Legislature(1999 - 2000)

04/18/2000 09:09 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                          MINUTES                                                                                             
                 SENATE FINANCE COMMITTEE                                                                                     
                      April 18, 2000                                                                                          
                          9:09 AM                                                                                             
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-00 # 96, Side A                                                                                                             
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair   John   Torgerson    convened   the   meeting   at                                                                    
approximately 9:09 A.M.                                                                                                         
                                                                                                                                
PRESENT  Co-Chair  John   Torgerson,  Senator  Loren  Leman,                                                                
Senator  Randy Phillips,  Senator  Gary  Wilken, Senator  P.                                                                    
Kelly,  Co-Chair  Parnell,  Senator  Adams,  Senator  Green,                                                                    
Senator Donley.                                                                                                                 
                                                                                                                                
Also  Attending:   REPRESENTATIVE  NORMAN   ROKEBERG;  CAROL                                                                  
CARROLL,  Director,  Division  of  Administrative  Services,                                                                    
Department  of  Military  and Veterans  Affairs;  RON  HULL,                                                                    
Deputy   Director,   Division    of   Employment   Security,                                                                    
Department of Labor.                                                                                                            
                                                                                                                                
Attending  via   Teleconference:  GENERAL   THOMAS  WESTALL,                                                                  
Alaska    National   Guard/Naval    Militia/Defense   Force,                                                                    
Department of  Military and Veterans Affairs;  MAJOR RICHARD                                                                    
THOMAS,  Assistant  Chief  of Staff,  Alaska  Army  National                                                                    
Guard, Department of Military and Veterans Affairs.                                                                             
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
HB  37-CIGARETTES:SALES/EDUC & CESSAT'N PROGRAM                                                                                 
                                                                                                                                
SCS CS  HB 37 (FIIN)  was reported  out of Committee  with a                                                                    
"do pass"  recommendation and with  a fiscal note  by Senate                                                                    
Finance Committee.                                                                                                              
                                                                                                                                
HB 331-AK NATL GUARD/NAVAL MILITIA/DEFENSE FORCE                                                                                
                                                                                                                                
CS HB  331 (MVL) was  reported out  of Committee with  a "do                                                                    
pass"  recommendation   and  with  a  fiscal   note  by  the                                                                    
Department of Military and Veterans Affairs.                                                                                    
                                                                                                                                
HB 337-AMTS OWED ON UNEMPLOYMENT TAX: CLM V. PFD                                                                                
                                                                                                                                
SCS CS  HB 337 (FIN)  was reported  out of Committee  with a                                                                    
"do   pass"  recommendation   and  with   fiscal  notes   by                                                                    
Department of  Revenue dated 2/8/00 and  Department of Labor                                                                    
and Workforce Development dated 1/12/00.                                                                                        
                                                                                                                                
HB 378-FEES FOR WORKERS COMP AND WORKER SAFETY                                                                                  
                                                                                                                                
SCS CS  HB 378 (FIN)  was reported  out of Committee  with a                                                                    
"no  recommendation"   and  with   three  fiscal   notes  by                                                                    
Department   of  Labor   and  Workforce   Development  dated                                                                    
4/17/00, Department of  Administration dated 4/14/00, Office                                                                    
of  Management  and  Budget  dated  4/14/00,  University  of                                                                    
Alaska dated  3/6/00 and Department of  Community & Economic                                                                    
Development dated 2/2/00.                                                                                                       
                                                                                                                                
HJR 22-AK NATIVE ON PACIFIC SALMON COMMISSION                                                                                   
                                                                                                                                
Co-Chair  Torgerson  noted that  HJR  22  was SCHEDULED  but                                                                    
would not be heard.  It was rescheduled for a latter time.                                                                      
     CS FOR HOUSE BILL NO. 331(MLV)                                                                                             
     "An  Act relating  to compensation  of  members of  the                                                                    
     Alaska  National  Guard  and Alaska  Naval  Militia  in                                                                    
     active service;  changing the name of  the Alaska State                                                                    
     Militia to the Alaska  State Defense Force; relating to                                                                    
     compensation and work status  for members of the Alaska                                                                    
     State  Defense Force;  and providing  for an  effective                                                                    
     date."                                                                                                                     
                                                                                                                                
CAROL   CARROLL,   Director,  Division   of   Administrative                                                                    
Services,  Department  of  Military  and  Veterans  Affairs,                                                                    
addressed the  three changes the  legislation would  make to                                                                    
existing law:                                                                                                                   
                                                                                                                                
     ·    The bill  would streamline the process  for paying                                                                    
          members  of  the  Guard  and  Naval  Militia  when                                                                    
          called   to  active   duty  ensuring   timely  and                                                                    
          accurate pay for the soldiers.                                                                                        
     ·    The  bill  would change  the  name  of the  Alaska                                                                    
          State Militia  to the Alaska State  Defense Force,                                                                    
          the name  commonly used to refer  to the volunteer                                                                    
          force.                                                                                                                
     ·    The bill  would clarify  the status of  the Alaska                                                                    
          State Defense  Force when  called to  State active                                                                    
          duty ensuring that the Defense  Force has Title 26                                                                    
          job  protection and  subject  to military  command                                                                    
          and discipline.                                                                                                       
                                                                                                                                
Co-Chair  Torgerson questioned  the zero  fiscal note  given                                                                    
the proposed pay increase.                                                                                                      
                                                                                                                                
Ms. Carroll responded, currently,  the Alaska National Guard                                                                    
is paid  basic federal  pay scale,  which increases,  by the                                                                    
number of years in service.   Additionally, they are paid an                                                                    
allowance for cost  of living.  The bill  clarifies that the                                                                    
basic pay  would be multiplied  by 200% and no  longer would                                                                    
the pay  allowances be given.   The State's impact  would be                                                                    
that some  members would be  paid a little less  and others,                                                                    
the exact same for most members  on duty.  The 200% would be                                                                    
an attempt to match what  is currently paid.  She reiterated                                                                    
that the impact to the State would be minimal.                                                                                  
                                                                                                                                
Co-Chair Torgerson  noted that it  was based on  the federal                                                                    
government basic pay and asked if  the State could be out of                                                                    
balance if they increase the pay rate.                                                                                          
                                                                                                                                
Ms.  Carroll  explained  that  the  State  would  always  be                                                                    
nearing what the  federal government pays as it  is based on                                                                    
the federal basic minimum pay.                                                                                                  
                                                                                                                                
Co-Chair Torgerson asked  what had been added  in Sections 6                                                                    
& 7.                                                                                                                            
                                                                                                                                
Ms.  Carroll commented  that both  groups would  be eligible                                                                    
for workman's  compensation when  brought on  State's active                                                                    
duty.     Those  sections  speak   to  the   workman's  comp                                                                    
situation.                                                                                                                      
                                                                                                                                
Senator  Leman  questioned  why  Section  5  was  not  being                                                                    
changed.                                                                                                                        
                                                                                                                                
Ms. Carroll replied  that it was left the  same because over                                                                    
the years,  as the  concept has  changed, other  things were                                                                    
applicable.   The  Department believed  that would  be safer                                                                    
since the impact was not known.                                                                                                 
                                                                                                                                
Senator Leman  did not  understand the  retroactivity clause                                                                    
and how that would make a difference.                                                                                           
                                                                                                                                
Ms. Carroll  agreed that it  would make sense to  change it,                                                                    
however,  the State  attorney had  recommended leaving  that                                                                    
language the same.                                                                                                              
                                                                                                                                
MAJOR  RICHARD   THOMAS,  (Testified   via  Teleconference),                                                                    
Assistant  Chief  of  Staff,  Alaska  Army  National  Guard,                                                                    
Department  of Military  and  Veterans  Affairs, offered  to                                                                    
answer  any  questions  the   Committee  had  regarding  pay                                                                    
concerns.                                                                                                                       
                                                                                                                                
GENERAL  THOMAS  WESTALL,   (Testified  via  Teleconfernce),                                                                    
Alaska    National   Guard/Naval    Militia/Defense   Force,                                                                    
Department  of Military  and  Veterans  Affairs, offered  to                                                                    
answer  any  questions  from  the  Committee  regarding  the                                                                    
history  of  the defense  force  and  why  the bill  was  so                                                                    
important to the Department.                                                                                                    
                                                                                                                                
Senator Leman  recommended that the Committee  identify what                                                                    
the  minimum  pay  is  for   the  current  fiscal  year  and                                                                    
determine what an appropriate multiplier would be.                                                                              
                                                                                                                                
Co-Chair Torgerson  countered that  he would prefer  to move                                                                    
the  bill from  Committee and  address that  concern on  the                                                                    
floor.                                                                                                                          
                                                                                                                                
Co-Chair  Parnell MOVED  to  report CS  HB  331(MLV) out  of                                                                    
Committee  with  individual  recommendations  and  with  the                                                                    
accompanying fiscal note.  There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CS HB  331 (MVL) was  reported out  of Committee with  a "do                                                                    
pass"  recommendation   and  with  a  fiscal   note  by  the                                                                    
Department of Military and Veterans Affairs.                                                                                    
     HOUSE JOINT RESOLUTION NO. 22                                                                                              
     Relating to the membership of the Pacific Salmon                                                                           
     Commission.                                                                                                                
                                                                                                                                
Co-Chair  Torgerson  noted that  HJR  22  was scheduled  but                                                                    
would not be  heard.  The bill was rescheduled  for a latter                                                                    
time.                                                                                                                           
     CS FOR HOUSE BILL NO. 337(JUD)                                                                                             
     "An  Act  relating  to claims  against  permanent  fund                                                                    
     dividends  to pay  amounts owed  to  the Department  of                                                                    
     Labor  and  Workforce   Development  under  the  Alaska                                                                    
     Employment  Security Act  and  to  fees for  processing                                                                    
     certain  claims against  permanent fund  dividends; and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
RON HULL, Deputy Director,  Division of Employment Security,                                                                    
Department of  Labor, explained that  his work  included the                                                                    
collection of  taxes from Alaska's employers  and the paying                                                                    
out  of benefits  to  Alaskans who  are  temporarily out  of                                                                    
work.  Last year over $129  million dollars were paid out in                                                                    
benefits.   Inherent in the responsibility  of administering                                                                    
the program is the  protection of the Unemployment Insurance                                                                    
(UI) Trust Fund.  By  protection, Mr. Hull indicated that he                                                                    
meant   detection,  prevention,   and   the  collection   of                                                                    
improperly paid benefits.                                                                                                       
                                                                                                                                
Mr.  Hull   continued,  as  of  12/31/99,   the  overpayment                                                                    
balances were as follows:                                                                                                       
                                                                                                                                
     *Fraud              $4,912,384                                                                                           
     *Non-Fraud          $1,516,688                                                                                           
     *Penalty            $3,145,620 (penalty for fraud)                                                                       
                                                                                                                                
He noted that the bill  would speed the recovery of overpaid                                                                    
UI benefits  that are currently  a debt  to the State.   The                                                                    
overpaid  benefits  would be  returned  to  the Trust  Fund,                                                                    
which  have a  beneficial effect  on the  employers' UI  tax                                                                    
rates.   The  penalty  amount would  be  deposited into  the                                                                    
General Fund.                                                                                                                   
                                                                                                                                
Mr. Hull  added that  with passage  of the  legislation, the                                                                    
Department  estimates in  the first  year a  return of  over                                                                    
$1.5  million  dollars to  the  Trust  Fund, and  over  $750                                                                    
thousand  dollars   to  the  General   Fund.     Every  year                                                                    
thereafter,  it is  estimated between  $700 -  $800 thousand                                                                    
dollars  would be  returned to  the Trust  Fund and  between                                                                    
$400  - $500  thousand  dollars would  be  deposited in  the                                                                    
General Fund.                                                                                                                   
                                                                                                                                
Mr. Hull  concluded that passage  of the bill would  be good                                                                    
for the  UI Trust  Fund, the General  Fund and  for Alaska's                                                                    
employers.                                                                                                                      
                                                                                                                                
Co-Chair  Torgerson asked  what currently  happens with  the                                                                    
debt.                                                                                                                           
                                                                                                                                
Mr. Hull  noted that much  of the balance  goes uncollected.                                                                    
The  method most  used  for  collecting is  in  the case  of                                                                    
someone  reapplying for  benefits in  the future,  then they                                                                    
can be tracked.                                                                                                                 
                                                                                                                                
Co-Chair  Torgerson  asked why  it  is  not taken  to  Small                                                                    
Claims Court.                                                                                                                   
                                                                                                                                
Mr. Hull advised that sometimes  it is taken to Small Claims                                                                    
Court and from time to time to Criminal Court.                                                                                  
                                                                                                                                
Senator Adams pointed out that  the limit had been raised to                                                                    
$20 thousand  dollars.  He asked  if that could be  used for                                                                    
the State's advantage.                                                                                                          
                                                                                                                                
Mr. Hull did  not know.  He reminded members  that this work                                                                    
is labor-intensive and the problem  continues of getting the                                                                    
money to the Trust or General Fund.                                                                                             
                                                                                                                                
Co-Chair  Torgerson  countered  that  if the  case  went  to                                                                    
court, the  judgement could be  taken and filed  against the                                                                    
Permanent Dividend check.                                                                                                       
                                                                                                                                
Co-Chair  Torgerson  observed  that   then  the  bill  would                                                                    
provide for  no court  action, and  instead, go  directly to                                                                    
the attachment.                                                                                                                 
                                                                                                                                
Mr. Hull  explained that it  would but the  Department wants                                                                    
to be in the same category  as other State agencies so as to                                                                    
levy these funds.                                                                                                               
                                                                                                                                
Co-Chair  Parnell  questioned  the  need  of  the  State  to                                                                    
continue  to expand  the  scope of  the  State's ability  to                                                                    
assume action on the PFD.                                                                                                       
                                                                                                                                
Mr. Hull stressed  that arrangement is "good"  for all State                                                                    
Divisions.                                                                                                                      
                                                                                                                                
Co-Chair  Parnell questioned  what is  "good" State  policy,                                                                    
while not going through "due process".                                                                                          
                                                                                                                                
Mr.  Hull  replied that  all  agencies  are required  to  go                                                                    
through   that  process,   referencing  the   Child  Support                                                                    
Enforcement Agency (CSEA).    Mr. Hull questioned why it was                                                                    
not "good" policy to collect State debt.                                                                                      
                                                                                                                                
Senator  Parnell  repeated his  question  of  why the  State                                                                    
should be allowed to take action without going to court.                                                                        
                                                                                                                                
Mr. Hull responded that it was a debt to the State.                                                                             
                                                                                                                                
Senator Wilken  asked how it  was determined who  would file                                                                    
against the PFD for money in dispute.                                                                                           
                                                                                                                                
Mr. Hull  stated if  any amount was  in dispute,  the agency                                                                    
would not be  allowed to move forward as  written in current                                                                    
statute.    He noted  that  there  exists an  administrative                                                                    
appeals process for court actions.                                                                                              
                                                                                                                                
Co-Chair Torgerson referenced Page  2, Lines 9-13, asking if                                                                    
those actions would  be addressed through the  use of social                                                                    
security numbers.  He questioned  the "broad based" language                                                                    
used.                                                                                                                           
                                                                                                                                
Mr.  Hull  explained  that  the  language  would  bring  the                                                                    
Department   in  compliance   with  requirements   that  the                                                                    
Department of Revenue had established.                                                                                          
                                                                                                                                
Co-Chair Parnell pointed out that  for PFD purposes, often a                                                                    
birthdate  is  needed.    Some people  do  not  have  social                                                                    
security   numbers  yet   and   that   alternate  forms   of                                                                    
identification can be used.                                                                                                     
                                                                                                                                
Co-Chair  Torgerson assumed  that the  people referenced  in                                                                    
the  legislation   would  be  old  enough   to  be  working;                                                                    
otherwise, the provision would not apply to them.                                                                               
                                                                                                                                
Co-Chair  Torgerson  inquired  if   the  notices  were  sent                                                                    
registered mail.                                                                                                                
                                                                                                                                
Mr. Hull replied that they are sent through regular mail.                                                                       
                                                                                                                                
Senator Parnell asked  if the State indicates  notice of the                                                                    
"right to appeal".                                                                                                              
                                                                                                                                
Mr.  Hull explained  that there  are a  number of  documents                                                                    
sent.   The first document is  send to the claimant  and the                                                                    
employer.    If funds  are  owed,  the claimant  receives  a                                                                    
letter of determination, which contains that document.                                                                          
                                                                                                                                
Senator  Parnell reiterated  his question,  if the  claimant                                                                    
received notice of the right to appeal for any decision.                                                                        
                                                                                                                                
Mr.  Hull advised  that  the claimant  does  receive such  a                                                                    
packet, which explains how to place those appeals.                                                                              
                                                                                                                                
Senator  Leman  offered  three minor  technical  amendments.                                                                    
Page  3,  Line 26,  delete  "interpret";  Page 3,  Line  29,                                                                    
transpose  the words  "only include";  Page 4,  Line 6  & 7,                                                                    
delete "interpret  for". Senator Leman MOVED  to adopt those                                                                    
language changes.  There being  NO OBJECTION, the amendments                                                                    
were incorporated.                                                                                                              
                                                                                                                                
Co-Chair Parnell MOVED to report SCS  CS HB 337 (FIN) out of                                                                    
Committee  with individual  recommendations and  with fiscal                                                                    
notes by Department  of Revenue and Department  of Labor and                                                                    
Workforce Development.  There being  NO OBJECTION, it was so                                                                    
ordered.                                                                                                                        
                                                                                                                                
Co-Chair  Torgerson stated  that  SCS CS  HB  337 (FIN)  was                                                                    
reported out  of Committee with  a "do  pass" recommendation                                                                    
and with fiscal notes by  Department of Revenue dated 2/8/00                                                                    
and  Department of  Labor  and  Workforce Development  dated                                                                    
1/12/00.                                                                                                                        
     SENATE CS FOR CS FOR HOUSE BILL NO. 37(JUD)                                                                                
     "An Act relating to restricting  sale of cigarettes, to                                                                    
     enforcement  of  certain  laws  relating  to  sales  of                                                                    
     cigarettes,  and  to  smoking education  and  cessation                                                                    
     programs administered  by the Department of  Health and                                                                    
     Social Services."                                                                                                          
                                                                                                                                
REPRESENTATIVE   NORMAN   ROKEBERG    testified   that   the                                                                    
legislation   would   authorize  a   comprehensive   smoking                                                                    
education,  tobacco  use   prevention  and  tobacco  control                                                                    
program.    It  would   ensure  that  non-State  contractors                                                                    
administer the tobacco  education prevention.  Approximately                                                                    
$816 million  dollars in tobacco  settlement monies  will be                                                                    
forthcoming to the  State.  He noted that  the Department of                                                                    
Health  and Social  Services would  monitor private  tobacco                                                                    
settlement contracts.                                                                                                           
                                                                                                                                
Representative  Rokeberg  stated  that   HB  37  outlines  a                                                                    
comprehensive tobacco  control program  based on  the Center                                                                    
for  Disease Control  guidelines.   The bill  would prohibit                                                                    
sales of cigarettes in-groups of  less than 20, not in their                                                                    
original  packaging, and  not properly  labeled for  sale in                                                                    
the  states.   He noted  that it  was his  intent that  upon                                                                    
passage of  the bill,  contractual agreements would  be made                                                                    
with organizations  such as the American  Cancer Society, to                                                                    
implement the program.  The  Department of Health and Social                                                                    
Services   would   be   responsible   for   the   oversight.                                                                    
Representative  Rokeberg stated  that  the  State of  Alaska                                                                    
does  not  need  to  contribute  government  bureaucracy  by                                                                    
burdening the State with additional programmatic duties.                                                                        
                                                                                                                                
Senator Wilken questioned the fiscal  note.  He asked if the                                                                    
hire of one full time equivalent was necessary.                                                                                 
                                                                                                                                
Representative  Rokeberg  replied  that  there  was  another                                                                    
fiscal note that he and  Senator Parnell had prepared a note                                                                    
that zeroed out that position.                                                                                                  
                                                                                                                                
Co-Chair Torgerson understood that  the Department of Health                                                                    
and Social  Services would like  to have more money  in that                                                                    
program, which the fiscal note reflects.                                                                                        
                                                                                                                                
Co-Chair Parnell spoke to  Amendment #1, 1-LS0247/B.1, Ford,                                                                    
4/13/00.    He  stated  that  the  amendment  would  address                                                                    
language  on  Page  5,  Line  5,  deleting  "more  than  one                                                                    
organization" and inserting "one or more organizations".                                                                        
                                                                                                                                
Representative   Rokeberg  voiced   his   support  for   the                                                                    
amendment.                                                                                                                      
                                                                                                                                
Senator  Leman stated  that he  would support  the amendment                                                                    
with  the  current dollar  amount.    He clarified  that  he                                                                    
supported competition for securing the contract.                                                                                
                                                                                                                                
Senator  Green  stated  that  she   could  not  support  the                                                                    
amendment.    She  believed  that  there  are  organizations                                                                    
currently  in  place that  should  be  eligible to  directly                                                                    
receive funding  and should  not be  required to  go through                                                                    
another agency or beneficiary.                                                                                                  
                                                                                                                                
Co-Chair Parnell  noted that was possible  with the proposed                                                                    
amendment language.                                                                                                             
                                                                                                                                
Senator Green OBJECTED to Amendment #1.                                                                                         
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:      Donley, Leman, Adams, Wilken, Phillips,                                                                          
               Parnell, Torgerson                                                                                               
OPPOSED:       P. Kelly, Green                                                                                                  
                                                                                                                                
The MOTION PASSED (7-2).                                                                                                        
                                                                                                                                
Co-Chair  Parnell  MOVED  to adopt  the  fiscal  note  dated                                                                    
4/15/00 as provided by the  Senate Finance Committee.  There                                                                    
being NO OBJECTION, it was adopted.                                                                                             
                                                                                                                                
Co-Chair Parnell  MOVED to report  SCS CSHB 37 (FIN)  out of                                                                    
Committee  with  individual  recommendations  and  with  the                                                                    
accompanying fiscal note.  There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
SCS CS  HB 37 (FIIN)  was reported  out of Committee  with a                                                                    
"do pass"  recommendation and with  a fiscal note  by Senate                                                                    
Finance Committee.                                                                                                              
     SENATE CS FOR CS FOR HOUSE BILL NO. 378(FIN)                                                                               
     "An Act  relating to  the establishment  of, assessment                                                                    
     of, collection of, and accounting  for service fees for                                                                    
     state  administration  of   workers'  compensation  and                                                                    
     workers' safety programs;  establishing civil penalties                                                                    
     and  sanctions for  late payment  or nonpayment  of the                                                                    
    service fee; and providing for an effective date."                                                                          
                                                                                                                                
Co-Chair Torgerson commented that  at the previous Committee                                                                    
meeting, there  had been  no motion  to move  HB 378  out of                                                                    
Committee.  He asked if  there was any Committee member that                                                                    
wanted to move the bill from the Committee at this time.                                                                        
                                                                                                                                
Co-Chair Parnell MOVED to report SCS  CS HB 378 (FIN) out of                                                                    
Committee  with  individual  recommendations  and  with  the                                                                    
accompanying fiscal  notes.  There  being NO  OBJECTIONS, it                                                                    
was so ordered.                                                                                                                 
                                                                                                                                
SCS CS  HB 378 (FIN)  was reported  out of Committee  with a                                                                    
"no  recommendation"   and  with   three  fiscal   notes  by                                                                    
Department   of  Labor   and  Workforce   Development  dated                                                                    
4/17/00, Department of  Administration dated 4/14/00, Office                                                                    
of  Management  and  Budget  dated  4/14/00,  University  of                                                                    
Alaska dated  3/6/00 and Department of  Community & Economic                                                                    
Development dated 2/2/00.                                                                                                       
ADJOURNED                                                                                                                   
                                                                                                                                
Senator Torgerson adjourned the meeting at 9:50 A.M.                                                                            

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