Legislature(2001 - 2002)

01/19/2001 01:42 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   HOUSE FINANCE COMMITTEE                                                                                      
                      January 19, 2001                                                                                          
                           1:42 PM                                                                                              
                                                                                                                                
 TAPE HFC 01 - 16, Side A                                                                                                       
 TAPE HFC 01 - 16, Side B                                                                                                       
                                                                                                                                
 CALL TO ORDER                                                                                                                
                                                                                                                                
 Co-Chair Mulder called the House Finance Committee meeting                                                                     
 to order at 1:42 PM.                                                                                                           
                                                                                                                                
 MEMBERS PRESENT                                                                                                              
                                                                                                                                
 Representative Eldon Mulder, Co-Chair                                                                                          
 Representative Bill Williams, Co-Chair                                                                                         
 Representative Con Bunde, Vice-Chair                                                                                           
 Representative Eric Croft                                                                                                      
 Representative John Davies                                                                                                     
 Representative Carl Moses                                                                                                      
 Representative Richard Foster                                                                                                  
 Representative John Harris                                                                                                     
 Representative Bill Hudson                                                                                                     
 Representative Ken Lancaster                                                                                                   
 Representative Jim Whitaker                                                                                                    
                                                                                                                                
 MEMBERS ABSENT                                                                                                               
                                                                                                                                
 None                                                                                                                           
                                                                                                                                
 ALSO PRESENT                                                                                                                 
                                                                                                                                
 Larry Persily, Deputy Commissioner,  Department of Revenue;                                                                    
 Mike Maher, Director, Division  of Administrative Services,                                                                    
 Department of Revenue; John Jenks, Chief Investment Officer,                                                                   
 Treasury Division, Department of Revenue.                                                                                      
                                                                                                                                
 PRESENT VIA TELECONFERENCE                                                                                                   
                                                                                                                                
 Marla Greenstein, Executive Director, Alaska Commission on                                                                     
 Judicial Conduct                                                                                                               
                                                                                                                                
 GENERAL SUBJECT (S):                                                                                                         
                                                                                                                                
 Review of Departments Accomplishments                                                                                          
           Department of Revenue                                                                                                
           Alaska Commission on Judicial Conduct                                                                                
                                                                                                                                
The following overview was taken in log note format.  Tapes                                                                     
and handouts will be on file with the House Finance                                                                             
Committee through the 22nd Legislative Session, contact 465-                                                                    
2156. After the 22nd Legislative Session they will be                                                                           
available through the Legislative Library at 465-3808.                                                                          
                                                                                                                              
                                                                                                                                
                                                                                                                                
LOG SPEAKER                DISCUSSION                                                                                       
                           ALASKA COMMISSION ON JUDICIAL CONDUCT                                                              
      TAPE HFC 00 - 16                                                                                                        
      SIDE A                                                                                                                  
000 MARLA GREENSTEIN,      Noted that the Commission is the smallest                                                            
      EXECUTIVE DIRECTOR, and most limited in the judicial branch.                                                              
      ALASKA COMMISSION ON The Commission operates as the ethical                                                               
      JUDICIAL CONDUCT     committee for judges.                                                                              
263 Ms. Greenstein         Noted that the Commission will have a                                                                
                           small supplemental for FY01 due to a case                                                            
                           involving incarceration of a witness.                                                              
327 Ms. Greenstein         Explained that a recommendation for                                                                  
                           discipline has been made to the state                                                                
                           supreme court. The judge is appealing the                                                            
                           decision.                                                                                          
364 Ms. Greenstein         Added that the Commission also issues                                                                
                           advice to judges.                                                                                  
436 Representative         Questioned where their budget is located.                                                          
      Hudson                                                                                                                    
453 Ms. Greenstein         Explained that the Commission has its own                                                            
                           budget but that it is generally                                                                      
                           associated with the Alaska Court System's                                                            
                           budget.                                                                                            
488 Co-Chair Mulder        Clarified that the Commission generated                                                              
                           general fund revenues.                                                                             
                           DEPARTMENT OF REVENUE                                                                              
525 LARRY PERSILY,         Reviewed highlights of the department. He                                                            
     DEPUTY COMMISSIONER, observed that the department handles                                                                  
      DEPARTMENT OF        60,000 Child Support Enforcement cases.                                                              
      REVENUE              More than 600,000 Alaskans are served                                                                
                           through the permanent fund dividend. He                                                              
                           added that 160 municipalities receive                                                                
                           shared taxes.                                                                                      
727 Mr. Persily            Discussed the Office of the Commissioner.                                                            
                           Dividend questions are answered within a                                                             
                           week. Child support cases are answered                                                               
                           within two weeks.                                                                                  
782 Mr. Persily            The number of cases waiting for formal                                                               
                           hearings has been reduced to 70 for child                                                            
                           support cases and 170 for dividend                                                                   
                           appeals.                                                                                           
820 Mr. Persily            Noted that the state's tax laws were                                                                 
                           developed with oil in mind, not gas.                                                               
845 Representative         Clarified that child support questions                                                               
      Hudson               are answered in Anchorage and asked if                                                               
                           there is a 1-800 number.                                                                           
873 Mr. Persily            Clarified that the 1-800 number rings in                                                             
                           Anchorage but that there are offices in                                                              
                           Juneau, Fairbanks and other areas.                                                                 
903 Mr. Persily            Discussed the Division of Administrative                                                             
                           Services. There have been no grievances                                                            
                            overturned. There is one that has not                                                               
                            been resolved. There have been no                                                                   
                            penalties.                                                                                        
 937 Mr. Persily            Reviewed the Tax Division; 95 percent of                                                            
                            assessed taxes have been collected. `                                                             
 1002 Mr. Persily           Discussed the merger of the Oil and Gas                                                             
                            and Excise Tax divisions. Concluded that                                                            
                            this has improved workflow.                                                                       
 1044 Mr. Persily           Noted that the department collected more                                                            
                            than $440 million dollars. A BP                                                                     
                            settlement represented the greatest                                                                 
                            portion.                                                                                          
 1152 Co-Chair Mulder       Discussed the ability to discern the                                                                
                            value of the settlement. Confidential                                                               
                            hearings could occur to brief the                                                                   
                            committee.                                                                                        
 1245 Representative        Pointed out the difficulty of                                                                       
     Whitaker              establishing a definitive approach.                                                                
 1260 Representative Croft Asked the disputed amount of the                                                                     
                            settlement. Mr. Persily did not have the                                                            
                            number.                                                                                           
 1281 Representative        Observed that it was a long-standing                                                                
      Whitaker              dispute.                                                                                          
 1334 Mr. Persily           Noted that revisions to the tax division                                                            
                            were initiated.                                                                                   
 1377 Mr. Persily           Reviewed the Permanent Fund Division. He                                                            
                            noted that 97.1 percent of the estimated                                                            
                            payable dividends were issued. He                                                                   
                            observed that 25 percent of the appeal                                                              
                            inventory exceeded six months. The goal                                                             
                            is to do a better job screening reviews.                                                            
                            Direct deposit is up to 67 percent.                                                                 
                            Applications can now be filed on line.                                                              
                            Random audits will occur this year. The                                                             
                            intent is to pull 1,000 applications. Out                                                           
                            of 600,000 applications, 50,000 are                                                                 
                            reviewed. The rest are not reviewed. When                                                           
                            700 applications were randomly reviewed                                                             
                            discrepancies were found.                                                                         
 1621 Representative        Noted that a number of checks are sent                                                              
      Hudson                outside of Alaska                                                                                 
 1644 Mr. Persily           Pointed out that checks sent out of state                                                           
                            are already reviewed.                                                                             
 1659 Vice-Chair Bunde      Gave the example of a constituent that is                                                           
                            required to be out of state 6 months of                                                             
                            the year for their employment. They have                                                            
                            a home in Alaska but are not eligible.                                                              
                            Military residents only need to return to                                                           
                            the state of Alaska for 72 hours every 2                                                            
                            years.                                                                                            
 1696 Representative        Asked for more information regarding                                                                
      Hudson                allowable absences.                                                                               
1713 Mr. Persily           Reviewed the Division of the Treasury.                                                               
                           Collections for the general fund, CBR,                                                               
                           Alaska Children's Trust and the Public                                                               
                           School Trust Fund exceeded their                                                                     
                           benchmarks. The International Airports                                                               
                           Revenue Fund did not.                                                                              
1800 Mr. Persily           Discussed the Alaska Municipal Bond Bank                                                             
                           Authority. He concluded that they had a                                                              
                           good year.                                                                                         
1830 Mr. Persily           PRS and TRS exceeded their benchmarks.                                                             
      JOHN JENKS, CHIEF    Discussed the CBR fund. There was a                                                                  
      INVESTMENT OFFICER, little more than a 2 percent loss.                                                                    
      TREASURY DIVISION,   Approximately 41 percent is invested in                                                              
      DEPARTMENT OF        equities. He continued to discuss                                                                    
      REVENUE              performance of equity holdings.                                                                    
2017 Mr. Persily           Discussed the Child Support Enforcement                                                              
                           Division. There was a record collection                                                              
                           of $85 million dollars. There is $29                                                                 
                           dollars in collection for every state one                                                            
                           dollar spent.                                                                                      
2064 Mr. Persily           There are 47.3 ongoing cases receiving                                                               
                           checks on time.                                                                                    
2096 Representative        Questioned the funding source                                                                      
      Hudson                                                                                                                    
2126 Mr. Persily           Noted that $118,000 dollars is straight                                                              
                           GF; GFPR (the state's share of                                                                       
                           collections) makes up the rest of state                                                              
                           funding.                                                                                           
2172 Mr. Persily           Discussed the backlog in accounting;                                                                 
                           6,500 cases have been reduced to 2,300.                                                              
                           He provided additional information on                                                                
                           adjustments in response to a question by                                                             
                           Representative Croft.                                                                              
2255 Vice-Chair Bunde      Noted that some clients have paid ahead                                                              
                           and not received credit for their extra                                                              
                           payments.                                                                                          
2281 Mr. Persily           Explained that extra payment amount,                                                                 
                           under the law, is considered a gift. He                                                              
                           continued to discuss performance of the                                                              
                           Child Support Enforcement Division.                                                                
                                                                                                                              
      TAPE HFC 01 - 16,                                                                                                       
      Side B                                                                                                                  
39    Mr. Persily          In response to a question by Vice-Chair                                                              
                           Bunde, discussed prosecution and                                                                     
                           collections. He stressed the need to                                                                 
                           retain the public's trust.                                                                         
104 Vice-Chair Bunde       Asked if there were additional measure                                                               
                           that the state could take in collecting                                                              
                           from self employed persons owing child                                                               
                           support.                                                                                           
236 Mr. Persily            Noted that the state can require them to                                                             
                           apply for a permanent fund dividend but                                                            
                            that it is difficult to collect from                                                                
                            these individuals.                                                                                
 309 Co-Chair Mulder        Observed that people will shirk their                                                               
                            responsibility and questioned how far                                                               
                            state government can go to force their                                                              
                            participation.                                                                                    
 347 Representative         Noted that collection has been tied to                                                              
      Hudson                business licenses and questioned if it                                                              
                            has been successful                                                                               
 386 Mr. Persily            Stated that it has helped but that there                                                            
                            are individuals that continue to work                                                               
                            without licenses and that enforcement is                                                            
                            time consuming.                                                                                   
 434 Mr. Persily            There is a 3 - 4 minutes average hold                                                               
                            time for assistance calls. The department                                                           
                            is looking to options for improved phone                                                            
                            services that would tell the time                                                                   
                            estimated for the hold. He noted that the                                                           
                            department would like to repeal sunset                                                              
                            laws for child support enforcement.                                                               
 716 Mr. Persily            Discussed the Alaska Mental Health Trust                                                            
                            Authority.                                                                                        
 755 Mr. Persily            Reviewed the Alcoholic Beverage Control                                                             
                            Board. He noted that there was a cost of                                                            
                            $159 dollars per license. There were 100                                                            
                            noncompliant license cases in FY00. The                                                             
                            board inspected 244 licensed premises.                                                            
 884 Representative         Questioned if it were a local collection                                                            
      Lancaster             problem.                                                                                          
 916 Representative         Observed that complaints go to the                                                                  
      Whitaker              municipality and the municipality turns                                                             
                            the problem over to the state.                                                                    
 1032 Co-Chair Mulder       Noted that subcommittees will review                                                                
                            missions and measures and report back to                                                            
                            the committee their recommendations.                                                                
                            Discussion occurred regarding the on-line                                                           
                            version and the need to coordinate the                                                              
                            data to prevent duplication of effort.                                                            
 1216 Representative        Stressed the benefit of missions and                                                                
      Hudson                measures. He recommended coordination                                                               
                            between departments.                                                                              
 1380 Co-Chair Mulder       Agreed and pointed out that there has                                                               
                            been an attempt to do so.                                                                         
 1409 Representative John Stated that it would be helpful to                                                                    
      Davies                receive the data prior to the committee                                                             
                            meeting.                                                                                          
 1427 Denny Dewitt, Staff, Explained that the intent is to work with                                                            
      Co-Chair Mulder       departments on the mission and measure                                                              
                            reports during the creation of the budget                                                           
                            in the fall. Subcommittee staff has been                                                            
                            asked to avoid rewriting and changing                                                               
                            measures, but were instructed to tweak                                                            
                           existing measures. The intent is to                                                                  
                           address where measures do not succeed.                                                             
1577                       ADJOURNMENT                                                                                        
                                                                                                                                
                           The meeting was adjourned at 2:55 p.m.                                                             
                                                                                                                                

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