Legislature(1997 - 1998)
02/25/1997 09:07 AM Senate FIN
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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
February 25, 1997
9:07 A.M.
TAPES
SFC-97, # 44, Side 1 (000-489)
CALL TO ORDER
Senator Bert Sharp, Cochair, Senate Finance Committee,
convened the meeting at approximately 9:07 A.M.
PRESENT
In addition to COCHAIR SHARP, COCHAIR PEARCE, SENATORS
DONLEY and ADAMS were present when the meeting was convened.
SENATORS PHILLIPS, TORGERSON and PARNELL arrived as the
meeting was in progress.
Also Attending:
SENATOR ROBIN TAYLOR, Sponsor of SB 38; SENATOR GARY WILKEN,
Sponsor of SB 84; MARK JOHNSON, Chief, Community Health and
Emergency Medical Services, Department of Health and Social
Services; WENDY REDMAN, Vice President for University
Relations, University of Alaska; BETTY MARTIN, Comptroller,
Treasury Division, Department of Revenue; and aides to
committee members.
Also Attending Via Teleconference:
JIM LYNCH, University of Alaska; MERRITT MITCHELL, Chair, UA
Alumni Legislative Committee; JOEL HARD, LT., Division of
Fish and Wildlife Protection, Department of Public Safety.
SUMMARY INFORMATION
SB 38 ANATOMICAL GIFTS, LIVING WILLS & DNR ORDER
SENATOR TAYLOR, Sponsor, testified on behalf of the
bill. MARK JOHNSON, testified in support of SB 38 and
answered questions regarding the fiscal note. SENATOR
ADAMS MOVED for passage with individual
recommendations. Without objection, CSSSSB 38 (JUD)
was REPORTED OUT of committee with individual
recommendations, a previous fiscal note from the
Department of Health and Social Services (2.0) and a
previous zero fiscal note from Department of Public
Safety.
SB 84 ASSETS OF THE UNIVERSITY OF ALASKA
SENATOR WILKEN, Sponsor, testified on behalf of the
bill. WENDY REDMAN answered questions of committee
members. JIM LYNCH was available for questions.
MERRITT MITCHELL spoke in support of the bill. BETTY
MARTIN addressed questions posed by committee members.
COCHAIR PEARCE MOVED for passage of SB 84 with
individual recommendations. Without objection, SB 84
was REPORTED OUT of committee with individual
recommendations and previous fiscal notes from the
University of Alaska (1,000.0) and the Department of
Revenue (9.0).
SB 7 HUNTING SPORT FISH TRAPPING FEES/LICENSES
SENATOR DONLEY noted a new draft CS before the
committee and recapped amendments from the previous
hearing. He also noted new fiscal notes that applied.
JOEL HARD was available for questions. SENATOR ADAMS
MOVED for ADOPTION of the draft CS. Without objection,
CSSB 7(FIN) was ADOPTED. SENATOR PARNELL MOVED for
passage with individual recommendations and
accompanying fiscal notes. There being no objection,
CSSB 7(FIN) was REPORTED OUT of committee with
individual recommendations, two zero fiscal notes from
the Department of Public Safety, and two new fiscal
notes from the Department of Fish and Game (<31.5>
Wildlife Conservation, <790.5> Sport Fish Division).
SENATE BILL NO. 38
"An Act relating to anatomical gifts, living wills, and do
not resuscitate orders."
SENATOR ROBIN TAYLOR, Sponsor, referred to the Sponsor
Statement in committee files (copy on file). The
legislation is simple and attempts to clean up and readily
provide for communication and notification of care givers
and care responders such as ambulance personnel regarding
whether the person being treated is an organ donor or has a
living will. He considered it a first step to providing
better notification. The second step being worked on, but
not yet developed was a future system to provide prompt
response via information carried on drivers' licenses so
that the care giver knows the person is an organ donor or
has a living will. The legislation attempts to improve the
communication link.
SENATOR PHILLIPS called attention to the fiscal note (2.0)
to design a symbol for bracelets and asked if the design
couldn't be taken from some other state. SENATOR TAYLOR
couldn't speak fully to that, but indicated that although
they wanted to come up with some universal symbol, it seemed
that each state had their own unique design.
MARK JOHNSON, Chief, Community Health and Emergency Medical
Services, Department of Health and Social Services;
supported the intent of the legislation. In response to a
question from SENATOR PHILLIPS regarding the fiscal note, he
believed it was very modest in that it does not provide
funds to educate providers or the public regarding the
legislation. The money would be for design, printing, and
some public notices in the newspaper. Regarding the design
symbol, he recalled previous legislation which required
similar action for a 'Do Not Resuscitate' identification and
protocol system. It passed without implementation funding,
so they did adopt a standard logo developed in Montana.
Unfortunately, no such logo exists for organ and tissue
donation in the U. S. Additionally, they would have to
print cards and provide some public notice, so there would
be a cost to the division. He believed the $2000 fiscal
note was extremely modest compared to the magnitude of
effort entailed to inform 4,000 EMS providers, plus hospital
workers and others. The division has received criticism
regarding lack of education and training on this issue,
which they continue to address. For example, they sent a
letter to every physician in the state.
SENATOR PHILLIPS felt MR. JOHNSON'S response didn't answer
his question, and he assumed it was impossible to come up
with logos from other states. MR. JOHNSON responded that
based on their research, there was no existing logo. He
reiterated that the $2000 included more than just designing
a logo.
COCHAIR SHARP inquired if there were any graphic artists on
staff at DHSS. MR. JOHNSON did not have any in his division
and was not aware of resources available on this.
SENATOR ADAMS MOVED for passage with individual
recommendations and accompanying fiscal notes. Without
objection, CSSSSB 38 (JUD) was REPORTED OUT of committee
with individual recommendations, a previous fiscal note from
the Department of Health and Social Services (2.0) and a
previous zero fiscal note from the Department of Public
Safety.
SENATE BILL NO. 84
"An Act relating to fiscal management of endowment assets of
the University of Alaska; amending the definition of
`university receipts' to include distribution from
university endowments and the total return from the
University of Alaska's endowment trust fund for land
obtained under the Act of Congress of January 21, 1929, as
amended, and transferring responsibility for management and
investment of those assets; and making technical amendments
to provisions relating to federal grants and appropriations
from federal land grant college fund sources that must be
paid to the state."
SENATOR WILKEN, Sponsor, testified on behalf of SB 84. It
was not the same as SB 250 which the legislature had
wrestled with the past few years, but it was a component of
that bill and has to do with the management of the
University of Alaska Trust. It consolidates the management
of some of the University's funds under the oversight and
direction of the regents. The Department of Revenue has
managed the fund for many years, but it is time for the
University to take another step toward development of self-
sufficiency. Statutory restrictions on management and use
of the fund insure that the interest of the public,
fiduciary responsibilities and accountability of the regents
are covered appropriately. Some paperwork will be saved by
moving the fund reporting to the University budget reports
rather than maintaining a separate reporting mechanism.
Some administrative costs will be saved in the Department of
Revenue. Consolidation with other University fund
management duties means that the costs will not be
replicated in their budget. Other University investments
have shown a higher rate of return than this fund under the
Department of Revenue's management, the differences being
the philosophy of investment. Since all parts of government
are being urged to run a tighter ship, SB 84 is consistent
because fund management is further consolidated, costs are
cut, efficiencies are realized and effectiveness enhanced.
SENATOR ADAMS noted the $1 million investment income and
inquired how much was in that particular pool at this time.
WENDY REDMAN, Vice President for University Relations,
University of Alaska; responded that there was $36.6 million
in cash and investments in the fund.
SENATOR ADAMS referred to page 3, lines 3-6, and asked for
an explanation of "net income" as it relates to
administration costs. MS. REDMAN replied that net income is
all of the money generated from the sale/lease/use of the
land minus the cost for the sale/lease or development of the
land. SENATOR ADAMS asked where the investment income would
be covered in the University budget. MS. REDMAN replied
that it would show up as Program Receipts. Currently, it is
reported separately in the annual report. SENATOR ADAMS
suggested that what is basically being done is allowing
program receipts to come into the University and reduce the
state money needed for the University. MS. REDMAN hoped
that was not exactly the case. It does take away the
incentive to make investments and raise private money if the
intention is a dollar-for-dollar decrease in general funds.
Although, it was the purpose of the original land bill that
the investments gained from lands would help support the
University and they would rely less on general funds.
The presence of Senators Torgerson and Parnell was noted.
SENATOR PHILLIPS inquired if the statement "lease funds are
adequately protected by law" referred to state law rather
than federal law. MS. REDMAN informed him that the land was
transferred with the direction that it be held in trust, the
Board of Regents statutes AS 14.40 directs that they will
handle all investments with prudent trust management, and SB
84 reiterates that the trust will be held in perpetuity on
page 3, line 10. SENATOR PHILLIPS next asked about the land
grant investment performance under the Department of
Revenue. He noted the University had a greater investment
return. MS. REDMAN responded that the Department of Revenue
had been held on the precipice for the last four years
regarding this provision in the land bill, so they have been
more conservative than normal with these funds. SENATOR
PHILLIPS' impression was that the department wanted to get
on with the transfer. MS. REDMAN confirmed that the
department didn't want to be held responsible for lower
returns and never opposed the University taking the fund
management back.
COCHAIR SHARP informed the committee that there were two
people on teleconference to testify.
JIM LYNCH, University of Alaska; did not have prepared
testimony and stated he was available for questions.
MERRITT MITCHELL, Chair, UA Alumni Legislative Committee;
briefly stated support for passage of SB 84 and pointed out
that the University had an excellent investment record.
COCHAIR SHARP called for questions. There being none, he
invited comments from others present at the meeting.
BETTY MARTIN, Comptroller, Treasury Division, Department of
Revenue; appeared before the committee and was available for
questions.
SENATOR ADAMS referred to a 1-23-97 letter from Ross Kinney,
Deputy Commissioner, (in committee files) that expressed
concern over prolonging resolution of this issue and its
relation to the earning power of the trust. MS. MARTIN
explained that for the last four years the issue had been
open regarding whether the money would move to the
University. Accordingly, the Department of Revenue felt
they had to be more conservative because it didn't make
sense to expand the equity position of the fund and have to
turn around and sell it because of transaction costs and the
possibility of losses. So, the concern was not with the
University having the trust, but a decision needed to be
made in order to properly invest this as a long-term trust.
SENATOR ADAMS asked if there would be a reduction in the
Department of Revenue due to the transfer of the investment
power to the University. Ms. Martin replied in the
negative.
COCHAIR SHARP pointed out the Department of Revenue's fiscal
note, particularly the $26,000 fixed cost. MS. MARTIN
responded that the department manages many funds and they
allocate a certain percentage of personal services and their
custody contract to those funds. In addition, they pay
their direct cost of investment management fees. The
University's fund is not large enough that it would allow
for reduction of a full position or affect the custody
contracts, so the cost would have to be reallocated back to
the general fund.
COCHAIR SHARP clarified that it would result in a cost shift
of $26,000 to those that do use the services. MS. MARTIN
confirmed. COCHAIR SHARP was curious what the fiscal note
was when they took over the services and whether they added
$26,000 then to cover the costs of management at the time.
He commented that, as Revenue Budget Subcommittee chair, he
would look at it.
SENATOR ADAMS inquired of the sponsor whether money had been
designated for use in the University system and suggested it
could be used to help solve the collective bargaining
problem existing with community teachers. SENATOR WILKEN
did not know the use of the money, but indicated there were
people in the room that did.
COCHAIR SHARP asked the pleasure of the committee. COCHAIR
PEARCE MOVED for passage of SB 84 with individual
recommendations and two accompanying fiscal notes. Without
objection, SB 84 was REPORTED OUT of committee with
individual recommendations and previous fiscal notes from
the University of Alaska (1,000.0) and the Department of
Revenue (9.0).
SENATE BILL NO. 7
"An Act reducing certain resident sport fishing, hunting,
and trapping license fees, increasing certain nonresident
sport fishing license and tag fees, and relating to
nonresident sport fishing, hunting, and trapping licenses;
and providing for an effective date."
SENATOR DONLEY, Sponsor, called attention to a draft CS
before the committee which reflects three changes:
1) The fee for combination resident, hunting and
trapping or resident hunting and sport fishing changed
from $38 to $39, reflecting the actual savings to the
state.
2) The nonresident annual sport fish license was
reduced from $200 to $150 in Section 5, page 2.
3) Another change made in Section 5 responded to an
earlier concern expressed by Senator Adams over
narrowing licensure provisions for commercial activity
to those in Alaska for the annual license. One of the
reasons for doing that was because of a proposal in the
other body that would require an annual sport fish
license before getting a guiding license, so it worked
in conjunction with other possible legislation.
SENATOR ADAMS asked for an explanation of the new fiscal
notes accompanying the proposed CS. SENATOR DONLEY said
that because the cost for the fourteen day license was
adjusted down, as was the annual nonresident license fee,
the revenue estimate declined to just above $3 million per
year instead of the earlier estimate of $6 million. The
reduction in fees were supported by the Department of Fish
and Game. The models used to predict the revenues were
uncertain business but there was strong indication that the
legislation would be a revenue generator.
COCHAIR SHARP clarifed that the proposed license schedule
for nonresidents left no option for an annual license except
for the one in Section 5. SENATOR DONLEY confirmed that was
correct. One of the main reasons for eliminating the annual
license for nonresidents was to get at the problem of over-
harvesting and using the sport fish license for commercial
harvesting purposes.
JOEL HARD, LT., Division of Fish and Wildlife Protection,
Department of Public Safety, was on teleconference. He had
no prepared testimony but was available for questions.
SENATOR ADAMS MOVED for ADOPTION of the draft CS, version 0-
LS131\K. Without objection, CSSB 7(FIN) was ADOPTED. He
asked about the repealer in Section 9. SENATOR DONLEY
confirmed that it was the annual nonresident sport fish
license that was repealed.
SENATOR PARNELL MOVED for passage with individual
recommendations and accompanying fiscal notes. There being
no objection, CSSB 7(FIN) was REPORTED OUT of committee with
individual recommendations, two zero fiscal notes from the
Department of Public Safety, and two new fiscal notes from
the Department of Fish and Game (<31.5> Wildlife
Conservation, <790.5> Sport Fish Division).
COCHAIR SHARP and other committee members made brief
announcements regarding upcoming budget subcommittee
meetings.
ADJOURNMENT
The meeting was adjourned at approximately 9:47 A.M.
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