Legislature(1997 - 1998)
03/30/1998 02:25 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 30, 1998
2:25 P.M.
TAPE HFC 98 - 82, Side 1
TAPE HFC 98 - 82, Side 2
CALL TO ORDER
Co-Chair Gene Therriault called the House Finance Committee
meeting to order at 2:25 p.m.
PRESENT
Co-Chair Hanley Representative Kelly
Co-Chair Therriault Representative Kohring
Representative Davies Representative Martin
Representative Davis Representative Mulder
Representative Foster
Representative Grussendorf
Representative Moses was absent from the meeting.
ALSO PRESENT
Senator Drue Pearce; Representative Joe Ryan; David Pree,
Staff, Representative Ryan; Bob Bartholomew, Deputy
Director, Income and Excise Audit Division, Department of
Revenue; Diane Mayer, Director, Governmental Coordination,
Office of the Governor; Sara Fisher-Good, Staff,
Representative Therriault.
SUMMARY
HB 28 "An Act repealing the Alaska Coastal Management
Program and the Alaska Coastal Policy Council, and
making conforming amendments because of those
repeals."
CSHB 28 (FIN) was REPORTED out of Committee with
"no recommendation" and with four zero fiscal
notes, one by the Department of Administration,
one by the Department of Community and Regional
Affairs, one by the Department of Environmental
Conservation; and one by the Department of Fish
and Game, and a fiscal impact note by the Office
of the Governor.
HB 252 "An Act relating to criminal records; relating to
notice about and registration of sex offenders and
child kidnappers; and amending Rules 11(c) and
32(c), Alaska Rules of Criminal Procedure."
CSHB 252 (FIN) was REPORTED out of Committee with
a "do pass" recommendation and with five fiscal
impact notes one by the Alaska Court System, two
by the Department of Public Safety, one by the
Department of Administration and one by the
Department of Corrections; and one zero fiscal
note by the Department of Law.
SB 240 "An Act repealing the tax on punch boards and
coin-operated amusement and gaming devices; and
providing for an effective date."
SB 240(title am)(reengrossed) was REPORTED out of
Committee with a "do pass" recommendation and with
a zero fiscal note by the Department of Revenue.
HOUSE BILL NO. 252
"An Act relating to criminal records; relating to
notice about and registration of sex offenders and
child kidnappers; and amending Rules 11(c) and 32(c),
Alaska Rules of Criminal Procedure."
Co-Chair Therriault provided members with a proposed
committee substitute for HB 252, work draft 0-LS0818\Z,
3/12/98 (copy on file). He also provided members with
Amendment 1 (copy on file). Amendment 1 reduces to 35 the
minimum number of days a defendant convicted of failure to
register, as a sex offender or child kidnapper would serve.
This is a reduction from 90 days. He explained that the
amendment is a response to fiscal concerns.
REPRESENTATIVE JOE RYAN stated that the amendment would not
affect the legislation's effectiveness and would reduce the
fiscal cost. Co-Chair Therriault noted that there would be
a reduction of approximately $87 thousand dollars to the
Department of Corrections.
DAVE PREE, STAFF, REPRESENTATIVE RYAN noted that the fiscal
note from the Alaska Public Defenders Agency contains a
reference to newspaper publication which is no longer
contained in the legislation.
Co-Chair Therriault MOVED to ADOPT Amendment 1.
Representative Ryan observed that the intent is to register
serious sex offenders. Failure to register would carry a
minimum sentence of 35 days. He stressed that the current
system is not working. Offenders are receiving suspended
sentences and still not registering. Co-Chair Therriault
pointed out that 35 days in jail would act as a deterrent.
Employment could be risked by the jail time. There being NO
OBJECTION, Amendment 1 was adopted.
Mr. Pree noted that the legislation currently requires the
information to be posted on the Internet.
Co-Chair Therriault observed that the adoption of Amendment
1 requires a new fiscal note by the Department of
Corrections. He added that the Alaska Public Defenders
Agency's fiscal note would be updated to reflect the current
version of the bill.
Representative Foster MOVED to ADOPT, work draft 0-LS0818\Z,
3/12/98 as amended by Amendment 1. There being NO
OBJECTION, it was so ordered.
Representative Foster MOVED to report CSHB 252 (FIN) out of
Committee with the accompanying updated fiscal notes.
CSHB 252 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with five fiscal impact notes one
by the Alaska Court System, two by the Department of Public
Safety, one by the Department of Administration and one by
the Department of Corrections; and one zero fiscal note by
the Department of Law.
HOUSE BILL NO. 28
"An Act repealing the Alaska Coastal Management Program
and the Alaska Coastal Policy Council, and making
conforming amendments because of those repeals."
Co-Chair Therriault noted that the Committee received work
draft 0-LS0189\T, 3/26/98 on 3/27/98.
Representative Davies questioned why coastal resource
districts are prohibited from incorporating by reference
state statutes and administrative regulations.
Co-Chair Therriault explained that state statutes and
regulations change. Districts are supposed to justify their
plans independently of state statutes and regulations. When
the statutes and regulations are the same, but
interpretation differs, the issue becomes who should
interpret the statutes and regulations.
DIANE MAYER, DIRECTOR, GOVERNMENTAL COORDINATION, OFFICE OF
THE GOVERNOR observed that the Coastal Policy Council Review
identified this area for amendment as the result of an
assessment. The assessment was completed at the end of
1996. They recommended that local coastal district programs
not repeat state laws or regulations by reference. Two
versions would exist if regulation referenced in a local
plan were changed by the agency. The state would have a new
version and the local district would have the old version.
By definition coastal districts receive deference in
interpreting their plans. Since the local district has
deference they would define state law. The Council felt
that the agency should be given deference on the
interpretation of state regulations, unless the district
demonstrated unique expertise. Districts argue points
relating to state laws or regulations based on their level
of professional expertise.
Representative Davies stressed that it is useful to adopt
statutes by reference in order to keep local requirements
current. He stressed that a coastal district may want to
have a definition in their plan that is consistent with
statute.
Ms. Mayer observed that there is one statewide coastal
management plan. Districts amend the plan for the
uniqueness of their area.
Co-Chair Therriault interjected that state statutes and
regulations form the base. Local areas are supposed to
bring an additional level of scrutiny.
Ms. Mayer agreed that local areas bring an additional look
of coastal resource uses and values from their perspective.
In response to a question by Representative Davies, Ms.
Mayer referred to seafood discharges from a seafood
processing plant in the Aleutians. The discharge
requirements are governed by the state's water quality
standard. The Department of Environmental Conservation
defines the mixing zone. Coastal districts can enhance
protections from the discharge. Standards would have to
relate to unique values or uses in the area of the
discharge. If state and local plans had the same numbers
they would be arguing over interpretation.
Ms. Mayer noted that when local districts are at the table
they have the ability to discuss what is on the table and
bring in their unique view.
In response to a question by Representative Davies, Ms.
Mayer observed that the Department of Environmental
Conservation defines mixing zone standards. A district
would have to have specific and acknowledged professional
expertise in the subject to address the need to reduce
concentrations. A compelling argument could be made based
on a traditional use of the area that needs to be protected.
If differences were maintained at the regional level it
would be brought to the director or commissioner level for a
policy call.
Representative Davies argued that there might be reasons to
adopt a state standard in a local plan. Ms. Mayer pointed
out that if the State has a definition or rule that the
local district wants to be operative, that it would be
operative. The prohibition is against incorporation of
state statutes or regulations into their policy. There can
be a reference section in the back to reference a state law
or regulation, "for purposes of discussion."
Ms. Mayer explained that values are defined through public
review and approval. She emphasized that the intent is not
to make the process less efficient. In response to a
question by Co-Chair Therriault, Ms. Mayer clarified that
the assessment by the Coastal Policy Council was conducted
over a year and a half.
Representative Davies MOVED to ADOPT Amendment 1 (copy on
file). He explained that the amendment further defines
"coastal waters". Amendment 1 would clarify that "coastal
water" means a water body in the coastal area, including
wetlands and the intertidal area."
SARA FISHER-GOOD, STAFF, REPRESENTATIVE THERRIAULT referred
to section 4, page 4, subsection (B). Co-Chair Therriault
observed that the legislation defines "coastal waters" as
"adjacent to tidal shorelines and that contains a measurable
quantity or percentage or sea water." He questioned why a
consistency determination should be required on a lake that
has no outflow. He stressed that the intent is to protect
coastal waters.
Representative Davies pointed out that birds that nest in
salt-water marshes sometimes travel a little inland.
Ms. Fisher-Good noted that the definition is a compromise
from the original proposal to shrink the coastal zone to the
zone of direct influence or interaction. The intent is to
allow boundaries to remain, but restrict the coastal
district's action relating to activities beyond the coastal
boundary. Consistency determinations would only be allowed
if the user activity has a direct and significant impact on
coastal waters. The intent is to have a strict definition
of coastal waters.
Ms. Mayer explained that the legislation would allow a
definition determination on salt water. She emphasized that
districts expanded boundaries to pick up anadromous fish
values and demonstrate an effect on the streams. She
recalled that the sponsor indicated that he would let the
expanded boundaries stand as long as reviews in expanded
areas were limited to effects in the streams. The
legislation currently restricts consideration to salt
waters. She maintained that the fish values, that the
program was designed to protect, are missing. She noted
that Amendment 1 would pick up the stream channels.
Co-Chair Therriault asserted that any activity in the stream
areas that require state permits would have public input.
State permits are designed to protect the ability of the
stream to act as a rearing area for anadromous fish.
Ms. Mayer stressed that the coastal management process
brings local knowledge and understanding. Districts and
their policies are brought to the table by consistency
determinations. She stressed that the issue is "letting
coastal management work in the area for which we have
defined the coastal boundary, to make it work."
Co-Chair Therriault noted that coastal districts could still
participate in the public process for the issuance of
permits. Ms. Mayer stressed that the coastal program
envisions that coastal districts would have standing in
those project reviews based on the policy in their plan that
may apply. She explained that the relationship of local
management to state management is analogous to the state
having a higher standard than the federal government.
Representative Davis spoke in support of the inclusion of
anadromous streams. He observed that the legislation makes
anadromous streams insignificant. Ms. Mayer noted that
Alaska's coastal program is broad.
A roll call vote was taken on the motion.
IN FAVOR: Grussendorf, Davies
OPPOSED: Davis, Foster, Martin, Therriault
Co-Chair Hanley and Representatives Kelly, Kohring, Moses
and Mulder were absent from the vote.
The MOTION FAILED (2-4).
Ms. Fisher-Good reviewed the fiscal note by the Office of
the Governor, Governmental Coordination. The fiscal note
requests $345 thousand dollars. It includes $5 thousand
dollars for program implementation; $10 thousand dollars for
required regulations; $100 thousand dollars for boundary
amendments; and $230 thousand dollars to remove reference to
statutes or regulations by reference. The Department of
Law's fiscal note is for $33.4 thousand dollars. She
recommended that the Department of Law's fiscal note be
zero. The Department of Law receives a universal service
agreement through the Division of Governmental Coordination.
She maintained that local districts should be able to
incorporate changes with their existing grants. She
observed that $93 thousand dollars in additional federal
dollars would be available as a Governor's budget amendment
for the Division of Governmental Coordination. She
recommended that the Division's fiscal note be reduced to
$58.4 thousand dollars. This would incorporate the
Department of Law's fiscal note. The Division would have
the flexibility to distribute the funding to other agencies.
(Tape Change, HFC 98 - 82, Side 2)
Ms. Fisher-Good maintained that the $93 thousand dollar
budget amendment along with $10 thousand dollars included in
the fiscal note would be sufficient to cover boundary
amendments.
Representative Martin MOVED to report CSHB 28 (FIN) out of
Committee with the accompanying amended fiscal notes.
Representative Grussendorf OBJECTED.
Representative Grussendorf expressed concern that the
legislation is not supported by any of the affected
municipalities. He questioned why the program is being
amended. He emphasized that communities in his district
support the program in its current version.
Co-Chair Therriault stressed that passage of the legislation
maintains a functional program. He asserted that the
program is not being gutted. He stressed that the right of
municipalities to participate is maintained.
Representative Davis acknowledged improvements to the
legislation. He noted his intent to work toward further
improvement. Co-Chair Therriault assured him that he would
continue to work with the Division and members to address
concerns.
A roll call vote was taken on the motion to move CSHB 28
(FIN) from Committee.
IN FAVOR: Davis, Foster, Kelly, Martin, Mulder, Therriault
OPPOSED: Moses, Grussendorf, Davies
Co-Chair Hanley and Representative Kohring were absent from
the vote.
The MOTION PASSED (6-3).
CSHB 28 (FIN) was REPORTED out of Committee with "no
recommendation" and with four zero fiscal notes, one by the
Department of Administration, one by the Department of
Community and Regional Affairs, one by the Department of
Environmental Conservation; and one by the Department of
Fish and Game, and a fiscal impact note by the Office of the
Governor.
SENATE BILL NO. 240
"An Act repealing the tax on punchboards and coin-
operated amusement and gaming devices; and providing
for an effective date."
SENATOR DRUE PEARCE spoke in support of SB 240. She
observed that SB 240 is an Act repealing coin operated
devices and the Punchboards Tax Program. The program began
in 1941 as a tax on amusement machines such as billiard
tables, jukebox machines and pinball games. The purpose of
the program was to raise revenues and track the number of
amusement games. Repeal of the program would lessen the
burden on 250 businesses in the state and free up 400 hours
of Department of Revenue staff time for higher priority
work. The amount of revenue lost from repealing the program
would be offset by money collected from increasing
compliance of larger tax programs.
Senator Pearce observed that, currently, 250 businesses
annually file a return and pay the appropriate amount of
tax. The current annual tax rate is $48 per device. The
rate has remained virtually unchanged since 1947. The
current program collects $90,000, shares $32,000 back to
local governments and costs $15,000 to operate. Thus the
net general fund revenue is $43,000. Department of Revenue
officials have discussed the program repeal with several
local government officials and the Alaska Municipal League.
All concurred that they could not afford to administer the
program locally for the small amount of revenue received.
She emphasized that repealing the program makes good
business sense and public policy. The Department of Revenue
presented the matter.
Representative Davies asked if consideration was given to
increasing the tax. Senator Pearce emphasized that the
program is expensive to administer. She did not think that
the original intent to track the number of games and raise
revenues was being served by the program.
In response to comments by Representative Grussendorf,
Senator Pearce pointed out that there would be a net general
fund loss of $43 thousand dollars. The Department of
Revenue would save 400 staff hours. The additional staff
time can be spent finding other tax payers who are not
complying with larger tax programs that bring in more money.
She anticipated that there would be a net gain from the
legislation.
BOB BARTHOLOMEW, DEPUTY DIRECTOR, INCOME AND EXCISE AUDIT
DIVISION, DEPARTMENT OF REVENUE clarified that the
legislation is at the request of the Department. He
observed that the Department has 17 tax programs. The
Department prioritized each program based on the amount of
money collected and the cost of the program. The Coin
Operated Devices Tax Program was at the bottom of the list.
The recommendation to eliminate the program was made in
response to budget reductions. He asserted that the
Department would be able to do a better job with remaining
programs.
Representative Davis spoke in support of the legislation.
Representative Martin MOVED to report SB 240(title
am)(reengrossed) out of Committee with the accompanying
fiscal note. There being NO OBJECTION, it was so ordered.
SB 240(title am)(reengrossed) was REPORTED out of Committee
with a "do pass" recommendation and with a zero fiscal note
by the Department of Revenue.
ADJOURNMENT
The meeting adjourned at 3:30 p.m.
House Finance Committee 9 3/30/98
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