that a House Rules Committee hearing was requested because HB 418 had already moved from the House Finance Committee. The thought was that the opportunities created by HB 333 and HB 334 could be addressed at another time. However, there are some components in HB 333 and HB 334 that are substantive and needed to be included in HB 418. Therefore, it was felt best to deal with this in committee. He said, "I think that they are consist with the intentions of [HB] 418 and that is to take programs that recognizably funded by users and as such are not affecting the fiscal gap and are self-supporting and as such should not be counted against a general fund allocation because they are separate and they are unique." Therefore, these are different than a general fund program that is a straight draw. He noted that this [bill] would allow the dive fishery and CDQ program to go forward. He indicated that in order for these programs to move forward without [this bill], there would have to be a reduction in commercial fishing or subsistence; that would be counterproductive. Therefore, placing these programs in HB 418 as a designated program receipt, it would allow these programs to continue without counting against the general fund allocation. Number 1071 REPRESENTATIVE PHILLIPS reiterated the importance for including the dive fishery in the title of the legislation that passed out of the House Finance Committee. REPRESENTATIVE MULDER commented that it is a potential problem; however, he did not fear [the funds not being] returned to those receiving the services. The intention of the designated program receipt is that those funds go back towards those programs that pay for it. He acknowledged that it is a "loose fence" around funding. REPRESENTATIVE PHILLIPS commented, "That was specifically why we included the language." REPRESENTATIVE MULDER remarked that perhaps it is necessary to [review] the whole point of the SDBR [statutory designated budget receipt]. He explained that they [SDBR programs] are part of the general fund, but they are a separate category and do not work against the goal, specifically economic development in this case. Therefore, a DBR (designated budget receipt) does return to the specific program. He guessed that the reason it [the dive fishery management assessment] is not in the title is because four very different programs with a common thread of being a designating program are being combined. REPRESENTATIVE PHILLIPS inquired as to why, then, the appropriations for the CDQ program is left [in the title]. She reiterated that the dive fishery is not included in the title, although that was very important when heard in the House Finance Committee. Number 1296 MIKE TIBBLES, Staff to the House Finance Standing Committee, Alaska State Legislature, informed the committee that in working with Legislative Legal Services, there was difficulty in satisfying the single subject rule. The reference in the title to the CDQ program is relating to a section of the bill outside of the designated program receipts. Since the dive fishery had to do only with the statutory designated program receipts, it was not [inserted in the title]. None of the programs that dealt only with the statutory designated program receipts were mentioned [in the title] in order to comply with the single subject rule and in order to allow flexibility to add something later. REPRESENTATIVE BERKOWITZ asked if placing the substance of the change in the bill, although not included in the title, would violate the single subject rule. REPRESENTATIVE MULDER reiterated that they [the programs] are tied together with the common thread of program receipts. MR. TIBBLES acknowledged that there is the single subject issue, but noted there is also the issue of making the title such that things could not be added or deleted later on in the process. He indicated that by listing each [program] specifically, it would eliminate the possibility of adding something later on. REPRESENTATIVE MULDER stated that he believes Representative Phillips' concerns are addressed in the bill because the receipts for Occupational Licensing are specifically listed under subparagraph (X), those for ASMI are under subparagraph (Y), those for CDQ are under subparagraph (Z) and the dive fishery program receipts are listed under subparagraph (AA). The reason for the inclusion of the language, "relating to the establishment of an administrative cost charge for the state's role in the community development quota program" in the title is because it is a bit different than the other components and [preferable to] having two bills. Number 1500 REPRESENTATIVE GREEN asked if these programs are all completely funded by program receipts. REPRESENTATIVE MULDER replied yes. He also indicated agreement with Representative Green's assessment that these programs are different than Parks, which has some [of both general funds and program receipts]. CHAIRMAN COWDERY asked if the program receipts return to the specific program [for which the receipts were collected]. REPRESENTATIVE MULDER replied yes. The receipts collected for each program return to the program for which it was collected. In regards to whether the funds can be intermixed, he did not believe so. In the budget process, the legislature designates an allocation toward Occupational Licensing that is currently GFPR (general fund program receipts). He noted, "Provided for the fact that GFPR is a separate BRU within their allocation, they can only go toward that function." If Occupational Licensing had some SDPR in it or if the division had more than just SDPR in it, he guessed it would be possible, although highly improbable [that the funds would intermingle]. Oftentimes, programs are fairly protective of their fund sources and know how much has been raised and collected. MS. REARDON informed the committee that the division has a statute, AS 08.010.065, saying that the department will set fees in order that the revenue equals approximately the regulatory cost of each profession. Therefore, mingling of funds would be violating that statute. Furthermore, the frequent audits over fee setting would probably quickly identify such a violation. REPRESENTATIVE MULDER commented that the legislature could actually take the money [such program receipts] and place it in another area. However, the legislature would be "more or less" in violation of statute. Number 1696 REPRESENTATIVE GREEN asked, "Is it because the legislature does maintain the authority, if we wanted to even though we'd be going against our own statute, or is it because it's not general fund, it [they are] program receipts [which are] separate that we don't get in trouble with violations." REPRESENTATIVE MULDER answered that it is the former. CHAIRMAN COWDERY inquired as to whether the ASMI dollars would be subject to reprogramming or administrative fees. MS. McCONNELL pointed out that a separate fund code is used for each program, and therefore they [the funds] would not be moved to other programs. CHAIRMAN COWDERY inquired as to how the administrative fees are established. TOM LAWSON, Director, Division of Administrative Services, Department of Community & Economic Development, explained that ASMI has to budget for its staff and travel expenses, which are part of the budget presented to the legislature each year. The ASMI funds that come in under this bill cannot be used for anything except ASMI-related expenses. REPRESENTATIVE PORTER stated that due to this statute and existing law, these funds will be designated to the agencies that develop the fees. However, this should not be interpreted to mean that this is designating funds past what is required for an annual review and reappropriation by the legislature. MS. McCONNELL agreed. Number 1888 REPRESENTATIVE PORTER moved to report CSHB 418, version M, out of committee with individual recommendations. REPRESENTATIVE BERKOWITZ objected and noted that he had an amendment that he wanted to offer. REPRESENTATIVE PORTER rescinded his prior motion. REPRESENTATIVE BERKOWITZ explained that his amendment addressed making DCED receipts, under subparagraph (X), effective immediately. REPRESENTATIVE PHILLIPS requested that the House Finance chairman respond to that amendment as it did not come up in the House Finance Committee. REPRESENTATIVE MULDER said that he concurred with that amendment. Number 1975 REPRESENTATIVE BERKOWITZ clarified that the amendment would read as follows on page 5, insert "Section 10 Section 1(X) takes effect immediately under AS 01.10 (indisc.)" There being no objection, the amendment was adopted. Number 1989 REPRESENTATIVE PORTER moved to report CSHB 418 as amended out of committee with individual recommendations. There being no objection, it was so ordered and CSHB 418(RLS) was reported from the House Rules Standing Committee.
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