Legislature(1995 - 1996)
01/31/1995 08:05 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE January 31, 1995 8:05 a.m. MEMBERS PRESENT Representative Jeannette James, Chair Representative Scott Ogan, Vice Chair Representative Joe Green Representative Ivan Representative Brian Porter Representative Ed Willis Representative Caren Robinson MEMBERS ABSENT None COMMITTEE CALENDAR * HB 74:"An Act relating to the assault of children by adults." PASSED OUT OF COMMITTEE HB 4:"An Act relating to absences from the state for purposes of determining residency under the permanent fund dividend program; and providing for an effective date." PASSED OUT OF COMMITTEE HJR 3:Proposing an amendment to the Constitution of the State of Alaska prohibiting the imposition of state personal income taxation, state ad valorem taxation on real property, or state retail sales taxation without the approval of the voters of the state. PASSED OUT OF COMMITTEE HB 70:"An Act relating to treatment of permanent fund dividends for purposes of determining eligibility for certain benefits; and providing for an effective date." PASSED OUT OF COMMITTEE * HB 81"An Act relating to the preservation of public facilities and to appropriations for annual maintenance and repair, periodic renewal and replacement, and construction of public facilities." HEARD AND HELD (* First public hearing) WITNESS REGISTER REPRESENTATIVE CON BUNDE Alaska State Legislature Capitol Building, Room 108 Juneau, AK 99801 Telephone: 465-4843 POSITION STATEMENT: Sponsored HB 74 REPRESENTATIVE PETE KOTT Alaska State Legislature Capitol Building, Room 432 Juneau, AK 99801 Telephone: 465-3777 POSITION STATEMENT: Sponsored HB 4 TOM ANDERSON, Legislative Aide to Representative Terry Martin Alaska State Legislature Capitol Building, Room 502 Juneau, AK 99801 Telephone: 465-3783 POSITION STATEMENT: Provided Information on HJR 3 ROD MOURANT, Administrative Assistant to Representative Kott Alaska State Legislature Capitol Building, Room 432 Juneau, AK 99801 Telephone 465-3777 POSITION STATEMENT: Discussed information relating to HB 70 ELMER LINDSTROM, Special Assistant Office of the Commissioner Department of Health and Social Services P.O. Box 119691 Juneau, AK 99802-0601 Telephone: 465-3030 POSITION STATEMENT: Provided Information HB 70 CURTIS LOMAS, Welfare Reform Coordinator Division of Public Assistance Department of Health and Social Services P.O. Box 11064 350 Main St., Room 317 Juneau, AK 99811-0640 Telephone: 465-3347 POSITION STATEMENT: Provided Information on AFDC Program JON SHERWOOD, Program Coordinator Office of the Commissioner Division of Medical Assistance Department of Health and Social Service Juneau, AK 99802-0601 Telephone: 465-3355 POSITION STATEMENT: Provided Information on PFD JOHN STEINMANN, Architect Division of Finance and Facilities Department of Education 801 West 10th Street, Suite 200 Juneau, AK 99801 Telephone: 465-2781 POSITION STATEMENT: Provided Information on HB 81 PREVIOUS ACTION BILL: HB 4 SHORT TITLE: PERMANENT FUND DIVIDEND ELIGIBILITY SPONSOR(S): REPRESENTATIVE(S) KOTT JRN-DATE JRN-PG ACTION 01/06/95 21 (H) PREFILE RELEASED 01/16/95 21 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 21 (H) STA, JUD, FIN 01/24/95 (H) STA AT 08:00 AM CAPITOL 102 01/24/95 (H) MINUTE(STA) BILL: HB 74 SHORT TITLE: ASSAULT BY ADULTS ON CHILDREN SPONSOR(S): REPRESENTATIVE(S) BUNDE, Green, Toohey, Kubina, JRN-DATE JRN-PG ACTION 01/06/95 40 (H) PREFILE RELEASED 01/16/95 40 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 40 (H) STATE AFFAIRS, JUDICIARY, FINANCE 01/20/95 106 (H) COSPONSOR(S): GREEN 01/20/95 106 (H) COSPONSOR(S): TOOHEY 01/23/95 119 (H) COSPONSOR(S): KUBINA 01/25/95 136 (H) COSPONSOR(S): B. DAVIS, ROKEBERG 01/31/95 (H) STA AT 08:00 AM CAPITOL 102 BILL: HJR 3 SHORT TITLE: VOTER APPROVAL FOR NEW TAXES SPONSOR(S): REPRESENTATIVE(S) MARTIN, Rokeberg, Bunde JRN-DATE JRN-PG ACTION 01/06/95 16 (H) PREFILE RELEASED 01/16/95 16 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 16 (H) STA, JUD, FIN 01/19/95 86 (H) COSPONSOR(S): BUNDE 01/24/95 (H) STA AT 08:00 AM CAPITOL 102 01/24/95 (H) MINUTE(STA) BILL: HB 70 SHORT TITLE: END PERMANENT FUND DIVIDEND HOLD HARMLESS SPONSOR(S): REPRESENTATIVE(S) KOTT, Green JRN-DATE JRN-PG ACTION 01/06/95 39 (H) PREFILE RELEASED 01/16/95 39 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 39 (H) STATE AFFAIRS, JUDICIARY, FINANCE 01/24/95 (H) STA AT 08:00 AM CAPITOL 102 01/24/95 (H) MINUTE(STA) 01/25/95 135 (H) COSPONSOR(S): GREEN BILL: HB 81 SHORT TITLE: PRESERVATION OF PUBLIC FACILITIES SPONSOR(S): REPRESENTATIVE(S) JAMES JRN-DATE JRN-PG ACTION 01/13/95 42 (H) PREFILE RELEASED 01/16/95 42 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 42 (H) STATE AFFAIRS, TRANSPORTATION, FINANCE 01/24/95 (H) STA AT 08:00 AM CAPITOL 102 01/24/95 (H) MINUTE(STA) 01/26/95 (H) STA AT 08:00 AM CAPITOL 102 01/26/95 (H) MINUTE(STA) 01/31/95 (H) STA AT 08:00 AM CAPITOL 102 ACTION NARRATIVE TAPE 95-5, SIDE A Number 000 CHAIR JEANNETTE JAMES called the meeting to order at 8:05 a.m. Members present at the call to order were Representative Ogan, Green, Ivan, Porter and Willis. Members absent were Representative Robinson. Chair James stated there was a quorum present. HSTA - 01/31/95 Number 017 HB 74 - ASSAULT BY ADULTS ON CHILDREN CHAIR JAMES recognized Representative Con Bunde, sponsor of HB 74. REPRESENTATIVE CON BUNDE reported that Shaun Jensen who was the impetus of HB 74, and who was schedule to be here, would not be available to testify due to weather conditions. His plane was grounded in Sitka. HB 74 was initiated because of public concern about the attack on this young person, Shaun Jensen, by three adults who could only be charged with a misdemeanor for their crime. Representative Bunde said the bill was intended to fill a gap if adults attack children under the age of ten. Instead of just being charged with a misdemeanor, it will ensure that they can be charged with a felony. This bill allows prosecutorial discretion, where there is an attack on a young person by people over the age of eighteen. Representative Bunde explained a discretionary provision has been included, because sometimes there are minor "fisticuffs" or misunderstandings that do not warrant a felony charge. Some individuals at age 14 look more like 17 years old, so there is some discretion required by the prosecutor. Also, there is public condemnation for people who would willingly and knowingly attack a young person. Number 115 REPRESENTATIVE BUNDE read the written testimony of Julie Jensen Zarr for the record. The following testimony was read as follows: My name is Julie Jensen Zarr and I am here today to ask for your support in passing House Bill 74. The current assault law needs to be updated. On November 11, 1994 at 5:30 a.m. while delivering the Anchorage Daily News my 14 year old nephew, Shaun Jensen, as viciously assaulted by 3 adult men in South Anchorage. Shaun lost 2 permanent teeth, suffered neck trauma and was run over by his own snow machine. The law as it reads now only made misdemeanor charges against these men possible, not a message we want to send to thugs that prey on our young. In 1971, my family moved to Alaska and settled in South Anchorage, it was a great place to grow up. We felt safe and secure walking or horse back riding anywhere. My parents raised three children in Alaska we are now running our businesses and raising our children here. The Anchorage of the 50s, 60s, 70s and 80s did not have drive by shootings, assaults or random senseless acts of violence, the law at that point in time fit, but in 1995 it does not. As crimes change so much, the laws must change to fit the crimes of 1995 and beyond. This event brought to light for me the need to make a difference and try to turn a negative into a positive, teaching my nephew and 2 children of empowerment instead of victimization. A change in this law will show that through hard work and believing in an idea one person can make positive impact on society. The outpouring of support from the people of Anchorage has also had a healing effect on Shaun. Again, I ask for your support in passing House Bill 74. I want to thank the committee for their attention and support. Thank you for taking the time to listen to me today. Number 137 CHAIR JAMES noted, for the record, that Representative Caren Robinson came in during the sponsor's statement. Number 140 REPRESENTATIVE JOE GREEN asked what the charge would be if the same thing happened to adults. He also questioned whether or not the injury to Shaun was done by fists. There was some concern on his part about if the bill was taking this far enough. REPRESENTATIVE BUNDE said that hitting with a fist is not assault with the deadly weapon unless there is bodily harm. So, the same damage to adults would just be a misdemeanor. Representative Bunde said there is a question about the difference between adults and juveniles, and how to determine if a person is adult. Some 16 year olds appear to be older. He said it is a frustration, and the law should be written as "doable" without clogging the system. Number 213 REPRESENTATIVE BRIAN PORTER complimented the sponsor of this legislation for not trying to dig into the criminal statutes and change standards of physical injury. These standards have been with us since 1980 and there is a lot of case law behind them. Trying to tinker in that area because of one situation would be folly; it would lead to a law that would not fit the next situation. What this bill does is present a policy-call on whether the whole category of offense should become a felony. Representative Porter said he thought the bill was the right approach that will satisfy the individual case without disrupting the statutes. He said whenever there is an alleged crime there are two considerations: (1) if a crime has been committed; and (2) then proving it. One is called "criminal law" and one is "criminal evidence." Criminal evidence, having to meet a standard of beyond a reasonable doubt, is where prosecutors and police officers run into problems. That was a problem with this case. The use of a snow machine to run over the child is something most people think should be a felony, yet it had to be proved beyond a reasonable doubt that the machine was intended to be used as a dangerous instrument. If that could not be proved, the charge would be a misdemeanor. Number 258 REPRESENTATIVE GREEN wondered why they made it the age of 16, not 17 or adulthood. He wondered if maybe they should make it anything below 18. REPRESENTATIVE BUNDE reiterated that some 16 year olds are quite physically mature and others aren't, so 16 seems to be the cusp of the change. More 17 and 18 year olds are likely to appear adult than 16 year olds. Number 279 REPRESENTATIVE IVAN IVAN had a question about the language of the bill. He wanted a definition of "reasonably" used on page 2, line 5. It states that the "injury reasonably requires medical treatment." Number 285 REPRESENTATIVE BUNDE answered that a reasonable adult will say whether an injury is serious enough to require medical attention. Number 293 CHAIR JAMES called for a motion. Number 295 REPRESENTATIVE PORTER moved that the committee pass HB 74 out of committee with individual recommendations and attached fiscal notes. There being no objections, it was so ordered. HSTA - 01/31/95 Number 327 HB 4 - PERMANENT FUND DIVIDEND ELIGIBILITY REPRESENTATIVE KOTT brought a proposed committee substitute (CS) to present to the committee, as the committee requested at the last meeting. The CS was CS 9-LS0036-C, dated 1-27-95. He defined the CS changes, as follows: 1.Section 1 redefines allowable absences as eligibility criteria instead of elements of residency. 2.Section 2 moves into a new section, those allowable absences already authorized by statute under AS 43.23.095, the current definition of "state resident." It makes the historical piggy back allowable absences previously in regulation a statutory allowable absence. It is now incorporated in statute. 3.Section 3 deletes the references to absences in the definition of State resident, since absences are defined as eligibility criteria in section one and Section 2 of the bill, so they are trying to conform and remove conflict. Also, Section 3 makes it clear that while absent an individual must maintain at all times an intent to return to the state and remain permanently a resident. 4.Section 4, the Permanent Fund Dividend of certain spouses retroactively reinstates the eligibility of all otherwise eligible individuals accompanying their eligible resident spouses for the years 1992, 1993 and 1994. This will allow the department to pay piggybacking spouses who were originally denied those dividends in 1992 and 1993. 5.Section 5 of HB 70, gives up to 1,317 of the 1994 piggybacking spouses who did not appeal by December 1, 1994 the ability to submit an appeal until September 1, 1995. 6.Section 6 makes Sections 1 and 3 retroactive. The one, effective date January 1995, makes the piggyback allowable absence effective for the 1995 dividend. 7.Section 7 makes the act effective as soon as it is signed by the Governor. Number 402 CHAIR JAMES asked for a motion to accept the CS, 9LS0036-C, as the working document. REPRESENTATIVE CAREN ROBINSON moved to accept CS 9LS0036-C as the working document. Hearing no objection, it was so ordered. Number 418 CHAIR JAMES confirmed that the committee would be working with this CS, 9LS0036-C. There were no other persons wishing to testify so CHAIR JAMES asked for a motion. Number 420 REPRESENTATIVE ROBINSON moved that they pass the CS for HB 4 out of committee with individual recommendations. Hearing no objections, it was so ordered. HSTA - 01/31/95 Number 427 HJR 3 - VOTER APPROVAL FOR NEW TAXES TOM ANDERSON, Legislative Aide to Representative Martin, sponsor of the measure, testified on the two versions of HJR 3, Version C and Version F. Version C would require prior voter approval of any increase in the rate of one or more of those taxes that they are looking at, ad valorem, retail, or income tax. Version F would require voter approval of any changes, increases or decreases in the rate of one or more taxes. CHAIR JAMES said one change is to vote on any increase as well as any implementation of any of these. The other says that any change, whether an increase or decrease, would have to be voted on. She opened it to discussion. Number 460 REPRESENTATIVE SCOTT OGAN said the people probably wouldn't have any argument to decrease taxes so he suggested they adopt Version C. CHAIR JAMES called for a motion and Representative Ogan moved to adopt Version C as the working document. It is number LS0214-C. Hearing no objection, it was so ordered. Number 478 REPRESENTATIVE OGAN expressed his support for the bill. REPRESENTATIVE PORTER said he could not support this bill at this time. He questioned the ability of this bill to frustrate the efforts of the legislature to establish a long range fiscal plan. If this bill were in place the legislature would have to work around it, and it would be difficult. Number 491 CHAIR JAMES said that what they are deciding is whether or not they wish to put forth this issue to the rest of the members of the legislature, and whether they wish this to go to the people. There are some hoops to go through before this would be implemented. This Version C of HJR 3 would need two-thirds vote on the floor of the House and Senate, then the bill would have to go to the vote of the people, and it would have to pass by a majority vote. Number 500 REPRESENTATIVE OGAN said that he polled the people in his district and that at least eight and a half to nine out of ten people spoke in favor of having the right to vote on taxes. REPRESENTATIVE OGAN moved to pass the resolution out of committee with individual recommendations. Number 515 There being objections, CHAIR JAMES called for a roll call vote. Representatives Green, Ivan, Willis, Ogan and James voted in favor of moving HB 4 out of committee. Representatives Porter and Robinson voted against the bill. The bill passed with individual recommendations. HSTA - 01/31/95 Number 535 HB 70 - PERMANENT FUND DIVIDEND HOLD HARMLESS ROD MOURANT, Administrative Assistant to Representative Kott, sponsor of the bill, said there would be new items in their bill packet, including a revised fiscal note from the Permanent Fund Division, and a series of fiscal notes from the Department of Health and Social Services, demonstrating the financial savings and expenses to the various programs that are affected by this legislation. There is also a letter from Hope Cottages expressing concern about HB 70 and its effects on their program. Number 562 REPRESENTATIVE PETE KOTT stated that he did not have anything more to add. However, he would answer questions. REPRESENTATIVE GREEN wanted assurance that if the bill passed, it would not cause people to lose their benefits. He said the Department of Health and Social Services had said that individuals would not lose their benefits, because they were the administrators of the program, but that some people questioned if that was true. Number 600 ELMER LINDSTROM, Special Assistant to Commissioner Perdue, Department of Health and Social Services, testified that the department is opposed to the bill. He asserted that although there is a net saving if thinking in terms of total funds, there is a net cost to the state, in terms of general funds. Number 605 CHAIR JAMES asserted that we have a tax on everyone in the state for this hold harmless amount. It is never appropriated in the budget, because it is part of the statute, yet Alaska residents are paying close to $23 million to $24 million in additional benefits that would not have to be paid if we did not have the hold harmless provision. This should be included in the budget appropriations' process. Number 622 MR. LINDSTROM said that all the funds, PFD, the various public assistance programs, and the hold harmless, are included in the operating budget on an annual basis. The confusion is the funding source. He said that they dont often talk about that during the budget deliberation because, again, the hold harmless funds are not general funds, they are earnings of the permanent fund. They are real dollars, and they are appropriated through the regular operating process. The information about the reductions from the PFD check is included on the PFD check stub. Number 656 CHAIR JAMES said people are distressed that money comes out of their PFD checks. The issue is that this is a tax, any time the state takes money from income, it is a tax. She suggested that we take the funds from the general fund. Number 661 REPRESENTATIVE ROBINSON asked what the savings would be to the individual, and what the increased amount would be to the general fund. CHAIR JAMES asked if the expense would be the same or less if these funds were taken from the general fund instead of from the PFD fund since it would only be a different funding source. MR. LINDSTROM said the expense would be the same. There would be an increase of $20 million in the general fund costs, however, if the legislature were to take that approach. He said that if the decision were made to fund the hold harmless out of the general fund it would not require a piece of legislation. It would be a budget decision made by the finance committees. Legislation would not be required to accomplish a funding source switch. TAPE 95-5, SIDE B Number 001 MR. CURTIS LOMAS, Welfare Reform Coordinator, Department of Public Assistance, Department of Health and Social Services gave information on the expenditures on the various relief programs. About $1,050,000 would be the increased expenditures of the general relief program; $330,000 would be part of the increased expenditures in the Medicaid Program; and $472,000 would be the increased expenditures in Public Assistance administration. Number 016 REPRESENTATIVE ROBINSON brought up the debate and the letter from Hope Cottage that disputes what the Mr. Lomas had said the other day that people would not lose their medical benefits. They believe that in cases of nursing homes, and others, that they would lose their benefits. Number 025 JON SHERWOOD, Program Coordinator, Division of Medical Assistance, Department of Health and Social Services, reported that the receipt of the Permanent Fund Dividend (PFD) would not disqualify someone for Medicaid in the month of receipt. If they retained the dividend, they would become ineligible because they would be what they call "over resource" in future months. Some people were placed on the Hold Harmless Program, and about 75 percent of the spending in the Medicaid Hold Harmless Program is for facilities, hospitals and nursing homes. They don't know the reasons why people chose to retain that money, but Mr. Sherwood said they are pretty sick people, so spending their PFD may not be their first priority. There are situations where Medicaid allows up to three months of coverage retroactively. If they are looking at retroactive cases some people will be disqualified, because of the receipt of a permanent fund dividend check in a prior month. REPRESENTATIVE ROBINSON asked what would happen to someone in a nursing home if they were dying and received the dividend and were suddenly ineligible. She asked if they would be kicked out. If they did not have money to continue to be in the facility, she asked what would happen to them. MR. SHERWOOD said he wasn't aware of a case where anyone was kicked out in a situation like that. Generally, the social workers at the nursing home would work with the family to try to get the money spent as soon as possible. If there was a period of ineligibility that would become a debt that the client had to pay the nursing home. If the client couldn't pay the debt, it would be a "bad debt" to the facility. Medicaid also allows provisions for people to use their income, when they are in a nursing home, to pay uncovered medical expenses such as expenses they haven't covered. If someone had some income coming in later months, they could pay off the debt using that income. REPRESENTATIVE ROBINSON asked who is responsible for the bad debt if the client or family doesn't have money to pay it. MR. SHERWOOD said that he thought the bad debt does not go into the rate they pay nursing homes, but he wasn't certain. Number 100 REPRESENTATIVE PORTER commented that it is not a problem of accepting the permanent fund dividend, but retaining it. MR. SHERWOOD said that is the case; there are a few exceptions but that is the rule. REPRESENTATIVE PORTER said it puts a person in the unusual situation of having to spend their money to get more. MR. SHERWOOD said he is in situations where he encourages people to plan spending their PFD to pay some uncovered medical expenses. CHAIR JAMES asked if there were any other questions of the people from the Division of Public Assistance. Number 120 REPRESENTATIVE SCOTT OGAN asked if people on public assistance spend their money on medical expenses, they would lose their PFD. MR. SHERWOOD said if they spend it in the month they receive it, in most cases it won't effect their Medicaid eligibility. Number 150 REPRESENTATIVE IVAN said he is not familiar with the welfare program and he asked what the average length of time is that a family is on public assistance if they got on AFDC or Medicaid or some sort of Public Assistance. Number 173 MR. CURTIS LOMIS said it is hard to say. The data they have indicates that most families remain on public assistance for less than two years. He did not have detailed length of participation data to provide specific information on that. REPRESENTATIVE IVAN brought up how different Alaska is from other states. It is equivalent to five states. It is very diverse and different circumstances occur if you compare one family in an urban setting versus a rural setting. He said he would need more information on the impact of this bill on the different constituencies before he could consider supporting such legislation as this. Number 195 MR. LOMIS presented a legislative research report, prepared last year, for purposes of analysis for a different piece of legislation. It is research request 94-94.172, and what it has is a breakdown of public assistance benefits by community for the month of October, 1993. This report is being updated by Legislative Research with October, 1994, information. He referred the committee to this document for analysis. The numbers are very representative. REPRESENTATIVE JOE GREEN asked if they must spend the PFD in the same month or same year to avoid the problem. Number 227 MR. LOMAS said they have to spend the PFD check in the same month it is received. The PFD money is considered as income for that month. If it is retained in the next month it is a resource, so then it might put the recipient over the resource line. Number 214 REPRESENTATIVE ROBINSON spoke about the lengths of time people are on public assistance, and about the people who come to Alaska from the Lower 48 states. There is a strong impact of other people coming in to get our benefits. She wondered if this would be part of the research they are doing. CURTIS LOMAS said the question has come up repeatedly over the last several years and the department did some research about three years ago. They questioned applicants who had been in the state less than a year about their reasons for coming to Alaska. They come for reasons like anyone else, they are looking for jobs. There is also a prevailing perception that Alaska is wealthy and it brings people here. CHAIR JAMES recalled hearing about people moving into the state specifically because they had a disabled person in the family and medical benefits and treatments for disabled people are better here than in other states. She asked Mr. Lomas to respond to that issue. Number 276 CURTIS LOMAS confirmed that the benefit levels in Alaska are higher than other states, although we are not higher in disability programs. The department's research does not bear out that benefits are a major factor when people from other states decide to come to Alaska. Number 290 REPRESENTATIVE CAREN ROBINSON wanted to know how much higher our payments are, and if that is because our cost of doing business here is higher. She wondered if the reason is that medical costs are higher and housing is higher; we are not so much higher compared to the kind of service they can get in the Lower 48. MR. LOMAS said that when the department has compared the AFDC rates in our state to that of other states, speaking in terms of the cost of living in Alaska, Alaska comes close to the top six states as a percentage of the poverty guide line. As generous as Alaska is, it is not considered remarkable compared to other states. Number 308 MR. SHERWOOD said people with disabilities may be intrigued by the levels of benefit payments in Alaska compared to other states, yet they lose interest in coming to Alaska when he explains the cost of rent in Alaska, or the lack of availability of some kinds of services that disabled people need in many communities. REPRESENTATIVE KOTT returned to give a closing statement on HB 70. There was concern about how it would effect Child Support and Enforcement Division (CSED) individuals. Since the last meeting, he spoke with them and determined that there would not be any pragmatic impact. Also, he had a preliminary zero fiscal note, so there is absolutely no impact on CSED. REPRESENTATIVE KOTT said there may not be statutory requirements to change the funding source; however, there would be statutory requirements to eliminate or delete from statute the hold harmless provisions, as well as the notification to the public, which is currently required. There will be some kind of statutory requirement. Also, there may be some start up costs in the program. The bill has a Judiciary and Finance referral. There is a mechanism to transfer people on and off of programs, namely, automation, and he believes some kind of program can be constructed to offer ease of transfer and to reduce bureaucratic costs. Number 385 REPRESENTATIVE KOTT said he spoke to Jan Hansen who said many people have come here because of Alaska's public assistant programs. Ten percent of Alaskan people are receiving some type of public assistance, one out of ten people. As stated before, the majority of people on public assistance stay on the program less than two years. Judging from the information Representative Kott has, this is a slim majority, Over 40 percent stay on the program longer than two years. The fiscal note is based on the theory that everyone currently on the Hold Harmless Program will accept the PFD check. Representative Kott thinks that, in the final analysis, people on public assistance will opt to stay on public assistance program and not receive the PFD check. Number 403 REPRESENTATIVE IVAN spoke of his concern to have slow welfare reform and said he respects the efforts and the intent of this legislation. CHAIR JAMES made a comment that many of the problems result from federal regulations. We are in a transition period, where in Washington D.C., they are currently working on what to do and how they will address welfare. Some federal changes might give us more control over how we handle public assistance. Number 442 REPRESENTATIVE BRIAN PORTER does not see this legislation as a step that would frustrate the attempt at welfare reform. He doesn't think it will adversely affect anyone, since there are mechanisms in place for those who have a dire need. Number 460 REPRESENTATIVE KOTT stated they are trying to work toward a mind set of being more self-sufficient. Number 485 REPRESENTATIVE ROBINSON voiced her objections. She totally disagreed with the testimony. She said that passing this bill would hurt the most needy people in our state, seniors, disabled, the poor and sickest. She believe they are spending the PFD frivolously. The permanent fund is part of their wealth that they deserve to receive. She said she will be voting against this bill. Number 526 CHAIR JAMES commented that there are the working poor also who are not on public assistance. Each one of them is paying about $41 of their permanent fund dividend check to keep these other people going. Number 539 REPRESENTATIVE BRIAN PORTER moved that the committee pass HB 70 from the House State Affairs Committee, with attached fiscal notes and individual recommendations. Number 540 REPRESENTATIVE ROBINSON objected. REPRESENTATIVE ED WILLIS testified that he will not support the bill. The intent of this bill was that money be put away for all generations of Alaskans. All Alaskans deserve its bounty. He believes that those of us who can work must help the people who cannot help themselves, and he will not support this bill until he knows precisely what impact this bill would have. As it is, everyone is only guessing, so for that reason he will have to vote "No." CHAIR JAMES said that the motion before the committee was whether or not to move this bill out of committee with individual recommendations. She asked the secretary to call the roll. Number 590 Representatives Ivan, Robinson and Willis voted against moving HB 70. Representatives Porter, Ogan, Green and James voted in favor of moving the bill with individual recommendations. The motion passed and HB 70 was moved out of committee. The committee took a brief break. CHAIR JAMES called the meeting back to order at 9:35 a.m. HSTA - 01/31/95 Number 622 HB 81 - PRESERVATION OF PUBLIC FACILITIES CHAIR JAMES announced that she would roll HB 81 over to the next meeting. She also said that on February 17, 1995, is an annual meeting regarding public facilities management, which she will be attending. CHAIR JAMES read the Sponsor Statement, updated 1-9-95, for the record: The State of Alaska has 2.3 billion dollars invested in 1,717 public buildings. There is currently a gigantic deferred maintenance backlog (Deferred Maintenance list, prepared by the Alaska State Facilities Administrators. February 1993, attached as exhibit #10) for these public buildings, this is a public disgrace, our buildings are falling down around us Statewide. No new construction should be undertaken until we have repaired and maintained our current facilities to an acceptable condition. It is senseless to keep building new facilities while our current buildings deteriorate from a maintenance need to a replacement need. This bill requires: 1. All deferred maintenance is to be performed over a 15 year period on all public buildings for a total appropriation as extrapolated from the fiscal note of $251,400,000.00 ($113,985,800.00 in the first 6 years) in capital replacement costs, the sum of the dollars needed is astonishing. The fiscal note for FY 95 building operation is $61,102,700.00 and continues annually forever, adjusted for inflation at an annual rate of 3.5 percent. The operating budget has been underfunded for a long time and is the reason the deferred maintenance exists. 2. All new buildings built after #1 is complete will need to be funded by a formula program to guarantee that the new buildings will be properly maintained. The continuing problem of assuring the money appropriated for maintenance goes to the maintenance is one that we must examine and incorporate into this bill through the amendment process. Public facilities have been underfunded for many years, it is sheer folly to expect our buildings to fix themselves, and to continue to ignore this crushing need is totally irresponsible. The Department of Transportation and Public Facilities is the agency I will charge with this task of repairing and replacing our public facilities including University of Alaska facilities. CHAIR JAMES said that in the analysis of the bill, all deferred maintenance on state buildings would take place over a 15 year period. All new buildings would be constructed after all deferred maintenance is completed. New construction will be funded by a formula program to guarantee that they will be properly maintained. TAPE 95-6, SIDE A CHAIR JAMES said there are horror stories about maintenance problems. The state needs operating expenses to avoid these capital expenses. Number 016 REPRESENTATIVE WILLIS concurred. He served on Military and Veterans Affairs budget subcommittee last year and found that they let maintenance slip. A preventative maintenance program could take care of problems in the first instance and cost considerably less than the repairs. Number 050 REPRESENTATIVE ROBINSON spoke in favor of the bill, saying she thought it was a good direction for the legislature to move toward. She asked how the priorities would be set out and if it would be similar to the school districts are doing now. Number 108 CHAIR JAMES said there would be an analysis by those people who are supposed to evaluate what is the most needed. The maintenance would be brought current over a fifteen year period. Meanwhile, we would be taking a life-cost basis and in the operating budget we would be funding what that is, so we could do the keeping up while catching up. REPRESENTATIVE ROBINSON asked if they would repeal the way they are handling maintenance and programs for the school districts now. CHAIR JAMES answered that there is a dispute as to whether or not the school districts are doing fine the way they are. They are doing fine with new buildings, but there is an extensive amount of deferred maintenance at this point too. REPRESENTATIVE ROBINSON brought up a Juneau school as a follow-up to that. The high school is in need of a new roof. Last year, they are number 7 on the priority list, and this year they are back down to 47. She was curious about how this would work, because at the school district level it seems they are in this spinning wheel. One day they are at four and next year at seven. When thinking about public facilities, which are grantees through the Division of Family Youth Services and through the Department of Public Safety, she wondered if they had considered including these into the program. CHAIR JAMES answered, "yes," and then recalled the Fairbanks Resource Center, which is a grantee of the state. They are pleading with the state for money to build their own building to avoid paying the outrageous rent they are paying; then the State could use their operating funds for the purpose that they are intended. However, Chair James pointed out that it does not work that way. It costs nearly as much to own a building as it does to rent one. This is a myth that many people hold to, but normally, the cost of maintenance is included in the rent they pay. There are advantages to owning a building, but it does not necessary save money. Number 132 REPRESENTATIVE OGAN said that CHAIR JAMES' statement was somewhat accurate, but he would have to debate with her some on it. When moving into a new building, maintenance would be less. When you rent a building the amortization costs are factored in as well as maintenance. In short term, they would have more money, but in long term, it might cost more. CHAIR JAMES said that there is a life cost basis for determining how much should be used for maintenance each year. If money is put aside on a life cost basis we would have the money when needed for maintenance. Number 158 REPRESENTATIVE PORTER wondered what can be done to maintain an account for maintenance. The legislature changes every two years and the philosophy of funding also changes. Number 175 CHAIR JAMES asserted that the legislature cannot be forced to appropriate funds for anything. It is up to the legislature to do that, and every two years they are free to budget what they want. However, the public is greatly distressed with the deferred maintenance on our public facilities. If there was a provision in the statutes to allow for a formula driven amount to apply to maintenance, the general public would not allow the legislature to turn away from the issue. REPRESENTATIVE ROBINSON inserted that the legislature would need a proposal to consider. Number 200 JOHN STEINMANN, Architect, Division of Finance, Department of Education (DOE), testified in favor of this bill. The Department of Education is an advocate of maintenance, and there are presently 163 Rural Education Administrative Areas (REAA) and 360 city borough sites. CHAIR JAMES asked about a life-cost amount calculated in the amount to do maintenance and repairs. MR. STEINMANN said the DOE advocates a plan to work on a long term life cycle basis. Number 247 REPRESENTATIVE GREEN mentioned there was money in the budget for maintenance, but it was appropriated to do other things. He was concerned that this situation might happen again. MR. STEINMANN wasn't prepared to answer that. CHAIR JAMES rolled the bill over to the next meeting on Thursday, February 2, 1995. ADJOURNMENT There being no further business to come before the State Affairs Committee, CHAIR JAMES adjourned the meeting at 10:25 a.m.