Legislature(1993 - 1994)
02/28/1994 01:30 PM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
February 28, 1994
1:30 P.M.
TAPE HFC 94 - 42, Side 1, #000 - end.
TAPE HFC 94 - 42, Side 2, #000 - end.
CALL TO ORDER
Co-Chair Larson called the House Finance Committee meeting
to order at 1:30 P.M.
PRESENT
Co-Chair Larson Representative Hoffman
Co-Chair MacLean Representative Martin
Vice-Chair Hanley Representative Navarre
Representative Brown Representative Parnell
Representative Grussendorf Representative Therriault
Representative Foster
ALSO PRESENT
Representative Cynthia Toohey; Jan Hansen, Director,
Division of Public Assistance, Department of Health and
Social Services; Thomas C. Williams, Director, Permanent
Fund Division, Department of Revenue; Crystal Smith, Alaska
Municipal League, Juneau; David Kamrath, Staff,
Representative Harley Olberg.
SUMMARY
HB 331 An Act relating to claims on permanent fund
dividends for defaulted public assistance
overpayment.
HB 331 was reported out of Committee with a "do
pass" recommendation and with two fiscal notes by
the Department of Health and Social Services dated
2/22/94 and one zero fiscal note by the Department
of Revenue dated 2/22/94.
HB 397 An Act relating to the power to levy property
taxes in second class cities.
HB 397 was held in Committee for further
consideration.
HOUSE BILL 394
"An Act relating to limited partnerships; and providing
1
for an effective date."
Co-Chair Larson informed the Committee that the sponsor of
HB 394 requested that it be waived from this Committee. He
asked members to consider the waiver.
CONTRACT BETWEEN THE STATE OF ALASKA AND THE CAMBRIDGE
ENERGY RESEARCH
Co-Chair Larson provided the Committee with the contract
agreement between the State of Alaska, Senate Finance
Committee and the House Finance Committee and the Cambridge
Energy Research Associates, Inc. for an amount of $15,750
dollars. [Attachment #1]. Representative Larson requested
that the Committee review the contract for future
consideration.
SENATE BILL 206
"An Act relating to real property transfers."
Co-Chair Larson provided the Committee with a copy of SB 206
and asked if the Committee objected to introducing the bill
as a House Finance Committee bill. There being NO
OBJECTIONS, it was so ordered.
HOUSE BILL 331
"An Act relating to claims on permanent fund dividends
for defaulted public assistance overpayment."
REPRESENTATIVE CYNTHIA TOOHEY explained that HB 331 would
give the Department of Health and Social Services, the
administrative authority to garnish permanent fund dividends
of individuals who have received public assistance
overpayment and are delinquent in repaying that debt.
She added that frequently persons receiving overpayment
agree to repay the debt but fail to do so. If a person is
still on public assistance the person's benefit can be
reduced as a means of collection, but if a person is off
assistance, collection becomes difficult. The Department
currently has over $1 million in delinquent debt.
Collection through the court system can be time consuming
and costly. HB 331 would allow the Department to pursue
collection in the same manner in which delinquent student
loans are pursued. Representative Toohey added that the
legislation is supported by the Department of Health and
Social Services.
JAN HANSEN, DIRECTOR, DIVISION OF PUBLIC ASSISTANCE,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, advised that the
2
amount of debt referenced in the proposed legislation
originates from closed cases estimated to total $500
thousand dollars.
Representative Brown questioned the number of persons who
would receive an overpayment as a result of an agency
mistake. Ms. Hansen replied that last year the number of
errors within the Aide to Families with Dependant Children
(AFDC) program was 204. These cases were due to client
error although 106 resulted from agency error. She stressed
that recuperation resulting from an agency error is mandated
by federal regulations.
Representative Parnell asked if there are other
administrative agencies which allow a "Rite of Execution"
from the court, following a judgement on the Permanent Fund
Dividend allocation.
THOMAS C. WILLIAMS, DIRECTOR, PERMANENT FUND DIVISION,
DEPARTMENT OF REVENUE, responded that there are other
agencies with that authority; the Alaska Commission on Post
Secondary Education has an identical provision. In
addition, Child Support Enforcement can service an
administrative levy to collect. Representative Parnell
asked which agencies supercede one another. Mr. Williams
stated that the Alaska Statutes define a priority listing.
Representative Hanley clarified the order of prioritization
according to Alaska Statute 43.23.065 (b).
1. Child support.
2. Court ordered restitution.
3. Student loans.
4. Court ordered fines.
5. Debt owed to an individual agency.
Representative Hanley understood that the proposed
legislation would be placed in category #5; Mr. Williams
agreed.
Representative Brown asked the length of time the Department
of Health and Social Services would need to determine if an
overpayment had been made. Ms. Hansen explained it usually
occurs quickly, although time limits are established which
the Department cannot exceed. The limits have been
established by federal mandates.
Ms. Hansen pointed out that in order to turn an account over
for garnishment, the Department is required to notify the
person, giving them the opportunity to appeal and repay the
overpayment back. The length of the process depends on the
volume of claims being handled by the Department.
3
Representative Brown asked if the proposed legislation would
affect the Adult Public Assistance Program (APA). Ms.
Hansen replied that the legislation was drafted with
collection terms for the Food Stamp and AFDC programs.
Currently, overpayment are not being collected on the APA
program. In the future, if overpayment claims were to be
established in that program, then it would be affected.
Representative Martin questioned the fiscal costs to the
Permanent Fund Division. Mr. Williams explained that
processing costs would depend upon the number of levies
received. Ms. Hansen pointed out there would be no extra
charge to the Department of Health and Social Services.
Currently, there is a staff person whose function it is to
collect overpayment.
Representative Hanley MOVED to report HB 331 out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTIONS, it
was so ordered.
HB 331 was reported out of Committee with a "do pass"
recommendation and with two fiscal notes by the Department
of Health and Social Services dated 2/22/94 and a zero
fiscal note by the Department of Revenue dated 2/22/94.
HOUSE BILL 397
"An Act relating to the power to levy property taxes in
second class cities."
DAVID KAMRATH, STAFF, REPRESENTATIVE OLBERG, provided the
Committee with Amendment #1 [Attachment #2] which would
limit second class cities to a two percent tax of the
assessed value of the property to be taxed.
Co-Chair MacLean asked why Amendment #1 would repeal Section
could be raised through city council meetings as presently
done in first class cities. Representative Navarre pointed
out, under this authorization, raising taxes to the new
level would create a disincentive for organizing a new
borough. He added his concern regarding the individual city
councils raising second class taxation to twenty mils.
Mr. Kamrath responded to Representative Martin's inquiry
regarding "personal and real property taxation" explaining
that personal property could be taxed only by a decision of
the local municipality. The proposed legislation would
guarantee local government taxation decisions.
4
(Tape Change, HFC 94-42, Side 2).
Representative Hanley pointed out that repealing Section #2
as proposed in Amendment #1, would delete local flexibility.
Co-Chair Larson commented on the potential effect of
taxation by local communities with oil and gas pipeline
property within their bourndaries.
Representative Brown understood that the oil and gas
pipeline property tax was a separate statute from regular
property taxation. Co-Chair Larson replied that all oil and
gas facilities would be assessed by the same policy,
however, organized municipalities may tax up to twenty (20)
mils. Representative Brown pointed out that the proposed
legislation would allow a second class city to further use
state revenues from pipeline property tax. She advised that
the fiscal note should be revised to indicate the impact on
state revenue.
Representative Martin recommended the continuance of levy of
taxes "by referendum" which would allow citizens a voice in
the taxation. Mr. Kamrath stated that first class cities
and home rule districts have the potential of milage rate
being raised to thirty (30) mils. He added that city and
borough governments establish the rate. It is not directly
decided by the local citizens through their election of
those officials. Representative Martin pointed out that
Anchorage has established a milage rate cap.
Representative Martin MOVED to adopt Amendment #1.
Representative Martin MOVED TO AMEND Amendment #1 by
restoring [BY REFERENDUM] to the context of Section #1.
Representative Hoffman OBJECTED to the amendment to
Amendment #1.
Representative Parnell asked if second class cities would
have a prohibition of funds. Co-Chair Larson explained that
citizens decide this issue from a voting power.
Representative Hoffman stated that second class cities
generally do not consider imposing a property tax because of
the amount of paper work imposed to collect the extra funds.
Committee members continued discussion regarding the levy of
property taxes by first and second class cities.
Representative Hanley pointed out that Amendment #1 would
provide more authority in delegating taxation to the
individual city councils.
Co-Chair MacLean advised that the amended Amendment #1 might
not allow the local government proper authority to provide
required services and revenues.
5
Co-Chair Larson summarized the amended amendment which would
propose a referendum to allow the city council the ability
to levy taxes, increasing the amount from five (5) mils to
twenty (20) mils. Representative Hoffman urged the
Committee to oppose the amendment. Representative Martin
felt that the amendment would take away local referendum
powers of the second class cities. Co-Chair MacLean
interjected her concern with the effect on education for the
second class cities as most of them are REAA's.
Representative Navarre OBJECTED to the MOTION to amend
Amendment #1.
A roll call vote was taken on the MOTION.
IN FAVOR: Hanley, Martin, Parnell, Therriault.
OPPOSED: Foster, Grussendorf, Hoffman, Navarre,
Brown, MacLean, Larson.
The MOTION FAILED (4-7).
Representative Martin MOVED to RESCIND his MOTION to adopt
Amendment #1. There being NO OBJECTION, it was so ordered.
Representative Hoffman MOVED to adopt Amendment #1.
Discussion followed regarding Amendment #1. Co-Chair
MacLean felt that to incorporate as a second class city, a
petition should be signed by the voters when the property
tax proposal is placed on the ballot. She MOVED to delete
Section #2 of Amendment #1. Mr. Kamrath explained that the
Division of Legal Service's Director, Tamara Cooke,
recommended including Section #2 of the amendment.
CRYSTAL SMITH, ALASKA MUNICIPAL LEAGUE (AML), JUNEAU, stated
that the Alaska Municipal League supports the intent of SS
HB 397, which would remove the limitation on the power of
second class cities to levy property taxes. She spoke to
the amendment asking for more time to consider the changing
circumstances which the amendment would initiate. She
understood that the amendment would preclude any future
adjustment to service the cap.
Co-Chair MacLean clarified that the amendment would provide
a petition for the new second class cities incorporation and
it would be on the property tax ballot proposal. The
legislation would allow second class cities to determine the
appropriate property tax rate and remove arbitrary limits on
their ability to generate revenue locally.
Co-Chair Larson requested the bill be held in Committee in
6
order to provide time for the Alaska Municipal League to
provide the Committee information regarding:
1. The ramifications of repealing the levy of
property taxes by referendum; and
2. Restrictions for cities at the time of
incorporation which would result in levies and
types of taxes.
Co-Chair MacLean MOVED to RESCIND the motion to delete
Section #2 of Amendment #1 until AML has the opportunity to
consider the above concerns.
Representative Brown requested more detailed information on
the loss of any revenue to the State as a result of the
proposed legislation.
Representative Parnell interjected his concern with the
legality of the "policy call" to be made by Committee
members on the referendum issue.
SS HB 397 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 3:00 P.M.
HOUSE FINANCE COMMITTEE
February 28, 1994
1:30 P.M.
TAPE HFC 94 - 42, Side 1, #000 - end.
TAPE HFC 94 - 42, Side 2, #000 - end.
CALL TO ORDER
Co-Chair Larson called the House Finance Committee meeting
to order at 1:30 P.M.
PRESENT
Co-Chair Larson Representative Hoffman
Co-Chair MacLean Representative Martin
Vice-Chair Hanley Representative Navarre
Representative Brown Representative Parnell
Representative Grussendorf Representative Therriault
Representative Foster
ALSO PRESENT
Representative Cynthia Toohey; Jan Hansen, Director,
7
Division of Public Assistance, Department of Health and
Social Services; Thomas C. Williams, Director, Permanent
Fund Division, Department of Revenue; Crystal Smith, Alaska
Municipal League, Juneau; David Kamrath, Staff,
Representative Harley Olberg.
SUMMARY
HB 331 An Act relating to claims on permanent fund
dividends for defaulted public assistance
overpayment.
HB 331 was reported out of Committee with a "do
pass" recommendation and with two fiscal notes by
the Department of Health and Social Services dated
2/22/94 and one zero fiscal note by the Department
of Revenue dated 2/22/94.
HB 397 An Act relating to the power to levy property
taxes in second class cities.
HB 397 was held in Committee for further
consideration.
HOUSE BILL 394
"An Act relating to limited partnerships; and providing
for an effective date."
Co-Chair Larson informed the Committee that the sponsor of
HB 394 requested that it be waived from this Committee. He
asked members to consider the waiver.
CONTRACT BETWEEN THE STATE OF ALASKA AND THE CAMBRIDGE
ENERGY RESEARCH
Co-Chair Larson provided the Committee with the contract
agreement between the State of Alaska, Senate Finance
Committee and the House Finance Committee and the Cambridge
Energy Research Associates, Inc. for an amount of $15,750
dollars. [Attachment #1]. Representative Larson requested
that the Committee review the contract for future
consideration.
SENATE BILL 206
"An Act relating to real property transfers."
Co-Chair Larson provided the Committee with a copy of SB 206
and asked if the Committee objected to introducing the bill
as a House Finance Committee bill. There being NO
OBJECTIONS, it was so ordered.
8
HOUSE BILL 331
"An Act relating to claims on permanent fund dividends
for defaulted public assistance overpayment."
REPRESENTATIVE CYNTHIA TOOHEY explained that HB 331 would
give the Department of Health and Social Services, the
administrative authority to garnish permanent fund dividends
of individuals who have received public assistance
overpayment and are delinquent in repaying that debt.
She added that frequently persons receiving overpayment
agree to repay the debt but fail to do so. If a person is
still on public assistance the person's benefit can be
reduced as a means of collection, but if a person is off
assistance, collection becomes difficult. The Department
currently has over $1 million in delinquent debt.
Collection through the court system can be time consuming
and costly. HB 331 would allow the Department to pursue
collection in the same manner in which delinquent student
loans are pursued. Representative Toohey added that the
legislation is supported by the Department of Health and
Social Services.
JAN HANSEN, DIRECTOR, DIVISION OF PUBLIC ASSISTANCE,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, advised that the
amount of debt referenced in the proposed legislation
originates from closed cases estimated to total $500
thousand dollars.
Representative Brown questioned the number of persons who
would receive an overpayment as a result of an agency
mistake. Ms. Hansen replied that last year the number of
errors within the Aide to Families with Dependant Children
(AFDC) program was 204. These cases were due to client
error although 106 resulted from agency error. She stressed
that recuperation resulting from an agency error is mandated
by federal regulations.
Representative Parnell asked if there are other
administrative agencies which allow a "Rite of Execution"
from the court, following a judgement on the Permanent Fund
Dividend allocation.
THOMAS C. WILLIAMS, DIRECTOR, PERMANENT FUND DIVISION,
DEPARTMENT OF REVENUE, responded that there are other
agencies with that authority; the Alaska Commission on Post
Secondary Education has an identical provision. In
addition, Child Support Enforcement can service an
administrative levy to collect. Representative Parnell
asked which agencies supercede one another. Mr. Williams
9
stated that the Alaska Statutes define a priority listing.
Representative Hanley clarified the order of prioritization
according to Alaska Statute 43.23.065 (b).
1. Child support.
2. Court ordered restitution.
3. Student loans.
4. Court ordered fines.
5. Debt owed to an individual agency.
Representative Hanley understood that the proposed
legislation would be placed in category #5; Mr. Williams
agreed.
Representative Brown asked the length of time the Department
of Health and Social Services would need to determine if an
overpayment had been made. Ms. Hansen explained it usually
occurs quickly, although time limits are established which
the Department cannot exceed. The limits have been
established by federal mandates.
Ms. Hansen pointed out that in order to turn an account over
for garnishment, the Department is required to notify the
person, giving them the opportunity to appeal and repay the
overpayment back. The length of the process depends on the
volume of claims being handled by the Department.
Representative Brown asked if the proposed legislation would
affect the Adult Public Assistance Program (APA). Ms.
Hansen replied that the legislation was drafted with
collection terms for the Food Stamp and AFDC programs.
Currently, overpayment are not being collected on the APA
program. In the future, if overpayment claims were to be
established in that program, then it would be affected.
Representative Martin questioned the fiscal costs to the
Permanent Fund Division. Mr. Williams explained that
processing costs would depend upon the number of levies
received. Ms. Hansen pointed out there would be no extra
charge to the Department of Health and Social Services.
Currently, there is a staff person whose function it is to
collect overpayment.
Representative Hanley MOVED to report HB 331 out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTIONS, it
was so ordered.
HB 331 was reported out of Committee with a "do pass"
recommendation and with two fiscal notes by the Department
of Health and Social Services dated 2/22/94 and a zero
fiscal note by the Department of Revenue dated 2/22/94.
10
HOUSE BILL 397
"An Act relating to the power to levy property taxes in
second class cities."
DAVID KAMRATH, STAFF, REPRESENTATIVE OLBERG, provided the
Committee with Amendment #1 [Attachment #2] which would
limit second class cities to a two percent tax of the
assessed value of the property to be taxed.
Co-Chair MacLean asked why Amendment #1 would repeal Section
could be raised through city council meetings as presently
done in first class cities. Representative Navarre pointed
out, under this authorization, raising taxes to the new
level would create a disincentive for organizing a new
borough. He added his concern regarding the individual city
councils raising second class taxation to twenty mils.
Mr. Kamrath responded to Representative Martin's inquiry
regarding "personal and real property taxation" explaining
that personal property could be taxed only by a decision of
the local municipality. The proposed legislation would
guarantee local government taxation decisions.
(Tape Change, HFC 94-42, Side 2).
Representative Hanley pointed out that repealing Section #2
as proposed in Amendment #1, would delete local flexibility.
Co-Chair Larson commented on the potential effect of
taxation by local communities with oil and gas pipeline
property within their bourndaries.
Representative Brown understood that the oil and gas
pipeline property tax was a separate statute from regular
property taxation. Co-Chair Larson replied that all oil and
gas facilities would be assessed by the same policy,
however, organized municipalities may tax up to twenty (20)
mils. Representative Brown pointed out that the proposed
legislation would allow a second class city to further use
state revenues from pipeline property tax. She advised that
the fiscal note should be revised to indicate the impact on
state revenue.
Representative Martin recommended the continuance of levy of
taxes "by referendum" which would allow citizens a voice in
the taxation. Mr. Kamrath stated that first class cities
and home rule districts have the potential of milage rate
being raised to thirty (30) mils. He added that city and
11
borough governments establish the rate. It is not directly
decided by the local citizens through their election of
those officials. Representative Martin pointed out that
Anchorage has established a milage rate cap.
Representative Martin MOVED to adopt Amendment #1.
Representative Martin MOVED TO AMEND Amendment #1 by
restoring [BY REFERENDUM] to the context of Section #1.
Representative Hoffman OBJECTED to the amendment to
Amendment #1.
Representative Parnell asked if second class cities would
have a prohibition of funds. Co-Chair Larson explained that
citizens decide this issue from a voting power.
Representative Hoffman stated that second class cities
generally do not consider imposing a property tax because of
the amount of paper work imposed to collect the extra funds.
Committee members continued discussion regarding the levy of
property taxes by first and second class cities.
Representative Hanley pointed out that Amendment #1 would
provide more authority in delegating taxation to the
individual city councils.
Co-Chair MacLean advised that the amended Amendment #1 might
not allow the local government proper authority to provide
required services and revenues.
Co-Chair Larson summarized the amended amendment which would
propose a referendum to allow the city council the ability
to levy taxes, increasing the amount from five (5) mils to
twenty (20) mils. Representative Hoffman urged the
Committee to oppose the amendment. Representative Martin
felt that the amendment would take away local referendum
powers of the second class cities. Co-Chair MacLean
interjected her concern with the effect on education for the
second class cities as most of them are REAA's.
Representative Navarre OBJECTED to the MOTION to amend
Amendment #1.
A roll call vote was taken on the MOTION.
IN FAVOR: Hanley, Martin, Parnell, Therriault.
OPPOSED: Foster, Grussendorf, Hoffman, Navarre,
Brown, MacLean, Larson.
The MOTION FAILED (4-7).
Representative Martin MOVED to RESCIND his MOTION to adopt
Amendment #1. There being NO OBJECTION, it was so ordered.
Representative Hoffman MOVED to adopt Amendment #1.
12
Discussion followed regarding Amendment #1. Co-Chair
MacLean felt that to incorporate as a second class city, a
petition should be signed by the voters when the property
tax proposal is placed on the ballot. She MOVED to delete
Section #2 of Amendment #1. Mr. Kamrath explained that the
Division of Legal Service's Director, Tamara Cooke,
recommended including Section #2 of the amendment.
CRYSTAL SMITH, ALASKA MUNICIPAL LEAGUE (AML), JUNEAU, stated
that the Alaska Municipal League supports the intent of SS
HB 397, which would remove the limitation on the power of
second class cities to levy property taxes. She spoke to
the amendment asking for more time to consider the changing
circumstances which the amendment would initiate. She
understood that the amendment would preclude any future
adjustment to service the cap.
Co-Chair MacLean clarified that the amendment would provide
a petition for the new second class cities incorporation and
it would be on the property tax ballot proposal. The
legislation would allow second class cities to determine the
appropriate property tax rate and remove arbitrary limits on
their ability to generate revenue locally.
Co-Chair Larson requested the bill be held in Committee in
order to provide time for the Alaska Municipal League to
provide the Committee information regarding:
1. The ramifications of repealing the levy of
property taxes by referendum; and
2. Restrictions for cities at the time of
incorporation which would result in levies and
types of taxes.
Co-Chair MacLean MOVED to RESCIND the motion to delete
Section #2 of Amendment #1 until AML has the opportunity to
consider the above concerns.
Representative Brown requested more detailed information on
the loss of any revenue to the State as a result of the
proposed legislation.
Representative Parnell interjected his concern with the
legality of the "policy call" to be made by Committee
members on the referendum issue.
SS HB 397 was HELD in Committee for further consideration.
ADJOURNMENT
13
The meeting adjourned at 3:00 P.M.
14
| Document Name | Date/Time | Subjects |
|---|