HOUSE FINANCE COMMITTEE February 9, 1993 1:35 P.M. TAPE HFC 93 - 18, Side 2, #000 - end. TAPE HFC 93 - 19, Side 1, #000 - #545. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 1:35 P.M. PRESENT Co-Chair Larson Representative Brown Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Hoffman Representative Martin Representative Parnell Representative Therriault Representative Navarre was not present for the meeting. ALSO PRESENT Representative Ulmer; Kristie Leaf, Deputy Director of Boards and Commissions, Office of the Governor; John Gaguine, Assistant Attorney General, General Civic Section, Department of Law; Donald G. Study, CSP, Director, Labor Standards & Safety Division, Department of Labor; Rod Mourant, Special Assistant to the Commissioner, Department of Revenue; Don Clocksin, Esq., Wagstaff, Pope and Clocksin, Anchorage, Alaska; Charlot Thickstun, Director, Division of Elections, Office of the Lieutenant Governor. SUMMARY INFORMATION EO 82 Transferring administration of the charitable gaming program from the Department of Commerce and Economic Development to the Department of Revenue. EO 82 was reported out of Committee with a "do pass" recommendation and two zero fiscal notes by the Department of Revenue dated 1/11/93 and the Department of Commerce and Economic Development dated 1/11/93. EO 83 Merging the State Geographic Board and Historic Sites Advisory Committee into the Alaska Historical 1 Commission in the Department of Natural Resources. EO 83 was reported out of Committee with a "do pass" recommendation and two zero fiscal notes by the Department of Natural Resources dated 1/11/93 and the Department of Community and Regional Affairs dated 1/11/93. EO 85 Moving the bonding program that serves as security for the collection of wages and payment for raw fish from the Department of Labor to the Department of Revenue. EO 85 was HELD in Committee for further discussion. HB 94 An Act making a supplemental appropriation for costs of elections operations; and providing for an effective date. HB 94 was HELD in Committee for further discussion. Co-Chair Larson provided the Committee with Attachment #1, the Cambridge Energy Research Associates (CERA) Contract/Oil Price Forecasts. The handout was distributed to the Committee for review for a future meeting. Co-Chair Larson noted that Commissioner Designee Paul Fuhs, Department of Commerce and Economic Development, has passed both the Special Committee on International Trade and Tourism and the Labor and Commerce Committee with a unanimous "do confirm" recommendation. Co-Chair Larson recommended the Committee waive holding a hearing to confirm, Commissioner Fuhs. Representative Brown supported waiving the confirmation hearing. Representative Hanley agreed with Representative Brown. Representative Brown MOVED to waive the Finance Committee confirmation hearing of Paul Fuhs, Commissioner of the Department of Commerce and Economic Development (DCED). There being NO OBJECTIONS, the confirmation hearing was waived. A roll call vote was taken on the measure: IN FAVOR: Hoffman, Gurssendorf, Parnell, Hanley, Larson, MacLean, Brown. 2 OPPOSED: 0 Representatives Martin, Foster, Therriault and Navarre were not present for the vote. The MOTION PASSED, 7 - 0. Co-Chair Larson provided the Committee with Attachment #2, a memorandum from Representative Barnes addressing the National Petroleum, Reserve-Alaska, account dispute. He asked the Committee to review the attached information for a future meeting. EXECUTIVE ORDER 82 "Transferring administration of the charitable gaming program from the Department of Commerce and Economic Development to the Department of Revenue." Co-Chair Larson noted that the Executive Order would transfer functions which relate to the regulations of games of chance and skill from DCED to the Department of Revenue (DOR). He added, Executive Order 82 is accompanied by two zero fiscal notes. Co-Chair MacLean MOVED to report EO 82 out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTIONS, it was so ordered. EO 82 was reported out of Committee with a "do pass" recommendation and with two fiscal notes by the Department of Revenue dated 1/11/93 and the Department of Commerce and Economic Development dated 1/11/93. EXECUTIVE ORDER 83 "Merging the State Geographic Board and Historic Sites Advisory Committee into the Alaska Historical Commission in the Department of Natural Resources." Co-Chair Larson explained that EO 83 would merge the State Geographic Board and the Historical Site Advisory Committee into the Alaska Historical Commission. The Commission will remain in the Department of Natural Resources where the Historical Site Advisory Committee is currently located. The purpose of the Executive Order is to: 1. Consolidate the closely related functions; 2. Increase public access; 3. Save money due to fewer members. 3 Co-Chair Larson noted that the Executive Order is accompanied by two zero fiscal notes by the Department of Community and Regional Affairs (DCRA) and the Department of Natural Resources (DNR). KRISTIE LEAF, DEPUTY DIRECTOR OF THE BOARDS AND COMMISSIONS, OFFICE OF THE GOVERNOR, spoke in support of EO 83. She stated that the Executive Order (EO) would combine the Historical Site Advisory Committee into the Alaska Historical Commission maintaining the Historical Commission within the Department of Natural Resources. She added there has been wide support for the consolidation. The functions and duties would remain the same. Membership would decrease from twenty-one to nine members. This consolidation would increase public access and would lower administrative costs. Co-Chair MacLean questioned the savings of merging the Commissions. Ms. Leaf pointed out there are two zero fiscal notes included with the bill. She added that the DCRA's Commissioner's budget lists a decrease to the proposed FY 94 budget information with the passage of EO 83. Co-Chair MacLean asked that backup be provided to the Committee. Representative Brown noted her concern that EO 83 would exceed statute in an attempt to move employees from a partially exempt service. She asked if the EO could be modified. Ms. Leaf commented that the Executive Director position has been vacant since 1986 and added that the Department of Law has stated the provision is under the appropriate executive order authority. Co-Chair Larson noted EO 83 was accompanied by a House Resources Letter of Intent. Representative Brown expressed her concern that the original intention of the Alaska Statutes would be violated by the Administration's Executive Order. Ms. Leaf stated that the Administration could not submit a substitute executive order. JOHN GAGUINE, ASSISTANT ATTORNEY GENERAL, GENERAL CIVIL SECTION, DEPARTMENT OF LAW, explained when two or more entities are merged together, the staffing structure of any of those entities can be the one adopted in the Executive Order. In EO 83, of the three entities which are being merged, only the Historical Commission has a specified Executive Director. The other commissions note that staff may be hired and that EO 83 adopts that language. Representative Brown stated EO 83 would alter the staff structure specified in the Alaska Statutes. Mr. Gaguine replied it would merge the three commissions together and 4 would not alter the structure of the Historical Sites Advisory Commission. Co-Chair MacLean MOVED to report EO 83 out of Committee, yet noted that it should not be construed as an approval for other agency transferral functions. Representative Brown OBJECTED. A roll call vote was taken on the measure: IN FAVOR: Grussendorf, Hanley, Parnell, Therriault, MacLean, Larson. OPPOSED: Hoffman, Brown. Representatives Foster, Martin and Navarre were not present for the vote. The MOTION PASSED, 6 - 2. Representative Hanley MOVED the two zero fiscal notes by the Department of Community and Regional Affairs and the Department of Natural Resources plus the Letter of Intent submitted by the House Resources Committee. There being NO OBJECTIONS, it was so ordered. EO 83 was reported out of Committee with a "do pass" recommendation and with two zero fiscal notes by the Department of Community and Regional Affairs dated 1/11/93 and the Department of Natural Resources dated 1/11/93. EXECUTIVE ORDER 85 "Moving the bonding program that serves as security for the collection of wages and payment for raw fish from the Department of Labor to the Department of Revenue." DONALD STUDY, CSP, DIRECTOR, LABOR STANDARDS AND SAFETY DIVISION, DEPARTMENT OF LABOR, testified in support of EO 85. Currently, licensing is administrated by the Department of Revenue (DOR). Applicants must prove to DOR that they have a bond and then file with the Department of Labor (DOL) before DOR will issue them a fisheries license. Transferring of the program will eliminate one state agency reducing requirements for business. Representative Hanley noted that EO 85 would repeal A.S. 16.10.292. He questioned the Department's position. Mr. Study stated that A.S. 16.10.292 grants the Commissioner of Labor authority to enforce and regulate functions. When it moves to the Department of Revenue, the authority will also 5 transfer to the DOR Commissioner. Co-Chair MacLean asked what the departmental move would accomplish. Mr. Study replied it would provide a function for those persons trying to obtain licenses and bonding consolidated. Representative Brown interjected that DOL would be exceeding the authority contained in the executive order. She expressed her opposition to EO 85. ROD MOURANT, SPECIAL ASSISTANT TO THE COMMISSIONER, DEPARTMENT OF REVENUE, commented that it was the intent of the Department of Revenue to adopt specific and appropriate regulations in order to continue to carry out the function of protecting employees in the fishing industry. Co-Chair MacLean questioned who would experience the impact of the legislation. Mr. Mourant stated it would protect the individual fishermen who are employed by others in the fishing industry. Representative Hoffman noted his concerns regarding EO 85. He stated that the bonding requirements should be included in the Executive Order. He emphasized, that when they are not included the fishermen are not protected. Co-Chair Larson stated EO 85 would be HELD in Committee for further consideration. HOUSE BILL 94 "An Act making a supplemental appropriation for costs of elections operations; and providing for an effective date." CHARLOT THICKSTUN, DIRECTOR, DIVISION OF ELECTIONS, OFFICE OF THE LIEUTENANT GOVERNOR, provided the Committee with handouts [Attachments 3-6]. Attachment #4 illustrated the current work plan from the Division from 2/01/93 through 4/30/93. 1. Catch-up after General Election continues; input of voter information in time to produce precinct registers for REAA/CRSA, municipal and borough elections. Archiving General Election voted ballots and precinct materials in progress. 2. Input of registration forms from the Permanent Fund Dividend packet running over a thousand per week, statewide. Input required in time to produce precinct registers for REAA/CRSA, municipal and borough elections. 6 3. Budget-Fiscal Work - FY 94 reapportionment increment being submitted. Supplemental legislation in House and Senate in process. Responding to requests for fiscal notes and testifying in legislative committees, as necessary. Legislative budget and audit continues. Training fiscal staff on-going. Co-Chair Larson asked if the requested amount of $372,963 dollars would pay for present staff and provide the necessary funds to meet voter registration until 5/01/93. Ms. Thickstun stated it would. Co-Chair MacLean questioned the calculation of the request provided by the Division of Elections. Ms. Thickstun offered to provide the corrected figures. Co-Chair MacLean questioned the travel component for February. Ms. Thickstun replied the figure included travel and contractual fees. Representative Brown added the total request as of 1/19/93 was $891,500 dollars. She asked if the current budget submitted would be a reduction from that request. Co-Chair Larson pointed out that the original request was through 6/30/93. The current figures cover operations through 5/01/93. Representative Hanley questioned the $4 thousand dollar difference between requests made in April and May. Ms. Thickstun replied that operating costs and personnel services would be less in April. Co-Chair MacLean pointed out accurate figures had not been provided to the Committee. She suggested discussion be continued when the Division of Elections can provide the corrected figures. (Tape Change HFC 93-19, Side 1). Co-Chair Larson provided the Committee with Attachment #7, a memorandum and order provided by Judge Weeks addressing attorney fees due municipalities from the reapportionment suit. He asked for discussion and consideration of HB 94 and the fees. REPRESENTATIVE ULMER asked the Committee to consider the information provided from the 2/08/93 order, as provided by Superior Court Judge Weeks, as the exact amount of money due to the plaintiffs for attorney fees and costs. There is no longer any dispute regarding that part of the reapportionment lawsuit at the Superior Court level. She asked the Committee to include these amounts in the 7 supplemental provided to the Division of Elections. Representative Grussendorf supported paying these fees itemized in Attachment #7. He noted the process has cost a lot of money and the political subdivisions should receive the amount of money which they have spent and to which they are legally entitled. Co-Chair Larson asked the Committee to consider alternatives to HB 94. Representative Hanley stated his concern with guaranteeing elections to continue in March and April. Representative Parnell echoed Representative Hanley's concerns and suggested that the issues be kept separate. Representative Hoffman pointed out that the requested allocations need to be refigured by the Division of Elections. He asked that they provide more information to the Committee. Representative Therriault asked if the fees determined by Superior Judge Weeks were negotiable. Representative Ulmer stated these fees are what is owed by the State of Alaska. Representative Therriault thought the two matters should be kept separate. Representative Parnell asked if the plaintiffs can move for reconsideration of the amounts granted through the court order. DON CLOCKSIN, ESQ., WAGSTAFF, POPE & CLOCKSIN, ANCHORAGE, ALASKA, stated that technically there is a right for reconsideration of any order. Although, he added, there is nothing left to reconsider from the court order provided by Judge Weeks. Judge Weeks ruled in favor of the State. The figures are much lower than the total amount of money which was accrued by the parties litigating the case. The State does have the authority to appeal the decision. Representative Brown asked if the figures listed in Attachment #7 included interest. Mr. Clocksin stated that interest had not yet been calculated. Representative Hanley asked to hear from the Department of Law. Co-Chair MacLean pointed out that the Department of Law does have $1.87 million dollars allocated in the supplemental, although that does not cover the total fees to date. Representative Grussendorf pointed out that the plaintiffs represented are constituents and he would like to see them repaid. He added the Department of Law will represent the Office of the Governor. 8 Representative Brown suggested the plaintiffs be provided the designated allocations. Currently there are new plans for reapportionment and this would allow them to participate in those proceedings. Representative Brown added the corrected information from the Division of Elections and the plaintiff's allocations should be included in a committee substitute bill. Representative Martin disagreed with paying the amounts allocated in the Superior Court order. He referenced papers submitted last year containing information regarding the effect of reapportionment and specifically the Democratic Party's involvement. Co-Chair Larson stated the Committee was currently discussing the judgement provided by Judge Weeks. Co-Chair Larson and Co-Chair MacLean disagreed with Representative Martin. Mr. Clocksin assured the Committee that the Court ordered award is for work directly involved with litigation over reapportionment. Representative Ulmer stated that the reapportionment lawsuit is directly related to the Division of Elections supplemental. She stressed the importance of the timeliness in paying this debt. It would be best for the plaintiffs and best for the State because of the accumulated interest. Representative Brown stated she disagrees with the comments of Representative Martin. Representative Grussendorf felt that if the House Finance Committee reimburses the plaintiffs, the Administration would then more carefully consider their future proposal. Co-Chair Larson asked the Division of Elections to provide corrected information to the Committee. He noted that Legal Services would be requested to draft a proposed bill, sponsored by the House Finance Committee, dealing with reimbursement to the municipalities for expenses incurred during reapportionment (HB 146). Representative Hoffman reiterated his concern with the high turnover in fiscal officers and the organizational efficiency within the Division of Elections. Co-Chair Larson stated that HB 94 would be HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 3:05 P.M. 9 10