HOUSE FINANCE COMMITTEE March 26, 1993 8:30 A.M. TAPE HFC 93 - 65, Side 1, #000 - end. TAPE HFC 93 - 65, Side 2, #000 - end. TAPE HFC 93 - 66, Side 1, #000 - #146. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 8:30 A.M. PRESENT Co-Chair Larson Representative Brown Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Hoffman Representative Martin Representative Therriault Representative Parnell Representative Navarre was not present for the vote. ALSO PRESENT Nancy Bear Usera, Commissioner, Department of Administration; Cheryl Frasca, Director, Division of Budget Review, Office of Management and Budget, Office of Governor; Marsha Hubbard, Director of Budget, University of Alaska; Representative Jerry Mackie; Ron B. Lind, Director, Plans, Programs and Budget, Department of Transportation and Public Facilities; Jenny Murray, Aid to Representative Con Bunde. SUMMARY INFORMATION HB 79 An Act relating to recovery from a parent or legal guardian of wilful or malicious destruction of property by a minor. CS HB 79 (FIN) was reported out of Committee with a "do pass" recommendation and with three zero fiscal notes by the Department of Health and Social Services dated 2/10/93, the Department of Administration dated 2/10/93 and the Department of Law dated 2/10/93. HB 143 An Act relating to the distribution of the revenue obtained from imposition of the state tax on motor fuel used in watercraft of all descriptions; and providing for an effective date. 1 CS HB 143 (CRA) was held in Committee for further discussion. HB 158 An Act making appropriations for contract settlement costs and cost-of-living adjustments for public employees who are members of certain collective bargaining units; and providing for an effective date. CS HB 158 (L&C) was reported out of Committee with a "do pass" recommendation. HB 225 An Act relating to notice of certain appropriations from the dividend fund. HB 225 was reported out of Committee with a "do pass" recommendation. HOUSE BILL 225 "An Act relating to notice of certain appropriations from the dividend fund." Representative Parnell noted that HB 225 had originated within the Department of Public Safety Subcommittee in order to transfer the permanent fund surplus into the Council on Domestic Violence and Sexual Assault. He noted that a felon's check would go to the Crime Victim Compensation Fund, Sex Offender Treatment, issued under the Department of Corrections and the Council on Domestic Violence. Representative Parnell MOVED HB 225 with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 225 was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Revenue. HOUSE BILL 158 "An Act making appropriations for contract settlement costs and cost-of-living adjustments for public employees who are members of certain collective bargaining units; and providing for an effective date." NANCY BEAR USERA, COMMISSIONER, DEPARTMENT OF ADMINISTRATION, stated that the Labor, Trades and Crafts Agreement Management goals are to: * Increase management flexibility to respond effectively to the changing economic conditions of 2 the State while maximizing the quality of government services to the public. 1. Where possible, defer to the Personnel Rules. 2. Increase management choice when making promotions. 3. Clarify management's right to contract out work and layoff employees. 4. Terminate all prior letters of agreement. * Improve productivity, accountability, consistency, and efficiency of State government operations. 1. Reduce overtime and other premium pay liabilities to FLSA standards. 2. Convert travel and per diem entitlement to those provided in the State Administrative Manual. 3. Reduce the number of holidays. * Realign the cost of personal services, moderating the State's relative position as a provider of wages and benefits so as to reflect the current and foreseeable economic environment. 1. Modify health benefits, reduce unnecessary utilization and increase employee participation in selecting the benefit package. 2. Share future cost increases of health insurance between the employees and the State. 3. Limit across the board salary increases. 4. Defer the effective date of the salary increase by six months. She noted that negotiations began in December, 1991, and were limited to six contract articles selected by the parties. With the assistance of a federal mediator, an agreement was reached with a three year arrangement. The issues covered were contracting-out, licenses, wages, classification, call back, travel, holidays, family leave, promotion, health insurance and signing bonus. She added, these are the bargaining terms covering the life of the 3 contract for a two year period. Co-Chair MacLean questioned the fiscal changes from $5 million to $9 million dollars occurring from the original bill. Ms. Usera stated that there was a monetary roll-in from the University agreement. The bargaining agreement now includes 1993/1994 members. CHERYL FRASCA, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, reiterated that an amendment had been included for the University in Sections 5 and 6. She added that additional sections were updated which omitted the employer costs of paying the bonuses. MARSHA HUBBARD, DIRECTOR OF BUDGET, UNIVERSITY OF ALASKA, advised that an agreement with the LTC Contract had been signed last May, 1992, and provided the same salary increase as given the non-union employees during FY 93. The receipt of the three percent increase is dependant upon negotiations and the Legislative appropriation. Co-Chair MacLean MOVED to report CS HB 158 (L&C) out of Committee with individual recommendations. There being NO OBJECTION, it was so ordered. CS HB 158 (L&C) was reported out of Committee with a "do pass" recommendation. HOUSE BILL 79 "An Act relating to recovery from a parent or legal guardian of wilful or malicious destruction of property by a minor." JENNY MURRAY, AID TO REPRESENTATIVE CON BUNDE, testified in support of HB 79 and stated that the legislation would increase the current cap for parental liability from $2 thousand dollars to what is allowable in district court, $50 thousand dollars. The bill would allow owners of property damaged wilfully or maliciously by a minor to recover monetarily from the minor's parents or legal guardian. With this bill, victims of property damage may finally be able to recover a greater portion of their losses as long as those damages total less than $50 thousand dollars. Representative Parnell referenced Page 1, Line 10, and asked why "destroys" was used instead of "damages". Ms. Murray stated the verbiage was the same as that used in the original statute. Representative Parnell recommended changing the language with the advise of the Department of Law. 4 Co-Chair MacLean suggested that the $50 thousand dollar fine was too harsh. She asked if the child could be covered by insurance. Ms. Murray suggested that home owners could be covered by home owners insurance. She pointed out that legislation is geared toward the victims of property damage. Discussion followed regarding the responsibility of the insurance company paying the fees of damage versus the parent's responsibility of the minor. Co-Chair Larson asked accountability of parents of run-away children. Ms. Murray pointed out that the legal guardian is the responsible party if they had not emancipated that child. The Department of Health and Social Services is involved in determining the necessary process. Co-Chair MacLean questioned the average rate paid by other states. Ms. Murray pointed out that Alaska's rate has not been revised since 1967 and is currently lower than the other maximums. The average for most states is $15 - $25 thousand dollars. Representative Hoffman questioned the rights of the injured party to collect the proposed fees. (Tape Change, HFC 93-65, Side 2). Ms. Murray stated that upon deciding that the juvenile is guilty, there are several ways to determine the responsibility such as claiming the permanent fund, taking their personal property, etc. Representative Hoffman thought this would place unfair hardship on the family. Representative Parnell reminded the Committee that there are exemptions protecting the family's equity. Discussion followed regarding protection the minor's parents and the victim's house insurance coverage. Co-Chair Larson MOVED to amend Page 1, Line 7, by inserting "$10 thousand dollars" and deleting "$2 thousand dollars". Representative Foster OBJECTED. He MOVED to amend the amendment to "$5 thousand dollars". Representative Parnell OBJECTED. A roll call was taken on the MOTION to amend the amendment. IN FAVOR: Martin, Brown, Foster, Grussendorf, Hoffman, MacLean. OPPOSED: Parnell, Therriault, Hanley, Larson. Representative Navarre was not present for the vote. 5 The MOTION PASSED, (6 - 4). A roll call was taken on the MOTION to adopt the $5 thousand dollar change. IN FAVOR: Brown, Foster, Grussendorf, Hanley, Martin, Larson, MacLean. OPPOSED: Parnell, Therriault, Hoffman. Representative Navarre was not present for the vote. The MOTION PASSED, (7 - 3). Representative Parnell MOVED to report CS HB 79 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CS HB 79 (FIN) was reported out of Committee with a "do pass" recommendation and with three fiscal notes by the Department of Health and Social Services dated 2/10/93, Department of Administration dated 2/10/93 and the Department of Law dated 2/10/93. HOUSE BILL 143 "An Act relating to the distribution of the revenue obtained from imposition of the state tax on motor fuel used in watercraft of all descriptions; and providing for an effective date." REPRESENTATIVE JERRY MACKIE testified in support of HB 143. The legislation was introduced in response to interest expressed by several communities regarding local harbor and dock facilities. The bill would provide to a municipality a portion of state watercraft fuel taxes collected within that municipality. The portion would be determined by the ratio of city owned docks and harbors to all public owned docks and harbors in that area. The bill would generate revenue sharing of tax receipts derived from facility users. Most harbor facilities located throughout the State are currently owned by the Department of Transportation and Public Facilities. These facilities are usually operated by the local municipalities. In recent years, the Department has sought to have the municipalities take ownership of the facilities and the associated maintenance responsibilities. Their view is that the "on site" operator is better suited for effective and efficient upkeep of a facility than the distant DOTPF personnel. 6 Representative Therriault expressed concern with the operational expense currently paid by the local municipalities. Representative Mackie remarked there is little maintenance performed in the smaller communities which have harbors although there is a lot of deterioration. The legislation would provide funds to address local harbor facility concerns. Representative Brown inquired how military facilities would be treated. Representative Mackie said "publically operated" refers only to moorage facilities operated by DOTPF or a local municipality. Discussion followed regarding facilities publically owned and operated. Representative Brown MOVED to amend Page 2, Line 7, by adding the language following "are" by deleting "publically operated" and insert "owned by the State or municipality" and to include Amendment #1 proposed by Representative Mackie. [Attachment #1]. An additional amendment was moved to add the language to Page 2, Line 7, after the word "commissioner" adding "of Department of Transportation and Public Facilities". Co-Chair MacLean recommended adding a sunset clause to the legislation. Representative Mackie explained adding a sunset would not work. An incentive would be provided and then the funds would be removed. This would leave the municipalities owning the harbors with no funds to operate them. Representative Brown MOVED the suggested amendment. (Tape Change, HFC 93-66, Side 1). RON LIND, DIRECTOR, PLANS, PROGRAMS, AND BUDGET, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, stated the amendment to change DOTPF as the agency for determining footage would be appropriate. He stated that the Alaska Marine Highway dock would need to be excluded. Representative Martin OBJECTED. A roll call was taken on the MOTION. IN FAVOR: Parnell, Therriault, Brown, Foster, Grussendorf, Hanley, Hoffman, MacLean, Larson. OPPOSED: Martin. Representative Navarre was not present for the vote. 7 The MOTION PASSED, (9 - 1) and the amendment was included. HB 143 was HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 10:05 A.M. HOUSE FINANCE COMMITTEE March 26, 1993 8:30 A.M. TAPE HFC 93 - 65, Side 1, #000 - end. TAPE HFC 93 - 65, Side 2, #000 - end. TAPE HFC 93 - 66, Side 1, #000 - #146. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 8:30 A.M. PRESENT Co-Chair Larson Representative Brown Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Hoffman Representative Martin Representative Therriault Representative Parnell Representative Navarre was not present for the vote. ALSO PRESENT Nancy Bear Usera, Commissioner, Department of Administration; Cheryl Frasca, Director, Division of Budget Review, Office of Management and Budget, Office of Governor; Marsha Hubbard, Director of Budget, University of Alaska; Representative Jerry Mackie; Ron B. Lind, Director, Plans, Programs and Budget, Department of Transportation and Public Facilities; Jenny Murray, Aid to Representative Con Bunde. SUMMARY INFORMATION HB 79 An Act relating to recovery from a parent or legal guardian of wilful or malicious destruction of property by a minor. CS HB 79 (FIN) was reported out of Committee with a "do pass" recommendation and with three zero fiscal notes by the Department of Health and 8 Social Services dated 2/10/93, the Department of Administration dated 2/10/93 and the Department of Law dated 2/10/93. HB 143 An Act relating to the distribution of the revenue obtained from imposition of the state tax on motor fuel used in watercraft of all descriptions; and providing for an effective date. CS HB 143 (CRA) was held in Committee for further discussion. HB 158 An Act making appropriations for contract settlement costs and cost-of-living adjustments for public employees who are members of certain collective bargaining units; and providing for an effective date. CS HB 158 (L&C) was reported out of Committee with a "do pass" recommendation. HB 225 An Act relating to notice of certain appropriations from the dividend fund. HB 225 was reported out of Committee with a "do pass" recommendation. HOUSE BILL 225 "An Act relating to notice of certain appropriations from the dividend fund." Representative Parnell noted that HB 225 had originated within the Department of Public Safety Subcommittee in order to transfer the permanent fund surplus into the Council on Domestic Violence and Sexual Assault. He noted that a felon's check would go to the Crime Victim Compensation Fund, Sex Offender Treatment, issued under the Department of Corrections and the Council on Domestic Violence. Representative Parnell MOVED HB 225 with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 225 was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Revenue. HOUSE BILL 158 "An Act making appropriations for contract settlement costs and cost-of-living adjustments for public 9 employees who are members of certain collective bargaining units; and providing for an effective date." NANCY BEAR USERA, COMMISSIONER, DEPARTMENT OF ADMINISTRATION, stated that the Labor, Trades and Crafts Agreement Management goals are to: * Increase management flexibility to respond effectively to the changing economic conditions of the State while maximizing the quality of government services to the public. 1. Where possible, defer to the Personnel Rules. 2. Increase management choice when making promotions. 3. Clarify management's right to contract out work and layoff employees. 4. Terminate all prior letters of agreement. * Improve productivity, accountability, consistency, and efficiency of State government operations. 1. Reduce overtime and other premium pay liabilities to FLSA standards. 2. Convert travel and per diem entitlement to those provided in the State Administrative Manual. 3. Reduce the number of holidays. * Realign the cost of personal services, moderating the State's relative position as a provider of wages and benefits so as to reflect the current and foreseeable economic environment. 1. Modify health benefits, reduce unnecessary utilization and increase employee participation in selecting the benefit package. 2. Share future cost increases of health insurance between the employees and the State. 3. Limit across the board salary increases. 4. Defer the effective date of the salary increase by six months. 10 She noted that negotiations began in December, 1991, and were limited to six contract articles selected by the parties. With the assistance of a federal mediator, an agreement was reached with a three year arrangement. The issues covered were contracting-out, licenses, wages, classification, call back, travel, holidays, family leave, promotion, health insurance and signing bonus. She added, these are the bargaining terms covering the life of the contract for a two year period. Co-Chair MacLean questioned the fiscal changes from $5 million to $9 million dollars occurring from the original bill. Ms. Usera stated that there was a monetary roll-in from the University agreement. The bargaining agreement now includes 1993/1994 members. CHERYL FRASCA, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, reiterated that an amendment had been included for the University in Sections 5 and 6. She added that additional sections were updated which omitted the employer costs of paying the bonuses. MARSHA HUBBARD, DIRECTOR OF BUDGET, UNIVERSITY OF ALASKA, advised that an agreement with the LTC Contract had been signed last May, 1992, and provided the same salary increase as given the non-union employees during FY 93. The receipt of the three percent increase is dependant upon negotiations and the Legislative appropriation. Co-Chair MacLean MOVED to report CS HB 158 (L&C) out of Committee with individual recommendations. There being NO OBJECTION, it was so ordered. CS HB 158 (L&C) was reported out of Committee with a "do pass" recommendation. HOUSE BILL 79 "An Act relating to recovery from a parent or legal guardian of wilful or malicious destruction of property by a minor." JENNY MURRAY, AID TO REPRESENTATIVE CON BUNDE, testified in support of HB 79 and stated that the legislation would increase the current cap for parental liability from $2 thousand dollars to what is allowable in district court, $50 thousand dollars. The bill would allow owners of property damaged wilfully or maliciously by a minor to recover monetarily from the minor's parents or legal guardian. With this bill, victims of property damage may finally be able to 11 recover a greater portion of their losses as long as those damages total less than $50 thousand dollars. Representative Parnell referenced Page 1, Line 10, and asked why "destroys" was used instead of "damages". Ms. Murray stated the verbiage was the same as that used in the original statute. Representative Parnell recommended changing the language with the advise of the Department of Law. Co-Chair MacLean suggested that the $50 thousand dollar fine was too harsh. She asked if the child could be covered by insurance. Ms. Murray suggested that home owners could be covered by home owners insurance. She pointed out that legislation is geared toward the victims of property damage. Discussion followed regarding the responsibility of the insurance company paying the fees of damage versus the parent's responsibility of the minor. Co-Chair Larson asked accountability of parents of run-away children. Ms. Murray pointed out that the legal guardian is the responsible party if they had not emancipated that child. The Department of Health and Social Services is involved in determining the necessary process. Co-Chair MacLean questioned the average rate paid by other states. Ms. Murray pointed out that Alaska's rate has not been revised since 1967 and is currently lower than the other maximums. The average for most states is $15 - $25 thousand dollars. Representative Hoffman questioned the rights of the injured party to collect the proposed fees. (Tape Change, HFC 93-65, Side 2). Ms. Murray stated that upon deciding that the juvenile is guilty, there are several ways to determine the responsibility such as claiming the permanent fund, taking their personal property, etc. Representative Hoffman thought this would place unfair hardship on the family. Representative Parnell reminded the Committee that there are exemptions protecting the family's equity. Discussion followed regarding protection the minor's parents and the victim's house insurance coverage. Co-Chair Larson MOVED to amend Page 1, Line 7, by inserting "$10 thousand dollars" and deleting "$2 thousand dollars". Representative Foster OBJECTED. He MOVED to amend the amendment to "$5 thousand dollars". Representative Parnell OBJECTED. 12 A roll call was taken on the MOTION to amend the amendment. IN FAVOR: Martin, Brown, Foster, Grussendorf, Hoffman, MacLean. OPPOSED: Parnell, Therriault, Hanley, Larson. Representative Navarre was not present for the vote. The MOTION PASSED, (6 - 4). A roll call was taken on the MOTION to adopt the $5 thousand dollar change. IN FAVOR: Brown, Foster, Grussendorf, Hanley, Martin, Larson, MacLean. OPPOSED: Parnell, Therriault, Hoffman. Representative Navarre was not present for the vote. The MOTION PASSED, (7 - 3). Representative Parnell MOVED to report CS HB 79 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CS HB 79 (FIN) was reported out of Committee with a "do pass" recommendation and with three fiscal notes by the Department of Health and Social Services dated 2/10/93, Department of Administration dated 2/10/93 and the Department of Law dated 2/10/93. HOUSE BILL 143 "An Act relating to the distribution of the revenue obtained from imposition of the state tax on motor fuel used in watercraft of all descriptions; and providing for an effective date." REPRESENTATIVE JERRY MACKIE testified in support of HB 143. The legislation was introduced in response to interest expressed by several communities regarding local harbor and dock facilities. The bill would provide to a municipality a portion of state watercraft fuel taxes collected within that municipality. The portion would be determined by the ratio of city owned docks and harbors to all public owned docks and harbors in that area. The bill would generate revenue sharing of tax receipts derived from facility users. 13 Most harbor facilities located throughout the State are currently owned by the Department of Transportation and Public Facilities. These facilities are usually operated by the local municipalities. In recent years, the Department has sought to have the municipalities take ownership of the facilities and the associated maintenance responsibilities. Their view is that the "on site" operator is better suited for effective and efficient upkeep of a facility than the distant DOTPF personnel. Representative Therriault expressed concern with the operational expense currently paid by the local municipalities. Representative Mackie remarked there is little maintenance performed in the smaller communities which have harbors although there is a lot of deterioration. The legislation would provide funds to address local harbor facility concerns. Representative Brown inquired how military facilities would be treated. Representative Mackie said "publically operated" refers only to moorage facilities operated by DOTPF or a local municipality. Discussion followed regarding facilities publically owned and operated. Representative Brown MOVED to amend Page 2, Line 7, by adding the language following "are" by deleting "publically operated" and insert "owned by the State or municipality" and to include Amendment #1 proposed by Representative Mackie. [Attachment #1]. An additional amendment was moved to add the language to Page 2, Line 7, after the word "commissioner" adding "of Department of Transportation and Public Facilities". Co-Chair MacLean recommended adding a sunset clause to the legislation. Representative Mackie explained adding a sunset would not work. An incentive would be provided and then the funds would be removed. This would leave the municipalities owning the harbors with no funds to operate them. Representative Brown MOVED the suggested amendment. (Tape Change, HFC 93-66, Side 1). RON LIND, DIRECTOR, PLANS, PROGRAMS, AND BUDGET, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, stated the amendment to change DOTPF as the agency for determining footage would be appropriate. He stated that the Alaska Marine Highway dock would need to be excluded. Representative Martin OBJECTED. 14 A roll call was taken on the MOTION. IN FAVOR: Parnell, Therriault, Brown, Foster, Grussendorf, Hanley, Hoffman, MacLean, Larson. OPPOSED: Martin. Representative Navarre was not present for the vote. The MOTION PASSED, (9 - 1) and the amendment was included. HB 143 was HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 10:05 A.M. 15