Legislature(1995 - 1996)

03/28/1995 09:15 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    SENATE FINANCE COMMITTEE                                   
                         March 28, 1995                                        
                            9:15 a.m.                                          
  SFC-95, #22, Side 1 (000-575)                                                
  SFC-95, #22, Side 2 (575-end)                                                
  SFC-95, #24, Side 1 (000-575)                                                
  CALL TO ORDER                                                                
  Senator  Rick  Halford, Co-chair,  convened  the meeting  at                 
  approximately 9:15 a.m.                                                      
  Co-chairs  Halford  and  Frank, Senators  Donley,  Phillips,                 
  Rieger  and  Zharoff were  present.   Senator  Sharp arrived                 
  shortly after the meeting began.                                             
  Also   Attending:   Representative  Jerry   Mackie;  Patrick                 
  Pourchot,  Legislative  Director,  Office of  the  Governor;                 
  Wendy  Redman, Vice  President,  University of  Alaska;  Del                 
  Smith, Deputy  Commissioner,  Public  Safety;  Mike  Greany,                 
  Director,  Legislative  Finance;  Andy  Pekovick,  Dept.  of                 
  Natural Resources;  Leo B. Rasmussen, City of Nome, Official                 
  Checker; and Bryce Edgmon, Aide to Senator Foster.                           
  SUMMARY INFORMATION                                                          
       SB  79 ADJUSTMENTS FOR DEFECTIVE SURVEY                                 
       Discussion was had with Representative Mackie and  Andy                 
       Pekovich. Amendments 1B and 1C plus a 3rd amendment by                  
       Co-chair Halford were ADOPTED for incorporation  within                 
       Senate Finance  CS.  SCSCSHB 79 (FIN)  was REPORTED OUT                 
  of          committee    with a "do pass" recommendation and                 
  zero fiscal           notes from Dept. of  Natural Resources                 
  and Community & Regional      Affairs.                                       
       HB 146 SLED DOG RACE CLASSIC                                            
       Testimony was heard from Leo B. Rasmussen. An Amendment                 
       Senator Rieger and  an Amendment  adding 4-year  sunset                 
       provisions were ADOPTED.  SCSCSHB 146 (FIN)  w   a   s                  
  REPORTED OUT      of committee "without recommendation" with                 
  a $25.0 fiscal note      from the Dept. of Revenue.                          
       SB 121 APPROP: U OF A DEFERRED MAINTENANCE                              
       Discussion  was  had  with Wendy  Redman  and   Patrick                 
       SB   121   REPORTED    OUT   of   committee    "without                 
       SB  80 MUNICIPAL POLICE SERVICES                                        
       Del Smith spoke to SB 80.  Amendment was ADOPTED to be                  
       incorporated into CSSB 80 (FIN) and brought back to be                  
       discussed at the next meeting.                                          
       HOUSE BILL NO. 79                                                       
       "An Act allowing the Department of Natural Resources to                 
           quitclaim  land  or  interests in  land,  including                 
  submerged or       shore land, to a municipality to  correct                 
  errors or  omissions             of  the  municipality  when                 
  inequitable detriment would result        to a person due to                 
  that person's reliance upon the errors or       omissions of                 
  the municipality."                                                           
  Co-chair Halford  invited Representative Mackie  to join the                 
  committee.   Rep. Mackie  distributed 3  possible amendments                 
  drafted  by  Legal Services,  explaining  that in  all three                 
  cases, a  title change  is not  necessary. Co-Chair  Halford                 
  stated that the errors being  addressed were created decades                 
  prior.  The language of the bill creates an 18-month window,                 
  which  would  allow a  municipality  to make  an  error next                 
  month, and  still come  back to  the state  to correct  that                 
  error. He asked  Rep. Mackie's approval  to add, on page  3,                 
  line 29, "January  1, 1993."  He  invited  Andy Pekovich  to                 
  join  the committee.  Mr.  Pekovich stated  that  he was  in                 
  agreement with the added language.                                           
  Senator Sharp joined the committee.                                          
  Senator  Sharp  MOVED  for  passage   of  AMENDMENT  1B.  No                 
  objection being heard Amendment  1B was ADOPTED.  There  was                 
  further extensive discussion regarding language.                             
  Senator Zharoff asked if Skagway does have entitlement lands                 
  Mr. Pekovich  stated that  Skagway does  have a  substantial                 
  entitlement.  Rep.  Mackie noted  that because Skagway  does                 
  have substantial entitlement,  it allows  for a zero  fiscal                 
  note.  He  assured Senator  Sharp that the  drafters of  the                 
  amendments  have  assured him  that  his concerns  have been                 
  taken care in the language.                                                  
  Senator  Sharp  MOVED  for  passage  of  AMENDMENT  1C.   No                 
  objection having been heard, Amendment 1C was ADOPTED.                       
  Senator Phillips MOVED  for passage of  a clause on page  3,                 
  line 27, after the word "municipality", "made before January                 
  1,  1993".    No  objection  having  been  heard,  the third                 
  amendment was ADOPTED.                                                       
  Senator Phillips MOVED for passage of  SCSCSHB 79 (FIN) with                 
  individual  recommendations.    No  objection  having   been                 
  raised,  SCSCSHB 79  (FIN) was  REPORTED  OUT with  two zero                 
  fiscal notes from  Dept. of Natural  Resources and Dept.  of                 
  Community and Regional Affairs.  Co-chairs Halford and Frank                 
  along with  Senators Phillips, Rieger, Donley,  Zharoff, and                 
  Sharp recommended a "do pass".                                               
  Co-chair Halford stated that  the Cambridge Energy  Contract                 
  required   ratification    by   the    committee   as    the                 
  interpretations of the  total amount  of the two  components                 
  exceeds  the  amount  that can  be  approved  without formal                 
  committee action. The  contract is in the amount of $15,750.                 
  This is a continuation at a lower cost of an on-going effort                 
  which provides oil watch market information.                                 
  Senator  Phillips  inquired  to  the  previous costs.    The                 
  response  was  $40.0.  Senator Frank  MOVED  to  approve the                 
  Cambridge Energy Contract. No  objection having been raised,                 
  the Contract was ADOPTED.                                                    
       HOUSE BILL NO. 146                                                      
       "An Act relating to sled dog race classics."                            
  Co-chair  Halford   invited  Leo   Rasmussen  to   join  the                 
  committee.    Mr.  Rasmussen  spoke  to the  words  "mushing                 
  classics".   He expressed that within  five years this would                 
  potentially  provide a revenue  stream for Iditarod.   He is                 
  convinced that  it would  take away  the financing  problems                 
  that  have  plagued  Iditarod  in   the  past.  Iditarod  is                 
  responsible for making Alaska an internationally known race.                 
  It has become a premiere event in Alaska which will increase                 
  Mr. Rasmussen testified that he has been an official checker                 
  for Iditarod.   He retired from  the Board in 1991  after 19                 
  years, but is still actively involved in trail mail. Senator                 
  Rieger asked if he thought the increasing competitiveness of                 
  the  race  has  improved  the  character  of  the  race.  He                 
  testified as to the negativity  of the race back in  1973 as                 
  compared  to now.  Mr. Rasmussen said  that there is much to                 
  be proud of  in spite of what the humane  society is saying.                 
  Co-chair Halford  agreed  to obtaining  and maintaining  the                 
  volunteer support as  much as possible.   The flavor of  the                 
  race has  changed.  It is now able to pay its bills, it does                 
  a better job economically, but along the way it has lost the                 
  earlier attitudes of the 70's.  Mr. Rasmussen indicated that                 
  it takes 10,000-20,000 volunteers to make the race work.  He                 
  estimates that  perhaps a third receives  some compensation.                 
  He noted  that there were people all over the world who took                 
  place in the race this year.  This allows the locals to take                 
  a break and  come back at another  time fresh and new.   The                 
  turnover has happened  this year  and is  an on-going  trend                 
  every three to four years.                                                   
  Co-chair Halford asked  what could be done to safeguard this                 
  race from  abuse?  Mr.  Rasmussen supported regulation.   He                 
  stated   that  there   is   history   with  the   All-Alaska                 
  Sweepstakes.  There was extensive discussion regarding prior                 
  abuses in  the race along with possible solutions.  Co-chair                 
  Halford stated that this legislation has been slowed down to                 
  find a way  to safeguard  this game.   He stated that  there                 
  must be a mechanism between the department and the committee                 
  that guarantees the  ability to safeguard.   Various methods                 
  of  protection  were discussed  to  keep a  black  mark from                 
  occurring on  the Iditarod.   Mr. Rasmussen assured  that he                 
  did not have an answer, but does support the reasoning.                      
  Senator Frank  interjected that it  is important to  keep it                 
  from  becoming  a  game of  chance,  but  to  keep the  game                 
  interesting.  He does  not want it  to become a lottery,  he                 
  likes the idea of trying  to guess when the musher  is going                 
  to cross the  line.   He supports placing  sanctions on  the                 
  musher  or  any  other  person  attempting  to  defraud  the                 
  situation.  He  suggests language that says,  "mushers can't                 
  bet or  be involved  in  the betting,  nor is  it legal  for                 
  anyone  to  ensnare  or  entangle  a  musher  in  a  betting                 
  situation."   He  elaborated on  the language and  said that                 
  when sanctions are placed  on the mushers the abuse  will be                 
  Co-chair Halford suggested placing bets on the combined time                 
  of the top three or four finishers, maintaining a historical                 
  perspective of past races.   He suggested that the committee                 
  wanted  to respond to  this bill,  the legislature  wants to                 
  help the  Iditarod, but that safeguards are  needed and that                 
  the sponsors and  the trail committee  need to come back  to                 
  the  committee  with   something  that  gives  a   level  of                 
  confidence needed on how it will happen.                                     
  Co-chair Halford invited  Mr. Edgmon to join  the committee.                 
  He stated that he did not have any solutions to safeguarding                 
  against abuse, but that his office would be glad to research                 
  it and come back  with language which could be  amended into                 
  the bill.   Co-chair Halford stressed that  the participants                 
  are  also  the volunteers  and  supporters of  the Iditarod.                 
  Therefore,  he advocated not  eliminating them from betting.                 
  He indicated that the direct participants and family members                 
  of  mushers  on the  trail, as  well  as race  officials and                 
  staff, should not  be betting on  the race.  Senator  Donley                 
  reiterated all the variables and does not know how to attack                 
  the problem.  He  suggested deferring it to someone  who has                 
  the level  of  expertise to  deal  with it.    He felt  that                 
  deferring the problem to the division would require a fiscal                 
  Co-chair Halford suggested adding a sunset of 4 years to the                 
  bill and with  a fiscal note of $25.0 along with a letter of                 
  intent that provides  criteria to  protect the integrity  of                 
  this lottery. Co-chair  Frank suggested  a fiscal note  from                 
  program receipts.                                                            
  Senator Zharoff raised  his concern  over the term  "mushing                 
  sweepstakes" and that  soon there  will be other  activities                 
  around the state like the  Beaver Roundup, Yukon Quest, etc.                 
  that want to participate too.  The definition that is in the                 
  bill is rather narrow.   Mr. Edgmon stated the  intention of                 
  the Division of Gaming, is that there is statutory authority                 
  for the  race organizations  to conduct  the game  activity.                 
  Some of the  interior race organizations do  conduct lottery                 
  game activity.   The  intent of  this bill  is  to put  this                 
  language  specifically in  the  statute  that  entitles  the                 
  Iditarod Trail  Committee to sell  tickets.  The  sponsor of                 
  the bill, after  speaking to legislative legal  council, the                 
  Gaming Division,  and the  Department of  Law, has  specific                 
  questions as  to the activity  of wagering  on the  arrival,                 
  check-point and finish line, and that it may not be allowed.                 
  Co-chair Halford suggested a fiscal note of $25.0 in program                 
  receipts, and pass  the bill out with a 4-year sunset.  This                 
  gives  the  trail  committee  4   years  to  work  with  the                 
  department.  If approved now, they will have it next year.                   
  Senator Sharp   expressed  his agreement. He  said it  would                 
  behoove  the  Iditarod  Committee  to  maintain the  highest                 
  integrity in  the checks.   Mr.  Rasmussen agreed  that with                 
  time  the race  is going  to have  to be  handled much  more                 
  professional than in the past.                                               
  Co-chair Halford asked for a motion to add a program receipt                 
  fiscal note of $25.0,  recognizing that it will  be reviewed                 
  when  the  budget  is  closed  out  and  the information  is                 
  provided by  the  department.   Discussion  was had  on  the                 
  amount of the fiscal note.                                                   
  Senator  Donley reiterated that gambling makes people behave                 
  differently.   There  have been few  things in  the statutes                 
  that have encouraged and encountered as much litigation over                 
  the precise meaning of them as  gambling.  The lawsuits come                 
  rapid  fire.    When there  is  money  involved  there is  a                 
  pecuniary  interest to file law-suits.   An activity such as                 
  this, paying 1% tax on gross,  has the potential for immense                 
  profits.  Careful thinking and  well-thought out planning is                 
  urged.  He associated  the complexity of this race  with the                 
  intricate regulations for parimutuel horse betting.                          
  Senator Rieger said that the concern over human interference                 
  can cause potential  abuse to the  race.  He suggested  that                 
  the more elements  of uncertainty introduced into  the race,                 
  the harder  it is for someone to  control.  He introduced an                 
  amendment that  would  indicate that  the  sweepstakes  must                 
  include  at  least   three  variables.    For   example,  in                 
  submitting a guess,  it might include  the names of the  top                 
  ten teams that finish, the winning time and perhaps the time                 
  between the arrival of the first  and second teams. It would                 
  be impossible  to rig that  sort of complexity  of guessing.                 
  This might take away Senator Donley's concern.                               
  Co-chair Halford said that  Senator Rieger's language leaves                 
  a lot up to the trail committee.  The existing language says                 
  that the only  thing they can  bet on is the  winning finish                 
  time.  He  stated  that  with  Mr.  Rasmussen  supporting  a                 
  concern, it validates the need  to address the problem  now.                 
  He also supports  making the betting  easy as stated by  Co-                 
  chair Frank, and  likes the  language introduced by  Senator                 
  Senator Rieger asked Mr.  Edgmon if he as in  agreement with                 
  the intent of the  amendment?  Mr. Edgmon indicated  that he                 
  didn't think the sponsor of the bill would be opposed to the                 
  amendment.   The bill  did pass the  House 30  to 5. Senator                 
  Rieger moved to adopt the Amendment.  Senator Frank OBJECTED                 
  to  the  amendment.  He  withdrew  his  debate  but  not his                 
  objection.    Co-chair  Halford  asked,  "Shall  the  Rieger                 
  Amendment be adopted?"   The Rieger Amendment passed 5  to 2                 
  and was ADOPTED.                                                             
  Senator Donley MOVED for  passage of a $25.0 fiscal  note to                 
  the  department  of program  receipts  with  a 4  yr  sunset                 
  provision. No objection having being raised, it was ADOPTED.                 
  Senator Sharp MOVED for passage of  SCSCSHB 146 (FIN) out of                 
  committee with individual recommendations  with accompanying                 
  fiscal note.   No objection having been  raised, SCSCSHB 146                 
  (FIN) was REPORTED  OUT of  committee with the  accompanying                 
  $25.0 program  receipt fiscal  note from  the Department  of                 
       SENATE BILL NO. 121                                                     
       "An  Act   making   an   appropriation   for   deferred                 
  maintenance for      the University of Alaska; and providing                 
  for an effective          date."                                             
  Co-chair Halford stated  that SB 121 would  appropriate $135                 
  million  from AHFC  after the  Board transferred  it  to the                 
  general fund  to the university  for major maintenance.   He                 
  referred  to  the  resolutions  and  the  statement  by  the                 
  university regarding major maintenance.                                      
  Senator Phillips asked how much money was being removed from                 
  Co-chair Halford responded that the capital  budget utilizes                 
  $70 million of AHFC money.  The governor's proposal on major                 
  maintenance uses another $30 million, which requires AHFC to                 
  sell bonds and carry the debt service on the bonds.   In the                 
  governor's cash flow projection, it  is showing $450 million                 
  from the constitutional budget reserve  and $70 million from                 
  AHFC.  He  stated  that  deferred   maintenance  has  to  be                 
  Wendy  Redman, University of Alaska, stated the need for the                 
  maintenance.    She pointed  out  that  nearly  80%  of  the                 
  buildings are 30 years or older,  and that the university is                 
  contained in 50%  of the buildings owned by the state.  This                 
  puts  a  hardship  on  the  state,  with  an  investment  of                 
  thousands of dollars in buildings that are beginning to fall                 
  apart. Ms. Redman spoke to  the concern of the mismanagement                 
  over the years  to allow the  buildings to deteriorate.  She                 
  stated that this is not true.  There was no money moved from                 
  maintenance accounts into  administration or academics.   In                 
  1986 when there  was a  20% budget reduction,  there was  $1                 
  million  at  the  Fairbanks  campus   that  was  taken  from                 
  maintenance to keep programs going.  The  money was replaced                 
  that  fall,  into the  maintenance  account, which  has been                 
  audited.   The problem has developed over time because there                 
  hasn't been enough money appropriated  to fix the buildings.                 
  She  stated  that  last year  the  university  received zero                 
  capital dollars.   She stated that  this has been a  10-year                 
  accumulation  which has accelerated.  It continues to be the                 
  Board's highest priority.  There are major health and safety                 
  issues  that  the  campuses are  facing  with  deteriorating                 
  facilities that are dangerous for  students to be occupying.                 
  The  Anchorage  campus  will cost  $40  million  in deferred                 
  maintenance, with Fairbanks needing even more attention.                     
  Senator Rieger asked who determines the needs of the various                 
  campuses?   Ms. Redman responded  that the Board  of Regents                 
  and  the  university use  a  formula system  of prioritizing                 
  deferred maintenance programs,  which is  also used by  DOT.                 
  The formula is updated several times a year as needed.   The                 
  Office  of  Management and  Budget  (OM&B) has  the complete                 
  backup list  of all  the  projects, starting  with the  most                 
  need.   OM&B  is not  involved in making  individual project                 
  decisions. The university makes the decisions.                               
  Senator Donley stated  that in  his opinion the  maintenance                 
  should not be a capital item, but rather an operational item                 
  in the budget.  Ms. Redman said  she agreed with this logic.                 
  Three years ago, the  Board of Regents did mandate  that the                 
  university  would  not  be  dependent  on "hoping  that  the                 
  legislature funded the operating maintenance requests".   In                 
  building new buildings there has been requests for operating                 
  maintenance to go along with those facilities. It is rarely,                 
  if ever, funded.   The  university's general fund  operating                 
  budget is exactly where it was 10 years ago. There  has been                 
  an increasing enrollment of 22% over  the past 10 years, but                 
  the general fund has  remained flat.  The tuition  money has                 
  been utilized to meet the need in student growth.  The Board                 
  of Regents agree  with what you  are indicating.  The  Board                 
  has said to the university, "don't expect any money from the                 
  state  to  build up  the  operating deficit  in maintenance"                 
  which is at this time guessed to be $11 million.   The Board                 
  has reallocated existing  resources over a 3-year  period of                 
  time to bring the maintenance budgets  up to where they need                 
  to be, based on a  formula.  The Fairbanks campus will  have                 
  to reallocate from current funds this year $4 million.                       
  Senator Donley asked  about future  maintenance issues.  Ms.                 
  Redman responded that  it is the  Board's intention to  have                 
  the maintenance costs rolled into the operating budget.  The                 
  campuses  have to  cut programs,  restrict enrollments,  and                 
  essentially  do  whatever  they have  to  do,  to bring  the                 
  maintenance budgets up.                                                      
  Pat  Pourchot,  Legislative Director  for  Governor Knowles,                 
  stated the  administration's concerns  with the direct  draw                 
  against the  reserves.   In  this case,  $35 million  versus                 
  putting a number  into the on-going annual  capital projects                 
  of  the  AHFC.   AHFC  would  issue and  be  responsible for                 
  servicing bonds.   That is the  case in the governor's  bill                 
  for the $30 million  allocated from the governor's  bill for                 
  student housing maintenance.   The allocation is  limited to                 
  student housing maintenance which the governor feels is more                 
  in line with the  on-going work and purposes and  mission of                 
  AHFC.   This  bill does  not distinguish  between major,  or                 
  deferred, maintenance for housing as opposed to other items.                 
  The  governor's approach  is to address  the other  key non-                 
  housing maintenance needs in  the capital budget.  There  is                 
  about $7 million in the capital budget that the governor has                 
  submitted  for  non-housing  goals.   The  difference within                 
  AHFC, due to  its special tax  situation, is its ability  to                 
  borrow  money  at low  interest rates.    In turn,  AHFC can                 
  invest its  reserves at  higher interest  rates.  By  having                 
  AHFC servicing their bonds  over a length of time,  the real                 
  cost of that money is significantly  reduced.  So, there are                 
  very real  and clear  reasons  for having  AHFC finance  and                 
  amortize the costs of the bonds,  opposed to a straight draw                 
  in cash off the reserves.  The reserves work for AHFC in its                 
  on-going  projects  and  missions,  one  of  which,  can  be                 
  legitimate student housing maintenance.                                      
  Co-chair Halford stated  he has  the same goals,  expressing                 
  concern  with  last  years approach  to  revenue  bonding or                 
  borrowing.   He emphasized  that with  the huge  maintenance                 
  backlog, this method borrowed into the future to pay for the                 
  mistake  of the  past. He  supports allocating the  funds to                 
  where  they  are needed,  to  catch  up from  real  dollars,                 
  instead of borrowing from the future.   AHFC internally does                 
  not gain or loose very much from the difference.                             
  Mr.  Pourchot  stated that  in  terms of  revenue  bonds and                 
  university or  housing maintenance,  there is  no cash  flow                 
  going  towards those  bonds.  Ideally,  capital budget  cash                 
  would be the best way of addressing the problem.   He stated                 
  that now, the state  is faced with an incredible  backlog of                 
  maintenance  and  even with  a 5-year  plan,  it would  be a                 
  stretch for capital dollars.   That is what  has led to  the                 
  governor's proposal.  The disadvantage again of the straight                 
  draw off the  reserves is  that by keeping  the reserves  of                 
  AHFC, it can  provide valuable programs into the future with                 
  the ability to make  money or at least narrow  the real rate                 
  of borrowing within their own agency to minimal levels.                      
  Co-chair Halford asked  what the governor's approach  is for                 
  next year when  the answer this  year is $30.0 for  housing?                 
  If it means borrowing continuously for  each and every step,                 
  then what is created is  a passing debt.  Mr.  Pourchot said                 
  that is why the "back stop"  legislation was introduced.  It                 
  was  granting  the university  authority  to issue  its' own                 
  revenue bonds  that would be  repaid through a  general fund                 
  budget  category, if the  administration and legislature did                 
  not  act  on some  other  plan  prior to  June,  1. Co-chair                 
  Halford stated that  it does not  apply to maintenance.   It                 
  would work on a  new dormitory with new receipts,  but asked                 
  how that works  on past  maintenance on  a common  building.                 
  Mr. Pourchot  stated that  it work  only in  the sense  that                 
  there  is  no  revenue  stream  to  repay the  bonds.    The                 
  repayment  comes into the front  section of the budget along                 
  with $10-$11 million.   It's  just another operating  budget                 
  item for  debt service.   The  reason for  that was  to meet                 
  pressing needs.   The development that Co-Chair  Halford was                 
  referring to is the  project in the next several  months, in                 
  the  development  of the  whole  budgeting process  for next                 
  year.    There is  no  concrete  plan for  the  mechanism of                 
  addressing the balance  of the  backlog of maintenance.  The                 
  governor's pledge is to work on this and develop a plan.  No                 
  options  have  been  selected beyond  this  year.   Co-chair                 
  Halford   stated  his concerned  that if  revenue bonds  are                 
  passed,  and  becomes  a  state   appropriation,  it  is  in                 
  violation of  the state constitution.  When  using a revenue                 
  bond  to  build  a  dormitory,  with  new  receipts,  it  is                 
  different  than  using  a  revenue bond  to  pay  for  major                 
  maintenance held over  from the past.   Mr. Pourchot  stated                 
  that  it   was  authorized  under   law.  Co-chair   Halford                 
  recognized  that it would  never be found  illegal in Alaska                 
  because it was first  done by the Court System to  build the                 
  court building in Juneau.  Other buildings were subsequently                 
  built for the court system.                                                  
  Co-chair Frank moved for  passage of SB 121 with  individual                 
  recommendations.  Senator Phillips OBJECTED without having a                 
  plan for the full-scale funding. Co-chair Halford stated the                 
  question is not decided regarding AHFC.  He said that SB 121                 
  is legitimate start, tho  it will probably sit in  the Rules                 
  Committee, while  other parts are discussed.  He recommended                 
  moving it.   Senator Phillips withdrew his  objection.  With                 
  no further objection, SB 121 REPORTED OUT  of committee with                 
  "other recommendations" by Senators Rieger, Phillips, Donley                 
  and Zharoff. Co-chair  Halford and  Frank and Senator  Sharp                 
  recommended "do pass".                                                       
       SENATE BILL NO. 80                                                      
       "An Act relating to police  protection service areas in                 
  unified           municipalities; and  to  police protection                 
  provided by the state      in certain municipal areas."                      
  Senator  Rieger  stated  the purpose  of  this  measure will                 
  increase local self-determination and provide relief to  the                 
  state's  operating budget.  It allows  for the citizenry who                 
  have the  desire and  willingness to pay  for public  safety                 
  protection and sets  forth a mechanism by which that payment                 
  is delivered to the state.                                                   
  The purpose of the bill is  to create a permissive situation                 
  where a unified municipality  can set up a service  area and                 
  pay for  trooper protection.   He  offered  an amendment  in                 
  response to a  fiscal note  by the Dept.  of Public  Safety,                 
  which spoke to  the desire  to have an  extended gearing  up                 
  time and  winding down time  compared to the  original bill.                 
  This bill is good government at its best.                                    
  Co-chair Halford invited  Del Smith  to join the  committee.                 
  Mr. Smith stated  that the administration opposes  this bill                 
  because they  are not interested in contracting.   He stated                 
  that if  the law does pass, the  Dept. of Public Safety will                 
  do their best to implement the contracting.                                  
  Senator Rieger  stated that he  has had good  cooperation in                 
  working  with the Dept.  of Public Safety  in discussing the                 
  issues.  The opposition has come from the governor's office.                 
  Senator Rieger MOVED Amendment #1.  No objection having been                 
  raised, Amendment #1 was ADOPTED and will be incorporated in                 
  the  Finance CS.  This bill  will be  taken up  at  the next                 
  committee meeting.                                                           
  Senator  Zharoff   asked  how   many  municipalities   could                 
  participate  in  this  activity?    He  inquired  as to  the                 
  department's fiscal note.   Senator  Rieger stated that  you                 
  could make an  argument that the  department benefits.   The                 
  wording  of the  actual  costing out  is,  direct cost  plus                 
  markup.  The department is the recipient, meaning more money                 
  is available  for the  delivery of  services throughout  the                 
  rest of the state.                                                           
  Co-chair Halford noted they  had run out of time,  and would                 
  take up SB 80 first thing at the next meeting.                               
  The meeting was adjourned at approximately 11:00 a.m.                        

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