HOUSE FINANCE COMMITTEE APRIL 23, 1993 8:45 A.M. TAPE HFC 93 - 118, Side 2, #000 - end. TAPE HFC 93 - 119, Side 1, #000 - #332. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 8:45 A.M. PRESENT Co-Chair Larson Representative Brown Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Hoffman Representative Martin Representative Navarre Representative Parnell Representative Therriault ALSO PRESENT Representative Tom Brice; Juanita Hensley, Director, Division of Motor Vehicles, Department of Public Safety; Annette Kreitzer, Aide, Senator Loren Leman; Mel Kroseng, Aide, Representative Ramona Barnes; Representative Bettye Davis; Representative Carl Moses; Representative Pat Carney; Norm Cohen, Interim Director, Coastal Villages Fishing Development, Juneau, Alaska. SUMMARY INFORMATION SB 71 An Act relating to emergency medical services; and repealing obsolete references to the Statewide Health Coordinating Council and health systems agencies. HCS SS SB 71 (HESS) was reported out of Committee with a "do pass" recommendation and with a House Finance Committee fiscal note. SB 84 An Act relating to fees for identification cards and certain motor vehicle licenses and permits; to licenses issued to drivers and to revocation of a license to drive; and providing for an effective date. SB 84 am was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Public Safety. 1 HB 83 An Act making appropriations for construction and major maintenance of schools; and providing for an effective date. CS HB 83 (FIN) was reported out of Committee with a "do pass" recommendation. SB 100 An Act making supplemental and special appropriations for the expenses of state government; making, amending, and repealing capital and operating appropriations; and providing for an effective date. SB 100 was held in Committee for further consideration. HB 264 An Act providing for a fishery resource landing tax; and providing for an effective date. HB 264 was held in Committee for further consideration. CONSENT AGENDA: SB 49 An Act relating to preelection reports; closing the two-day reporting gap in those reports; setting the date of February 15 for filing year-end campaign finance reports; and requiring reporting of zero year-end reports. HCS SB 49 (STA) was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Administration dated 2/01/93. SB 57 An Act relating to employment contributions and to extending the pilot project for the state training and employment program; and providing for an effective date. SB 57 was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Senate Finance Committee dated 4/08/93. SB 156 An Act amending the definition of `municipality' for purposes of the human services community matching grant program. SB 156 was reported out of Committee with a "do pass" recommendation and with zero fiscal notes by the Department of Health and Social Services dated 2 3/24/93 and the Department of Community and Regional Affairs dated 3/24/93. SB 162 An Act relating to the implementation of the federal emergency unemployment compensation program; making changes relating to unemployment compensation under the extended benefits program and the supplemental state benefits program; and providing for an effective date. CS SB 162 (FIN) was reported out of Committee with "no recommendations" and with a zero fiscal note by the Department of Labor dated 3/12/93. CONSENT AGENDA: Representative Foster MOVED the Consent Agenda. There being NO OBJECTION, it was so ordered. SENATE BILL 49 "An Act relating to preelection reports; closing the two-day reporting gap in those reports; setting the date of February 15 for filing year-end campaign finance reports; and requiring reporting of zero year-end reports." HCS SB 49 (STA) was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Administration dated 2/01/93. SENATE BILL 57 "An Act relating to employment contributions and to extending the pilot project for the state training and employment program; and providing for an effective date." SB 57 was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Senate Finance Committee dated 4/08/93. SENATE BILL 156 "An Act amending the definition of `municipality' for purposes of the human services community matching grant program." SB 156 was reported out of Committee with a "do pass" recommendation and with zero fiscal notes by the Department of Health and Social Services dated 3/24/93 and the Department of Community and Regional Affairs dated 3/24/93. 3 SENATE BILL 162 "An Act relating to the implementation of the federal emergency unemployment compensation program; making changes relating to unemployment compensation under the extended benefits program and the supplemental state benefits program; and providing for an effective date." CS SB 162 (FIN) was reported out of Committee with "no recommendations" and with a zero fiscal note by the Department of Labor dated 3/12/93. SENATE BILL 84 "An Act relating to fees for identification cards and certain motor vehicle licenses and permits; to licenses issued to drivers and to revocation of a license to drive; and providing for an effective date." JUANITA HENSLEY, DIRECTOR, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF PUBLIC SAFETY, stated that SB 84 amends current law by requiring a holographic symbol be placed on driver's license and identification cards to prevent illegal alteration or duplication. The bill also adds a new section to Alaska's motor vehicle driver's license of any person under the age of 21 who uses a drivers license as fraudulent or false identification in an attempt to gain entry or purchase alcohol from a liquor establishment. Ms. Hensley noted that the fiscal note passed out by the Senate Finance Committee would not be sufficient to adequately address the Legislation. She encouraged the House Finance Committee to adopt the fiscal note provided by the Department of Public Safety. Representative Martin MOVED to report SB 84 am out of Committee with individual recommendations and with the fiscal note by the Department of Public Safety. There being NO OBJECTION, it was so ordered. SB 84 am was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Public Safety. SENATE BILL NO. 71 "An Act relating to emergency medical services; and repealing obsolete references to the Statewide Health Coordinating Council and health systems agencies." Representative Foster MOVED to report HCS SS SB 71 (HES) out 4 of Committee with individual recommendations and with the accompanying fiscal notes. Representative Brown OBJECTED for further questioning. ANNETTE KREITZER, AIDE, SENATOR LOREN LEMAN, explained that Sections 9 & 10 address patient information systems. She added, the sponsor submitted a fiscal note for the Committee's consideration of $140 thousand dollars. Representative Foster MOVED the $140 thousand dollars fiscal note. Representative Brown WITHDREW her OBJECTION. There being NO further OBJECTION, it was so ordered. CS SS SB 71 (HES) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the House Finance Committee. HOUSE BILL NO. 83 "An Act making appropriations for construction and major maintenance of schools; and providing for an effective date." Representative Hanley provide the Committee with Amendment the Anchorage School district from school construction to school maintenance. The shift would provide 75% of the amount needed to complete roof repairs to the Spur Elementary School. Representative Hanley MOVED Amendment Representative Martin MOVED CS HB 83 (FIN) out of Committee with individual recommendations. Representative Navarre OBJECTED. Representative Navarre requested an additional $8.2 million dollars for the new Kenai Elementary School. He MOVED the additional allocation to Page 2, Line 12, noting that it would increase the amount included in Section 2. This amount would provide 70% of the project cost. Co-Chair MacLean OBJECTED noting that the addition had not been submitted for the priority list. Representative Navarre argued that the priority list had been submitted by Representative John Davies. A roll call was taken on the MOTION. IN FAVOR: Navarre, Brown, Grussendorf, Hoffman. OPPOSED: Parnell, Therriault, Foster, Hanley, Martin, Larson, MacLean. The MOTION FAILED, (4-7). 5 The MOTION to MOVE the bill from Committee was reiterated. Representative Navarre OBJECTED. He advised that the allocation of funds had not fairly been distributed and emphasized that the priority list did not reflect areas of impact or growth. There is little flexibility in the list. A roll call was taken on the MOTION. IN FAVOR: Parnell, Therriault, Brown, Foster, Grussendorf, Hanley, Hoffman, Martin, MacLean, Larson. OPPOSED: Navarre. The MOTION PASSED, (10-1). CS HB 83 (FIN) was reported out of Committee with a "do pass" recommendation. SENATE BILL 100 "An Act making supplemental and special appropriations for the expenses of state government; making, amending, and repealing capital and operating appropriations; and providing for an effective date." Co-Chair Larson pointed out the Committee had completed Sections 1 - 74 at the previous meeting. Section 75 was adopted. Sections 76 - 79 are currently in discussion between the House and the Senate budget meetings. Section 80 provides $30 thousand dollars for the Sitka Campus of the Katlian Vocation School. Representative Martin asked if these projects were currently listed in the University budget. Representative Grussendorf stated that this component was not included in the University's budget. Representative Grussendorf MOVED Section #80. There being NO OBJECTION, Section #80 was adopted. Representative Brown understood that Section #75 was the same component included in the capital budget request for $1.7 million dollars. She felt it was not needed in the proposed legislation. MEL KROSENG, AIDE, REPRESENTATIVE RAMONA BARNES, advised that it is the Speaker's request that the allocation be funded in the supplemental so that the Department of Corrections can begin Project Hope this year. Representative Brown REMOVED her OBJECTION noting that the 6 Department of Correction's budget is seriously underfunded and she would like to encourage as many resources as possible for that agency. There being NO FURTHER OBJECTION, Section 75 was adopted. SB 100 was HELD in Committee for further consideration. HOUSE BILL 264 "An Act levying and providing for the collection of an disposition of the proceeds of a fishery resource landing tax; and providing for an effective date." REPRESENTATIVE CARL MOSES explained HB 264. The legislation will impact those operators who both catch and process fish outside Alaska and bring the processed product into the State. The legislation is aimed at catcher/processors in the Exclusive Economic Zone ("EEZ) that currently pay no Fisheries Business Tax. The EEZ catcher/processors are not subject to the Fisheries Business Tax because it only applies if fishery resources are either caught or processed in Alaska. Since the catcher/processors catch and process in the EEZ exclusively, the Fisheries Business Tax does not apply to them. Alaska provides significant benefits and services at the same time incurs fishery management costs to resources. Coupled with the impact the operations have on local Alaska communities, the tax is one way to compensate the State for the services. The Fisheries Business Tax applies to unprocessed fishery resources while the Landing Tax applies to processed fishery resources. If the Fisheries Business Tax applies, the Landing Tax will never be applicable. The Landing Tax only applies if the first landing is in this State. The seller will generally be liable for the tax. The tax is imposed on the owner of the resource at the moment of unloading or transfer. (Tape Change, HFC 93 - 119, Side 1). Co-Chair MacLean voiced her support of the legislation stating that 89% of the factory trollers are from out of state. She pointed out that the legislation would bring an additional $8.6 million dollars revenue to the general fund. Representative Grussendorf echoed Representative MacLean's sentiments. Representative Foster referenced a letter from the Bering Sea Fishing Association. He noted that the Association 7 would like to submit an amendment to the legislation to provide for a portion of the money be placed into a non- profit corporation to serve specific fishery governmental purposes. He requested additional time for consideration of the legislation in order to accommodate further testimony. NORM COHEN, INTERIM EXECUTIVE DIRECTOR, COASTAL VILLAGES FISHING COOPERATIVE DEVELOPMENT, JUNEAU, ALASKA, stated that the amendment in the proposed committee substitute is narrow and would only allow for companies which are fishing as part of a community development quota program to use it as a tax credit. He added, the money would then be available for governmental type purposes in the communities which are part of the CDQ program. The amount of funds available is only $2.90 thousand dollars, which would not come from a general fund share. The programs are important and the money could allow for government type investments. HB 264 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 10:10 a.m. HOUSE FINANCE COMMITTEE APRIL 23, 1993 8:45 A.M. TAPE HFC 93 - 118, Side 2, #000 - end. TAPE HFC 93 - 119, Side 1, #000 - #332. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 8:45 A.M. PRESENT Co-Chair Larson Representative Brown Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Hoffman Representative Martin Representative Navarre Representative Parnell Representative Therriault ALSO PRESENT 8 Representative Tom Brice; Juanita Hensley, Director, Division of Motor Vehicles, Department of Public Safety; Annette Kreitzer, Aide, Senator Loren Leman; Mel Kroseng, Aide, Representative Ramona Barnes; Representative Bettye Davis; Representative Carl Moses; Representative Pat Carney; Norm Cohen, Interim Director, Coastal Villages Fishing Development, Juneau, Alaska. SUMMARY INFORMATION SB 71 An Act relating to emergency medical services; and repealing obsolete references to the Statewide Health Coordinating Council and health systems agencies. HCS SS SB 71 (HESS) was reported out of Committee with a "do pass" recommendation and with a House Finance Committee fiscal note. SB 84 An Act relating to fees for identification cards and certain motor vehicle licenses and permits; to licenses issued to drivers and to revocation of a license to drive; and providing for an effective date. SB 84 am was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Public Safety. HB 83 An Act making appropriations for construction and major maintenance of schools; and providing for an effective date. CS HB 83 (FIN) was reported out of Committee with a "do pass" recommendation. SB 100 An Act making supplemental and special appropriations for the expenses of state government; making, amending, and repealing capital and operating appropriations; and providing for an effective date. SB 100 was held in Committee for further consideration. HB 264 An Act providing for a fishery resource landing tax; and providing for an effective date. HB 264 was held in Committee for further consideration. CONSENT AGENDA: 9 SB 49 An Act relating to preelection reports; closing the two-day reporting gap in those reports; setting the date of February 15 for filing year-end campaign finance reports; and requiring reporting of zero year-end reports. HCS SB 49 (STA) was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Administration dated 2/01/93. SB 57 An Act relating to employment contributions and to extending the pilot project for the state training and employment program; and providing for an effective date. SB 57 was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Senate Finance Committee dated 4/08/93. SB 156 An Act amending the definition of `municipality' for purposes of the human services community matching grant program. SB 156 was reported out of Committee with a "do pass" recommendation and with zero fiscal notes by the Department of Health and Social Services dated 3/24/93 and the Department of Community and Regional Affairs dated 3/24/93. SB 162 An Act relating to the implementation of the federal emergency unemployment compensation program; making changes relating to unemployment compensation under the extended benefits program and the supplemental state benefits program; and providing for an effective date. CS SB 162 (FIN) was reported out of Committee with "no recommendations" and with a zero fiscal note by the Department of Labor dated 3/12/93. CONSENT AGENDA: Representative Foster MOVED the Consent Agenda. There being NO OBJECTION, it was so ordered. SENATE BILL 49 "An Act relating to preelection reports; closing the two-day reporting gap in those reports; setting the date of February 15 for filing year-end campaign 10 finance reports; and requiring reporting of zero year-end reports." HCS SB 49 (STA) was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Administration dated 2/01/93. SENATE BILL 57 "An Act relating to employment contributions and to extending the pilot project for the state training and employment program; and providing for an effective date." SB 57 was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Senate Finance Committee dated 4/08/93. SENATE BILL 156 "An Act amending the definition of `municipality' for purposes of the human services community matching grant program." SB 156 was reported out of Committee with a "do pass" recommendation and with zero fiscal notes by the Department of Health and Social Services dated 3/24/93 and the Department of Community and Regional Affairs dated 3/24/93. SENATE BILL 162 "An Act relating to the implementation of the federal emergency unemployment compensation program; making changes relating to unemployment compensation under the extended benefits program and the supplemental state benefits program; and providing for an effective date." CS SB 162 (FIN) was reported out of Committee with "no recommendations" and with a zero fiscal note by the Department of Labor dated 3/12/93. SENATE BILL 84 "An Act relating to fees for identification cards and certain motor vehicle licenses and permits; to licenses issued to drivers and to revocation of a license to drive; and providing for an effective date." JUANITA HENSLEY, DIRECTOR, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF PUBLIC SAFETY, stated that SB 84 amends current law by requiring a holographic symbol be placed on driver's license and identification cards to prevent illegal 11 alteration or duplication. The bill also adds a new section to Alaska's motor vehicle driver's license of any person under the age of 21 who uses a drivers license as fraudulent or false identification in an attempt to gain entry or purchase alcohol from a liquor establishment. Ms. Hensley noted that the fiscal note passed out by the Senate Finance Committee would not be sufficient to adequately address the Legislation. She encouraged the House Finance Committee to adopt the fiscal note provided by the Department of Public Safety. Representative Martin MOVED to report SB 84 am out of Committee with individual recommendations and with the fiscal note by the Department of Public Safety. There being NO OBJECTION, it was so ordered. SB 84 am was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Public Safety. SENATE BILL NO. 71 "An Act relating to emergency medical services; and repealing obsolete references to the Statewide Health Coordinating Council and health systems agencies." Representative Foster MOVED to report HCS SS SB 71 (HES) out of Committee with individual recommendations and with the accompanying fiscal notes. Representative Brown OBJECTED for further questioning. ANNETTE KREITZER, AIDE, SENATOR LOREN LEMAN, explained that Sections 9 & 10 address patient information systems. She added, the sponsor submitted a fiscal note for the Committee's consideration of $140 thousand dollars. Representative Foster MOVED the $140 thousand dollars fiscal note. Representative Brown WITHDREW her OBJECTION. There being NO further OBJECTION, it was so ordered. CS SS SB 71 (HES) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the House Finance Committee. HOUSE BILL NO. 83 "An Act making appropriations for construction and major maintenance of schools; and providing for an effective date." Representative Hanley provide the Committee with Amendment 12 the Anchorage School district from school construction to school maintenance. The shift would provide 75% of the amount needed to complete roof repairs to the Spur Elementary School. Representative Hanley MOVED Amendment Representative Martin MOVED CS HB 83 (FIN) out of Committee with individual recommendations. Representative Navarre OBJECTED. Representative Navarre requested an additional $8.2 million dollars for the new Kenai Elementary School. He MOVED the additional allocation to Page 2, Line 12, noting that it would increase the amount included in Section 2. This amount would provide 70% of the project cost. Co-Chair MacLean OBJECTED noting that the addition had not been submitted for the priority list. Representative Navarre argued that the priority list had been submitted by Representative John Davies. A roll call was taken on the MOTION. IN FAVOR: Navarre, Brown, Grussendorf, Hoffman. OPPOSED: Parnell, Therriault, Foster, Hanley, Martin, Larson, MacLean. The MOTION FAILED, (4-7). The MOTION to MOVE the bill from Committee was reiterated. Representative Navarre OBJECTED. He advised that the allocation of funds had not fairly been distributed and emphasized that the priority list did not reflect areas of impact or growth. There is little flexibility in the list. A roll call was taken on the MOTION. IN FAVOR: Parnell, Therriault, Brown, Foster, Grussendorf, Hanley, Hoffman, Martin, MacLean, Larson. OPPOSED: Navarre. The MOTION PASSED, (10-1). CS HB 83 (FIN) was reported out of Committee with a "do pass" recommendation. SENATE BILL 100 "An Act making supplemental and special appropriations 13 for the expenses of state government; making, amending, and repealing capital and operating appropriations; and providing for an effective date." Co-Chair Larson pointed out the Committee had completed Sections 1 - 74 at the previous meeting. Section 75 was adopted. Sections 76 - 79 are currently in discussion between the House and the Senate budget meetings. Section 80 provides $30 thousand dollars for the Sitka Campus of the Katlian Vocation School. Representative Martin asked if these projects were currently listed in the University budget. Representative Grussendorf stated that this component was not included in the University's budget. Representative Grussendorf MOVED Section #80. There being NO OBJECTION, Section #80 was adopted. Representative Brown understood that Section #75 was the same component included in the capital budget request for $1.7 million dollars. She felt it was not needed in the proposed legislation. MEL KROSENG, AIDE, REPRESENTATIVE RAMONA BARNES, advised that it is the Speaker's request that the allocation be funded in the supplemental so that the Department of Corrections can begin Project Hope this year. Representative Brown REMOVED her OBJECTION noting that the Department of Correction's budget is seriously underfunded and she would like to encourage as many resources as possible for that agency. There being NO FURTHER OBJECTION, Section 75 was adopted. SB 100 was HELD in Committee for further consideration. HOUSE BILL 264 "An Act levying and providing for the collection of an disposition of the proceeds of a fishery resource landing tax; and providing for an effective date." REPRESENTATIVE CARL MOSES explained HB 264. The legislation will impact those operators who both catch and process fish outside Alaska and bring the processed product into the State. The legislation is aimed at catcher/processors in the Exclusive Economic Zone ("EEZ) that currently pay no Fisheries Business Tax. The EEZ catcher/processors are not subject to the Fisheries Business Tax because it only applies if fishery resources are either caught or processed in Alaska. Since the catcher/processors catch and process in the EEZ exclusively, 14 the Fisheries Business Tax does not apply to them. Alaska provides significant benefits and services at the same time incurs fishery management costs to resources. Coupled with the impact the operations have on local Alaska communities, the tax is one way to compensate the State for the services. The Fisheries Business Tax applies to unprocessed fishery resources while the Landing Tax applies to processed fishery resources. If the Fisheries Business Tax applies, the Landing Tax will never be applicable. The Landing Tax only applies if the first landing is in this State. The seller will generally be liable for the tax. The tax is imposed on the owner of the resource at the moment of unloading or transfer. (Tape Change, HFC 93 - 119, Side 1). Co-Chair MacLean voiced her support of the legislation stating that 89% of the factory trollers are from out of state. She pointed out that the legislation would bring an additional $8.6 million dollars revenue to the general fund. Representative Grussendorf echoed Representative MacLean's sentiments. Representative Foster referenced a letter from the Bering Sea Fishing Association. He noted that the Association would like to submit an amendment to the legislation to provide for a portion of the money be placed into a non- profit corporation to serve specific fishery governmental purposes. He requested additional time for consideration of the legislation in order to accommodate further testimony. NORM COHEN, INTERIM EXECUTIVE DIRECTOR, COASTAL VILLAGES FISHING COOPERATIVE DEVELOPMENT, JUNEAU, ALASKA, stated that the amendment in the proposed committee substitute is narrow and would only allow for companies which are fishing as part of a community development quota program to use it as a tax credit. He added, the money would then be available for governmental type purposes in the communities which are part of the CDQ program. The amount of funds available is only $2.90 thousand dollars, which would not come from a general fund share. The programs are important and the money could allow for government type investments. HB 264 was HELD in Committee for further consideration. ADJOURNMENT 15 The meeting adjourned at 10:10 a.m. 16