Legislature(1995 - 1996)

04/01/1996 09:35 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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       CS FOR HOUSE BILL NO. 468(FIN) am                                       
                                                                               
                                                                               
       "An Act  making  supplemental  appropriations  for  the                 
  expenses  of  state  government   and  making  and  amending                 
  appropriations;     ratifying  certain  state  expenditures;                 
  and providing for an     effective date."                                    
                                                                               
  Nancy  Slagle  was  invited  to  join the  committee.    She                 
  referred to a  letter of 24  March 96 requesting changes  to                 
  the  supplemental request.  The first item was the increased                 
  need  for the  longevity bonus  program for  FY 96.   It was                 
  identified that they were expecting the  checks to be run on                 
  26 March and updated the model forecast for the current year                 
  and  the  need  is  $1.6  million  to  cover  the additional                 
  applicants that have entered into the program.                               
                                                                               
  Co-chairman  Frank asked if  there was information regarding                 
  in migration.                                                                
                                                                               
  Sharon Barton,  Department of Administration was  invited to                 
  join the committee.   She said that on 27 March a packet was                 
  sent over that included a study "Elderly Graphic Profiles of                 
  the United States".  What the studied showed was that Alaska                 
  is  a  net  out   migrator  with  respect  to  the   elderly                 
  population.  The  surprising new information was  the number                 
  of people reaching the  age of 60 - 65 and  those folks made                 
  up a larger percentage than had been anticipated,  very much                 
  higher than in the  other states.  Senator Rieger  said that                 
  elderly  birth  meant that  a person  who  was here  and now                 
  qualified as being  elderly.  Ms. Barton  clarified this and                 
  said that it was those persons  who reached this age between                 
  1985  and 1990.  She said that they relied on experience for                 
  the  supplement request.   Senator  Sharp said there  was an                 
  increase over anticipated payments for  new applicants.  Ms.                 
  Barton  concurred.    She  said  they relied  on  historical                 
  behaviour  to  determine how  they  will participate  in the                 
  program.                                                                     
                                                                               
  Nancy Slagle said the  next item was a request  for $150,000                 
  for  the permanent fund  dividend division.   This  would be                 
  funds from the permanent fund  dividend fund for garnishment                 
  fees that  the division  has statutory  authority to  charge                 
  ($2.00 fee) and this  would assist the division to  meet its                 
  obligations under contractual services.   This is a shortage                 
  for processing a computer conversion.                                        
                                                                               
  Nanci  A.  Jones was  invited to  join  the committee.   She                 
  explained the history  of the  project since December  1984.                 
  This would cover an unexpected charge back for the mainframe                 
  computer system.  Senator Rieger asked what the total charge                 
  back  that  was  being anticipated  from  the  Department of                 
  Administration to the Permanent Fund Division.  She said the                 
  total would be approximately $465,000.   She said the actual                 
  usage by the division has increased.  Senator Rieger said he                 
  felt  this  was an  undue  increase  and  has asked  Senator                 
                                                                               
                                                                               
  Phillips to take a hard look at the entire mainframe system.                 
  The cost should not be going up.  She advised that they must                 
  use their data base more than once a year.  They are  in the                 
  process  of  trying to  establish  a plan  for  hot back-up.                 
  Senator Rieger said he was skeptical  of the total price tag                 
  and  perhaps  this  could  go to  a  private  contractor  to                 
  maintain the data.                                                           
                                                                               
  Nancy  Slagle  said the  next  item  was  amendments to  the                 
  miscellaneous claims and stale dated warrants section of the                 
  bill,  section  14(a),  an  increase  to the  Department  of                 
  Administration  and  to  Public Safety.    Further  sections                 
  include  ratifications   as  identified   in  the   original                 
  supplemental  for  Departments of  Administration, Commerce,                 
  Labor and Public  Safety to clean up  some over-expenditures                 
  or  under  collections  of  revenue.   The  departments  are                 
  continuing to  try and  clean up  their accounting  records.                 
  She  said the AIDEA  one was $16,000.   She further said the                 
  last one was the Exxon Valdez Trustees Council requesting an                 
  appropriation  of   $6,670,500.  in  settlement   funds  for                 
  purchase  of  several small  parcels  in the  Prince William                 
  Sound,  Kenai Peninsula  areas.   Senator  Halford indicated                 
  that it  may have  been better  to have  gone through  LB&A.                 
  Senator  Phillips  said he  was  curious about  River Ranch,                 
  located near mile 32  on the Kenai  River.  Ms. Slagle  said                 
  there  was  a   memo  sent   over  this  morning   basically                 
  transmitting  Department  of Administration's  regarding the                 
  longevity  bonus.    Also  it  requested  a  change  in  the                 
  Department of  Law's judgments.   The Department of  Law had                 
  increased the amount of their request by  $55,422 in general                 
  funds and  $4,012 in  public employee  retirement funds  and                 
  $13,900 in international airport revenue funds.                              
                                                                               
  Barbara Ritchie, Department of  Law was invited to  join the                 
  committee.  She noted the additional judgments that  came in                 
  since  the   original  supplemental  was  put  together  for                 
  consideration.  She explained the international airport fund                 
  being another  $13,000.  The  original request had  been put                 
  together by the  Department of  Transportation and they  had                 
  not  calculated  the post  judgment  interest.   The general                 
  funds request, "Sorensen", was  a judgment in the amount  of                 
  $2,969.61 with  interest and  was a  DMV license  revocation                 
  proceeding.    (off record-return)   Senator Rieger asked if                 
  the core of the case was  the ruling saying there was a  due                 
  process  right  involved in  a  revocation proceeding.   Ms.                 
  Ritchie concurred.                                                           
                                                                               
  Senator Phillips referred to item  #16 and Ms. Ritchie  said                 
  that was part of the election case that grew out of the 1994                 
  election.  This was  a reversal in the "Dansereau"  case and                 
  since they were no  longer the prevailing party they  had to                 
  repay the prior cost award to  "Dansereau".  He continued on                 
  to item #17  and she identified "Cordova  District Fishermen                 
  United" and this matter arose out of a review of a State Oil                 
                                                                               
                                                                               
  & Gas lease sale 1979.  It involved an administrative appeal                 
  which produced a declaratory judgement.  The judgment was an                 
  award of attorney fees and costs against the State.  Senator                 
  Rieger asked about  the appeal and  how many points did  the                 
  State win on.   She said the State prevailed on one issue in                 
  the case.   Senator Rieger noted that some of  the fees were                 
  not disallowed  because they  pertained to  the other  point                 
  they lost on but because they were excessive.  Senator Sharp                 
  asked  if  there was  information  weather the  Trustees for                 
  Alaska were involved in the original complaint.  Ms. Ritchie                 
  said   they  were   not  in   the  original   case  at   the                 
  administrative level but entered later.   However, the party                 
  is  not  entitled to  attorney fees  for  time spent  at the                 
  administrative level.  She further advised co-chairman Frank                 
  that  the   "Brantly"  and  "Palmer"  cases  were  discussed                 
  previously.  This was an additional $13,900 in interest that                 
  had not  been calculated in  the original submittal  on this                 
  judgment.  Co-chairman Frank asked that she explain the PERS                 
  fund.  She  said this  was an Anchorage  case involving  the                 
  Public Employee Retirement System.  They  were sued  and the                 
  claim had been  that under law that  was in effect  when the                 
  plaintiff joined PERS  she was entitled to  specific medical                 
  treatment  that  had been  denied by  AETNA.   The  case was                 
  settled for attorney  fees, the State paying  half and AETNA                 
  paying the other  half.  Nancy  Slagle advised that was  the                 
  end of the judgments.                                                        
                                                                               
  Co-chairman Frank introduced EVOS.  (off record-return)                      
                                                                               
  (change to tape SFC-96, #62, Side 1)                                         
                                                                               
  Molly McCammon was invited to join the committee.  She noted                 
  there were  two major habitat  protection parcels with   the                 
  oil spill area near the Kenai River.  $12 million a year has                 
  been  committed  to be  put  in  an account.    An extensive                 
  planning  process will  be deciding  on  how to  spend those                 
  funds in the  next one to  two years.   She referred to  the                 
  first  phase  of the  small  parcel program  wherein willing                 
  sellers are represented that have agreed to sell their lands                 
  for appraised value  as approved by a  government appraiser.                 
  These are all  parcels within the  spill area.   Two are  in                 
  Prince  William  Sound  and  the   remaining  in  the  Kenai                 
  Peninsula.  In  light of  the Kenai River  parcels it  would                 
  have been the council's preference to try and focus strictly                 
  on the area closest to the river.   However, in dealing with                 
  private sellers basically  it must  be negotiated with  what                 
  private  sellers are  willing to  sell.   The Department  of                 
  Natural  Resources would  be responsible for  managing these                 
  lands.   The  primary  benefits  for  which they  are  being                 
  acquired is to protect the resources they surround.  In some                 
  cases  it  is  sockeye  and  pink  salmon  habitat,  herring                 
  fisheries habitat, bird  habitat, and intertidal  resources.                 
  In   other   cases   it   would   also   provide  additional                 
  opportunities for public access and recreation.                              
                                                                               
                                                                               
  Senator Phillips  requested information regarding  the Tulin                 
  parcel.  She  noted that  it belonged to  an elderly  couple                 
  that had  homesteaded the  property.   The  benefit of  this                 
  parcel was that  it would provide  beach access.  She  noted                 
  this parcel was  220 acres.  The River Ranch  parcel is  146                 
  acres, near Mile 32 on the Kenai River.  Current owners were                 
  considering putting in a fishing  lodge and housing complex.                 
  The program for  acquiring these parcels on the  Kenai River                 
  is being done through  a joint project of the  Kenai Habitat                 
  Restoration funded by  Senator Stevens.  Any  lands acquired                 
  under  this  program  would  be  eligible  for  restoration.                 
  Senator  Sharp  noted  that  there  was  very  little  river                 
  frontage on  the Tulin  parcel.  She  said one  of the  main                 
  attributes of this  parcel was the potential  for recreation                 
  and tourism.  Further,  it is located on Katchemak Bay.  The                 
  City of  Kenai indicated they  would rezone this  portion of                 
  the bend of the river to  conservation.  All appraisals were                 
  conducted by state appraisers.                                               
                                                                               
  Marty Rutherford testified via teleconference.   In response                 
  to  Senator  Sharps  inquiry  she  said  she  would  get the                 
  information  regarding  the  taxes  paid  on   the  parcels.                 
  Senator  Rieger  commented  on government  appraisal.    The                 
  appraiser must determine  the maximum  value.  Ms.  McCammon                 
  advised  that all  the  parcels were  appraised  as a  blank                 
  slate.   The landowners  had no commitment  that they  would                 
  accept  the  appraisal  and there  was  no  negotiated offer                 
  beforehand.  Senator  Rieger further asked the  success rate                 
  of  people agreeing to  sell.  Ms.  McCammon indicated there                 
  were 32 parcels considered for appraisal.  Some acquisitions                 
  would be going through the Forest Service and the Department                 
  of  Interior and  will  not go  through  the state  process.                 
  There  are  another   five  or  six  possible   parcels  for                 
  consideration.    The  submission  had   to  come  from  the                 
  landowner.                                                                   
                                                                               
                                                                               
  Traci Cramer, Exxon Valdez Oil Spill was invited to join the                 
  committee.   In  response  to  co-chairman Frank's  question                 
  regarding  section  16, EVOS,  she  said it  carried forward                 
  what had been  previously approved  by Legislative Budget  &                 
  Audit Committee for the  1996 work plan.  It  was consistent                 
  with past language in previous reappropriation  supplemental                 
  bills.  Senator  Halford requested copies of  this paperwork                 
  be  submitted.  He noted this  was the first number of small                 
  parcels  involved.    He  said his  concern  was  that  this                 
  generation would sell out to government ownership instead of                 
  further private owners in areas that may be individually  to                 
  their  benefit  but may  not be  to  the benefit  of overall                 
  private ownership in the future.  The Kenai  River has a lot                 
  of private land  and he did  not want to see  the settlement                 
  eliminate  the  last vestiges  of  private ownership  in the                 
  entire  Prince Williams Sound.  Ms. McCammon felt this would                 
                                                                               
                                                                               
  not  happen  because  there   were  not  enough   landowners                 
  interested in selling or participating in the program.  Only                 
  32 parcels were  deemed significant  or important enough  to                 
  actually  have  an  appraisal done.    Only  those presently                 
  before the committee had  agreed to sell at that price.  She                 
  referred the committee to the Civil Settlement, Exxon Valdez                 
  booklet.  She noted the whole program for the Prince William                 
  Sound was  initiated by then  Governor Hickel with  the idea                 
  that  the Whittier access road would come to pass.   Senator                 
  Halford said  his concern  was that  there would be  private                 
  facilities available to  the public adjacent to  public land                 
  that  help this land  be used  rather than  government owned                 
  facilities.        Senator    Sharp   commented    regarding                 
  superinflation of the values and the prices going to be paid                 
  and the other  was what would  the joint property owners  be                 
  faced with when the evaluation hits the assessment books and                 
  the  surrounding  properties  that  are  adjoining  are  re-                 
  evaluated  up to the  price paid for  the particular parcel.                 
  Ms.  McCammon  said  that among  the  landowners  those that                 
  seemed the happiest were those who had the parcel for twenty                 
  to forty years.  Those who  purchased their lands later were                 
  not  on  the  list.    Senator  Halford  voiced  his further                 
  concerns.                                                                    
                                                                               
  Co-chairman Frank  requested RPL's and  said Senators  Sharp                 
  and  Halford  would  submit  their  recommendations  to  the                 
  committee.                                                                   
                                                                               
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at approximately 10:55 A.M.                            
                                                                               

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