Legislature(1993 - 1994)
05/04/1994 09:15 AM Senate FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
May 4, 1994
9:15 a.m.
TAPES
SFC-94, #87, Side 1 (450-end)
SFC-94, #87, Side 2 (end-000)
SFC-94, #89, Side 1 (000-end)
SFC-94, #89, Side 2 (end-100)
CALL TO ORDER
Senator Drue Pearce, Co-chair, convened the meeting at
approximately 9:15 a.m.
PRESENT
In addition to Co-chairs Pearce and Frank, Senators Rieger,
Kerttula, and Sharp were present. Senators Jacko and Kelly
joined the meeting after it was in progress.
ALSO ATTENDING: Diane Schenker, Special Assistant to the
Commissioner, Department of Corrections; Elmer Lindstrom,
Special Assistant to the Commissioner, Department of Health
& Social Services; David Harding, aide to Representative
Eileen MacLean, sponsor of HB 73; Alison Elgee, Director,
Statewide Budget Office, University of Alaska;
Representative John Davies, sponsor of HB 234; Bill Paulick,
Business Development Information Network, Division of
Economic Development, Commerce & Economic Development and
member, Board of Directors, Aerospace Development
Corporation; Representative Cynthia Toohey, sponsor of HB
507; Representative Con Bunde, sponsor of HB 506; Joe
McCormick, Executive Director, Alaska Commission on
Postsecondary Education (ACPE); Joe Ambrose, aide to Senator
Taylor; C.E. Swackhammer, Deputy Commissioner, Department of
Public Safety; Chris Christensen, Staff Counsel, Alaska
Court System; Margot Knuth, Assistant Attorney General,
Criminal Division, Department of Law; Juanita Hensley,
Chief, Driver Services, Division of Motor Vehicles,
Department of Public Safety; Senator Fred Zharoff; Wanda
Cooksey, lobbyist for Single Site School District
Consortium; Susan Sorenson and Dana LaTour, fiscal analysts,
Mike Greany, Director, Legislative Finance Division;
representatives of the media, aides to committee members and
other members of the legislature.
SUMMARY INFORMATION
CSSSSB 301(HES): An Act relating to the calculation of
instructional units used in determining
state aid for education; and providing
for an effective date.
Joe Ambrose, aide to Senator Robin
Taylor, sponsor of SB 301, spoke in
support of the bill. Senator Kerttula
proposed amendment 1. Wanda Cooksey,
lobbyist for Single Site School District
Consortium, and Senator Fred Zharoff
testified in support of amendment 1.
Amendment 1 FAILED to be adopted.
Amendment 2 by Senator Kelly would
tighten the title of SB 301. Amendment
2 was ADOPTED. CSSSSB 301(FIN) was
REPORTED out of committee with a "no
recommendation," and a fiscal note for
the Department of Education for $96.4.
SB 381: An Act relating to the construction of
the Alaska Orbital Launch Complex by the
Alaska Aerospace Development
Corporation.
Bill Paulick, Business Development
Information Network, Division of
Economic Development, Commerce &
Economic Development, and member of the
Board of Directors, Aerospace
Development Corporation, testified in
support of SB 381. SB 381 was REPORTED
out of committee with a "do pass," and a
zero fiscal note for the Department of
Commerce & Economic Development.
SJR 52: Proposing amendments to the Constitution
of the State of Alaska relating to the
budget reserve fund.
Senator Rieger proposed amendment 1
incorporating new language for SJR 52.
Amendment 1 was ADOPTED. CSSJR 52(FIN)
was REPORTED out of committee with a "do
pass," and a fiscal note for the Office
of the Governor/ Division of Elections
for $2.2.
HB 73: An Act relating to state and local
taxation and other state regulation as
affected by the Alaska Native Claims
Settlement Act, as amended, and related
federal statutes; and providing for an
effective date.
David Harding, aide to Representative
Eileen MacLean, sponsor of HB 73,
testified in support of the bill. HB 73
was REPORTED out of committee with
individual recommendations and a zero
fiscal note for the Department of
Revenue.
CSHB 231(FIN): An Act relating to when previous conduct
constituting a sexual offense may be
used as an aggravating factor at
sentencing.
Margot Knuth, Assistant Attorney
General, Criminal Division, Department
of Law, answered questions until Diane
Schenker, Special Assistant to the
Commissioner, Department of Corrections,
could be located to speak to the fiscal
note and the bill. CSHB 231(FIN) was
HELD in committee until a new fiscal
note and committee substitute could be
drafted.
HB 234: An Act relating to endowments and
donations of the University of Alaska
and the University of Alaska endowment
trust fund; and providing for an
effective date.
Representative John Davies, sponsor of
HB 234, and Alison Elgee, Director,
Statewide Budget Office, University of
Alaska, testified in support of the
bill. HB 234 was REPORTED out of
committee with a "do pass," a zero
fiscal note for the University of
Alaska, and a fiscal note for the
Department of Revenue for $22.5.
SCSCSHB 409(HES): An Act relating to the maximum amount of
assistance that may be granted under the
adult public assistance program and the
program of aid to families with
dependent children; proposing a special
demonstration project within the program
of aid to families with dependent
children and directing the Department of
Health and Social Services to seek
waivers from the federal government to
implement the project.
Scheduled but not heard.
CSHB 412(HES) am: An Act relating to facilities for the
care of children; to child placement
agencies; to maternity homes; to certain
residential facilities for adults; and
to foster homes for adults; and
providing for an effective date.
Elmer Lindstrom, Special Assistant to
the Commissioner, Department of Health &
Social Services, testified in support of
the bill. CSHB 412(HES) am was REPORTED
out of committee with individual
recommendations and a fiscal note for
the Department of Health & Social
Services-HFC for $30.0.
SCSHB 445(JUD): An Act relating to operating or driving
a motor vehicle, commercial motor
vehicle, aircraft, or watercraft; to
classifying certain driving while
intoxicated offenses as felonies; to
motor vehicle forfeiture; and providing
for an effective date.
C.E. Swackhammer, Deputy Commissioner,
Department of Public Safety, spoke to
the difference of the original and the
Judicial version. He agreed with the
bill on principle but the cost reflected
in the department's fiscal note would
not allow him to support the bill.
Chris Christensen, Staff Counsel, Alaska
Court System, testified that a new
fiscal note was forthcoming
approximately twice the amount of the
existing one. Margot Knuth, Assistant
Attorney General, Criminal Division,
Department of Law, answered questions by
the committee regarding the fiscal note
for the Department of Law and number of
hearings for DWI arrests. Juanita
Hensley, Chief, Driver Services,
Division of Motor Vehicles, Department
of Public Safety, spoke to whose
vehicles would be confiscated under HB
445. SCSHB 445(JUD) was HELD for a new
committee substitute.
CSHB 506(FIN) am: An Act relating to student loans; to
sanctions for defaulting on a student
loan, including denial of a state
occupational license; and providing for
an effective date.
Representative Con Bunde, sponsor of HB
506, and Joe McCormick, Executive
Director, Alaska Commission on
Postsecondary Education (ACPE) testified
in support of HB 506. Senator Rieger
voiced his opposition to the denial of a
state license to those in default of
student loans. CSHB 506(FIN) am was
REPORTED out of committee with a "do
pass," with a zero fiscal note for the
Department of Administration, and a
fiscal note for the Department of
Education (ACPE) in the amount of $99.7
also showing a revenue of $1,408.3.
SCSCSHB 507(HES): An Act relating to licensure by the
State Medical Board and temporary
permits for certain optometrists.
Representative Cynthia Toohey, sponsor
of HB 507, testified in support of the
bill. SCSCSHB 507(HES) was REPORTED out
of committee with a "do pass," and a
fiscal note for the Department of
Commerce & Economic Development for
$2.5.
SENATE JOINT RESOLUTION NO. 52:
Proposing amendments to the Constitution of the State
of Alaska relating to the budget reserve fund.
Co-chair Pearce announced that SJR 52 had been previously
heard in committee. She said that Senator Rieger had
proposed new language that could be incorporated into a
committee substitute. It was understood that the House
version was on the way to the Senate.
SENATOR STEVE RIEGER said that in both versions of the bill
the repayment provision was repealed because of court
rulings that suggested repayment might require ratings and
revolving loan funds or other funds that were serving a
purpose but technically could be treated as repayment.
Also, the amount that was withdrawn might not be practically
repayable making this a meaningless provision in the
Constitution. Secondly, he said this approach paralleled
the prior constitutional amendment. The statement in
support which was in the election pamphlet said that money
in the budget reserve fund could be used only if it did not
serve to increase spending over the prior year of spending,
but if it was used to increase spending, it would require a
three-quarter vote. He explained that the House approach
was more restrictive, saying that money in the budget
reserve fund could not be used for any purpose even in cases
of a deficit or a shortfall that needed to be covered except
with a three-quarter vote. The other issue raised was
whether to use plain english or as it was drafted in
technical language. He felt it should be put in plain
English like the rest of the Constitution was written.
Senator Rieger MOVED amendment 1 containing his plain
English language. Senator Kerttula OBJECTED. Amendment 1
was ADOPTED on a vote of 3 to 1 (Co-chairs Pearce, Frank,
and Senator Sharp were in favor, Senator Kerttula was
opposed).
CSSJR 52(FIN) was REPORTED out of committee with a "do
pass," and fiscal note for the Office of the Governor,
Division of Elections, for $2.2. Co-chairs Pearce and
Frank, Senators Rieger and Sharp, signed a "do pass."
Senator Kerttula signed a "do not pass."
SENATE CS FOR HOUSE BILL NO. 445(JUD):
An Act relating to operating or driving a motor
vehicle, commercial motor vehicle, aircraft, or
watercraft; to classifying certain driving while
intoxicated offenses as felonies; to motor vehicle
forfeiture; and providing for an effective date.
Co-chair Pearce announced that SCSHB 445(JUD) was before the
committee with 6 fiscal notes making the bill very
prohibitive. She invited someone from the department to
speak to the bill.
End SFC-93 #87, Side 1
Begin SFC-93 #87, Side 2
C.E. SWACKHAMMER, Deputy Commissioner, Department of Public
Safety, said the Governor's bill that was introduced changed
the implied consent law that would allow the taking of blood
and urine in fatal and major injury accidents. In 1992, 382
major injury accidents occurred involving 552 drivers, and
89 fatality accidents involving 125 drivers. The Senate
Judiciary version made two changes the department agreed
with on principle but were prohibitive due to the high
fiscal notes.
The first change made a third time DWI offender a class C
felony. The second change was that the court shall forfeit
the offender's vehicle even if it was the first offense. He
referred to page 10-11 of the bill. In answer to Senator
Rieger, Mr. Swackhammer confirmed that forfeiture would
occur on the first offense.
In answer to Co-chair Frank, Mr. Swackhammer said that
presently the Department had the right to take blood or
urine samples if an arrest was made. In major injury
accidents, the person would usually be in the hospital, and
if an arrest was made, the department would be responsible
for that person from that time on.
Co-chair Pearce asked if the forfeiture portion of the bill
added a fiscal note to the bill. Mr. Swackhammer referred
to fiscal notes for the Department of Law for $786.3, and
for the Alaska Court System in the amount of $986.9.
In answer to Co-chair Frank, Mr. Swackhammer said there were
over 600 cases of DWI third time offenders a year. The
Department of Corrections had anticipated 320 additional
beds would be needed for this legislation.
CHRIS CHRISTENSEN, Staff Counsel, Alaska Court System,
informed the committee that a new fiscal note, approximately
double the existing one, would be forwarded to them. Each
year there were about 4400 first time DWI cases in Alaska.
The trial rate was under 5 percent because the consequences
were generally 3 days in jail and a $250 fine. With this
new legislation, consequences would change to a fine, 3 days
in jail, and the confiscation of the vehicle. He said it
would take four more district court judges to handle the
conservative estimated 10 percent increase in trials which
explained the revised fiscal note not yet received.
In answer to Senator Rieger, Mr. Swackhammer said that drunk
driving under SCSHB 445(JUD) would became a felony on the
third offense. Mr. Christensen said that the day fines
legislation specifically prohibited any crime with a
mandatory sentence being treated with a day fine. DWIs
would not come under that legislation if it should pass.
In answer to Senator Sharp, Mr. Christensen said that any
money the state received for the sale of any seized vehicle
would go into the general fund.
In answer to Co-chair Frank, Margot Knuth, Assistant
Attorney General, Criminal Division, Department of Law, said
the success rate of DWI cases going to trial was about 80
percent. If there was to be a mandatory sentence of 360
days in jail for the third DWI offense, the Department
expected the success rate to go down because jurors would be
aware of the sentence and may feel that it was not an
appropriate sentence. It could drop to a 60-70 percent
success rate. Again, in answer to Co-chair Frank, Ms. Knuth
said that a ruling from the Alaska Supreme Court said that
an error rate of one percent must be factored into cases on
the breath machine, making a .10 no longer adequate but
instead .11 was needed. Those cases would then be lost.
Also, some DWI arrests were made on behavior or conduct
rather than a breathalizer result and those were easier to
argue. In any case that goes to the jury, there was a
factor of a loss rate for unknown reasons even though the
system did not allow for jury nullification.
In answer to Senator Sharp, Ms. Knuth answered that if a
person tested at 1.1, even though the jury should find the
defendant not guilty of a DWI, his/her license would still
stay suspended. Senator Sharp then asked why the forfeiture
would not hold up. Ms. Knuth said the biggest problem with
a forfeiture was that anyone that had an interest in the
vehicle was entitled to a hearing on it. Rarely were the
drivers sole owners of the vehicles. That was why a hearing
was held in almost every forfeiture case. Mr. Swackhammer
said it would be only the equity of the owner that would be
wiped out. He said, in answer to Senator Sharp's first
question, the forfeiture was court ordered and the refusal
to take a breathalizer was implied consent. A driver's
license could be suspended administratively and a forfeiture
must be done through the court.
In answer to Senator Rieger, JUANITA HENSLEY, Chief, Driver
Services, Division of Motor Vehicles, Department of Public
Safety, said under SCSHB 445(JUD) any vehicle could be
forfeited whether it was borrowed or rented. She said the
owner could petition the court for a hearing regarding the
forfeiture of the vehicle.
In answer to Co-chair Frank, Ms. Knuth said that about one-
half to one-third of the fiscal note was caused by the
forfeiture provision because of the hearings required in the
forfeitures.
In answer to Co-chair Frank, Ms. Knuth said that the
Department of Law believed this legislation would have some
deterrent effect, but not enough to offset the number of new
trials expected. When a misdemeanor on a third offense
became a felony, the motivation to go to trial would
increase at least five times, causing trials to increase
even though there might be a fifteen percent case load
reduction because of the deterrent effect.
Mr. Swackhammer agreed that the legislation would have some
deterrent value but the system was already processing over
4,000 DWI cases a year and did not have enough beds to take
care of existing offenders.
Discussion was had by Senator Sharp and Mr. Swackhammer
regarding restricting the forfeiture language to only third
offenses. Ms. Knuth pointed out that the Courts already had
a forfeiture provision that applied to third and subsequent
offenses. The Court did use that provision when the
defendant was the sole owner of the vehicle. The provisions
of SCSHB 445(FIN) were mandatory in all offenses. She was
not certain that any portion of the forfeiture provisions
could be left in the bill and be useful. She suggested that
over the interim a comprehensive forfeiture provision be
written for this legislation.
Ms. Knuth reiterated that the problem with the forfeiture
provision was the number of hearings it would require. In
answer to Senator Sharp, Mr. Christensen agreed that the new
fiscal note was triggered by the forfeiture provision
applied to first, second and third, etc. offenses. He said
he would not have revised the fiscal note if it had applied
only to third offenses. He wanted to point out that while
the existing fiscal note did not take into effect the
increased number of trials, it did take into account the
increase in forfeiture hearings. He went on to say a
conservative estimate said that 10 percent of the cases
would have hearings, equating to 300 hearings at a half a
day each, requiring three-quarter time of a circuit court
judge.
Discussion followed by Co-chair Frank and Ms. Knuth
regarding real estate forfeiture procedures for use with
vehicles. In answer to Co-chair Frank, Ms. Hensley said
that there were very few forfeitures in process at present.
Co-chair Frank observed that this process was cumbersome and
he could understand why it was not used extensively. Ms.
Knuth also pointed out that along with the process being
burdensome, as offenses increased, the worth of the
defendant's vehicle usually decreased.
Co-chair Frank acknowledged that the opinion was that the
vehicle should be taken out of the hands of the offender
rather than capturing any money from the vehicle. Ms. Knuth
again reiterated that the Department of Law completely
supported the idea of confiscating vehicles but did not feel
that this version of the bill was the appropriate one.
In answer to Senator Rieger, Ms. Knuth said the original
intent of the bill was to expand implied consent to cover
accident cases where there was serious physical injury or
death. The point was that the officer need not arrest the
driver before asking for a blood or urine sample. Many of
these accidents were caused by people under the influence of
drugs and unlike alcohol there was no odor on the breath,
bloodshot eyes or other signs of intoxication. The public's
interest in finding out these persons were operating under
the influence was so high it warranted asking them for blood
or urine samples. Ms. Knuth agreed with Senator Rieger,
that implied consent could be applied to a victim as well.
Co-chair Pearce announced that SCSCSHB 445(FIN) would be
held in committee.
CS FOR HOUSE BILL NO. 506(FIN) am:
An Act relating to student loans; to sanctions for
defaulting on a student loan, including denial of a
state occupational license; and providing for an
effective date.
Co-chair Pearce invited Representative Con Bunde, sponsor of
HB 506, and Joe McCormick, Executive Director, Alaska
Commission on Postsecondary Education (ACPE), to join the
members at the table.
REPRESENTATIVE CON BUNDE, sponsor of HB 506, said the bill
had been requested by Postsecondary Education and would make
the student loan program more "user friendly" and business-
like.
JOE MCCORMICK highlighted the purposes of HB 506. First, it
was written to enhance the integrity of the Alaska Student
Loan Program in the eyes of the bond holders, bond insurers,
and financial markets. Since 1986, the legislature had
directed that the Alaska Student Loan Program issue tax
exempt bonds in order to continue funding the program. As a
result, the program had been examined and was required to
come before the legislature with recommendations that would
improve and strengthen the stability of the program.
Secondly, it provided for easier repayment terms for
students by offering a consolidation program provision in
the bill. Also, a variable interest rate provision would
allow students the lowest possible interest rate depending
on the cost of money at the time of issuance of the bonds.
Third, provisions had been identified to improve program
administration. Lastly, the ability to collect loans from
borrowers had been improved. A strong message would be sent
to students that the fund was a revolving one and their
repayment was the most important aspect of the loan because
it provided future opportunities for students to continue to
borrow in the program.
Senator Rieger asked if the department would consider
seizing the delinquent borrower's vehicle since it would
deny occupational licenses for unpaid loans. Mr. McCormick
explained that the occupational license was not a forfeiture
but a stop-gap measure so that prior to an issuance of a
renewal of a license, a student loan must be brought
current. If a loan was in default, the department would
like to negotiate with the borrower prior to the issuance of
the license. Seizing vehicles had not been something the
Commission would like to pursue or suggest. Representative
Bunde added that student loans were made without collateral
and most borrowers had no credit history.
Senator Rieger reiterated his discomfort in regard to
holding someone's license if they were in default. He felt
that by taking away someone's license, the person would be
unable to make a living and likened it to debtor's prison.
Representative Bunde responded that once a debtor had made
arrangements for repayment they were no longer in default.
Senator Sharp observed that with the new consolidation
provision it would be easier for borrowers to repay their
loans. Mr. McCormick stressed that this bill would not
collect a lot of money for the Alaska Student Loan program
but the Commission wanted to send a message to the borrowers
and bond holders in New York that collection efforts would
be taken seriously. He felt that if the State could loan
money to a student for their education it was only right
that the borrower remained current while enjoying the
privilege of practicing law, medicine, etc. in Alaska.
Senator Sharp MOVED for passage of CSHB 506(FIN) am from
committee. Hearing no objection, the bill was REPORTED out
with a "do pass", a zero fiscal note for the Department of
Administration, and a fiscal note for the Department of
Education, ACPE for $99.7 showing $1,408.3 revenue. Co-
chairs Pearce, Frank, Senators Sharp, and Kelly signed "do
pass." Senator Rieger signed "do not pass."
SENATE CS FOR CS FOR HOUSE BILL NO. 507(HES):
An Act relating to licensure by the State Medical Board
and temporary permits for certain optometrists.
Co-chair Pearce announced that HB 507 was before the
committee and invited Representative Cynthia Toohey to come
to the table.
REPRESENTATIVE TOOHEY said HB 507 was the companion bill to
SB 298 which had passed out of Senate HESS & Labor and
Commerce Committees. She said it was requested by the State
Medical Board regarding a problem in the bush or in an area
where there was no physician present. The tenen locum
problem stopped the attempt to secure a physician to cover
for another one. It was a bill the optometrists also
supported so that when they were sick or on vacation, they
could find a substitute.
In answer to Co-chair Frank, Representative Toohey said
there had been an attempt to interview by telecommunication.
The required interview must be made by a designated
representative of the State Medical Board.
Senator Kelly MOVED for passage of SCSCSHB 507(HES) from
committee with individual recommendations. The bill was
REPORTED out of committee with a "do pass", and with a
fiscal note for the Department of Commerce & Economic
Development for $2.5. Co-chairs Pearce, Frank, Senators
Rieger, Kelly, Sharp and Kerttula signed "do pass."
CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 301(HES):
An Act relating to the calculation of instructional
units used in determining state aid for education; and
providing for an effective date.
Co-chair Pearce announced CSSSSB 301(HES) was before the
committee and invited Joe Ambrose, aide to Senator Taylor,
sponsor of SB 301, to speak to the bill.
JOE AMBROSE said the bill originally introduced by Senator
Taylor encompassed a permanent fix on the single site school
issue but that provision had been removed from the bill. He
wanted the committee to know that Senator Taylor was in
support of CSSSSB 301(HES) which drastically reduced the
fiscal note.
Mr. Ambrose outlined section 1 which reduced the percentage
at which the hold harmless provision was triggered from the
current 10 percent to 5 percent. It would bring Sitka into
the hold harmless cycle which allowed their loss to be
spread over three years. In answer to Co-chair Pearce, Mr.
Ambrose ask Senator Rieger to speak to Section 2.
Senator Rieger said Section 2 would effect Adak's hold
harmless if, in fact, the Adak shutdown occurred as
proposed. What the new hold harmless provisions did as a
package was to create three tiers of hold harmless. He went
on to explain if a reduction in entitlement of instructional
units exceeded 5 percent in a year, it triggered the hold
harmless similar to what was in existing law. There were
two other brackets for more dramatic changes in the
entitlement to instructional units. Existing law said there
was a three-step process. First, a four-year phase-down
where the school would receive 75 percent of what they would
have been entitled to, then 50 percent, then 25 percent,
then zero. The next, a three-year phase-down, two-thirds,
one-third and then zero, as a hold harmless. Then a more
extreme, two-year phase-down bracket, 50 percent and then
zero. The more rapid phase-downs occurred in cases where
there was a more dramatic drop in entitlement to
instructional units. If a community suffered a complete
shutdown, it was reasoned that it should not take three
years of gradual phasing out of the harmless. There was
recognition of some need for hold harmless because some
employment contracts needed to be honored and contractual
obligations and funding were required to carry those out.
Mr. Ambrose said that the Department of Education had
advised them that a reduction of the 5 percent trigger would
add only Sitka to the hold harmless provision. There were
three other districts in one step or the other at the
present time. In answer to Co-chair Frank, Mr. Ambrose did
not know which communities those were.
Senator Kerttula MOVED amendment 1. Co-chair Pearce
OBJECTED for discussion purposes. Senator Fred Zharoff
explained that amendment 1 would hopefully take care of
funding for the single/dual site schools. Since the funding
formula had been revised 5-6 years ago, a shortfall had
happened each year.
Wanda Cooksey, lobbyist for Single Site School District
Consortium, spoke in support of amendment 1. She said the
formula provided in amendment 1 was the exact formula that
was being used now. She felt this was a good time to add
this formula so when the foundation formula was worked on in
the future, this issue would be included instead of being
outside the formula. In answer to Senator Kelly, Ms.
Cooksey answered that the fiscal impact for the coming year,
$3.1M would be funded in HB 505.
In answer to Senator Sharp, Ms. Cooksey said it effected 21
school districts that range in size from 50 to 800 students
ADM. Again in answer to Senator Sharp, Ms. Cooksey answered
that there were 3 REAAs in the group and the rest were small
municipal schools. In answer to Senator Kerttula, she said
each REAA had only one funding community.
Co-chair Pearce called for a show of hands on the motion to
ADOPT amendment 1 and the motion FAILED on a vote of 6 to 1
(Co-chairs Frank and Pearce, Senators Sharp, Kelly, Rieger
and Jacko were opposed, Senator Kerttula was in favor).
Senator Rieger MOVED for passage of CSSSSB 301(HES) from
committee with individual recommendations. Co-chair Pearce
noted that SB 301 had not received a "do pass." Senator
Kelly noted that he was not comfortable with the title. No
further objection having been heard, the bill was REPORTED
out.
Senator Kelly MOVED that CSSSSB 301(HES) be brought back
before the committee for the purpose of an amendment to
"tighten" the title. No objection being heard, the motion
to RESCIND the committee's action CARRIED.
Senator Kelly MOVED conceptual amendment 2 that would revise
the title to conform with the contents of the bill. No
objection being heard, amendment 2 was ADOPTED for
incorporation within a Finance Committee Substitute for the
bill.
Senator Kelly MOVED for passage of CSSSSB 301(FIN) from
committee with individual recommendations. No objection
being heard, the bill was REPORTED out as amended with a "no
recommendation", and a fiscal note for the Department of
Education for $96.4. Co-chair Pearce, Senator Kelly,
Rieger, Kerttula and Sharp signed "no recommendation".
SENATE BILL NO. 381:
An Act relating to the construction of the Alaska
Orbital Launch Complex by the Alaska Aerospace
Development Corporation.
Co-chair Pearce invited Bill Paulick, Business Development
Information Network, Division of Economic Development,
Commerce & Economic Development, to speak to SB 381.
BILL PAULICK explained he also was a member of the Aerospace
Development Corporation Board of Directors. SB 381
authorized the Aerospace Development Corporation to engage
in a project that would cost more than $1M. He noted that
projects over $1M had to be authorized by the legislature.
He felt the aerospace industry represented a new industry
for the state, new employment, and new income for Alaskans.
He was instrumental in setting up the new Corporation, as
well as selecting the new Director and very pleased to be a
part of the operation.
Mr. Paulick went on to say that SB 381 marked the
commercialization of aerospace for Alaska. The bill had a
zero fiscal note and in no way obligated the legislature for
future authorizations. It would allow the Corporation to
bond and construct a commercial launch facility on Kodiak
Island to be serviced by the ground facilities at the
University of Alaska Geophysical Institute in Fairbanks. He
offered to answer questions from committee members.
In answer to Senator Kelly, Mr. Paulick said that bonds
would be a combination of revenue and possibly AIDEA bonds.
Since it would be a dual use facility through the Department
of Defense, there were about five commercial contractors,
including Lockheed Aerospace, that would participate in
commercial debt funding in the facility. He did not
anticipate any state financing besides AIDEA bonds for this
project.
In answer to Senator Rieger, Mr. Paulick said the facility
had been planned and approved by the Aerospace Development
Corporation Board of Directors. They had reviewed the draft
plan and the plans could be adjusted depending upon
commercial requirements decided over the next eighteen
months prior to launch. Mr. Paulick handed out an aerial
photo artist mock-up of the proposed facility. He then
showed the committee a notebook of specifications for the
facility. He went on to explain the relationship between
Fairbanks and Kodiak. He said that Kodiak represented a
unique location and opportunity for launching different
directions and into different orbits. In comparing
Vandenberg to Kodiak, he said the weather was as good in
Kodiak as it was in Florida and the rainfall and cloud cover
was about the same. He admitted that the temperature was
different. He also noted that it was economically more
feasible to launch out of Kodiak that Vandenberg.
In answer to Senator Jacko, Mr. Paulick agreed there was
existing infrastructure at Kodiak (about 32 miles out of
town) and other places around the state. Fairbanks and
Kenai had been ruled out.
In answer to Senator Kelly, Mr. Paulick said the first
launch would hopefully be in late 1995. The safety analysis
would be complete early 1995. The Japanese and several
others were interested in using the launch site. He said
the people in Kodiak were very supportive of the project.
Co-chair Frank MOVED for passage of SB 381 from committee
with individual recommendations. No objection being heard,
the bill was REPORTED out with a "do pass", and a zero
fiscal note for the Department of Commerce & Economic
Development. Co-chair Pearce, Senators Kelly, Rieger, and
Jacko signed "do pass," and Senator Sharp signed a "no
recommendation".
HOUSE BILL NO. 234:
An Act relating to endowments and donations of the
University of Alaska and the University of Alaska
endowment trust fund; and providing for an effective
date.
Co-chair Pearce invited Representative Davies to come before
the committee and speak to HB 234.
REPRESENTATIVE JOHN DAVIES, sponsor of HB 234, said the
University was interested in managing the endowment trust
fund. The University felt it could get a better return for
their money and showed a good track record on other funds it
managed.
Senator Kelly asked if he was referring to the same
University that was unable to maintain its buildings and now
wanted to manage its own money.
ALISON ELGEE, Director, Statewide Budget Office, University
of Alaska, provided a copy of the investment performance
rating by Callan & Assoc. of the Department of Revenue's
management of the land grant trust funds for the University.
She said that over the past three years, the University's
own performance of the management of the foundation funds
had realized approximately 3 percent greater rate of return
than the Department of Revenue which placed them in the top
three percent nationwide for the management of these types
of funds. In comparison, she said the Department of Revenue
was placed in the bottom one percent nationwide.
Co-chair Frank reminded the committee of the SBS investment
losses made by the Department of Revenue several years ago.
He said he did not know if there was any connection between
managing money and coping with deferred maintenance.
Senator Sharp MOVED for passage of HB 234 from committee
with individual recommendations. No objection being heard,
the bill was REPORTED out with a "do pass", a zero fiscal
note for the University and a fiscal note for the Department
of Revenue for $22.5. Co-chairs Pearce and Frank, Senators
Sharp and Rieger signed "do pass." Senator Jacko and Kelly
signed a "no recommendation"
CS FOR HOUSE BILL NO. 412(HES) am:
An Act relating to facilities for the care of children;
to child placement agencies; to maternity homes; to
certain residential facilities for adults; and to
foster homes for adults; and providing for an effective
date.
Co-chair Pearce invited Elmer Lindstrom, Special Assistant
to the Commissioner, Department of Health & Social Services,
to speak to HB 412.
ELMER LINDSTROM said that HB 412 was not substantially
different than CSSB 268(JUD) which was previously moved from
Senate Finance. The most significant change related to page
6 of the bill, exemptions from foster home licensor. The
other difference was that the House Finance Committee
reduced the fiscal note submitted by the Department to
$30.0. The Department preferred the larger, previously
submitted fiscal note but would proceed with the $30.0 note
if so directed by the legislature.
Senator Rieger MOVED for passage of CSHB 412(HES) am from
committee with individual recommendations. No objection
being heard, the bill was REPORTED out with individual
recommendations, and a fiscal note for the Department of
Health & Social Services for $30.0. Co-chair Pearce, and
Senator Jacko signed "do pass." Co-chair Frank, Senators
Rieger and Sharp signed "no recommendation."
HOUSE BILL NO. 73:
An Act relating to state and local taxation and other
state regulation as affected by the Alaska Native
Claims Settlement Act, as amended, and related federal
statutes; and providing for an effective date.
Co-chair Pearce announced that HB 73 had previously been
heard by the committee in February 1994. Co-chair Frank had
some questions regarding federal law. She invited David
Harding to join the members at the table to speak to HB 73.
DAVID HARDING, aide to Representative MacLean, sponsor to HB
73, said that the bill made technical changes to state law
to bring it into compliance with changes in the federal
Alaska Native Claims Settlement Act as it related to
exemptions from property taxation at the state, local and
federal level. He referred the committee to a memo written
by Jack Chenoweth that stated that federal law took
precedence and at present, state law did not reflect those
changes. He drafted HB 73 so that it would now and in the
future track federal law. There had been several cases that
had ended up in court because state law was misread. HB 73
was drafted to avoid that confusion in the future by the
state assessor or anyone else reading the law.
In answer to Senator Sharp, Mr. Harding said the cases had
taken place in Cook Inlet but he did not know the exact
circumstances.
Senator Jacko MOVED for passage of HB 73 from committee with
individual recommendations. No objection being heard, the
bill was REPORTED out with a individual recommendations, and
a zero fiscal note for the Department of Revenue. Co-chairs
Pearce, and Frank, and Senator Jacko signed "do pass."
Senators Rieger and Sharp signed "no recommendation."
CS FOR HOUSE BILL NO. 231(FIN):
An Act relating to when previous conduct constituting a
sexual offense may be used as an aggravating factor at
sentencing.
Co-chair Pearce invited Margot Knuth, Assistant Attorney
General, Criminal Division, Department of Law, to the table
since Diane Schenker, Special Assistant to the Commissioner,
Department of Corrections, had not arrived at the meeting.
Ms. Knuth said there was an assumption being made by the
Department of Corrections that this aggravator provision
would be used in extremely few cases and anticipated a one
percent incidence. Because of the sex offenders that were
already in custody, she explained any impact at all carried
with it a fiscal note. HB 231 would pick up situations
where a sex offender's prior offense was either sexual
assault (rape) or sexual abuse of a minor, and either of
those would be used as an aggravating factor.
At this time, Diane Schenker joined the meeting. Co-chair
Pearce explained that there were questions about the
Department of Correction's fiscal note and why it was so
late in coming.
DIANE SCHENKER said that the fiscal note was submitted last
year when the original bill included a mitigator which was
not in the bill at present. She said that as long as the
aggravating factor was in the bill, it must be assumed that
sentences would be aggravated.
In answer to Co-chair Frank, Ms. Schenker said an operating
cost was included because the bill aggravated sex offenses
which already generally resulted in a year of incarceration.
The actual prisoner would already be incarcerated on a
normal sentence and if the aggravator went into effect, the
sentence would be lengthened at some point. She explained
that the capital expenses were put into FY95 because
approximately five beds would need to be added. A rough
estimate was made of the aggravate increase and capital
money was asked for up front.
In answer to Co-chair Pearce, Ms. Schenker said she did not
know why Section 3 with the mitigating language was removed.
Ms. Knuth said there was a philosophical objection to the
language that said why should someone be rewarded whose
conduct was becoming more serious. Co-chair Frank concurred
with that opinion.
In answer to Co-chair Pearce, Ms. Schenker remarked that
even if the mitigating language was put back into the bill,
a zero fiscal note would not be applicable.
Co-chair Pearce said that she would prefer to move the bill
and add back in the mitigating language in Rules Committee
or on the floor if it would make a difference in the fiscal
note.
After comments from Co-chair Frank, Ms. Schenker said, based
on the crime legislation that would pass this year, not
including the third time felony DWI, the Department of
Corrections would require the construction of over 200
additional beds. The Department did consider every
conceivable way that those could be housed in outside
contract or less secure beds. The beds needed for HB 231
were on top of those additional 200 beds, none of which were
funded. In fact, she said, some existing beds had been
threatened to be defunded.
In answer to Senator Rieger, Ms. Schenker said in regard to
the expansion of the furlough policy, the department was not
prohibited from furloughing presumptive sentences or any
offender by crime offense. The only restriction on furlough
was that they had to have served a third of their sentence,
be within three years of their release, and able to be in
community custody. At this time, the department had gone as
far as it could in this area. in fact, it had to pull back
in furloughing untreated sex offenders.
At Co-chair Pearce's request, Ms. Schenker agreed to provide
the committee with a new fiscal note if the mitigating
language was added back into HB 231.
Co-chair Pearce announced that HB 231 would be HELD in
committee.
Scheduled but not heard:
SENATE CS FOR CS FOR HOUSE BILL NO. 409(HES):
An Act relating to the maximum amount of assistance
that may be granted under the adult public assistance
program and the program of aid to families with
dependent children; proposing a special demonstration
project within the program of aid to families with
dependent children and directing the Department of
Health and Social Services to seek waivers from the
federal government to implement the project.
ADJOURNMENT
The meeting was recessed at approximately 11:00 a.m.
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