Legislature(1997 - 1998)
02/27/1998 03:25 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE February 27, 1998 3:25 p.m. MEMBERS PRESENT Representative Norman Rokeberg, Chairman Representative John Cowdery, Vice Chairman Representative Bill Hudson Representative Joe Ryan MEMBERS ABSENT Representative Jerry Sanders Representative Tom Brice Representative Gene Kubina COMMITTEE CALENDAR * HOUSE BILL NO. 458 "An Act relating to establishing a golf course alcoholic beverage license to allow sales of beer and wine; and providing for an effective date." - MOVED CSHB 458(L&C) OUT OF COMMITTEE HOUSE BILL NO. 400 "An Act combining parts of the Department of Commerce and Economic Development and parts of the Department of Community and Regional Affairs by transferring some of their duties to a new Department of Commerce and Rural Development; transferring some of the duties of the Department of Commerce and Economic Development and the Department of Community and Regional Affairs to other existing agencies; eliminating the Department of Commerce and Economic Development and the Department of Community and Regional Affairs; relating to the Department of Commerce and Rural Development; adjusting the membership of certain multi-member bodies to reflect the transfer of duties among departments and the elimination of departments; and providing for an effective date." - HEARD AND HELD HOUSE BILL NO. 304 "An Act relating to the location of the convening of the legislature in regular session; repealing provisions relating to student guests of the legislature; and providing for an effective date." - BILL HEARING CANCELLED (* First public hearing) PREVIOUS ACTION BILL: HB 458 SHORT TITLE: GOLF COURSE BEER/WINE LICENSE SPONSOR(S): LABOR & COMMERCE BY REQUEST Jrn-Date Jrn-Page Action 02/18/98 2363 (H) READ THE FIRST TIME - REFERRAL(S) 02/18/98 2363 (H) LABOR & COMMERCE 02/27/98 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 400 SHORT TITLE: DEPT OF COMMUNITY & ECONOMIC DEVELOPMENT SPONSOR(S): REPRESENTATIVES(S) KOHRING, Austerman, Barnes, Cowdery, Hodgins, Kelly, Mulder, Ogan, Ryan, Therriault, Vezey Jrn-Date Jrn-Page Action 02/12/98 2307 (H) READ THE FIRST TIME - REFERRAL(S) 02/12/98 2308 (H) L&C, FINANCE 02/23/98 (H) L&C AT 3:15 PM CAPITOL 17 02/23/98 (H) MINUTE(L&C) 02/25/98 (H) L&C AT 3:15 PM CAPITOL 17 02/25/98 (H) MINUTE(L&C) 02/27/98 (H) L&C AT 3:15 PM CAPITOL 17 WITNESS REGISTER JEFF BARNHART, Manager Palmer Municipal Golf Course and Russian Jack Springs Municipal Golf Course 231 West Evergreen Avenue Palmer, Alaska 99645 Telephone: (907) 745-4653 POSITION STATEMENT: Testified in favor of HB 458. DON DAPCEVICH, Executive Director Governor's Advisory Board on Alcoholism and Drug Abuse P.O. Box 110608 Juneau, Alaska 99811-0608 Telephone: (907) 465-8920 POSITION STATEMENT: Testified against HB 458. FRED JAMES P.O. Box 499 Palmer, Alaska 99645 Telephone: (907) 586-6459 POSITION STATEMENT: In favor of HB 458; testified in support of HB 400, suggested additional changes. DOUG GRIFFIN, Director Alcoholic Beverage Control Board 550 West 7th Avenue, Suite 350 Anchorage, Alaska 99501 Telephone: (907) 277-8638 POSITION STATEMENT: Testified on HB 458. DWIGHT PERKINS, Special Assistant Office of the Commissioner Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 Telephone: (907) 465-2700 POSITION STATEMENT: Testified on Section 65 of HB 400 which would move the Job Training Partnership Act Program into the Department of Labor from the Department of Community and Regional Affairs. MIKE KRIEBER, Legislative Administrative Assistant to Representative Vic Kohring Alaska State Legislature Capitol Building, Room 421 Juneau, Alaska 99801 Telephone: (907) 465-6863 POSITION STATEMENT: Answered questions on HB 400. SUSAN RODEHEAVER P.O. Box 1128 Kodiak, Alaska 99615 Telephone: (907) 486-7064 POSITION STATEMENT: Testified against HB 400, specifically against changes to the Head Start Program. ROBERT HALL P.O. Box 871906 Wasilla, Alaska 99687 Telephone: (907) 892-6557 POSITION STATEMENT: Provided testimony to Mr. Gifford supporting HB 400. DAN GIFFORD P.O. Box 874803 Wasilla, Alaska 99687 Telephone: (907) 373-5606 POSITION STATEMENT: Read Mr. Hall's testimony; testified in support of HB 400. KEVIN RITCHIE, Executive Director Alaska Municipal League 217 Second Street, Suite 200 Juneau, Alaska 99801 Telephone: (907) 586-1325 POSITION STATEMENT: Testified on HB 400. SYLVIA SULLIVAN, President Alaskans for a Just Society P.O. Box 2684 Valdez, Alaska 99686 Telephone: (907) 835-3729 POSITION STATEMENT: Testified against HB 400. ACTION NARRATIVE TAPE 98-20, SIDE A Number 0001 CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce Standing Committee meeting to order at 3:25 p.m. Members present at the call to order were Representatives Rokeberg, Cowdery, Hudson and Ryan. He noted the committee would be hearing HB 458 and HB 400; HB 400 had also been scheduled for Friday, March 6. HB 458 - GOLF COURSE BEER/WINE LICENSE Number 0093 CHAIRMAN ROKEBERG announced the committee's first item of business was HB 458, "An Act relating to establishing a golf course alcoholic beverage license to allow sales of beer and wine; and providing for an effective date." He stated HB 458 was coming in as a committee bill. He referred to information in the committee members' packets and explained that the City of Palmer and its golf course ran into a problem after the course's establishment a few years ago. Chairman Rokeberg said he believed what occurred was that approximately concurrent with the establishment of the Palmer Municipal Golf Course, a regulation was passed by the Alcoholic Beverage Control (ABC) Board for a municipal golf course license in 15 AAC 104.670, providing that a beer and wine license could be obtained by a municipal golf course with a minimum of nine holes covering 1,200 yards ["120 yards" stated on tape] for a biennial fee of $400. He indicated he believed the ABC Board had no real authority to do that, commenting there was a provision in the statutes which "gave them a little bit of a wrinkle there." Chairman Rokeberg said the problem with the license is that the beer and wine could be served in the building but not taken outside, which he indicated is a traditional golf course practice. He said that beverages are traditionally available at the "turn" between the ninth and tenth holes, and, in the more luxurious golf courses, beverages are often sold from a cart driven around the course. Number 0326 CHAIRMAN ROKEBERG indicated a golf course would have to have a "package store license" to sell alcohol to be taken outside, and therefore, in Alaska, a golf course would be required to have both a beer and wine license and a package store license to allow these traditional functions which revolve around a recreational golf course area. He believed the testimony would show the difficulties the City of Palmer has had with this particular issue, noting the issue first came to his attention almost two years ago; he had hoped something could have been worked out in the interim but it has not been. Chairman Rokeberg also commented on the proliferation of golf course development and planned golf course development in Alaska and worldwide. He said golf is a growing sport because of changing demographics and aging populations, and he indicated the bill, in addition to clearing up the statute to help out the municipal golf courses, is also designed to encourage the development of golf courses throughout the state which meet minimum standards. He said, "Also to make sure that it didn't come in the population count. ... As you all know, there are certain restrictions on the number of types of licenses that relate to population, so this bill exempts that." He stated a course had to be "championship in nature." Although only nine holes are required, half of a true championship course, he said it has to be a long course, referring to Version K and indicating the committee might want to adjust those standards slightly. Chairman Rokeberg noted it was questionable whether the Mendenhall golf course in Juneau would qualify. REPRESENTATIVE BILL HUDSON commented the new one would though. Number 0556 CHAIRMAN ROKEBERG referred to information in the packets, commenting that the Weeping Trout Sports Resort in Haines would also be too short to qualify because it wasn't championship in nature. He stated that it usually required a capital investment of well in excess of a million dollars to develop a true championship golf course of at least nine holes, noting HB 458 would be helpful to the economic development of the area and the building of golf courses. He stated there were approximately three witnesses waiting to testify. Number 0613 REPRESENTATIVE JOHN COWDERY confirmed that all the laws governing the sale of alcohol, including sale to minors, would still apply. Number 0623 CHAIRMAN ROKEBERG answered in the affirmative. He indicated Mr. Griffin from the ABC Board was available for questions via teleconference. Number 0631 REPRESENTATIVE COWDERY confirmed that possible existing restrictions regarding things like liquor licenses being close to schools had been considered. Number 0654 CHAIRMAN ROKEBERG noted those restrictions did exist and had been considered. Number 0671 REPRESENTATIVE JOE RYAN said that it appeared on the surface that anyone who consumes alcohol and plays golf would have a conflict of interest, noting that he did not do either and was declaring a non- conflict but was going to keep an eye on everybody else. Number 0682 CHAIRMAN ROKEBERG said he was a golf aficionado but could not imbibe alcoholic beverages and play golf simultaneously, noting he therefore had no direct conflict of interest. Number 0710 REPRESENTATIVE RYAN noted he had to go a House Health, Education and Social Services Standing Committee meeting for a bill. Number 0715 CHAIRMAN ROKEBERG stated the committee had a proposed committee substitute (CS) before it. Number 0721 REPRESENTATIVE HUDSON moved the adoption of Version L, proposed CS for HB 458, labeled 0-LS0507\L, Ford, dated 2/27/98. He asked unanimous consent. Number 0729 CHAIRMAN ROKEBERG requested that Representative Ryan return to the meeting at some point, commenting that it was the chairman's intention to move HB 458 that day unless there were substantial problems. He stated the proposed CS had been adopted, and indicated the change from the original bill was on page 2, line 31, where the golf course size had been increased from 2,500 to 2,950 yards. He said they believe the new Muskey Meadow golf course in Wrangell is 3,035 yards, indicating they want to make sure that this is adequate to make a distinction between a true golf course and a smaller "pitch and putt (indisc.)" or executive course. Number 0783 JEFF BARNHART, Manager, Palmer Municipal Golf Course (Palmer Golf Course) and Russian Jack Springs Municipal Golf Course, testified via teleconference from Anchorage. He referred to his letter which was in the bill packet, noting that the Palmer Municipal Golf Course had run into many financial difficulties until the current year, and had become a drain on the City of Palmer's finances. He said the course was turned over to a management group and is slowly turning around financially. Mr. Barnhart commented on the liquor restriction; beer and wine can be sold but cannot leave the building. In the situation of tournaments, noting they have had nearly 60 tournaments a season, beer, wine and sodas have been provided for entertainment and fund-raising purpose. However, he indicated, he cannot sell any beer or wine on the course and people end up bringing their own because of the way the law is currently written. He noted the alcoholic beverages are on the golf course, but he is not able to benefit or add any profit situation to the golf course. Number 0896 MR. BARNHART also indicated he cannot sell alcoholic beverages to the course's weekend or mid-week players who would like to take a beer or two with them out onto the course or buy one at the turn shack. Again, he has found these players simply bring it themselves without restriction from the golf course, noting that is how these players enjoy their golf and he certainly wants them to continue to enjoy their golf. However, he indicated this has put some economic strain on the golf course. Mr. Barnhart said there is another problem, although not as significant, which he sees as a control problem. He indicated he has no way of knowing, besides the standard indications of intoxication, how many alcoholic beverages a person may have consumed on the course if that person then goes into the building to drink after a golf game. He said they would have a better "handle" on alcohol consumption rates if they were the ones that were able to sell alcoholic beverages to these people, noting, again, that people are bringing it themselves. His understanding of the package store license is that (indisc.) could buy one, step outside the door and drink it with it still being lawful. He said that if he's capable of selling beer or wine to people, he can prohibit people from bringing it or introducing it to the golf course as is done at the state fair, noting introducing alcoholic beverages to the fairgrounds or leaving the partitioned premises with it is not allowed. Number 1013 MR. BARNHART said the other thing (indisc.) is that the bill is more open than just to municipal golf courses, indicating the sale of alcoholic beverages is such a large area of profit, and such an expected part of a golf course out of state or for golf course development in Alaska. He commented, "You'd definitely want to be able to sell the beer and wine. If you really, really had the investment, you'd probably take it beyond that, which would make a large investment into a much more expensive liquor license." Mr. Barnhart noted the cost of golf course development, commenting that the Palmer Golf Course was built for a little over $2 million and the land did not have to be purchased. He said a large development could easily run $5 million dollars and every avenue to generate the income would certainly be needed, noting that was generally his concern. He said he has had meetings with the Municipality of Anchorage regarding its desires for the Russian Jack Springs Golf Course, and does not know if it would ever be pursued, but he said if it was available, it could certainly become more of an issue for them to deal with. Mr. Barnhart stated the Palmer Golf Course definitely needs it, commenting that the golf course has probably drained off nearly $2 million dollars out of the city's funds and has created problems for many years. He said they have turned it around but will need help to continue growth as other golf courses are developed in the area, indicating Fort Richardson is expanding to an 18-hole course. He noted they need to be able to compete, or at least keep their heads above water, so that the golf course will be able to pay for itself and the Palmer taxpayers won't have to continue to support it. He commented that this was the ultimate goal. Number 1130 CHAIRMAN ROKEBERG asked if this problem could be solved if the golf course could purchase a package store license. Number 1137 MR. BARNHART replied in the affirmative. However, he said Palmer's demographics are so small and the political arena is such that the city's government does not want to compete against a private citizen for that particular license if it became available. He said the golf course had been rezoned and the boundaries of the city limits redrawn so the golf course would have to pay sales tax, indicating the city was very growth-oriented and did not want to be in competition with the public for the "growth money." Number 1183 CHAIRMAN ROKEBERG asked how many yards the Russian Jack Springs Golf Course was. Number 1200 MR. BARNHART replied that the Russian Jack course was "just shy" of 3,000 yards, depending on tee position. CHAIRMAN ROKEBERG asked if it would qualify at 2,950 yards from the tips. MR. BARNHART responded that length would require some reconfiguration, indicating a 2,500 yard requirement would allow the course to qualify. He noted that measurement is a tough one, as they had previously discussed, questioning what set of tees is the yardage measurement taken from. Number 1216 CHAIRMAN ROKEBERG noted he would say for the maximum yardage, to the benefit of the course. Number 1221 MR. BARNHART stated he thought 2,500 yards would be a very comfortable yardage for any developer, even for a nine-hole, executive-style course which he said is a popular style of course because of the lower amount of land needed. He indicated he thinks any developer would build a nice golf course if the minimum yardage was 2,500. Number 1241 CHAIRMAN ROKEBERG noted that the limits had been raised in the bill to 2,950 yards. MR. BARNHART said he thought that the tee configuration at the Russian Jack Springs Golf Course could be conformed to that. Number 1254 CHAIRMAN ROKEBERG indicated the intention was to only have truly real golf courses qualify rather than executive or "pitch and putt" courses. Number 1261 MR. BARNHART indicated the "mom and pop" backyard courses would be eliminated by this legislation, noting he thought that was the way to go. He said there wasn't the developmental money, for one. Mr. Barnhard indicated he thinks they need to use this as a pro- development tool. He said he thinks when they want to build more tourist attractions or more things for tourists to do, that these tourists should be going to a better-quality, nicer golf course, indicating he doesn't think a "mom and pop" backyard, four-hole course should be able to sell beer and wine. Mr. Barnhart said he thinks this is designed correctly and is pro-development. Number 1297 CHAIRMAN ROKEBERG asked Mr. Barnhart if he was a member of the Professional Golfers' Association of America (PGA). MR. BARNHART answered in the affirmative. CHAIRMAN ROKEBERG confirmed that Mr. Barnhart was a golf "pro." He noted the committee would go first to the two witnesses in Juneau. Number 1335 DON DAPCEVICH, Executive Director, Governor's Advisory Board on Alcoholism and Drug Abuse, came forward to testify. He said he has been instructed by the board to speak in opposition to HB 458. He noted he was an avid golfer and he speaks personally and professionally against this. He stated they just keep finding new ways to get new outlets to sell alcohol in Alaska. He said Alaska would have to increase its population to 1,575,000 people to conform to the existing rules with regards to distilled spirits. He reiterated that they keep finding more ways to sell more alcohol in Alaska, and they "keep burying the fruits of those sales by all the problems" they have in the criminal justice and court systems. Mr. Dapcevich noted his other concern was that this bill appears to limit access to golf by youth, if golf courses become one large beer and wine license facility. He said, from a public policy standpoint, he thinks this is poor public policy and would speak against the bill. Number 1416 CHAIRMAN ROKEBERG referred to Mr. Dapcevich's statement that he was an avid golfer and asked him if all the real golf courses he has played have served alcoholic beverages. Number 1426 MR. DAPCEVICH replied that most do serve alcoholic beverages. Number 1431 CHAIRMAN ROKEBERG asked if he could name one that didn't. Number 1435 MR. DAPCEVICH recalled he has played several courses in Arizona and California that do not allow alcohol on the course but do sell it in the bars. Number 1446 CHAIRMAN ROKEBERG noted Mr. Dapcevich indicated the Governor's Advisory Board on Alcohol and Drug Abuse had instructed him to oppose HB 458. He asked if the board had met on this very bill. MR. DAPCEVICH replied that the board had considered all the bills in its winter meeting, noting HB 458 was the last bill the board had considered at its meeting in Juneau the previous week, on the day this bill had been introduced. Number 1468 CHAIRMAN ROKEBERG stated he was glad the board had a chance to look at it. He asked Mr. Dapcevich if he drank alcohol. MR. DAPCEVICH answered in the negative. Number 1489 CHAIRMAN ROKEBERG called Fred James to testify, indicating Mr. James had signed the witness register for HB 458 and was from Palmer. FRED JAMES indicated he wished to testify on HB 400, but said he liked HB 458. Number 1507 REPRESENTATIVE HUDSON asked if the advisory board's control over licenses was principally relating to population, and if that was the biggest concern, that this does not relate to population or proximity to schools and things of that nature. Number 1536 MR. DAPCEVICH said the board's concern is that the number of outlets for alcohol in the state keep growing "by leaps and bounds" far beyond the intent or the spirit of the statute. He indicated this is just another one of those special conditions making alcohol even more accessible in Alaska, which already has a significant alcohol problem. Number 1558 REPRESENTATIVE HUDSON noted the outside recreational aspect of golf, indicating he thought this seemed to be of less social harm than many of the other situations where alcoholic beverages were available. Number 1585 MR. DAPCEVICH responded he would not suggest that a beer and wine license was more detrimental than a distilled spirits license in terms of the social harm it does. Number 1600 REPRESENTATIVE COWDERY said it was his observation that golfers sometimes drive for good distances to play golf. He said golfers could presently bring their own alcoholic beverages to the course, asking if that was correct. Number 1628 CHAIRMAN ROKEBERG replied they could to the Palmer Golf Course but he thought it varied, depending on the particular course's rules and regulations, and it was very customary to restrict the use of personal alcohol on courses. He referred to Mr. Barnhart's testimony, indicating he believed that if the Palmer Golf Course had this license, it would be able to better control alcohol consumption on the course because the course management could prohibit the importation of alcoholic beverages not purchased from the clubhouse or golf course. Number 1658 REPRESENTATIVE COWDERY indicated there seemed to be a freedom issue as well. He noted he was not normally a beer consumer, mentioning restaurants. He said if people go to the golf course and this is what they want, it was more of a "freedom thing" and they should give this ability to the course owners to enhance that. Number 1701 CHAIRMAN ROKEBERG responded: 1) that it was clear in their statutory scheme that the state has a compelling interest to regulate alcohol consumption; and 2) the rules and regulations of a private, public or quasi-public premise rules of conduct (indisc.) that each individual organization and private club, for example, should be able to make up their own rules, noting he didn't think there were any infringements on right here. He asked Mr. Dapcevich if the advisory board had ever supported the creation of a new type of liquor license. Number 1741 MR. DAPCEVICH answered, "Absolutely not." Number 1744 CHAIRMAN ROKEBERG noted, then, that the board's opposition to this license was not inconsistent with its ongoing policy to oppose any new outlets, et cetera. He asked if that was correct. MR. DAPCEVICH answered in the affirmative. Number 1753 CHAIRMAN ROKEBERG said then that the board did not make a distinction as to whether this license would be less harmful vis- - vis any other type of license. Number 1758 MR. DAPCEVICH replied only with respect to the matter of youth being served by golf courses and also being exposed to alcohol under this scenario, noting that makes it somewhat different from other licenses and more onerous. Number 1778 CHAIRMAN ROKEBERG noted he hoped that in this society this would not lead to further uncontrolled and improper abuse of alcoholic beverages. Number 1792 MR. DAPCEVICH clarified that the board was not prohibitionist; the board is opposed to any new licenses or any licenses that go beyond the spirit and the statute with regards to population base and alcohol sales in the state. Number 1806 CHAIRMAN ROKEBERG stated the committee would take testimony next from Doug Griffin, and appreciated any direction Mr. Griffin could give the committee on this bill. Number 1824 DOUG GRIFFIN, Director, Alcoholic Beverage Control Board, testified via teleconference from Anchorage [NOTE: FURTHER TESTIMONY SHOWS MR. GRIFFIN'S INITIAL STATEMENTS WERE BASED ON THE ORIGINAL VERSION OF HB 458, NOT THE PROPOSED CS]. He said the best way for him to approach it was from a technical, then policy, side. He said the city manager of the City of Palmer had come to the ABC Board in approximately August of 1996 addressing this issue, and the board at that time suggested the purchase of a package store license. He indicated, given the local politics and the availability of municipal funds, that may not have been an option. Mr. Griffin said there was no question that the board was "at loggerheads" with the Palmer Golf Course and the City of Palmer on that point. Based on that situation, he would have to say that the board still thinks a package store license is the best option for the golf course, commenting that it would also be in opposition to creating a new license and license type. He said the board tries to accommodate the needs of people to have access to alcoholic beverages within the existing license structure and it tries very much to use the current general license structure to meet needs as these needs arise. Mr. Griffin noted the authority in the regulation for creating a municipal golf course license had been mentioned. He indicated that license was created somewhat in response to a request from the City of Palmer when it started its municipal-type golf course, which was unique at time. He noted he was not the director of the ABC Board at that time, nor did he believe any of the current members were serving, but the statutory authority he would cite for that action by the board was AS 04.06.100, subsection (14), "creation of classifications of licenses or permits not provided for in this title;" which basically says that the board, by regulation, can create classifications of licenses or permits not provided for in that title. He noted, therefore, that the board has a fairly broad mandate in the creation of new licenses and probably could have done so when so requested by the City of Palmer a couple of years ago. He said the board had not chosen to do so because it felt that the licenses were out there. He indicated the board thought that if the City of Palmer felt this was necessary as a business decision, the license would be purchased, and he understood the financial hardship associated with this Mr. Barnhart mentioned. Mr. Griffin said he thought the board would be opposed to HB 458 just because it does create an additional license and a new type of license. Number 1972 MR. GRIFFIN indicated there were some real problems from a technical point of view. He said the board thinks an unintended consequence of the bill is that the entire golf course would become the licensed premise, and he thinks it is very clear that is what the bill does. He said, in effect, the area of the whole golf course was being made into a bar, and all kinds of statutes from Title 4 would come into play. However, he said, most importantly, anyone under the age of 21 would be legally prohibited from entering and remaining on the premises of the golf course unless accompanied by a parent or legal guardian - it would be the same as a minor entering and remaining in a bar. So, even though the ABC Board has the policy concerns, he said that is why the board, in its discussions with Palmer's city manager and others, thought the package store approach made the most sense. He noted this was what was used at the Anchorage Golf Course on O'Malley Road; a person could go in, buy a couple of beers and consume them on the course, and he commented that there is no legal prohibition in Alaska against consuming alcohol in public, assuming the person is of proper age and not creating any other kind of nuisance in doing so. He said that from a technical standpoint this solution would be less problematic for the people they were trying to assist. Mr. Griffin emphasized the board was opposed from a policy point, but, he said, if the committee really wanted to do this, in order to make this thing work better, he recommended the establishment of some type of municipal golf course package store license. He indicated limiting the license to beer and wine might make it a little easier. Mr. Griffin said he was available for questions, noting Bill Roche, Enforcement Supervisor, Alcoholic Beverage Control Board, was also available. Number 2128 CHAIRMAN ROKEBERG stated it had not been the committee's intent to limit youth golfing and he indicated clarification had been requested from the drafter to make certain the bill did not do these very things brought to the committee's attention by Mr. Griffin and Mr. Dapcevich. Chairman Rokeberg indicated he was asking Mr. Griffin if language replicating the beer and wine license and package store license would make him more comfortable. Number 2167 MR. GRIFFIN said that would accomplish what the committee was trying to accomplish; the board would still be opposed to it, but would be a lot less opposed. He noted a good point had been made, giving the example of a recreational site license approved by the ABC Board for the racetrack not too far from the Palmer Golf Course. He noted part of the rationale used was the same issue Mr. Barnhart had raised, the management of the premise would have more control. He indicated, however, he did not think it would be enough to convince the board to create another type of license. He said that aspect does make some sense if it went hand in hand with prohibiting people from bringing their own alcohol onto the course, noting he thinks management could do this as a matter of policy if they provided through their own package store. Number 2221 CHAIRMAN ROKEBERG stated Mr. Griffin said the board would oppose this on the policy it did not want to create another license but he suggested that they would not really be creating another license; they would be replacing an existing regulation that specifies a municipal golf course license which this bill would terminate. He said basically the regulatory license promulgated by the board would be replaced by a statutory license. Number 2247 MR. GRIFFIN said that was a good point. He noted the scope of the existing license the board created through regulation was being expanded, indicating he was not sure how the board would look on that. Number 2281 CHAIRMAN ROKEBERG stated, "I also suggest to you, sir, that by raising the yardage requirements up that -- the municipal regulation now is only 1,200 yards, we're - we're raising it up to a real substantial investment and a ... major construction-type project which would be intended to generate tourism and (indisc.) be an amenity to a community, and would - would necessitate the scope of activities including environmental impact statements and full public hearings before a course could even be built, and therefore would have a lot of public input on it." He indicated it would not be somebody's back yard "pitch and putt" ["20 acres" stated on tape]. Although he noted Mr. Griffin was correct in that HB 458 expanded the scope of the license from the municipality to anybody in the public or private sector and he appreciated Mr. Griffin's testimony. Chairman Rokeberg stated they had requested the bill drafter, Mike Ford, to inform the committee of his intentions in the drafting of the bill. Chairman Rokeberg noted the instructions had been given to draft the bill in such a manner that it would meet the criticisms which have been raised, and he said, either Mr. Ford would convince then all, or the bill would be held over until the language was corrected, because they did not want the bill to contain anything which would restrict the use of a recreational facility by youth. Chairman Rokeberg indicated to Mr. Ford that Version L had been adopted by the committee but concern had been raised by page 2, new section 04.11.115, "(a) A golf course license authorizes the licensee to sell and serve beer and wine for consumption on licensed premises located on a golf course." The chairman noted it went on to say in subsection (c) on line 21 "... and a detailed diagram that clearly identifies a proposed area that constitutes the licensed premises. ...", and testimony from the ABC Board and other sources states that a boundary is being delineated which would be analogous to one big bar. Number 2428 MR. GRIFFIN stated that they had just received a copy of the proposed CS and he thinks it may address those issues. He requested a minute to review the current version. Number 2443 CHAIRMAN ROKEBERG asked Mr. Ford what he did to fix this. TAPE 98-20, SIDE B Number 0007 MIKE FORD, Attorney, Legislative Legal and Research Service, Legislative Affairs Agency, came forward to testify. As he understands the problem, they do not want to describe licensed premises as being the golf course, so in this version he has attempted to restrict the licensed premises to a building or a motor vehicle on the golf course, not to the entire course. He said if that has not been achieved, changes can be made, but he believes the proposed CS should solve that problem of having an entire golf course become off limits to people under age 21. Number 0052 CHAIRMAN ROKEBERG said that then the problem becomes that all good golfers want to encourage walking, not riding golf carts, and he asked what happens to the walking golfer under Mr. Ford's definition on page 3. Number 0070 MR. FORD replied he didn't see that as being a problem. A person could still walk up to the motorized vehicle and partake if the person chose, but the person would not be required to ride a cart. Number 0085 CHAIRMAN ROKEBERG asked if a person could carry an open container down the fairway and consume it. Number 0102 MR. FORD confirmed that Chairman Rokeberg was referring to walking with a can of beer. He said he would like to hear what the ABC Board thought of that, commenting that if it was necessary, new language could be created. Number 0131 CHAIRMAN ROKEBERG noted that was a constituent element everyone saw there, indicating the situation where the entire boundaries of the golf course is described as the licensed premise because of the impact on underage people. Number 0150 MR. FORD clarified that they were talking simply about sales of beer, not possession. He noted Chairman Rokeberg was speaking of possession walking on the course. Mr. Ford said possession is currently allowed and that shouldn't be a problem. Number 0180 MR. GRIFFIN stated that was correct. He indicated they had looked the proposed CS over and it appears the committee has addressed the board's concern about the licensed premise issue, noting he thinks Mr. Ford has clearly done that. He stated he thinks this is okay and the technical aspect has been addressed. Number 0224 CHAIRMAN ROKEBERG noted there had been earlier testimony stating there was no prohibition on the consumption of alcohol, with the restriction of no open container in a motor vehicle. Number 0248 There was a brief discussion between Chairman Rokeberg, Mr. Ford and Mr. Griffin regarding the term "motor vehicle," and whether it was necessary to add the language "unlicensed" to indicate that the motor vehicle in question on the golf course would most likely be a motorized golf cart. Number 0368 MR. GRIFFIN stated he did not think there was going to be a problem, noting he did not think they need to call it an unlicensed vehicle. He indicated the vehicle clearly needed to be operated safely and in way that was not hazardous to anyone. Number 0432 CHAIRMAN ROKEBERG thanked Mr. Ford for his testimony. He stated that concluded the testimony on HB 458; the committee would hold the bill over for a short period and proceed with the meeting agenda. HB 400 - DEPT OF COMMUNITY & ECONOMIC DEVELOPMENT Number 0451 CHAIRMAN ROKEBERG announced the committee's next item of business would be HB 400, "An Act combining parts of the Department of Commerce and Economic Development and parts of the Department of Community and Regional Affairs by transferring some of their duties to a new Department of Commerce and Rural Development; transferring some of the duties of the Department of Commerce and Economic Development and the Department of Community and Regional Affairs to other existing agencies; eliminating the Department of Commerce and Economic Development and the Department of Community and Regional Affairs; relating to the Department of Commerce and Rural Development; adjusting the membership of certain multi-member bodies to reflect the transfer of duties among departments and the elimination of departments; and providing for an effective date." Number 0459 DWIGHT PERKINS, Special Assistant, Office of the Commissioner, Department of Labor (DOL), came forward to testify. He noted the committee had heard a great deal of testimony over the last few days and he had prepared a statement on behalf of the DOL to read into the record: In Section 65 ... of HB 400 it states that the Department of Labor shall operate the federally-funded employment and training programs under 29 U.S.C. 1501 through 1792(b), the Job Training Partnership Act [JTPA]. The impact of this section would be to transfer the JTPA Program from Department of Community and Regional Affairs to Alaska Department of Labor. Alaska Department of Labor ... has had a long and productive partnership with the Department of Community and Regional Affairs, and as Alaska Department of Labor has not administered this program, the transition would protract the coordination and distribution of the JTPA grants, as well ... as the impact in close employer relationships that have been generated by the JTPA. Additionally, a mere program transfer would promulgate new leases for working space, remodeling and furniture and supply costs. In conclusion ... the Department of Labor envisions ... no immediate benefit to the public recipients of these services, both job seekers and employers, nor do we see any monetary savings from the JTPA transfer to Labor. MR. PERKINS noted that concluded his prepared statement. In addition, he indicated many people are under the impression DOL is in the business of job training, stating the department really is not. He said that when a person is unemployed, it is the DOL's mission to get that individual back into the workforce as soon as possible to avoid depletion of the unemployment insurance (UI) trust fund. He referred to previous testimony, noting that, as they have heard, the missions are considerably different. Commenting on the relationship DCRA has with the rural communities throughout the state, Mr. Perkins said the DOL feels it would probably be in the best interest for JTPA to remain where it currently is. Number 0664 CHAIRMAN ROKEBERG asked if the Human Resource Investment Council was administered by the DOL. MR. PERKINS replied, "That is under the governor's office and they oversee the training programs, but that is not under the purview of the Alaska Department of Labor ...." Number 0695 CHAIRMAN ROKEBERG questioned Representative Kohring whether HB 400 affected the Human Resource Investment Council. Number 0715 MIKE KRIEBER, Legislative Administrative Assistant to Representative Vic Kohring, came forward to testify. He replied HB 400 does not do anything with the council except change the names of the commissioners to the new department. Number 0742 CHAIRMAN ROKEBERG asked Mr. Perkins if the DOL had any job training programs. MR. PERKINS responded that the department did not. He clarified the department did not do job training, it put people to work. He said DOL is the "dispatcher" getting requests from employers and providing qualified applicants to those employers. Mr. Perkins stated these other programs are about job training. Number 0770 CHAIRMAN ROKEBERG noted JTPA was under DCRA, but he questioned whether there were other job training programs in the Department of Health and Social Services (H&SS). Number 0780 MR. PERKINS responded that was getting outside his realm of expertise, noting he thought there might be some job training associated with the Division of Public Assistance but he was not sure. Number 0797 CHAIRMAN ROKEBERG indicated he thought there were job training programs related to monies from unemployment compensation funds (indisc.) surcharge tax. Number 0818 MR. PERKINS said he believed Chairman Rokeberg was referring to the State Training Employment Program (STEP) which he said will sunset this year, noting there is legislation that will hopefully be seen. He stated the department's role in that program is to collect the funds the employer sends in on employment security tax and transfer those funds to DCRA for distribution to training programs. Number 0845 CHAIRMAN ROKEBERG confirmed that program was administered by DCRA. He asked if it was under JTPA. Number 0853 MR. PERKINS answered in the negative, stating it was a separate program. Number 0887 REPRESENTATIVE RYAN asked where and to whom DCRA distributed that money. Number 0900 MR. PERKINS asked which type of money Representative Ryan was referring to. Number 0903 REPRESENTATIVE RYAN clarified he was referring to the employment security tax money collected by DCRA and transferred to DCRA. Number 0907 MR. PERKINS explained that was through the STEP Program. He noted the program is up for sunset review this year and that there is legislation which would extend it. He said .1 percent of the unemployment tax from working Alaskans goes into a fund for job training. He indicated Alaskans who have had a direct connection to the workforce within the previous three years qualify to receive these funds for employment training. However, Mr. Perkins indicated, that is all administered through the private industry councils, the vocational education technical schools, and labor organizations who qualify for those funds to train these individuals, upgrading their skills. Number 0963 REPRESENTATIVE RYAN indicated he would like to look into that bill when it came up. Number 0969 MR. PERKINS noted he would be happy to discuss it further if Representative Ryan wished. Number 0978 CHAIRMAN ROKEBERG commented the committee was disappointed to see the DOL was not in the job training program. Number 0997 SUSAN RODEHEAVER testified via teleconference from Kodiak. She stated, "I have been a Kodiak "representative" for 26 years. ... I have been aware of the Head Start Program for many years, but only recently become involved. I have a 3 1/2 year old daughter in (indisc.) home-based program. I am calling in concern to ... House Bill 400. I feel that consolidating these two departments is not the solution. The DCRA works with community-based development along with Head Start, nurturing all aspects of family life, not just education. Head Start's goal is to support the family with physical, mental and emotional support to keep our children health and safe. The DCED supports the community with job-training programs and works to maintain fair and consistent business regulations. Let's compare the departments saying, as an old fashioned married couple, with the husband contributing to financial support while the wife takes care of the household engineering department. Suddenly the husband dies, leaving the wife totally responsible for financial and household tasks. The wife has to do it, but the end result lacks the same quality and efficiency obtained when both did their separate jobs. The DCRA and the DCED support each other, they have the same goal of improving the community life but have different methods of reaching this goal. ... The DCRA provides physical, mental and emotional support for families; the DCED provides job training programs. Both of these departments are needed, if we try to heap the responsibility on one department, the workload will become too heavy and the important tasks will be shuffled aside. The Department of Commerce and Rural Development may not have much responsibility, but what about the Department of Health and Social Services to which day care assistance and Head Start will be shifted, and the Department of Labor to which the job training program [JTPA] will be added. How would these departments bear up under the extra load? Will more employees be hired for those departments, in the end not saving any money on labor costs? We are considering our children's future with this bill, so my question is, why should we change the system that works so successfully on the possibility that we may save money?" Number 1138 ROBERT HALL had to leave the Matanuska-Susitna Legislative Information Office (Mat-Su LIO) before he was able to testify. He left his testimony with Mr. Gifford. Number 1159 DAN GIFFORD testified next via teleconference from the Mat-Su LIO. He read Mr. Hall's handwritten statement supporting HB 400 to the committee. Mr. Gifford mentioned at various times that parts of Mr. Hall's statement were unreadable or difficult to make out. HB 400 represents a wonderful opportunity for the legislature to make a statement government is important to the people of Alaska. In these days of diminishing revenues the legislature has a clear option of protecting constituencies that support big, ineffective government and cut programs that help citizens, or you can reduce upper-level bureaucracy, rearrange government to more efficiently and effectively deliver services and programs which, in this case, would result in protecting $1 million worth of programs that have a clear benefit to the people. The Department of Commerce and DCRA are ideal candidates for this merger. In the days when the state had large revenues, this was a luxury the states could afford. No longer can any state (indisc.) agency stand on its own merits of whether or not it is a good idea. In the absence of budget cutting and budget deficits, legislatures must make tough comparative decisions. How does protecting entrenched bureaucracy compare to cutting funding for the actual programs? When any legislative effort suggests reducing funding, there is always opposition from those affected. In this case, the upper-level bureaucracy may make an impassioned plea to protect their camp. As legislators, you're (indisc.-- sentence). Good government is not glamorous. The people of Alaska has an interesting view. We have good, dedicated state employees that are hamstrung by a (indisc.) bureaucracy. The view point of "it's not broke, don't fix it" ignores the benefits of efficient and effective government. Yet, HB 400 delivers better services but allows other programs the financial freedom not to be cut. This bill, in some small way, also allows the "legislator" to restore credibility to state government. Number 1364 CHAIRMAN ROKEBERG noted to Mr. Gifford that the committee would be happy to have a typed copy of Mr. Hall's testimony for the written public record. Number 1386 MR. GIFFORD said he would contact Mr. Hall about this, and he continued with his own testimony. Mr. Gifford said HB 400 looked like a very good bill from his limited amount of research. There might be some structural problems which might need to be addressed, but, overall, he thought that combining DCED and DCRA would be a very good thing since there was duplication in the areas of rural economic development; rural small business development and fisheries; rural tourism; infrastructure scoping, planning and funding; rural sanitation projects and funding; energy development; electrical utility assistance; and also assistance to economically- distressed regions. He noted these were all duplications that could be put into one agency, and, from just doing some rough math, he understands that would save at least $1 million a year by cutting upper management. Mr. Gifford said it would still be manageable for one commissioner, indicating the new department would have less than 500 people and he thinks there are several departments in state government larger than that. He commented the benefit was that programs would not have to be cut, and perhaps even more money might be made available for those same programs. He said HB 400 seems to simply streamline government and make it more efficient. Number 1487 MR. GIFFORD noted dropping oil prices, revenue and oil production on the North Slope. He said if things went badly for oil prices, and other things, state agencies might have to cut services and positions in a "meat-axe" type of way. It made more sense to him to economize in an orderly, slow, careful way, to say nothing of what it might do to Alaska citizens depending on those programs for assistance. Mr. Gifford indicated HB 400 would be advantageous to rural development in the DCRA if rural development was in the same department with DCED which currently handles most of the funding processing. He noted it would make a lot of sense to have that money available in the same department, indicating this would tend to streamline things and make them work better. Mr. Gifford stated he had a question for Mr. Perkins from the DOL, "I was under the impression that this basically keeps JTPA right where it is with the Department of Labor, or either adds the Department of Labor to - to do this, and I'm - I'm a little mystified as what the problem is, because I just read over Section 65 and it quite clearly states that the Department of Labor runs JTPA ...." Mr. Gifford noted that concluded his testimony. Number 1584 REPRESENTATIVE COWDERY indicated he had asked Commissioner Irwin from DCRA at the February 23 hearing if he would possibly take a cut in pay to come into the new department and help with the transition. Representative Cowdery said he thought the commissioner had stated there was no one in the other department who could do what Commissioner Irwin was doing. Representative Cowdery said the impression he received was that the commissioner would not be interested in any salary cut to assist with this consolidation. Representative Cowdery stated that was what he thought this bill was about: management and this consolidation. He stated he would hope that both departments would give and take a little bit to end up with what was best for the public, noting that was more or less an editorial comment and he had only been present for part of that previous meeting. Number 1650 CHAIRMAN ROKEBERG stated the committee would go back to testimony in Juneau. Number 1664 FRED JAMES came forward to testify in Juneau. He said he completely supported HB 400, with one interesting qualification. Mr. James said it was a wonderful bill, he thinks it was consistent with the reason most of the Republicans were placed in office in 1994 all over the country, which he said was the just cry to cut government. He stated government was too big and bloated and they needed to get rid of some of it, and in many peoples' opinions, a lot of it. Mr. James commented that, while this process of cutting $50 or $60 million a year has been slow, he understood from gossip that the incentive to cut was being "piddled away" this year because of the prospect of the election. He commented that, therefore, HB 400 was excellent because it gave them a means of trimming and didn't remove any of the services provided. He said he really liked the bill and noted it was because of two deep impressions he received as a younger man. The first was an example of government waste he saw while doing his army basic training. He watched a large amount of ammunition shot off for no purpose because a second lieutenant was too lazy to go through the record- keeping to log the unshot ammunition. Number 1774 MR. JAMES said his second deep impression was several years later at the University of Hawaii when he was studying economics. He learned about the notion of "make do, make work" - the theoretical idea of one person digging holes and another one, always employed by the government, filling those holes up. He said one digs, one fills, and it is photographed with the big show that this is taxes in action, and the fact that it is "make work" is concealed. Mr. James said those two notions of "make-work" and government waste have stayed with him ever since, stating, "And as a taxpayer, I ... represent all notions of conserving what our treasure is, and that's what this bill is all about, so I - I completely back it, with this exception. And that is, that instead of moving, or ... taking all these little divisions within the departments, and the bill calls for them simply to remain in place and be administered by one commissioner instead of two. Well the notion is noble, but I would think that it would be more proper to go further than that. We should not just move them, but we should think very seriously about cutting them, because some of them are very much like digging holes and then filling them up." Number 1842 MR. JAMES indicated one of the ones he had in mind was the Division of Tourism, which he said takes government tax dollars, the people's money, and gives it to one sector of the private economy instead of another. He said the Division of Tourism was functioning as a bank and he commented that the act of the government giving out money to certain people for one reason or another, which a lot of these little departments did, was crowding out the proper function of banks and other private lending institutions. He indicated this was why bank rates went up. Mr. James also noted a secondary reason was that when private people gave away money, they were more careful with it because they were profit-oriented. He said the Division of Tourism could be phased- out and its management could find honest jobs in the private sector. He noted that then some of the complaints that were raised could be averted, commenting that the problem of computer compatibility had been brought up. Mr. James said that problem became nothing when compared to the "Y-2000" problem which every computer in the world was going to have to face in less than two years, and which, he said, would have to be solved first. He indicated this problem would be solved by someone in the private sector. Number 1931 MR. JAMES also referred to the complaint that certain buildings were ADA (Americans with Disabilities Act) incompatible. He stated the solution was make the buildings compatible, using open contracts so that it could be done efficiently. He commented that another criticism had been that work would increase over a short time because of reorganization. Mr. James said with the abolishment of the Division of Tourism and the reduction of "division of licensure" (Division of Occupational Licensing) by eliminating a number of businesses requiring licensure such as "haircutting" and he used the analogy of getting government off the backs of the people, not as many bureaucrats would be needed to administer all these programs. He commented he thought the funniest complaint of all was about the full-time space organizer. He indicated that, because of the trimming, the deputies would have extra time, and said they should be assigned the task of reorganizing the space, noting that if they cut and trim, there would be space to organize. Number 2009 CHAIRMAN ROKEBERG said he believed the testimony had been for two space planners. Number 2013 MR. JAMES said he thought Representative Kohring had been dead right when he commented two days previously that the commissioners were like rabbits running scared in front of headlights. Mr. James said he has seen it time and time again, indicating that all the testimony against HB 400 was from people were benefitting from the current system. He said they were complaining that their "cushy" jobs were being cut, but they would get more productive jobs in the private sector. Mr. James stated he would advise the committee to think about cutting whole agencies or whole departments or trimming others, noting they would have the everlasting thanks of many of the people. He said the Governor's office, as Representative Ryan commented the other day, has been noncommittal about HB 400, and he said he would go further to say that it has been arrogant, noting that those on the "third floor" are supposed to be public servants. He indicated he suggests that the legislature, the people who make the rules, ought to be the ones who call the shots, and the Governor's office ought to administer what the legislature sets up. Mr. James referred to a letter to the editor in the Anchorage Daily News, February 27, 1998, which was distributed to the committee, from a Palmer man, Jim Van Doren. Mr. James quoted, "His [Representative Kohring's] latest bill, HB 400, will consolidate two fat state government departments, get rid of their upper- management hierarchies and deliver the same services for far less cost. This should be music to our ears." Mr. James noted it was music to his, he urged the committee to do it, and he congratulated Representative Kohring for bringing it up. Number 2123 CHAIRMAN ROKEBERG asked if there were any questions for Mr. James. Number 2125 REPRESENTATIVE COWDERY commented that Mr. James had obviously heard the testimony from the last hearing and he asked Mr. James if he thought the departments were motivated to get behind this proposal or motivated for their own salaries. He noted Mr. James discussed reorganizations and the departments had talked about the reorganization. Representative Cowdery indicated he thinks the legislators do that every election and it seems to work out. He asked Mr. James if he thought the department heads or the departments were capable of making this merger, or did he think they were not motivated, or not interested. Number 2156 MR. JAMES said he thought, from the comments made by the departments, that they were protecting their (indisc.). He said their bottom-line motivation was higher salaries and good, fat retirements with benefits. He indicated he couldn't say exactly what the members of the departments or department heads thought, but he could almost predict what they would say, noting he believed they were conjuring up every single reason they could think of to make it look as if HB 400 was impractical and would hurt people. He referred to the two female witnesses who testified against moving the Head Start Program to H&SS. He noted that, while Representative Kohring did not want any changes, there might be some administrative changes which could be worked out in the details. He stated, "Already they're reading long prepared documents, who - who do think ... gave them those documents? They didn't think 'em up." He noted he had prepared his own documents and stated he was saying this because that was the way he felt, and that was his political philosophy. He said, "They're protecting themselves and we should see clearly that this is the case." Number 2221 CHAIRMAN ROKEBERG said there were two other witnesses signed up to testify, but he indicated the committee would pause the public hearing on HB 400 in order to bring HB 458 back before the committee. HB 458 - GOLF COURSE BEER/WINE LICENSE Number 2236 CHAIRMAN ROKEBERG indicated HB 458 was back before the committee. He stated he would entertain a motion on Version L, the proposed CS for HB 458 labeled 0-LS0507\L, Ford, dated 2/27/98. Number 2243 REPRESENTATIVE COWDERY made a motion to move Version L. Number 2245 CHAIRMAN ROKEBERG asked if there were any objections. There being none, he stated CSHB 458(L&C) was so moved with the attached zero fiscal note and individual recommendations. HB 400 - DEPT OF COMMUNITY & ECONOMIC DEVELOPMENT Number 2266 CHAIRMAN ROKEBERG announced the committee would take HB 400 back up. He noted Representative Kohring has been in attendance, and Pat Poland, Director, Division of Municipal and Regional Assistance, DCRA, had been standing by for questions in Anchorage. Chairman Rokeberg called Mr. Ritchie forward, indicating the committee had the Alaska Municipal League's February 25 letter. Number 2280 KEVIN RITCHIE, Executive Director, Alaska Municipal League, came forward to testify in Juneau. He noted the Alaska Municipal League was not a state agency. He said it worked with municipalities, many of which did work with DCRA, noting a lot of what the league does is help with the same types of issues: savings, efficiency. He indicated the league supported any effort toward efficiency in that direction, but it cautioned the committee members to carefully consider each one of the changes being recommended. He said many of the members had obviously done things like this in private business, noting it is not always quite as straight forward as it seems. Mr. Ritchie referred to the Alaska Municipal League's letter which had been made available to the committee, and indicated the league is concerned on behalf of its members because the Constitution of the State of Alaska mandates only one agency, a local government agency [Article X, Section 14 of the Constitution of the State of Alaska reads: "Local government agency. An agency shall be established by law in the executive branch of the state government to advise and assist local governments. It shall review their activities, collect and publish local government information, and perform other duties prescribed by law."]. Mr. Ritchie said, according to his reading, since there is only one agency mandated, the framers of the constitution felt it was an extremely important function of government, and would be in the long term. He said the only point he would make about a local government agency was that government has become quite a bit more complicated than it used to be, and the need for an agency to provide advice and support to local governments is more and more important. He commented on the need for support with federal environmental rules, federal mandates of many kinds, state mandates and personnel law. Mr. Ritchie suggested the committee talk to some of the people involved in the constitutional discussions of the necessity of a local government agency, noting that if this agency was set aside in a separate department as a sub-program, it was probably not going to get the same type of attention and emphasis intended by the constitution. Number 2360 REPRESENTATIVE COWDERY commented on the low price of oil, and indicated that times for cut-backs come up, and this is such a time. He said the agencies the Alaska Municipal League deals with would still be in place and the composition of upper management really didn't matter, noting the league was more interested in the programs, and he didn't think the programs would be impacted in this change. He said he had asked Representative Hudson how many departments had existed 20 or 25 years ago, noting there had been fewer. Representative Cowdery said he hasn't done the research but he stated, "The departments have split up and went just the opposite of what we're trying to do it back into one now. And I - I, just a question, do you, I just -- if you could elaborate on why you think ..." [TESTIMONY INTERRUPTED BY TAPE CHANGE] TAPE 98-21, SIDE A Number 0001 MR. RITCHIE stated, "... I used to - to be a city manager for a fairly large organization, and having gone through that exercise a number of times, some of the things that seem like they'll save money may not particularly save money." He noted one example in the late 1970s, where the City and Borough of Juneau (CBJ) had been approached by a private management corporation who guaranteed the assembly the company could save the CBJ $1 million in its organization. Mr. Ritchie said the company did save $1 million in organization, coming back for $35,000 or $40,000 with a list of positions to eliminate, but he noted there were some significant impacts beyond that. He said he would caution that it was a difficult thing to do, but not that it couldn't be done. In terms of whether or not the agency would be effective if made more of a sub-program, he said he could not say what would happen, but he noted that when a program was moved down the line in terms of importance, it often received less organizational time. He said the state constitution seemed to put a great deal of importance on a local government agency from a policy as well as a service standpoint, by saying there was only one real, constitutionally- required agency, and this might be important for the committee to think about in its deliberations. Number 0153 REPRESENTATIVE COWDERY noted he came from the private sector also. He referred to his company and the changes that were necessary as the economy changed. Representative Cowdery said his company hadn't been very large, at times it had made $10 million a year in the heydays. Different sections had dealt with different functions: private houses, subdivision development, highway work. As the economy changed, he said it was necessary to merge these functions. He noted his company still performed these functions, it did whatever it was competitive to do, but it had to merge to remain competitive. He indicated he felt these were just necessary things that needed to be done. Representative Cowdery commented that he had been working for the Municipality of Anchorage during the oil price collapse. He said when Mayor Fink took over, the banks were failing, peoples' homes had depreciated, people couldn't afford to pay for them, and some were leaving the state. However, Representative Cowdery said, it struck him most that the city employees he worked with didn't know there was a problem because they were still getting paid. He indicated he believed the majority of employees in the two merged departments would "dig their heels in," noting that when they cut back in the municipality they ended up with a better product, and served the public better. He said Representative Kohring's idea was not new, it had been thought out a couple of years previously. Representative Cowdery indicated it was time to make some hard decisions which might not be popular with everyone, recalling that some of the municipality employees had said they didn't really care about lay-offs because they were so far up on the seniority list. He stated he really has strong feelings that this is proper, timely, and is something that should be done. Number 0536 CHAIRMAN ROKEBERG noted Mr. Ritchie's letter and testimony brought the committee's attention to Article X, Section 14, of the Alaska State Constitution. Chairman Rokeberg commented that it only said "agency," not investing it with the importance of a department. He asked Mr. Ritchie if he thought that if HB 400 passed, the existence of an agency, not necessarily a division, within the merged department would fulfill the constitutional mandate? Number 0606 MR. RITCHIE answered he believed they had a lot of latitude to interpret what the constitution says, noting he is certain it has been done many times since its writing, and he thinks that agency may have been moved around quite a bit. He stated the Alaska Municipal League's point, and something that needed to be carefully considered, was that does this agency still do the types of things as well as or as envisioned by the framers of the constitution. He indicated further research in this area might be worthwhile. Number 0649 CHAIRMAN ROKEBERG indicated the committee would look at the minutes of the constitutional convention. Number 0667 REPRESENTATIVE RYAN noted there was an axiom in government that when departments were merged, the bigger one usually ate the little one. He asked Mr. Ritchie if the composition of the municipal league, and how it was funded, had changed in the past ten years since Representative Ryan had participated in it. He noted the disparity in dues had been phenomenal, although each member had only one vote. He said Fairbanks had been paying something like $50,000 a year while Fort Yukon was paying $250, noting the smaller communities were the majority. Number 0720 MR. RITCHIE indicated this was not still the case. REPRESENTATIVE RYAN asked how the league was currently put together. Number 0723 MR. RITCHIE answered that the maximum dues paid by any organization were $37,000 and that the minimum dues have come up considerably for the smaller organizations. He said his bosses were the ten regional representatives, noting it was much like the legislature with population as one of the key factors. He commented that Anchorage and Fairbanks both had their own seats. Mr. Ritchie indicated the key decisions on policy matters were made by the ten regional representatives, but he noted Representative Ryan was correct in that the municipalities each received one vote, which, he said, is the same as the vast majority of other municipal leagues in the United States. He noted the reason for this is that municipal leagues, by their nature, have to be consensus organizations. He indicated that if an issue causes a significant split between any configuration of the municipalities, it would not really be an appropriate statewide issue to go forward with on a consensus opinion. Number 0798 CHAIRMAN ROKEBERG thanked Mr. Ritchie for his testimony, noting the committee would take testimony from one more witness in Valdez, thanking her for her patience. Number 0834 SYLVIA SULLIVAN, President, Alaskans for a Just Society, testified next via teleconference from Valdez. She noted her patience ran out about an hour ago and commented that her testimony would be brief. She asked how many legislators were present. Number 0880 CHAIRMAN ROKEBERG stated there were four House members present. He said the committee had received Ms. Sullivan's 13-page faxed statement and it had been distributed to the committee members. Number 0871 MS. SULLIVAN noted the fiscal note on HB 400 had been requested and asked if it had been prepared. Number 0880 CHAIRMAN ROKEBERG replied that the committee had not received the fiscal note. Number 0898 MS. SULLIVAN said she was not sure if the legislators had a chance to read her letter. She stated she was a paralegal of 15 years, noting her statement consisted of a six-page letter and the documentation she was referring to. Ms. Sullivan stated HB 400 was unconstitutional and believed she proved that in her letter. She said every piece of legislation must pass constitutional muster. Ms. Sullivan indicated the drafting attorney on HB 400 was Terri Lauterbach, and said her letter indicates she called Legislative Legal and Research Services to get the legal opinion on HB 400 but was refused. She indicates she was told that Legislative Legal and Research Services were confidential, which Ms. Sullivan said was "baloney." Number 0980 CHAIRMAN ROKEBERG noted Ms. Sullivan said she would (indisc.) a legal opinion and he asked her what legal opinion she was talking about. Number 0989 MS. SULLIVAN said she found it was interesting that so many legislators did not know there was a drafting manual for both the drafting of regulations and the drafting of legislation. Ms. Sullivan stated that, in the process of drafting legislation and regulation, the attorneys at legal services are mandated by the constitution and the Alaska Supreme Court to have a check-off list to make sure that when they give legislation back to the legislators it has passed constitutional muster, i.e. it is not illegal or unconstitutional. She noted from her experience as a paralegal she could see in two minutes that HB 400 was both illegal and unconstitutional because: 1) there was one more than one subject in this bill and a bill could not have more than subject; 2) page 11 of HB 400 listed a brand-new program, a brand-new Section. She said it was a brand-new law and was not even noted in the title. Ms. Sullivan said she stated in her letter that the reason the Alaska Supreme Court said the attorneys with legal services had to check-off the conformance of every piece of legislation was so no one would try to include something in legislation that should not be there. She noted that was illegal. Number 1096 CHAIRMAN ROKEBERG said he appreciated Ms. Sullivan's criticisms of the legislative legal agency, noting many members might sometimes share a lot of her opinions, but, given the time constraints, he asked her to keep to the subject of the bill, not the drafting manual. Number 1120 MS. SULLIVAN replied that if it is not legal, then it is invalid. Number 1125 CHAIRMAN ROKEBERG noted it was a matter of opinion and he appreciated her opinion, and asked her to speak to the bill on its merits. Number 1133 MS. SULLIVAN stated she wanted to update the committee, indicating she had received the two memorandums on HB 400 just before going to the LIO. She noted that on both of these pages Ms. Lauterbach said she had not checked for legal or technical review of the bill. Ms. Sullivan stated the top of the February 10 memorandum said, "Enclosed is your new final, ready-for-introduction bill." She indicated the Legislative Legal and Research Services attorneys are in trouble when they put a stamp of approval on the bill like that because they did not follow the mandate. Ms. Sullivan stated her association is absolutely against this, commenting that it has been going on two years now. She said what affects her association in particular is the business incentive training program, noting she indicated this in her letter and backed it up with the applicable federal law. She indicated federal monies cannot be used for the state work and training programs if those people are assigned to employers for training work, on the job training, or any of the like, noting that 84,000 unemployed Alaskans need jobs. She stated HB 400 was introduced so these employers could get free slave labor, commenting that all the bill sponsors were business owners. Ms. Sullivan asked if Representatives Brice or Kubina were present. Number 1243 CHAIRMAN ROKEBERG noted they were not there that day. MS. SULLIVAN said they were the only two that were not in business, and she said her organization was taking this farther because they believed this was intentional fraud. Number 1261 CHAIRMAN ROKEBERG interjected. He stated HB 400 did not speak to any substantive changes in the law, noting those were already existing laws. He indicated HB 400 merged various elements of government currently in statute now and it seemed she was straying from the title and subject matter of HB 400 because the merging of different functions was what was before the committee, not the merits of that particular program. Number 1286 MS. SULLIVAN asked for clarification on page 11, which said Section 21 was amended by adding a new Section 3 and telling how a business incentive training program would be set up. Number 1302 CHAIRMAN ROKEBERG noted that was in existing law and not before the committee in terms of its substance. Number 1308 MS. SULLIVAN said the entire bill was before the committee. Number 1303 CHAIRMAN ROKEBERG replied that was true; he said that if the committee chose to redraft any sections of the bill, it certainly would. However, he noted that was not the intention of HB 400, nor was it the intention of committee to review every element of existing statute as it related to the two departments; the purpose of this bill was to merge two departments and nothing else. Number 1328 MS. SULLIVAN stated that was not what the bill was doing and she commented that they would handle it from there, indicating she was sure a judge would agree. She referred to the material she had provided and the drafting manual, indicating she believed the bill was totally illegal. Number 1349 CHAIRMAN ROKEBERG noted Representative Kohring had no closing comments. HB 400 was held over. ADJOURNMENT Number 1354 CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Standing Committee meeting at 5:19 p.m.