COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 418(RLS) "An Act designating certain receipts as program receipts, appropriations of which are not made from the unrestricted general fund; relating to the establishment of an administrative cost charge for the state's role in the community development quota program; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. Co-Chair Torgerson directed member's attention to a proposed committee substitute, SCS CS HB 418, 1-LS1500\V. He noted that the language on page two of this committee substitute, relating to use of program receipts, is new. He added that a proposed amendment makes technical corrections and adds more programs to the list. REPRESENTATIVE NORM ROKEBERG, Chair, House Labor and Commerce Committee, testified to the bill. He stated that the bill is a result of his and other members of the House committee's frustrations with occupational licensing. He explained that many of the state's licensing boards and commissions want broader authority. However, he said the finance committees of both houses prohibit this because of the impact of any increase in activities of these boards and commissions would have on the state's fiscal gap. This he shared is because increased costs would have to be paid for from the general fund. Representative Rokeberg gave an example of the Board of Nursing that received a $150,000 federal grant to establish an outreach program for children. This grant expired, he said because the state was unable to provide additional necessary funds. Representative Rokeberg gave another example of the members of the Board of Architects who wish to participate in committees on the national level. However, he said that because of the inability for the board to raise its fees, the board is unable to secure funds for travel costs. Representative Rokeberg stressed that the legislature's attempts to reduce general fund spending should not reflect on the boards and commissions and those professional licensees that operate in the state. He asserted that the boards and commissions must be self-supported by the licensing fees. Therefore, he said, they need the ability to increase the fees as necessary. Representative Rokeberg noted the House Finance Committee added provisions to the bill to include the Alaska Seafood Marketing Institute (ASMI), the dive fishery and Department of Community and Economic Development programs. He stated he supported these additions. Representative Rokeberg pointed out that this bill passed through the House of Representatives with no objection. Representative Rokeberg assured that fee support services (FSS) are not removed from the budget, but just relocated to another category. Senator P. Kelly moved to adopt SCS CS HB 418, 1-LS1500\V as a workdraft. There was no objection and the committee substitute was ADOPTED. Amendment #1: This amendment inserts "receipts of" on page 2, lines 6 and 19 of the committee substitute. The amended language reads as follows. "(DD) receipts of the Alaska Vocational Technical Center; . (KK) receipts of the Alaska Police Standards Council;" The amendment also adds two subsections to Section 1. "(QQ) receipts of the Department of Corrections from the inmate telephone system; (RR) receipts of the Department of Public Safety from the Alaska automated fingerprint system under AS 44.41.025(b);" Co-Chair Parnell moved for adoption. Co-Chair Torgerson explained the first two changes are technical and proposed at the recommendation of the Division of Legislative Finance. Without objection the amendment was ADOPTED. Senator Phillips asked if the Division of Lands program receipts were considered for inclusion on this list. Co-Chair Torgerson responded that program was addressed in SB 283. He noted the proposed Amendments #2 and #3 were addressed in other legislation. Co-Chair Torgerson stressed that this committee substitute has nothing to do with the Majority's goal to reduce $30 million in general fund spending and is just a fund source change. He assured that this is not a "smoke and mirrors change". Senator Phillips asked if a representative from Department of Transportation and Public Facilities was present to tell him if any highway facilities other than the soon to be completed, Whittier tunnel charge tolls. Co-Chair Torgerson replied that the Whittier Tunnel is the only toll-operated facility in the state and that this passage is expected to be self-sustained. [Note: The following amendment was considered out of numerical order.] Amendment #4: This amendment deletes the language on page 1 lines 9-11. The language reads as follows. "(Y) receipts from the seafood marketing assessment under AS 16.51.120 - 16.51.170, the salmon marketing tax under AS 43.76.110 - 43.76.130, and other receipts of the Alaska Seafood Marketing Institute;" Senator Donley moved for adoption and expressed concern about Outside interests governing ASMI that have not been sufficiently responsive or forthcoming with the legislature. He wanted the legislature to maintain scrutiny over this board's operations especially because so much of the board's activities occur out of state. Co-Chair Torgerson pointed out that each of the boards and commissions are subject to annual appropriation and therefore, the appropriation process is not circumvented by this legislation. Senator Leman objected to the amendment, saying ASMI is fully supported by a tax that the fishermen agreed upon for the purpose of marketing their product. He stressed that whether or not the legislature is convinced the board's actions are entirely appropriate, is a matter that should be addressed separately. Co-Chair Torgerson added that he has seen ASMI's budget jump from $3 million to $10 million, but noted this is due primarily to federal funds. He said he also opposes the amendment. Senator P. Kelly expressed that he did not think the legislature could force ASMI to be any more responsive by removing it from this legislation. The only result, he said is the state is "still punished by their success" since the legislature is faced with increased general fund spending to support the board's growth. A roll call was taken on the motion. IN FAVOR: Senator Green, Senator Phillips and Senator Donley OPPOSED: Senator Adams, Senator Wilken, Senator P. Kelly, Senator Leman, Co-Chair Parnell and Co-Chair Torgerson The motion FAILED (3-6) The amendment FAILED to be adopted. Amendment #2: This amendment inserts a new subsection to Section 1 of the House Rules committee substitute as follows. "(BB) receipts of the Department of Public Safety under AS 44.41.025(b);" This amendment was NOT OFFERED since the changes were contained in the committee substitute. Amendment #3: This amendment inserts a new subsection to Section 4 of the House Rules committee substitute as follows. (f) The department shall not assess nor collect administrative charges under this section from new CDQ groups, representing communities not eligible for the CDQ program as of the effective date of this Act, for a period of two years from the actual award of fishery quota to that newly formed CDQ group." Senator Adams moved for adoption. Co-Chair Torgerson objected for an explanation. Senator Adams stated that this amendment incurs no cost to the state. He spoke of attempts to establish a CDQ in the area from Kotzebue to Point Hope, which this amendment addresses, but that federal approval is still required. Co-Chair Torgerson asked if this provision was adopted in earlier Committee action. Senator Adams replied that he presented the issue but no action was yet taken. Representative Rokeberg shared that the House Labor and Commerce Committee had adopted a similar amendment but the House Finance Committee removed the language. He thought the matter has merit and saw no reason to oppose this amendment. KEVIN BROOKS, Director, Division of Administrative Services, Department of Fish and Game stated the department does not oppose the amendment. [Statement was made out of the range of the recording equipment.] JEFF BUSH, Deputy Commissioner, Department of Community and Economic Development testified that the department's position on the amendment is neutral. He clarified that the Department of Community and Economic Development oversees the CDQ program rather than the Department of Fish and Game. There was no objection and the amendment was ADOPTED. Co-Chair Parnell offered a motion to move from Committee, SCS CS HB 418, 1-LS1500\V as amended with accompanying zero fiscal notes from the Department of Revenue and the Department of Health and Social Services. AT EASE 8:49 PM / 8:50 PM Co-Chair Parnell moved to withdraw his motion to report the bill from Committee. By unanimous consent, the motion was WITHDRAWN. Co-Chair Parnell moved to give the Division of Legal and Research Services technical direction to insert the appropriate department names to "(QQ)" and "(RR)" as added to the bill by Amendment #1. [Amendment language shown above contains these changes.] There was no objection and the motion was ADOPTED. Co-Chair Parnell re-offered his motion to move from Committee, SCS CS HB 418, 1-LS1500\V as amended with accompanying zero fiscal notes from the Department of Community and Economic Development, Occupational Licensing component and ASMI plus new zero fiscal note from the Department of Fish and Game. Without objection the bill MOVED from Committee.