Legislature(1995 - 1996)
03/20/1995 01:40 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
MARCH 20, 1995
1:40 P.M.
TAPE HFC 95 - 57, Side 1, #000 - end.
TAPE HFC 95 - 57, Side 2, #000 - end.
TAPE HFC 95 - 58, Side 1, #000 - #486.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 1:40 P.M.
PRESENT
Co-Chair Hanley Representative Kohring
Co-Chair Foster Representative Martin
Representative Mulder Representative Navarre
Representative Brown Representative Parnell
Representative Grussendorf Representative Therriault
Representative Kelly
ALSO PRESENT
Senator John Torgerson; Melinda Gruening, Staff,
Representative Joe Green; Representative Joe Green; Pam
Neil, President, Alaska State Chamber of Commerce,
Anchorage; Michael McGee, Chief, PFD Operations, Permanent
Fund Dividend Division, Department of Revenue; Kevin
Koechlein, Director of Public Safety for the Matsu Borough,
Matsu; Bob Griffith, Sgt., Anchorage Police Department,
Anchorage; Steven O'Connor, Chair, KPB 9-1-1 Advisory Board,
Kenai Peninsula Borough, Soldotna; Craig Lewis, Director of
Emergency Medical Services, Fairbanks; Kyle Parker, Staff,
Representative Gail Phillips.
SUMMARY
HB 32 An Act relating to administrative proceedings
involving a determination of eligibility for a
permanent fund dividend or authority to claim a
dividend on behalf of another.
CS HB 32 (FIN) was reported out of Committee with
a "no recommendation" and with a fiscal note by
the Department of Revenue dated 2/13/95.
HJR 1 Proposing an amendment to the Constitution of the
State of Alaska relating to repeal of regulations
by the legislature.
1
HJR 1 was reported out of Committee with a "do
pass" recommendation and a fiscal note by the
Office of the Governor dated 3/01/95 and a zero
fiscal note by the Department of Law dated
3/01/95.
SB 55 An Act repealing the sunset of the enhanced 911
emergency reporting systems.
SB 55 was reported out of Committee with a "do
pass" recommendation and with zero fiscal notes by
the Department of Commerce and Economic
Development dated 2/03/95, the Department of
Public Safety dated 2/03/95, and the Department of
Health and Social Services dated 2/03/95.
SENATE BILL 55
"An Act repealing the sunset of the enhanced 911
emergency reporting systems."
SENATOR JOHN TORGERSON testified in support of SB 55. He
explained the legislation would repeal the delayed Amendment
provisions of the enhanced 911 emergency reporting systems,
as enacted in 1993.
Senator Torgerson indicated that there is a review of
federal and/or state funding for enhanced 911 systems. He
ascertained that a funding source for a statewide system
would be remote. At the same time, there are enhanced 911
systems in the State which are operating, and the State must
be assured of the ability to assess a surcharge to ensure
operations. He added that those systems have proven to be a
viable and critical service. The bill, SB 55, would remove
the "sunset" provisions resulting from the 1993 legislation.
He continued, the effect of the bill would allow
municipalities to continue to impose a surcharge for 911
services after July 1, 1996, and which in turn would provide
for the critical service of the enhanced 911.
Senator Torgerson spoke in opposition to Amendment #1
provided by Representative Brown. [Copy on file].
Representative Brown provided the Committee with a brief
history of the system. She stated that Alaska currently
does not have a universal 911 system although communities
are moving forward in developing a more sophisticated system
of E911. At this time, ten percent of Alaska does not have
any type of emergency response system. A number of other
communities have a basic system, but not the enhanced
service.
2
Representative Brown suggested the benefits in providing
middle ground communities the opportunity to use the same
mechanism that the larger communities have in place for
taking advantage of the E911. That system would provide for
an adequate public safety response system within the State.
She suggested ways of funding the statewide response system
which would not effect the revenue source to the existing
municipalities. Amendment #1 would expand the definition of
who could use the funds for a basic system.
Representative Brown summarized that there would be no cost
to the State associated with the proposed amendment. At
this time, in order to have use of the E911 system, a charge
to the users is attached at a rate of $.50 cents per month
for the larger communities and $.75 cents per month for the
smaller communities. Those fees are collected by the phone
companies and then passed on to the local government. The
local governments in turn use those fees to purchase
equipment.
Representative Brown pointed out that the sunset on the
original legislation would have removed the authority to
make the change next year. The effect of the amendment
would allow those communities to use that fund for any
aspect of their basic enhanced response system.
Representative Brown pointed out that there has been no
municipal opposition to the concept proposed by Amendment
KEVIN KOECHLEIN, DIRECTOR OF PUBLIC SAFETY FOR THE MATSU
BOROUGH, MATSU, spoke in support of SB 55. He pointed out
that the most important service that government can provide
its citizens is emergency medical services and basic public
safety reporting systems. SB 55 would allow local
municipalities around Alaska to continue to provide enhanced
911 capabilities not only in the development and
installation of the systems but also the yearly operational
costs to the systems. He urged the Committee to implement
the proposed legislation promptly.
Representative Martin asked when the public would no longer
be responsible for paying the service charge. Mr. Koechlein
agreed that the municipalities should either reduce the
surcharge or reduce the tax dollars. He guaranteed that at
some point there would be a reduction to the public.
Representative Brown disagreed stating that the
municipalities would continue to use the surcharge in order
to maintain the dispatch services. She added that currently
Anchorage is spending over $5 million dollars per year for
costs associated with the response.
3
Representative Parnell elaborated that when the surcharge
was initially enacted, he understood that it would be
discontinued when the systems had been paid for. He asked
if the surcharge funded an entire communication system
currently in place or just the enhanced 911 system. Mr.
Koechlein replied that Matsu Borough understood that the
cost of the E911 system would include the software and
hardware for the mapping system and would also display a
primary response for the police or fire station. Also
included in that sum would be costs associated with the
telephone line charges, costs to maintain the data base and
the individual 911 tracking lines.
BOB GRIFFITH, SGT., ANCHORAGE POLICE DEPARTMENT DISPATCH
CENTER, ANCHORAGE, testified in support of SB 55. He added,
the Municipality of Anchorage generates $883 thousand
dollars revenue from the surcharge. Current expenditures
to support the 911 related service is $5.1 million dollars.
Representative Parnell asked what costs had been included in
the expenditure total. Mr. Griffith pointed out that 50% of
the dispatch operation costs amounted to over $5 million
dollars and did not include the operator expenses to
coordinate the response. Discussion followed between
Representative Parnell and Mr. Griffith regarding the
expenditures.
Representative Martin voiced his concern that the people of
Anchorage were paying for more than the E911 services. Mr.
Griffith reiterated that the costs to man the 24 hour
operation, which receives more than 12,000 calls per month,
plus the cost of operating the fire department, creates a $5
million dollar budget expenditure.
Representative Parnell agreed with Representative Martin
that the surcharge had been passed only to fund the cost of
the E911 acquisition. He asked if the acquisition costs had
been met and pointed out that the surcharge had not been
designed to pay for the personnel costs. Mr. Griffith
responded that the acquisition costs had been amortized over
a ten year period. In the meantime, the maintenance costs
associated with the E911 amounted to $48 thousand dollars
per year to maintain the municipal data base subscribers.
Mr. Griffith added that the legislation would provide
coverage of the associated telephone and personnel charges.
Representative Martin recommended extending the sunset.
Senator Torgerson stated that all municipalities were not
like Anchorage, pointing out that the Kenai Borough collects
$1000 dollars a month less than the cost of operation. He
urged members not to remove the sunset.
(Tape Change, HFC 95-57, Side 2).
4
STEVEN O'CONNOR, CHAIR, KPB 9-1-1 ADVISORY BOARD, SOLDOTNA,
stated that the Advisory Council supports the legislation to
repeal the sunset date, July, 1996. He added, following the
review recommendations from the Alaska Division of Emergency
Services, he encouraged Committee members not to adopt any
amendments.
Mr. O'Connor continued that the statewide E911 system as
currently proposed would be inappropriate. If the State
wants to develop an E911 system then they should do so with
general funds, a statewide user fee, or make that system
their priority as a capitol project to the Legislature. The
fee that the Kenai Peninsula Borough currently collects is a
user fee gathered to support the E911 system, not a tax.
Mr. O'Connor suggested creating a working committee upon the
passage of the legislation. That committee could consist of
technical specialists and E911 users to address
recommendations being made by the Alaska Division of
Emergency Services. He added that a statewide system should
come from the grassroots level and have input from local
jurisdictions and agencies.
CRAIG LEWIS, DIRECTOR, INTERIOR REGION, EMERGENCY MEDICAL
SERVICES, FAIRBANKS, encouraged the Committee to consider
Amendment #1 offered by Representative Brown. He advised
that the amendment would create a more fair situation for
rural areas to receive basic 911 services.
Co-Chair Hanley noted his concern that the amendment would
guarantee that the initial surcharge never be repealed. He
pointed out that the addition of the amendment would also
require a resolution and title change which could delay
passage of the legislation.
Representative Brown argued that the initial request for the
surcharge created conflicting intentions. She stated that
it would be used to "acquire, operate and maintain the
system". She pointed out that if a fee existed for larger
communities, other municipalities should be included, adding
that it would be appropriate for the local governments to
use the system.
Representative Brown MOVED to adopt Amendment #1.
Representative Mulder OBJECTED.
A roll call was taken on the MOTION.
IN FAVOR: Navarre, Brown, Grussendorf
OPPOSED: Parnell, Therriault, Kelly, Kohring,
Martin, Mulder, Hanley
5
Co-Chair Foster was not present for the vote.
The MOTION FAILED (3-7).
Co-Chair Hanley recommended the House Finance Committee
introduce at a later date legislation which would address
Representative Brown's concern as stated in the amendment.
Representative Mulder MOVED to report SB 55 out of Committee
with individual recommendations and with the accompanying
fiscal notes. There being NO OBJECTION, it was so ordered.
SB 55 was reported out of Committee with a "do pass"
recommendation and with zero fiscal notes by the Department
of Commerce and Economic Development dated 2/13/95, the
Department of Public Safety dated 2/13/95, and the
Department of Health and Social Services dated 2/13/95.
HOUSE JOINT RESOLUTION 1
Proposing an amendment to the Constitution of the State
of Alaska relating to repeal of regulations by the
legislature.
KYLE PARKER, STAFF, REPRESENTATIVE GAIL PHILLIPS, testified
in support of the proposed legislation. He state that the
proposal would place the constitutional amendment before the
voters of the State on the 1996 general election ballot.
The amendment would permit the Legislature to repeal
regulations promulgated by State agencies that do not
properly implement state statutes.
He added, although many regulations do conform to and
accurately implement the laws passed by the Legislature,
there are an increasing number of situations where
regulations imposed on the citizens of the State do not. In
many cases, legislative directives are ignored or
regulations are promulgated that go far beyond the scope of
what the Legislature intended.
Mr. Parker noted that this issue has been before the voters
three times before, and prior efforts to persuade the voters
to support similar amendments have failed. Nevertheless,
with a better presentation, clearer ballot language and the
current popular support for regulatory reform, the
constitutional amendment can become a reality.
Representative Grussendorf MOVED to report HJR 1 out of
Committee with individual recommendations and with the
accompanying fiscal notes. Representative Kohring asked the
impact of the proposed legislation. Mr. Parker remarked the
6
last time the legislation was before the voters was 1986.
He added with the new emphasis on the regulatory reform, the
voters will be more amenable to the legislation.
PAM NEIL, PRESIDENT, ALASKA STATE CHAMBER OF COMMERCE,
ANCHORAGE, testified in support of HJR 1.
There being NO OBJECTIONS, it was so ordered.
HJR 1 was reported out of Committee with a "do pass"
recommendation and with a fiscal note by the Office of the
Governor dated 3/01/95 and a zero fiscal note by the
Department of Law dated 3/01/95.
HOUSE BILL 32
"An Act relating to administrative proceedings
involving a determination of eligibility for a
permanent fund dividend or authority to claim a
dividend on behalf of another."
MELINDA GRUENING, STAFF, REPRESENTATIVE JOE GREEN, stated
that HB 32 would address a serious problem with the number
of appeals filed after an applicant is denied a Permanent
Fund Dividend (PFD), and the length of time that it takes to
process those appeals. She added, that processing such a
large number of appeals is costly as well as being unfair to
those who have a legitimate claim. Currently there are ten
permanent full time employees in the Permanent Fund
Division, yet there are still almost 10,000 appeals pending,
with no end in sight. In years prior to 1994, the
percentage rate of denials was significantly higher.
HB 32 would implement a $25 filing fee for individuals
protesting the denial of their PFD application. The
legislation would provide for a waiver of the fee for an
indigent individual who is a member of a family whose income
is equal to or less than the federal poverty guideline. The
filing fee would be refundable if the appeal is successful,
and non-refundable if the denial was upheld.
Representative Martin voiced his concern with appeals
submitted by military personnel and their families.
REPRESENTATIVE JOE GREEN acknowledged that the military
concern had been addressed in other pending legislation. He
added that the established criteria used to determine
eligibility sometimes appears to be subjective. Discussion
followed between Representative Green and Representative
Martin regarding a person's intent when trying to determine
eligibility.
7
Representative Brown asked Representative Green if filing an
appeal time limit had been considered. Ms. Gruening stated
that it would be more reasonable to institute a deadline
filing date. She added, approximately 54% of the denials
are labeled by the Department as "bright-line" issues.
Tape Change, HFC 95-58, Side 1).
Representative Therriault recommended a "family fee"
consideration for military and/or education concerns.
Representative Green explained that consideration had been
made.
MICHAEL MCGEE, CHIEF, PFD OPERATIONS, PERMANENT FUND
DIVIDEND DIVISION, DEPARTMENT OF REVENUE, noted that each
case is treated separately. Representative Martin asked who
would file for a child in a foster home. Mr. McGee advised
that the State Department of Health and Social Services,
Family and Youth Service Division, would be the responsible
party to file for the child. Each year, DHSS files about
2200 PFD cases.
Mr. McGee stated that the legislation would discourage
frivolous persons from filing an appeal, although,
legislative clean-up projects have exasperated the denial
system. He added that all applications containing missing
information were denied. There are certain policies being
implemented in DHSS that are eliminating some of the
problems with the PFD system. Mr. McGee concluded that with
the addition of a due date on appeals would create an unfair
situation for rural communities.
Discussion followed among Committee members regarding the
effective date of the bill. Representative Grussendorf
understood that it would be 90 days after passage of the
legislation. Representative Martin thought it would be July
1, 1995, the beginning of the new fiscal year. Mr. McGee
advised that administering the implementation would be
difficult and that it would create the need for a new
section to account for funds. Representative Mulder
recommended implementing the legislation on January 1, 1996.
Representative Brown commented that the correct language
would be technically challenging in order to provide this
calendar year's regulation inclusion. Representative Green
stated that he would be amenable to the change.
Ms. Gruening responded that appeals had been overturned
resulting from lack of information and are not considered
"frivolous". These are not the appeals addressed in the
proposed legislation. She stated that regulations could go
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into effect at the beginning of the next cycle.
Representative Parnell MOVED a conceptual amendment adding
the language: "The appeal fee set forth in AS 43.23.015G
should take effect January 1, 1996". Mr. McGee advised that
language would provide the Department ample time to write
the needed regulations. Representative Brown MOVED a
"friendly" amendment that regulations be adopted in the 1995
calendar year. She pointed out that the Department
currently does not have the authority without the additional
language. There being NO OBJECTION to the "friendly"
amendment, it was adopted. There being NO OBJECTION to the
amended amendment, it was adopted.
Representative Parnell MOVED to report CS HB 32 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTIONS, it was
so ordered.
CS HB 32 (FIN) was reported out of Committee with a "no
recommendation" and with a fiscal note by the Department of
Revenue dated 2/13/95.
ADJOURNMENT
The meeting adjourned at 3:35 P.M.
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