Legislature(1999 - 2000)
04/30/1999 02:00 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 30, 1999
2:00 P.M.
TAPE HFC 99 - 115, Side 1.
TAPE HFC 99 - 115, Side 2.
CALL TO ORDER
Co-Chair Therriault called the House Finance Committee
meeting to order at 2:00 P.M.
PRESENT
Co-Chair Therriault Representative Foster
Co-Chair Mulder Representative Grussendorf
Vice-Chair Bunde Representative Kohring
Representative Austerman Representative Moses
Representative J. Davies Representative G. Davis
Representative Williams was not present for the meeting.
ALSO PRESENT
Representative Andrew Halcro; Senator Jerry Mackie; Mike
Tibbles, Staff, Representative Gene Therriault; Lisa
Torkelson, Staff, Representative Fred Dyson; Joe Balash,
Staff, Representative Gene Therriualt; Tina Lindgren,
Executive Director, Alaska Visitors Association (AVA),
Anchorage; Annalee McConnell, Director, Office of Management
and Budget, Office of the Governor; Jack Kreinheder, Senior
Policy Analyst, Office of Budget and Management; Ginny Fay,
Acting Director, Division of Tourism, Department of Commerce
and Economic Development.
SUMMARY
HB 34 An Act relating to the crime of misprision of a
crime against a child.
CS HB 34 (FIN) was reported out of Committee with
a "do pass" recommendation and with indeterminent
fiscal notes by the Department of Administration
and the Department of Law dated 4/21/99.
HB 40 An Act combining parts of the Department of
Commerce and Economic Development and parts of the
Department of Community and Regional Affairs by
transferring some of their duties to a new
Department of Commerce and Rural Development;
transferring some of the duties of the Department
of Commerce and Economic Development and the
Department of Community and Regional Affairs to
other existing agencies; eliminating the
Department of Commerce and Economic Development
and the Department of Community and Regional
Affairs; relating to the Department of Commerce
and Rural Development and the commissioner of
commerce and rural development; adjusting the
membership of certain multi- member bodies to
reflect the transfer of duties among departments
and the elimination of departments; creating the
office of international trade and relating to its
duties; and providing for an effective date.
HB 40 was HELD in Committee for further
discussion.
SB 107 An Act relating to tourism and tourism marketing;
eliminating the Alaska Tourism Marketing Council;
and providing for an effective date.
CS SB 107 (FIN) was reported out of Committee with
"no recommendation" and with two new fiscal notes
by the House Finance Committee.
HOUSE BILL NO. 34
An Act relating to the crime of misprision of a crime
against a child.
Representative Foster MOVED to RESCIND action taken on
moving HB 34 out of Committee. There being NO OBJECTION, it
was rescinded.
Representative J. Davies MOVED to RESCIND action taken on
adopting the original Amendment #1. [Copy on File]. There
being NO OBJECTION, action was rescinded.
Representative J. Davies MOVED to adopt the new Amendment
Chair Therriault OBJECTED for the purpose of discussion.
Representative J. Davies explained that the amendment would
address concerns previously expressed by Committee members.
He indicated that Amendment #I.3 was fundamentally the same
as the amendment adopted previously, however, it had been
structured differently to be more complete including
references and definitions.
LISA TORKELSON, STAFF, REPRESENTATIVE FRED DYSON, noted that
Representative Dyson agrees with the changes made by the
amendment. Co-Chair Therriault WITHDREW his OBJECTION to
adopting the amendment. There being NO further OBJECTIONS,
it was adopted.
Representative Bunde MOVED to report CS HB 34 (FIN) out of
Committee with individual recommendations and with the
attached fiscal notes. There being NO OBJECTION, it was so
ordered.
CS HB 34 (FIN) was reported out of Committee with a "do
pass" recommendation and with a fiscal notes by the
Department of Administration and the Department of Law dated
4/21/99.
CS FOR SENATE BILL NO. 107(FIN)
An Act relating to tourism and tourism marketing;
eliminating the Alaska Tourism Marketing Council; and
providing for an effective date.
JOE BALASH, STAFF, REPRESENTATIVE GENE THERRIAULT, pointed
out that CS SB 107 (FIN) was the companion bill to HB 136
which previously had been heard in the House Finance
Committee. Mr. Balash spoke to the changes between the two
bills.
TINA LINDGREN, EXECUTIVE DIRECTOR, ALASKA VISITORS
ASSOCIATION (AVA), ANCHORAGE, touched upon the plan of the
bill. She commented that the bill before the Committee is
the product of several years effort. The actual wording was
agreed to by the Alaska Visitors Association and the
Administration. She hoped that the bill would pass. A
transition team has already begun the work of establishing a
new organization and to date, a number of people have
enrolled. The idea is that industry will create a new
organization that combines the Alaska Tourism Marketing
Council (ATMC) and the Alaska Visitors Association (AVA) and
the marketing functions of the Division. Passing the bill
will provide that the process move forward.
Representative J. Davies asked how realistic is it to assume
that financing will be raised through the private sector.
Ms. Lindgren stated that this will not be an easy challenge,
however, there has been a $2 million dollar commitment from
major players. She acknowledged that the community portion
of $1 million dollars will be more difficult to raise.
Representative J. Davies advised that he would continue to
support implementation of a statewide tourism tax.
SENATOR JERRY MACKIE spoke in support of the Senate Finance
Committee (SFC) version of the legislation. He pointed out
that everything in that version concurred with the proposed
House Finance Committee (HFC) version and that the SFC had
adopted the fiscal notes brought forward by the HFC. He
confirmed that the fiscal notes are appropriate and support
the changes made to the legislation.
Mr. Baylash explained the difference between the fiscal
notes prepared by the SFC and the HFC. He advised that the
two fiscal notes proposed by HFC address the tourism BRU
within the Department of Commerce and Economic Development;
SFC did adopt fiscal notes identical in numbers to the ones
drafted. In FY00, the pertinent note for the Alaska Tourism
Marketing Council (ATMC) numbers indicate personal services,
travel and contractual and are listed as requested in the
Governor's budget. In the Tourism Development component,
the FY00 Division of Tourism fiscal note, there is a $200
hundred thousand-dollar difference in the contractual line.
Mr. Baylash suggested that the Department no longer needs
authority to receive and expend that funding. Additionally,
there is a $100 thousand dollar reduction to the personal
service line. That number was based on a FY01 projection.
The Director of the Division has resigned and it is believed
that additional turnover will occur. Rather than deleting
specific positions, $100 thousand dollars was deleted from
the entire line in order that it could be absorbed in other
areas of their program.
Mr. Baylash continued, the reduction was based on part to
the millenium plan and partially to the legislation. The
other $700 hundred thousand dollars will be used for the
operations and staffing for the Division of Tourism. In
subsequent years, FY02 and FY03, the contractual line will
decrease each year by $500 thousand dollars as the State's
contribution to the marketing effort is ratcheted down.
GINNY FAY, ACTING DIRECTOR, DIVISION OF TOURISM, DEPARTMENT
OF COMMERCE AND ECONOMIC DEVELOPMENT, spoke to the
difference in the fiscal notes. She pointed out that the
ATMC fiscal note submitted by the Division is close to the
same as the HFC proposed note. The big difference is to the
Tourism Development note. The note submitted by the
Department is based on current tourism funding by the State.
Presently, the State of Alaska pays $5.3 million dollars
total tourism funding, of which, $3.3 million dollars of
that is a contract through ATMC, $1.2 million dollars is
program receipts, and that industry provides a 25% match for
the Tourism Marketing contract, and $2.2 million to the
Division of Tourism.
Ms. Fay continued, the marketing provided by the State of
Alaska is done in two pieces. One portion is handled by
ATMC and the other is international marketing addressed by
the Division of Tourism. The Department's fiscal note
envisions that after the merger occurs, the marketing done
by contract now through the Division and that done by
contract through ATMC will be one large contract with the
qualified trade association. The Department's contractual
line indicates the addition of both of those marketing
contracts.
Ms. Fay advised that the personal service line is an area of
major difference. Between the two fiscal notes, there will
be six state employees that vacate. The Department does not
know what the qualified trade association will be doing as
all the marketing currently is done by the State through
contract. She assumed that the Administration would be
handling the additional work of ATMC without additional
staff. That Division continues to do the work that they are
currently doing now and will assumed the new obligations.
She emphasized that the current workload can not be handled
without any additional staff.
Senator Mackie understood the Department's concern, however,
addressed the need of compromising considering the State's
economic budget. He stated that the Division of Tourism
does not need to remain the same as it is now since they
will not no longer be marketing. He noted that what is
reflected in the fiscal notes involves general funding,
program receipts and designated program receipts. In the
current year, the State is spending just over $7 million
dollars for tourism. In the prepared legislative fiscal
notes, that amount will be $6.7 million dollars a $300
thousand dollars reduction. He believed that reduction
would not decimate the Division of Tourism and could provide
a reasonable funding level for the transition.
Representative J. Davies inquired if there are other
function areas of tourism besides the marketing effort. Ms.
Fay explained that there are many services provided that are
not related to marketing as travel into the State,
permitting on federal lands and land use planning. The
Department also works closely with communities as they try
to develop tourism in their areas. She emphasized that
there continues to be growth and need for information on
developing tourist opportunities especially in rural Alaska.
Currently there is insufficient staffing to do the
development functions related to tourism.
Ms. Fay advised that it would be difficult to assume the
role of overseeing in-put on the large contract with current
staffing. Agreement has occurred among all businesses
because the State was willing to oversee the contract to
guarantee that businesses and communities benefit from
tourism activities within the State. Ms. Fay argued that
the current Division of Tourism fiscal note will begin to
de-staff that Division, loosing the ability to have a
reasonably active role in the contract.
Representative J. Davies commented that the funding cut
could decimate the work of the Division. Co-Chair
Therriault interjected that the proposed funding should be
adequate. Senator Mackie agreed that nothing was being
decimated with the proposed level of funding.
Ms. Fay pointed out that in FY00, the Division would not
remain whole with a $100 thousand dollar reduction,
affecting five positions.
Representative J. Davies MOVED an amendment to the Division
of Tourism fiscal note. He proposed a change to the FY01
note adding $100 thousand dollars to personal services,
adding $40 thousand dollars to the travel line, and
subtracting $200 thousand dollars from the contractual line
making it would be a net zero amendment. The employee
position line would increase from six to eight.
Representative Austerman OBJECTED.
(Tape Change HFC 99 - 115, Side 2).
Representative Austerman suggested that the biggest change
would be in FY01. The difference then between what the
Department wants and what the Legislature would be doing
would not be that significant. Senator Mackie noted that
the net change would be zero, however, the effect would be
$200 thousand dollars less in marketing, going to personal
services and travel. The $200 thousand dollars that would
be reduced to marketing would create an additional loss of
$500 thousand dollars because of the 60% match.
Representative J. Davies explained that the intent by making
the shift was to have a continued effort in rural
development tourism. Representative Austerman stated that
effort would be made through a $60 thousand dollar grant
already included. Representative J. Davies emphasized that
the present level of funding is not adequate.
A roll call vote was taken on the motion made on the
Division of Tourism fiscal note.
IN FAVOR: Moses, J. Davies, Grussendorf
OPPOSED: Austerman, Bunde, G. Davis, Foster, Kohring,
Therriault
Representatives Williams and Co-Chair Mulder were not
present for the vote.
The MOTION FAILED (3-6).
Representative Bunde MOVED to report CS SB 107 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CS SB 107 (FIN) was reported out of Committee with "no
recommendation" and with two fiscal notes by the House
Finance Committee.
HOUSE BILL NO. 40
An Act combining parts of the Department of Commerce
and Economic Development and parts of the Department of
Community and Regional Affairs by transferring some of
their duties to a new Department of Commerce and Rural
Development; transferring some of the duties of the
Department of Commerce and Economic Development and the
Department of Community and Regional Affairs to other
existing agencies; eliminating the Department of
Commerce and Economic Development and the Department of
Community and Regional Affairs; relating to the
Department of Commerce and Rural Development and the
commissioner of commerce and rural development;
adjusting the membership of certain multi- member
bodies to reflect the transfer of duties among
departments and the elimination of departments;
creating the office of international trade and relating
to its duties; and providing for an effective date.
JACK KREINHEDER, SENIOR POLICY ANALYST, OFFICE OF BUDGET AND
MANAGEMENT, offered to answer questions on the technical
placement of verbiage. In response to Representative
Austerman, Mr. Kreinheder advised that there are no new
programs contained in the legislation. Co-Chair Therriault
added that the drafter had been requested to "keep a look
out" for anything that appeared to be new.
Co-Chair Therriault MOVED to adopt Amendment #1. [Copy on
File]. He advised that the Department of Education had
requested the amendment.
MIKE TIBBLES, STAFF, REPRESENTATIVE GENE THERRIUALT,
explained that Amendment #1 would move all the licensure of
child care facilities from Title 47, Chapter 35, the
Welfare, Social Services Institution chapter and would place
them into Title 14, Chapter 37. Mr. Tibbles noted that a
request was made that an effective date of July 1, 2000 be
added, which would provide the Department enough time. Mr.
Tibbles advised that the delayed effective date was not
printed in the amendment.
Representative J. Davies MOVED to AMEND Amendment #1 by
adding the effective date, July 1, 2000.
Representative Kohring observed that the proposed change
would be consistent with the work done by the Committee. It
was the subcommittee's intent that child care programs go
into one department. There being NO OBEJCTION, the
amendment to the amendment was adopted.
There being NO OBJECTION to the adoption of the new
Amendment #1, it was adopted as amended.
Co-Chair Therriault MOVED to adopt Amendment #2. [Copy on
File]. Mr. Tibbles explained that the amendment would
provide another effective date change on all the provisions
that relate to the transfer of the Alaska Human Resource
Investment Council from the Office of the Governor to the
Department of Labor and Workforce Development. There being
NO OBJECTION, it was adopted.
Co-Chair Therriault MOVED to adopt Amendment #3. [Copy on
File]. Mr. Tibbles commented that the amendment would
provide a technical change from the Project Loan Committee
commissioner, which would create a decline in public members
from four to three. The total membership of that Committee
will be five. There being NO OBJECTION, Amendment #3 was
adopt.
Co-Chair Therriault MOVED to adopt Amendment #4. [Copy on
File]. Mr. Tibbles pointed out that the amendment would be
placed in the repealler section of the bill, therefore,
deleting the existing statutory reference of the Manpower
Training Program. Mr. Kreinheder agreed that program no
longer existed and that the statute was obsolete. There
being NO OBJECTION, Amendment #4 was adopted.
Co-Chair Therriault MOVED to adopt Amendment #5. [Copy on
File]. Mr. Tibbles noted that Amendment #5 states that the
Governor shall appoint the executive director of the Alaska
Human Resource Investment Council. Currently, statutes
provide that it exist in the Governor's Office. The bill is
proposing to move that to the new Department of Labor &
Workforce Development. Mr. Kreinheder noted that the
Administration did support the change. There being NO
OBJECTION, Amendment #5 was adopted.
Co-Chair Therriault MOVED to adopt Amendment #6. [Copy on
File]. Mr. Tibbles explained that the amendment would add
another section to the repealler statute thereby deleting
the existing statutory reference to that advisory committee.
He pointed out that money continues to be collected,
however, there are no more loans. Mr. Kreinheder spoke to
the Administration's support of the amendment. There being
NO OBJECTION, it was adopted.
Co-Chair Therriault MOVED to adopt Amendment #7. [Copy on
File]. Mr. Tibbles advised that the amendment was a request
from the Department of Labor. They asked that the section
dealing with the Business Incentive Training Program be
moved from Title 23, Chapter 5, to Title 23, Chapter 15.
There being NO OBJECTION, Amendment #7 was adopted.
Representative Austerman WITHDREW Amendment #8. [Copy on
File].
Representative Austerman MOVED to adopt Amendment #9. [Copy
on File]. Co-Chair Therriault OBJECTED for the purpose of
discussion.
Representative Austerman explained that the amendment would
delete material from Page 4, Line 21 through Page 5, Line
23, which would remove funding for the child care facility
assistance. He recommended that funding be moved to the
Childcare Assistance Program. Representative J. Davies
OBJECTED. He stated that he would object on two grounds:
* The bill intends only to move things around and
not make substantive changes.
* Additionally, the grant program is different than
day care assistance and it exists so as to insure
that day care programs deliver developmentally
appropriate assistance, education and care of
children.
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGMENT AND BUDGET,
OFFICE OF THE GOVERNOR, noted that the Administration
strongly objects to making a change of this magnitude.
There has been no opportunity for the public to know what is
under consideration. She recommended that this could be
discussed next year. Passage of the amendment would put
into jeopardy many facilities and families.
In response to Representative Austerman, Representative J.
Davies explained that the program was not used to help the
facilities operate but rather it was used to add quality
pieces to their operations. It is based on $50 per month,
per child, and must be applied for. Representative G. Davis
voiced concern with the issues and legal aspects which could
result from the proposed change. Representative Kohring
suggested that this concern be addressed through next year's
budget cycle.
A roll call vote was taken on the motion.
IN FAVOR: Austerman, Bunde
OPPOSED: J. Davies, G. Davis, Foster, Kohring, Moses,
Therriault
Representatives Williams, Grussendorf, and Mulder were not
present for the vote.
The MOTION FAILED (2-6).
Co-Chair Therriault explained that his "no" vote should not
be indicative that he will not consider elimination to that
program in the future. He noted that having worked with the
Administration and the prime sponsor of the bill, the action
could overturn the delicate balance currently achieved.
Representative J. Davies MOVED to adopt Amendment #10.
[Copy on File]. Co-Chair Therriault OBJECTED for the
purpose of discussion.
Representative J. Davies stated that consolidation effort
has been the focus on economic development efforts in rural
Alaska. The amendment would add to the commissioner's
responsibilities, advising on issues and making
recommendations. Co-Chair Therriault WITHDREW his OBJECTION
to the amendment. There being NO further OBJECTION, it was
adopted.
Ms. McConnell addressed the anticipated savings through the
fiscal note. She noted that there are several positions
which will be eliminated, however, initially, a lot of work
will be needed to address serious issues. Co-Chair
Therriault advised that fiscal notes would be ready for the
Committee's preview at a forthcoming meeting.
HB 40 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 3:40 P.M.
H.F.C. 11 4/30/99
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