01/20/2004 08:00 AM House STA

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ALASKA STATE LEGISLATURE HOUSE STATE AFFAIRS STANDING COMMITTEE January 20, 2004 8:00 a.m. MEMBERS PRESENT Representative Bruce Weyhrauch, Chair Representative Jim Holm, Vice Chair Representative John Coghill Representative Bob Lynn Representative Paul Seaton Representative Max Gruenberg MEMBERS ABSENT Representative Ethan Berkowitz COMMITTEE CALENDAR HOUSE BILL NO. 241 "An Act relating to optional exemptions from municipal property taxes on residential property." - HEARD AND HELD HOUSE BILL NO. 337 "An Act relating to anatomical donor registries, to an anatomical gift awareness fund, to an anatomical gift awareness program, and to motor vehicle licenses and registrations." - HEARD AND HELD HOUSE BILL NO. 373 "An Act requiring warrants drawn by the Department of Administration against the state treasury to be negotiable instruments." - MOVED HB 373 OUT OF COMMITTEE PREVIOUS ACTION BILL: HB 241 SHORT TITLE: MUNICIPAL PROPERTY TAX EXEMPTION SPONSOR(S): REPRESENTATIVE(S) CHENAULT 04/04/03 (H) READ THE FIRST TIME - REFERRALS 04/04/03 (H) CRA, STA 05/06/03 (H) CRA AT 8:00 AM CAPITOL 124 05/06/03 (H) -- Meeting Canceled -- 05/08/03 (H) CRA AT 9:00 AM CAPITOL 124 05/08/03 (H) Moved Out of Committee 05/08/03 (H) MINUTE(CRA) 05/12/03 (H) CRA RPT 3DP 1NR 05/12/03 (H) DP: KOTT, WOLF, MORGAN; NR: CISSNA 01/13/04 (H) STA AT 8:00 AM CAPITOL 102

01/13/04 (H) <Bill Hearing Postponed>

01/20/04 (H) STA AT 8:00 AM CAPITOL 102 BILL: HB 337 SHORT TITLE: ANATOMICAL GIFTS REGISTRY SPONSOR(S): REPRESENTATIVE(S) MCGUIRE

01/12/04 (H) PREFILE RELEASED 1/2/04

01/12/04 (H) READ THE FIRST TIME - REFERRALS

01/12/04 (H) STA, HES, FIN

01/20/04 (H) STA AT 8:00 AM CAPITOL 102 BILL: HB 373 SHORT TITLE: STATE TREASURY WARRANTS SPONSOR(S): STATE AFFAIRS

01/12/04 (H) READ THE FIRST TIME - REFERRALS

01/12/04 (H) STA

01/20/04 (H) WITNESS REGISTER SHARALYN WRIGHT, Staff to Representative Mike Chenault Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Presented HB [Contains discussion of SB exemption to come off the borough's general government services mill rate levy. For instance, he said the Nikiski borough has a six and a half mill levy for general borough government services. In addition, there are numerous service areas that are tacked on to it. Those service areas throughout the boroughs are instituted by a vote of the people. He said the intent is not to take those much needed service revenues and deplete them from their current budgets. MR. SUPERMAN explained that the Kenai Peninsula Borough currently has a unique situation in comparison to some other boroughs; although he is not intimately involved in what the general fund balances are in other boroughs. He said the Kenai Peninsula Borough currently has anywhere from $20-$23 million in its fund balance. He noted that he expected those funds to be depleted in the "not too distant future." Mr. Superman said the reason that this [bill] was brought forward was to essentially provide another "tool" to work in the borough's own process. He said the borough had seen an increase in taxable assess valuation for the last 5-6 years. MR. SUPERMAN said it averages a 5 percent increase per year with that valuation, which equates to approximately a couple hundred million dollars per year in total valuation. He said a consequence of that is that there has been a considerable increase in tax liability for those homeowner's within the borough. Some people have seen their tax rates, for all intents and purposes, double within that time period, he explained. Mr. Superman said as a reflection of that, the borough is seeing its board of equalization rolls fill up more as time goes by. He said last year was the fullest schedule he'd seen, and he'd been on the assembly for two terms, once in the late 1980s and again more recently. Number 2030 MR. SUPERMAN said he thought there would be more requests for some kind of a tax relief at the local level, which doesn't mean if this bill is passed that it is a done deal. He said it essentially brings it back to the assembly to put it back out to the public for a vote. He remarked, "Whether you think that's a done deal or not if it went to a vote, I don't know; I don't make assumptions anymore." Mr. Superman said he thought it would become a political debate at the assembly level. He reiterated his belief that the main purpose of the bill is to provide the borough with another tool, and he said the borough is seeing more liability at the local level. MR. SUPERMAN said a proposition passed this year for a hospital in the borough, which will increase the [millage] another half a mill. He explained that there will be a proposition going out in a special election in March that will ask the people to vote on a half a mill increase to fund co-curricular activities within the school district. He said this is something that is outside the cap, and a lot of residents are beginning to see some very harmful effects with their tax bills. Mr. Superman said he had always been a proponent of trying to keep taxes at a steady rate for a couple of different purposes. Mainly, he said it helps economic growth and helps people to move to the area. It helps people to raise their children in the area and put those children in local schools. He noted that the borough is in desperate need of schools at this time. MR. SUPERMAN said a big plus is a good, fair tax rate, and if the borough does not have this tool at its disposal, he thought residents would see some horrendous climbing in their tax bills. He said the AML has supported this in the past, but he couldn't say whether it was in the policy statement this year. Mr. Superman said Senator Gene Therriault had introduced a bill in although that bill did not pass it is something that has been "tossed around" for some time now. He noted that there had been a few legislators who have tried to push it through. Number 2200 REPRESENTATIVE HOLM asked Mr. Superman if it is his opinion that HB 241 individual landowner's options of voting themselves a tax liability for whatever services that they want to pay for. MR. SUPERMAN indicated he did not understand the question. REPRESENTATIVE HOLM said Title 29 [provides] the [borough] with the opportunity to tax itself for whatever it wants done within that service area. He indicated that [36, taxation. MR. SUPERMAN said that is the intent here, although it may require some additional verbiage to make that perfectly clear. CHAIR WEYHRAUCH called attention to the proposed language in lines 6-8 of the bill, and he asked Mr. Superman what "special services" meant. MR. SUPERMAN said it is his belief that that's just an illusion of the services that the service area provides, whether it's recreational services, senior services, or fire services. He said [the language] is just alluding back to the services. Number 2309 REPRESENTATIVE SEATON said it was his understanding, for example, that if there was a half a mill in library service tax or fire service tax, with the $50,000 exemption to the borough tax, that would not apply. He asked if, at some rate, a half a mill in service area taxes might equal or exceed the six-mill borough property tax. MR. SUPERMAN, in response, said correct; that could happen. He said [Kenai] is very close to that in some areas of the borough now. REPRESENTATIVE SEATON, in regard to Mr. Superman's comment that Kenai's reserve account will be depleted in the near future, asked if the assumption is that if [revenues] didn't come from the state, [the Kenai Peninsula Borough] would be more likely to pass an increase in the millage rate than an elimination of this $50,000 individual residential property tax. Number 2385 MR. SUPERMAN remarked, "This, by no means, is any cut at our assessor within the borough - I think he does a fabulous job." He said there has been an increase averaging five percent across the board in the taxable assessed value within the peninsula. Mr. Superman noted that he is not speaking for the entire assembly, and he said he didn't know which way [the assembly] would go with regard to an increase in the general government mill rate. He indicated he was unsure whether the assembly was going to add the extra mill this year. Mr. Superman said, essentially, with that growth in "our" assessed valuation, it somewhat mitigates the loss with this extended exemption. He said this was passed unanimously on the consent agenda, and he thought it was the assembly's intent to try to keep the residents of Kenai in the borough. REPRESENTATIVE SEATON brought attention to the fiscal note, and he said it seemed to him, as a resident of the borough, that if the issue was put to a vote, he would be much more likely to increase the millage rate, which is going to basically apply to the oil assets within the borough instead of eliminating or reducing the exemption on individual houses. He said because Mr. Superman is anticipating the depletion of the [borough's] reserve account in the near future, it seems that that is a necessity, which would therefore shift the tax to the higher valued properties - the oil properties - and then would basically take that percentage away from the state's revenue. He asked if that assumption was correct. MR. SUPERMAN said he thought that is an assumption that he is really not making, although that is an assumption that some people are making. He said that within the borough there is an approximate $4 billion in assessed valuation, and just a little over $6 million of that is "4356" property. related real properties that account for approximately 30 percent of that total. He said if the mill rate was increased, with that in mind, "they're" not going to be carrying burden of this. Number 2757 CHAIR WEYHRAUCH asked if there is an inconsistency in Mr. Superman's comment that there is more liability at the local level and residents are looking for tax relief, but at the same time residents are voting [for] projects that increase their tax bills. He asked if that issue is being addressed through this bill. MR. SUPERMAN said there are always inconsistencies with public votes. CHAIR WEYHRAUCH said the committee would take this bill up again in a week and would hear from the Department of revenue. REPRESENTATIVE GRUENBERG said that, as a member of the House Special Committee on Ways and Means, he is extremely concerned. He said as he understands it, there is an impact on this because it will potentially shift the burden to property that would otherwise be taxed by the state and would thereby reduce the state's revenue at a time of a significant fiscal crisis in Alaska. Representative Gruenberg suggested that this bill should probably be heard by the House Special Committee on Ways and Means, and he may make that recommendation. He said he knows that Mr. Superman and [the Kenai Peninsula Borough's] taxpayers do not want to pay taxes, which nobody does, but [the legislature] has to look out for the state's interests too. Number 2633 REPRESENTATIVE SEATON brought attention to the exemption provisions in the bill. He asked if it is correct that the bill could possibly provide a $90,000 exemption. MR. SUPERMAN said he thought the intent was to make the "lid" at $50,000. He said he could appreciate Representative Gruenberg's comments that nobody likes to pay taxes, and he thought he was speaking for the people [in the Kenai Peninsula Borough] who do pay plenty of taxes. He said he personally pays plenty of taxes on his home and a couple of businesses. Mr. Superman said the intent is not to "divorce ourselves" from that liability and that obligation, but people are beginning to cry out for some type of local tax relief. He said he can understand the predicament that the state is in, and if the state continues off-loading to the lower levels, more of these types of request from the taxpaying constituency would be seen. Mr. Superman remarked, "All we are asking for is to have this tool ... at our disposal. Whether ... it will be used no one knows at this point; that is a political question." [HB HB [Contains discussion of HB Weyhrauch's HB legislature will consider this year. The proposed legislation will authorize the creation of an organ donation registry. Number 2808 REPRESENTATIVE SEATON, upon request of the chair, moved to adopt the committee substitute (CS) for TAPE 04-04, SIDE B Number 2976 REPRESENTATIVE McGUIRE stated her belief that, as a result of legislation [in the State of Washington], approximately 80 percent of those who have gone to that state's DMV have decided to add their names to the organ donation registry. Currently, want to become an anatomical donor [do so at] the Division of Motor Vehicles. She clarified that many of us may think about becoming anatomical donors, but actually going out to Life Alaska or going online is "a whole 'nother step She indicated that many people think about this issue for the first time when they come into the DMV, and [that's when they make their wishes known]. She stated that one of the most important things about making these kinds of decisions is that they be done with clarity, so that those who are left behind understand what it is that their deceased loved ones want done. HB 337 consent in the DMV. REPRESENTATIVE McGUIRE offered to answer questions from the committee. She noted that there are others available to answer questions, as well. In particular, she said that she wants to publicly thank Duane Bannock from the DMV for his cooperation. REPRESENTATIVE McGUIRE added that 337 Number 2828 REPRESENTATIVE HOLM questioned the functionality of the bill in a state that is so vast and so difficult to get around in. He stated his understanding that Life Alaska is a great program, and he revealed that he is a tissue and organ donor who has [a sticker] on his license. He asked what the practical aspects of this are in Alaska. He stated that, in Alaska, the odds of someone getting a heart transplant with any speed probably would be "next to nil." Number 2788 REPRESENTATIVE McGUIRE stated that there is no better place than Alaska for all the reasons that Representative Holm just cited. Creating a central registry that can be accessed online is something that "we're hoping to do here," she said. the vast geographical diversity of Alaska, it is difficult to access information. She stated that [the intent of the bill] is to allow healthcare providers to go to a central registry in a timely manner. As to the second part of Representative Holm's question regarding how likely it would be for an Alaskan to receive a heart transplant from another Alaskan, she said she cannot speak to the specifics on that. However, she noted that things like corneas and ligaments are widely used and given from one Alaskan to another. She stated that she thinks the prospect of having that available is exciting. REPRESENTATIVE McGUIRE reemphasized that unless a person has his or her driver's license on them at time of death, it is impossible for a healthcare facility to carry out that person's wishes, unless the deceased person's spouse, for example, knows with absolute certainty that he or she wanted to be an anatomical [organ] donor. REPRESENTATIVE HOLM revealed that his brother died at 38, and a boy in Houston, Texas, received "a kidney." He clarified that his question had been more about whether there are any facilities in Alaska that do "these types of operations." He stated his understanding that heart transplants are not done in Alaska, for example. Number 2646 CHAIR WEYHRAUCH shared that he knew of one instance where an infant in Juneau [died] after birth and the heart kept another infant in Texas alive. Number 2602 REPRESENTATIVE LYNN noted that, whereas Representative Holm has a sticker on his license, he has a card. He asked if it was the same thing. REPRESENTATIVE McGUIRE explained that the DMV in Anchorage, for example, gives the opportunity to get both [a card and a sticker]. Both serve as one indication of a person's wish. That information is only on the license and is not [in a central location, such as Life Alaska]. She stated, "The law today does not allow for that information to go anywhere." The proposed legislation is necessary to allow for the legal transfer of information from a state agency to a nonprofit organ and tissue bank. Representative McGuire repeated the previously mentioned three options [for people choosing whether or not to be organ donors]. She expressed her hope that people will choose to register [with Life Alaska or online with Life Center Northwest]. In response to a follow-up question from Representative Lynn, she reconfirmed that there is no linkage between [having a card or sticker on a license] and "any kind of system." Number 2490 CHAIR WEYHRAUCH asked if it is true that, currently, a person is not considered an organ donor unless he or she opts in to the system. REPRESENTATIVE McGUIRE answered that's correct. CHAIR WEYHRAUCH asked if HB remove him or herself from the registry. She noted that that provision is found on page 3, [lines 5-10], and it read as follows: Sec. 13.50.140. Notification of cancellation. (a) A donor whose motor vehicle document information is on a registry shall notify a procurement organization of the destruction or mutilation of the motor vehicle document or revocation of the gift under AS 13.50.050 in order to remove the donor's name from a registry. If the procurement organization that is notified does not maintain a registry, the organization shall notify all procurement organizations that do maintain a registry. REPRESENTATIVE McGUIRE noted that there are other systems in existence that make it so a person is [automatically] in that system unless he or she opts out, but she emphasized that she would never advocate for that regarding this issue. Number 2444 REPRESENTATIVE GRUENBERG suggested another more prevalent and widespread manner in which to get the message out would be to include a way to register [as an organ donor] in the application for the Alaska permanent fund dividend (PFD). He asked if Representative McGuire would consider that. Number 2320 REPRESENTATIVE McGUIRE stated that that possibility had been a consideration and she is not opposed to it; however, she chose to go forward with legislation that mirrored the models in Washington state and Montana, because they have been tested and are easily understood. She maintained that it might be easier, given that it is the second year of the Twenty-Third Legislative Session, to get this legislation on the books and allow it to go forward now, and consider "expansion" at a later date and time. Number 2313 REPRESENTATIVE GRUENBERG pointed to a letter from [Theresa L.] Bannister, [Legislative Counsel, Legislative Legal and Research Services], dated December 23, [2003, included in the committee packet], which he said refers to Section 13.50.160, subsection (d) - an "anti-sweep" provision. He turned to page 4 [of Version Q] and noted that the language there says that the money can go into the fund without further appropriation, but there is no anti-sweep language contained therein. He suggested that that may be something that could be taken up in the House Finance Committee. REPRESENTATIVE McGUIRE responded that Sec. 13.50.090. Short title. HB effort." MR. ZALNERAITIS told the committee that he has been [involved] in organ and tissue donation [matters] for 28 years and has come to know both the tragic circumstances of loss and the benefits and successes of transplantation. He stated that it is known - through surveys, polls, and campaigns - that most people in the United States would like to be donors. However, it is also known that when family members are not aware of their loved one's wish at the time of death, there is not the same rate of consent "as would be the case in the first person," because they are many times reluctant to make a decision on behalf of that loved one if they do not know his or her wish. Having a first- person consent registry [allows] individuals to affirm their desire to be a donor, provides for readily retrievable information through electronic means, and lets those family members know the wishes of their loved one who has died suddenly. He added, "And it is this mechanism that we find is one of the most beneficial aspects of a registry." Number 0650 REPRESENTATIVE GRUENBERG told the committee that he wears a lapel pin in the shape of a ribbon, that stands for organ donation. He offered his understanding that that pin had been put out by the federal Department of Health and Human Services. He asked if it would be possible to obtain a supply of the pins to distribute to other legislators. MS. STEINHAUS said yes. MR. ZALNERAITIS responded that he would be glad to assist in that request. REPRESENTATIVE GRUENBERG stated that [having those pins available for legislators to wear] would remind them "how good this bill is." Number 0534 CHAIR WEYHRAUCH asked how 337. MR. HILYARD clarified that the definition of procurement organization has been changed in Version Q. The previous definition referred to an organization approved by the United States Department of Health & Human Services. He surmised that "therein lay the confusion." He offered his understanding that the Alaska Department of Health & Social Services "has any immediate interface." Number 0237 REPRESENTATIVE GRUENBERG turned to page 4, [lines 16-18], which read as follows: (5) "procurement organization" means a person licensed, accredited, or approved under the laws of a state for the procurement, distribution, or storage of body parts; REPRESENTATIVE GRUENBERG asked Mr. Hilyard if the State of Alaska currently has laws governing the procurement, distribution, or storage of body parts. MR. HILYARD offered that there is some governance under Chapter "Essentially, this definition that's included is a definition that I have worked on with Representative Weyhrauch's staff member, with regard to ... HB 337]. interact with DMV's scheduled training with its frontline workers, so that DMV can be giving accurate information and increasing the number [registered]. Mr. Bannock stated 337 will help the data is transmitted back to Life Alaska. It also incorporates some physical changes, as a result of the new digital driver's licenses. He offered to answer questions from the committee. Number 0721 CHAIR WEYHRAUCH announced that HB [Contains brief mention of NATIONAL BANK OF ALASKA, National Banking Association, Appellants, v. UNIVENTURES 1231 and STATE OF ALASKA, DEPARTMENT OF ADMINISTRATION, Appellees. The court held that [warrants] were negotiable instruments. He noted that this case followed cases from Louisiana and Nebraska, for example. In the majority of cases it was held that warrants are negotiable instruments and, therefore, are under the Uniform Commercial Code. Representative Gruenberg described the bank as a holder in due course. He said that, unless that [holder in due course] had actual knowledge that the warrant had been dishonored, the state had to pay. He added that that was only a just and fair result. REPRESENTATIVE GRUENBERG stated that HB Number 1150 REPRESENTATIVE GRUENBERG moved to report HB 241 on behalf of l/Detail/23?Root=HB241'>HB 241 and answered questions. href='/basis/Bill/Detail/23?Root=HB241'>HB 241 and answered href='/basis/Bill/Detail/23?Root=HB337'>HB 337. href='/basis/Bill/Detail/23?Root=HB337'>HB 337. Root=HB337'>HB 337. ll/Detail/23?Root=HB337'>HB 337. /Detail/23?Root=HB337'>HB 337. ll/Detail/23?Root=HB337'>HB 337. 241-MUNICIPAL PROPERTY TAX EXEMPTION ?Root=SB36'>SB 36.] tail/23?Root=HB241'>HB 241 on behalf of Representative name='HB241' href='/basis/Bill/Detail/23?Root=HB241'>HB 241 has She with municipal il/23?Root=HB241'>HB 241 does not mandate that this in HB 241 do that by law. href='/basis/Bill/Detail/23?Root=SB36'>SB 36, which is href='/basis/Bill/Detail/23?Root=HB241'>HB 241] is much 36] is that the intent is to allow that budgetary 2000 that essentially had the same effect as this bill, and allows these potential exemptions without affecting the href='/basis/Bill/Detail/23?Root=HB241'>HB 241] is "over" the not changing that, href='/basis/Bill/Detail/23?Root=HB241'>HB 241, which was not in SB that service areas are exempted from this limitation of There are oil- the whole 241 was heard and held.] 337-ANATOMICAL GIFTS REGISTRY ?Root=HB25'>HB 25.] 337, opined that, along with Representative Bruce 25, HB 337 is one of the most important bills the ill/Detail/23?Root=HB337'>HB 337, Version 23-LS1257\Q, HB 337 is href='/basis/Bill/Detail/23?Root=HB337'>HB 337 mirrors 90 percent of all the people who make some indication that they for many of us." would make it possible for people to [sign] an informed ll/Detail/23?Root=HB337'>HB 337 also makes a provision that HB will end up funding itself. Because of l/23?Root=HB337'>HB 337 would change that to a person 337 would add a provision to allow a person to href='/basis/Bill/Detail/23?Root=HB337'>HB 337 does have a tutes.asp#13.50.010'>AS13.50.010 - 3?Root=HB337'>HB 337 picks up a portion of that and atutes.asp#13.50.090'>AS 13.50.090] are and said, "In 135 organ donors in the state of Washington. One hundred and tail/23?Root=HB337'>HB 337 will streamline the process href='/basis/Bill/Detail/23?Root=HB337'>HB 337 would href='/basis/Bill/Detail/23?Root=HB337'>HB 337 would help clarify and HB 25. He l/23?Root=HB337'>HB 337 and any coverage thereof will prevail." 337 would address "a streamlining of that l/23?Root=HB337'>HB 337 would help streamline the data HB 13.50 [which is the Uniform Anatomical Gift Act]. He stated, ail/23?Root=HB25'>HB 25." He said HB 25 has some ail/23?Root=HB337'>HB 337, and [the sponsor] is "trying to name='HB337' href='/basis/Bill/Detail/23?Root=HB337'>HB 337 is ail/23?Root=HB25'>HB 25, or vice versa. name='HB337' href='/basis/Bill/Detail/23?Root=HB337'>HB 337] or "its He noted that Life Alaska has been asked to that HB way DMV processes information and the way that etail/23?Root=HB337'>HB 337 was heard and held. 373-STATE TREASURY WARRANTS l/23?Root=HB109'>HB 109.] href='/basis/Bill/Detail/23?Root=HB109'>HB 109 passed last year. /Bill/Detail/23?Root=HB373'>HB 373 simply codifies that HB 373 name='HB109' href='/basis/Bill/Detail/23?Root=HB109'>HB 109 last /23?Root=HB373'>HB 373 does nothing to change the way 23?Root=HB373'>HB 373 simply clarifies in statute the 373]. href='/basis/Bill/Detail/23?Root=HB373'>HB 373 out of committee ll/Detail/23?Root=HB373'>HB 373 moved out of the House "> id="docLink">Open document in new windowX ht:100%;min-height:600px" id="docFrame"> width="105" height="107" bills, locate st-whos-who.php">contact information. .gov/webmaster.php">help

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