Legislature(1999 - 2000)
04/10/2000 02:15 PM House FIN
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HOUSE FINANCE COMMITTEE
April 10, 2000
2:15 P.M.
TAPE HFC 00 - 111, Side 1.
TAPE HFC 00 - 111, Side 2.
CALL TO ORDER
Co-Chair Therriault called the House Finance Committee
meeting to order at 2:15 P.M.
PRESENT
Co-Chair Therriault Representative Foster
Co-Chair Mulder Representative Grussendorf
Representative Austerman Representative Moses
Representative Bunde Representative Phillips
Representative J. Davies Representative Williams
Representative G. Davis
ALSO PRESENT
Representative Eric Croft; Senator Mike Miller; Lauree
Hugonin, Director, Alaska Network on Domestic Violence and
Sexual Assault (ANDVSA), Juneau; Trisha Gentle, Director,
Council on Domestic Violence and Sexual Assault (CDVSA),
Juneau; Deirdre O'Connor, Division of Family and Youth
Services, Department of Health and Social Services; Del
Smith, Deputy Commissioner, Department of Public Safety;
Carol Carroll, Director, Division of Administrative
Services, Department of Natural Resources; Tina Kobayashi,
Assistant Attorney General, Oil, Gas and Mining Section,
Department of Law; Juli Lucky, Staff, Senator Rick Halford;
Diane Barrans, Executive Director, Alaska Postsecondary
Education, Department of Education.
TESTIFIED VIA TELECONFERENCE
Bob Leoffler, Director, Division of Mining, Land and Water,
Department of Natural Resources, Anchorage; Kevin Banks,
Division of Oil and Gas, Department of Natural Resources,
Anchorage; Steve Borell, Executive Director, Alaska Miners
Association, Anchorage; Milton Byrd, Anchorage; James
Hanson, Lease Sale Manager, Division of Oil and Gas,
Department of Natural Resources.
SUMMARY
HB 58 An Act relating to certain audits regarding oil
and gas royalty and net profits and to audits
regarding costs relating to exploration incentive
credits and oil and gas exploration licenses; and
providing for an effective date.
HB 58 was HEARD and HELD in Committee for further
consideration.
HB 270 An Act relating to sexual assault and sexual abuse
and to payment for certain medical costs and
examinations in cases of alleged sexual assault or
sexual abuse.
CS HB 270 (HES) was reported out of Committee with
a "do pass" recommendation and with a zero fiscal
note by the Department of Public Safety dated
3/15/00.
SB 175 An Act relating to state mining law, to methods of
locating mining claims, to the granting of larger
mining claims using a legal subdivision based on
rectangular survey descriptions, and to mandatory
rental payments for prospecting rights.
SB 175 was reported out of Committee with a "do
pass" recommendation and with a fiscal note by
Department of Natural Resources dated 2/29/00.
SB 275 An Act relating to the school year for purposes of
the postsecondary student loan program; and
providing for an effective date.
SB 275 was HEARD and HELD in Committee for further
consideration.
SENATE BILL NO. 175
An Act relating to state mining law, to methods of
locating mining claims, to the granting of larger
mining claims using a legal subdivision based on
rectangular survey descriptions, and to mandatory
rental payments for prospecting rights.
JULI LUCKY, STAFF, SENATOR RICK HALFORD, stated that SB 175
proposes changes to the Alaska State Mining Law that would
reduce the mining claim processing time and cost for the
State, while improving the accuracy and accessibility of the
claim location data. The changes affect methods of locating
mining claims, rental payments and other related items.
They would have no effect on the rights established by
claims.
Ms. Lucky noted that the Department of Natural Resources
currently has a substantial backlog of claims that have been
filed but are not yet on the land status plats. Changes
proposed by SB 175 would improve the situation by allowing
the Department to use a format, whereby, mining claim
corners conform to an aliquot part legal description and can
then be electronically entered onto (or removed from) the
State land status plats.
Ms. Lucky stated that the changes proposed by SB 175 would
incorporate several years of work between the mining
industry and the Alaska Department of Natural Resources. The
primary concern for DNR is the amount of manpower, time and
cost that are now required to process the paperwork for
mining claims.
Ms. Lucky pointed out that from the viewpoint of the mining
industry, the changes would simplify the process of staking
mining claims and reduce errors during the staking,
recording and filing process. One change would make it
simpler and more feasible to utilize the Global Positioning
Systems (GPS) to establish claim corners in the field.
Another change would allow the location of a larger size of
mining claim, which would decrease the number of stakes in
the field and reduce the amount of paperwork by 75%. The
existing claim location system will continue to be available
for those situations where the new positioning method is not
practical.
Ms. Lucky concluded that other changes proposed regard
prospecting sites including the establishment of a rental
charge, repeal of the limitation of the number of sites that
can be held, and clarification of the terms.
Ms. Lucky stated that SB 175 is supported by the Alaska
Miners Association and the Department of Natural Resources.
Representative Phillips emphasized that the mining industry
would be very happy with the change proposed in the
legislation.
Representative J. Davies asked for more information
regarding the rental aspects. Ms. Lucky explained that the
labor rate would remain in place. There would be a change
in the rental rates dealing with the prospecting sites.
BOB LEOFFLER, (TESTIFIED VIA TELECONFERENCE), DIRECTOR,
DIVISION LAND, MINING AND WATER, DEPARTMENT OF NATURAL
RESOURCES, stated the SB 175 is a solution to a problem that
the Department has had. He pointed out that over the last
few years, the mining claims have been expanding. New
mining claims average about ten thousand a year and have for
the past five years. As a result, the Department has had a
difficult time keeping up. It takes four to six months to
process a mining claim. He noted that SB 175 would provide
for some automation. The bill will not change the
relationship between the mining industry and the State but
would allow for better service.
Mr. Leoffler addressed the fiscal note. He stated that the
bill could make it more efficient for the State and the
locator. It applies to renting the processing sites. The
Department believes that would result in $150 thousand
dollars, new income from the mining industry. Approximately
half of that would go to the permanent fund. The fiscal
note attempts to capture the other half, so the Department
could decrease the time to process a claim to a six-week
period. The bill recommends using funding, which the
industry pays, to bring the service level to a more
agreeable time.
Representative J. Davies asked if there would be less
incentive to develop the lands by making the system more
efficient.
STEVE BORELL, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE
DIRECTION, ALASKA MINERS ASSOCIATION, ANCHORAGE, voiced
support for the legislation. He stated that the provision
of the bill affects the process of location, which would not
decrease the rights established by the claims. Mr. Borell
noted that the provisions of the legislation would provide
for more rapid distribution of information to the public.
He urged enactment of the legislation at the earliest
possible date.
Representative Foster inquired about the existing system
claims. Mr. Borell replied that they would remain the same.
Representative Foster wanted a guarantee that the small
village people would not be required to purchase a GPS
system. Mr. Borell acknowledged that they would not.
Representative Foster MOVED to report SB 175 out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
SB 175 was reported out of Committee with a "do pass"
recommendation and with a fiscal note by the Department of
Natural Resources dated 2/29/00.
HOUSE BILL NO. 270
An Act relating to sexual assault and sexual abuse and
to payment for certain medical costs and examinations
in cases of alleged sexual assault or sexual abuse.
REPRESENTATIVE ERIC CROFT stated that HB 270 would guarantee
that adult victims of sexual assault are not charged for the
costs of evidentiary forensic exams.
He noted that a victim of sexual assault has by definition
been victimized once. In order to facilitate investigation
of the crime and prosecution of the criminal, a victim is
often asked to submit to a forensic exam to gather evidence.
The forensic exams often involve taking physical samples and
photographs. While it is the ordinary police practice to pay
for these evidence-gathering exams, some victims now report
that they have been asked to pay for the cost of the
forensic exam through their medical insurance. To victims of
sexual assault, this is a third victimization.
Representative Croft explained that when a house is
burglarized and law enforcement takes photos or fingerprints
of evidence, the victim is never sent the bill, directly or
indirectly, or asked to have their homeowners' insurance
billed. There is faith that most law enforcement agencies
take responsibility for victims' needs and appropriately pay
for evidentiary exams as needed.
Representative Croft concluded that with the passage of HB
270, victims would be assured that they could not be
required to pay for evidentiary forensic exams.
Representative Foster questioned how widespread the problem
is. Representative Croft replied that it is not widespread
but that it does exist. He noted that the majority of
police agencies do the right thing in this regard. However,
some agencies do try to transfer this concern to the
individual's insurance. That type action can result from
tight budget times.
Representative G. Davis inquired the average cost for the
service. Representative Croft advised that it costs
approximately $300-$500 dollars.
Co-Chair Therriault questioned if there was any legitimate
payment which could be cut off through passage of this
legislation. Representative Croft commented that some
places have indicated that they do not charge families out
of pocket expense. If a child was eligible for Medicaid or
health insurance, they may attempt to tap that source. He
reiterated that the family should not be liable.
Representative Austerman asked the ratio of children versus
adult cases. Representative Croft did not know the answer.
LAUREE HUGONIN, DIRECTOR, ALASKA NETWORD ON DOMESTIC
VIOLENCE AND SEXUAL ASSAULT (ANDVSA), JUNEAU, commented that
these charges occur as a result of hospital accounting
procedures. The range of costs can be from between $300-
$1000 dollars. The direct charges usually result from the
accounting procedures at the hospitals and not the law
enforcement agencies. She noted that there has been some
difficulty in Mat-Su, Anchorage, Kenai and Sitka and
possibly in Bethel. She was not aware of other parts of the
State where there was a problem. Ms. Hugonin advised that
this problem is not on going and pervasive, but that it does
occur more than sporadically.
Ms. Hugonin testified on the actual exam process that a
person must go through after the assault. She urged the
Committee to seriously consider passing the legislation so
that the victim does not have to go through the pain of the
ordeal again.
Vice Chair Bunde asked the advantage to the hospital in
requesting the exam money. He questioned if the police
agencies were slow in processing these claims. Ms. Hugonin
acknowledged that the hospitals are concerned with having
timely payments. Originally, there was concern that law
enforcement would not bring forward all the cases because
they would not be able to pay for the exams.
Representative Austerman asked if the object of the
legislation is that no one individual would be responsible
to pay for this type service. Ms. Hugonin replied that it
is the intention that no "victim" pay for the examine. She
noted that it clarifies that the State Troopers and/or the
local law enforcement would pay for the exam.
TRISHA GENTLE, DIRECTOR, COUNCIL ON DOMESTIC VIOLENCE AND
SEXAUL ASSAULT (CDVSA), JUNEAU, voiced support for the
legislation. She reiterated that the actual "receiving of
the bill" again reminds the victim of the trauma that they
experienced. She emphasized that the bill would help
protect the rape victim from further trauma.
DEL SMITH, DEPUTY COMMISSIONER, DEPARTMENT OF PUBLIC SAFETY,
noted that the Department supports the legislation. He
clarified that the cost of collection of forensic evidence
and the prosecution of the crime is the responsibility of
the agency that is investigating and collecting that
evidence. The legislation guarantees that the victim does
not pay. The Anchorage Police Department was concerned that
there were certain parties that could pay for the service.
Mr. Smith agreed that placing the stipulation in statute
would guarantee that the victim does not receive the bill.
Mr. Smith speculated that hospitals are not set up to
administer a third party billing. He noted that his
Department currently pays out approximately $50 thousand
dollars per year for this type service.
Representative Phillips read for the record, a statement
from a woman in Juneau who had experienced the charges as
indicated. The letter states that the medical costs should
not become a deterrent for a woman to seek out the care that
they need after a rape experience.
Representative Foster MOVED to report CS HB 270 (HES) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS HB 270(HES) was reported out of Committee with a "do
pass" recommendation and with a fiscal note by the
Department of Public Safety dated 3/15/00.
(TAPE CHANGE, HFC 00 - 111, Side 2).
CS FOR SENATE BILL NO. 275(HES)
An Act relating to the school year for purposes of the
postsecondary student loan program; and providing for
an effective date.
SENATOR MIKE MILLER stated that currently, AS 14.43,
Subsection (5), Section 160, "definitions" reads: "School
year", means a period from September 1st of one year through
August 31st of the following year. The bill would amend the
definition to read that an academic period could be a
minimum of 30 weeks of instructional time to begin between
September 1st of one year and August 31st of the following
year.
Senator Miller noted that the current definition of "school
year" assumes an agricultural society, such as existed when
public education in America began in earnest in the 1820's
and 1830's. Then the vast majority, perhaps 85%-90% of
Americans lived on family farms. The school year was
designed to begin after fall harvest and end before spring
planting.
Senator Miller continued, today, hardly more than one-
percent of our population lives on family farms. The school
calendar is obsolete, especially for higher education in
urban America. The U. S. Department of Education defines an
academic year as thirty weeks of instruction, and virtually
all colleges and universities follow that pattern, either
offering two fifteen-week semesters or three ten-week
quarters. However, most continue to use the agriculture
calendar, making it difficult to offer a fast-track program
for urban individuals who want to get on with their
education in a vigorous fashion. The U. S. Department of
Education will offer a full loan to a full-time student who
completes successfully a thirty-week academic year and will
offer another loan as soon as that student begins another
similar period of full-time study.
Senator Miller pointed out that Charter College in Anchorage
has experimented with offering five ten-week quarters in one
calendar year or one and two-thirds academic years in one
calendar year. That has proven popular because it allows a
student to complete a two-year associate degree in just
fifteen months. Charter is now in the planning stage of a
four-year bachelor degree program, which will allow
ambitious and hard-working students to complete their
degrees in as little as thirty consecutive months.
Unlike students in other programs following the slower and
more traditional calendar, these students cannot obtain four
State loans for their degrees, given the current definition
of a school year. They deserve the option of taking on the
challenge of a fast-track baccalaureate degree. Senator
Miller advised that under that circumstance, the sum total
of their loans for their education would be no more than
that for their counterparts following traditional calendars.
However, the cost of their education will have been reduced
because they will have yielded less foregone income during
their college years when they were in no position to hold
full-time jobs.
Co-Chair Therriault asked about the structure of the
language on Page 1, Line 6-7. Senator Miller explained that
language was left in for accounting purposes at the Student
Loan Division.
Representative J. Davies suggested that a period could be
placed after "time". Senator Miller reiterated that the
Student Loan Division wanted that language left as is for
accounting purposes.
Vice Chair Bunde asked if this would create a large change
to the current semester system. He suggested that the
language as currently written implies that a person can only
apply for one student loan in the 12-month period. Senator
Miller explained that the time would be "compressed" so that
the student could receive a four-year degree in a three-year
period.
DIANE BARRANS, EXECUTIVE DIRECTOR, ALASKA COMMISSION ON
POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION, spoke to
the Postsecondary Commission's support for the legislation.
Ms. Barrans stated that there would be zero fiscal impact to
the Commission while at the same time offering more
opportunities to the Alaska College students.
Ms. Barrans spoke to her concern. She pointed out that the
objective was twofold:
? Providing an opportunity under an excellerated
program to borrow more than one loan per year; and
? Doing so without changing anymore needed related
statutes.
Ms. Barrans commented that the intent was to keep the bill
short, pointed out that it had been reviewed by the Attorney
General. She reiterated that the legislation would allow
the Commission to offer more than one loan per year with set
terms of conditions.
Co-Chair Therriault asked what would happen to a student
that was not able to finish the program according to the
proposed schedule. He asked if they would be precluded from
receiving a loan for the following year. Ms. Barrons
replied that would be a different issue in terms of
completing the term at the required enrollment level. If
the student were to complete that academic year in another
loan year, under the terms of the new loan, they would be
able to continue to borrow. Co-Chair Therriault clarified
that a student would actually be able to draw three years
worth of loans in a two-year period of time. Ms. Barrans
acknowledged that was correct.
Representative J. Davies asked the current restrictions on
borrowing. Ms. Barrans explained that currently, an
undergraduate could borrow $8500 dollars in a 12-month
period. Representative J. Davies believed that the
legislation would limit the 12-month period. Ms. Barrans
stated that there would be a number of factors used to
determine if they qualify for a second loan. The first
criteria is if they had completed the entire academic period
for the previous loan. If they did and had made good
progress, they could apply for and receive a second loan.
Representative J. Davies believed that by formulating the
proposed change, there would be no limit on the number of
loans that a person could receive in a two-year period. He
proposed an amendment which would clarify that language.
Co-Chair Therriault stated that rather than moving a
conceptual amendment at this time, the bill would be held in
Committee in order to confer with the drafters.
MILTON BYRD, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE,
added that the U.S. Department of Education defines an
academic period as 30 weeks of instruction. Most colleges
in the country, pursue that by offering two 15 or 16 week
semesters or three 10 or 11 week quarters. Mr. Byrd noted
that a school can offer a compressed program, but they must
offer the same amount of class time. He stressed that one
could not compress the amount of time that it would take to
complete a four-year degree by cutting out the "pauses"
between terms. However, you can compress the amount of time
taken to complete a degree.
Representative J. Davies asked if there was language which
stipulates that a student must complete the one 30-week
period before receiving the next loan. Mr. Byrd referred
that to Ms. Barrans.
HB 275 was heard and HELD in Committee for further
consideration.
HOUSE BILL NO. 58
An Act relating to certain audits regarding oil and gas
royalty and net profits and to audits regarding costs
relating to exploration incentive credits and oil and
gas exploration licenses; and providing for an
effective date.
KEVIN BANKS, (TESTIFIED VIA TELECONFERENCE), DIVISION OF OIL
AND GAS, DEPARTMENT OF NATURAL RESOURCES, ANCHORAGE, stated
that the bill would transfer oil and gas royalty audit
functions from the Department of Revenue (DOR) to the
Department of Natural Resources (DNR). He noted that it
would make sense to put tile audit duties in the same
department that administers, enforces, and is most
knowledgeable with the oil and gas-leasing program.
Mr. Banks pointed out that the audit functions previously
rested with the Department of Natural Resources, but was
switched to Department of Revenue in 1980 based on a
legislative audit report. That recommendation stated that
cost savings would be achieved by having one staff of
auditors review both tax and royalty compliance information.
Since 1980, however, the State has entered into royalty
settlements with the North Slope producers and have made
changes to tax regulations. As a result, there is no longer
as much overlap between royalty and tax audits. Separating
Department of Natural Resources duties to administer and
enforce oil and gas contracts, agreements, and leases from
the Department's ability to conduct audits leading to
possible enforcement actions, has resulted in inefficiencies
and other problems.
Mr. Banks noted that HB 58 would authorize DNR to audit
reports and costs relating to exploration incentive credits
and oil and gas licenses. It also grants the Department
audit powers commensurate to those of DOR currently,
including the right to subpoena information for audit
purposes. The two departments would be allowed to exchange
confidential information obtained in the course of their
respective audits.
Mr. Banks pointed out that language on Page 2, Section 2,
"by an agreement with the department or by
AS38.05.035(a)(9), AS 41,09.010(d)" was inadvertently
deleted in the proposed version of the legislation.
Co-Chair Therriault MOVED to ADOPT Amendment #1, which would
insert after "required" on Page 2, Line 9, "by an agreement
with the department or by AS38.05.035(a)(9), AS
41,09.010(d)". There being NO OBJECTION, it was so ordered.
CAROL CARROLL, DIRECTOR, DIVISION OF SUPPORT SERVICES,
DEPARTMENT OF NATURAL RESOURCES, observed that the
Department had submitted Amendment #2. Ms. Carroll
explained that the amendment would correct a law in the
public notice law section by removing the notice requirement
for final decisions in oil and gas lease sales. The
amendment would correct a problem by removing a separate
requirement for notice for the final decision.
JAMES HANSON, (TESTIFIED VIA TELECONFERENCE), LEASE SALE
MANAGER, DIVISION OF OIL AND GAS, DEPARTMENT OF NATURAL
RESOURCES, pointed out that the notice requirement is
redundant. He explained that 180 days before the sale, the
Department issues a preliminary finding. There is a public
comment period following that. When the finding is noticed,
the public is informed when the final finding will be
issued. At the time the final finding is issued, the notice
of sale lets the pubic know that the appeal process is not
agreeing with the decision to go forward with the sale. The
30-day notice prior to that finding is simply restating what
was already said when the preliminary finding came out.
Representative J. Davies asked if that was a current
requirement in statute to be done. Mr. Hanson replied that
the requirement is that they issue a notice of the
preliminary finding and included in that notice is when the
final notice would become available. Representative J.
Davies did not understand the redundancy. He asked what
language would the Department be comfortable including.
Representative Phillips requested further testimony to
address any changes which the language could cause.
Representative Grussendorf commented that the language of
the preliminary findings might not affect the final
findings.
Co-Chair Therriault agreed that the change could cause
confusion. Mr. Hanson pointed out that the notice which the
Division is trying to eliminate, would be after the comment
period. The public comment period lasts from 60-90 days
after the preliminary findings. He stressed that it would
be "way beyond" the public comment period and serves no
purpose in the bill.
Co-Chair Therriault advised that it was his intent to hold
the bill in Committee to address the proposed language
change.
Ms. Carroll interjected that if the amendment were going to
delay the bill, the Department would request to withdraw the
proposal to change that language.
HB 58 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 3:45 P.M.
H.F.C. 12 4/10/00
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