HOUSE FINANCE COMMITTEE April 25, 1993 12:10 p.m. TAPE HFC 93-124, Side 2, #000 - end. TAPE HFC 93-125, Side 1, #000 - end. TAPE HFC 93-125, Side 2, #000 - end. TAPE HFC 93-126, Side 1, #000 - end. CALL TO ORDER Co-Chair Larson called the House Finance Committee to order at 12:10 p.m. PRESENT Co-Chair Larson Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Parnell Representative Foster Representative Therriault Representative Grussendorf Representative Hoffman was absent from the meeting. ALSO PRESENT Mike Greany, Director, Legislative Finance Division; Jack Fargnoli, Office of Budget and Management; Shelby Stastny, Director, Office of Budget and Management; Kent Swisher, Alaska Municipal League; Dean Guaneli, Chief, Assistant Attorney General, Department of Law; Charles Cole, Attorney General, Department of Law; Ken Erickson, Staff, Senator Pearce; Lieutenant Chris Stockard, Department of Public Safety. SUMMARY INFORMATION SB 97 "An Act relating to enhanced 911 emergency reporting systems; and providing for an effective date." HCS CSSB 97 (FIN) was reported out of Committee with a "no recommendation" and with a zero fiscal note by the Department of Commerce and Economic Development, dated 2/24/93. 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." 1 SB 100 was HELD in Committee. HB 124 "An Act relating to grants to municipalities, named recipients, and unincorporated communities; establishing capital project matching grant programs for municipalities and unincorporated communities; establishing a local share requirement for capital project grants to municipalities, named recipients, and unincorporated communities; and providing for an effective date." CSHB 124 (FIN) was reported out of Committee with "no recommendation" and with a zero fiscal note by the House Finance Committee and with two fiscal impact notes by the House Finance Committee. HB 125 "An Act making appropriations for capital project matching grant programs; and providing for an effective date." CSHB 125 (FIN) was reported out of Committee with "no recommendation". HB 187 "An Act authorizing the interception of private communications related to the commission of certain criminal offenses; making related amendments to statutes relating to eavesdropping and wiretapping; relating to the penalty for violation of statutes relating to eavesdropping and unauthorized interception, publication, or use of private communications; and providing for an effective date." CSHB 187 (FIN) was reported out of Committee with "no recommendation" and with a zero fiscal note by the Department of Law, dated 3/1/93; a zero fiscal note by the Department of Administration, dated 3/1/93; a fiscal impact note by the Alaska Court System; a fiscal impact note by the Department of Public Safety, dated 4/2/93; and with a fiscal impact note by the Department of Administration, dated 3/1/93. HB 188 "An Act relating to forfeiture of certain property; and providing for an effective date." HB 188 was HELD in Committee. SENATE BILL NO. 100 "An Act making supplemental and special appropriations 2 for the expenses of state government; making, amending, and repealing capital and operating appropriations; and providing for an effective date." Co-Chair Larson reviewed sections held open in SB 100. SB 100 was held in committee. HOUSE BILL NO. 124 "An Act relating to grants to municipalities, named recipients, and unincorporated communities; establishing capital project matching grant programs for municipalities and unincorporated communities; establishing a local share requirement for capital project grants to municipalities, named recipients, and unincorporated communities; and providing for an effective date." Co-Chair MacLean provided members a with work draft for HB 124 (FIN), 8-GH1018\O (copy on file). Co-Chair MacLean provided members with AMENDMENT 1 (Attachment 1). She explained that Amendment 1 would create a sliding scale and change 8 percent to 7 percent. Co-Chair MacLean MOVED to ADOPT AMENDMENT 1. There being NO OBJECTION, it was so ordered. Representative Brown presented members with AMENDMENT 2 (Attachment 2). Amendment 2 would define "capital project" as a project with a cost exceeding $10.0 thousand dollars... with an anticipated life exceeding one year..." She suggested that the Amendment be amended to $5.0 thousand dollars a year over two years. SHELBY STASTNY, DIRECTOR, OFFICE OF BUDGET AND MANAGEMENT did not have objections to Representative Brown's amendment or amendment to the Amendment. Co-Chair Larson expressed concern that school districts and municipalities would use the matching grant for deferred maintenance. Representative Martin expressed concern that the $5.0 thousand dollar eligibility requirement would result in more administrative costs. Representative Parnell asked if the Internal Revenue Code definition of capital project would apply. Mr. Stastny replied that the Internal Revenue Code defines "capital project" as any expenditure that is expected to last more than a year and/or extend the life of an asset. Representative Grussendorf noted that the definition of capital project contained in Amendment 2 would only apply to the Capital Matching Program. 3 Co-Chair Larson stressed that municipalities can handle smaller maintenance projects. Representative Brown asserted that small communities need flexibility. Representative Brown MOVED to AMEND Amendment 2 to insert "$5.0" and delete "$10.0" and delete "one" and insert "two" years. Representative Martin OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Parnell, Brown OPPOSED: Grussendorf, Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson Representatives Hoffman and Navarre were not present for the vote. The MOTION FAILED (2-8). Representative Brown MOVED to ADOPT AMENDMENT 2. Representative Martin OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Therriault, Brown, Foster, Grussendorf, MacLean OPPOSED: Martin, Parnell, Hanley, Larson Representatives Hoffman and Navarre were not present for the vote. The MOTION PASSED (5-4). Representative Brown provided members with AMENDMENT 3 (Attachment 3). She explained that the Amendment would acknowledge that the state is not responsible for operation of projects. She discussed Amendment 3. Members discussed the affect of the amendment on CSHB 82 (FIN). Representative Brown WITHDREW AMENDMENT 3. Co-Chair MacLean expressed concern that page 4, line 20 and 23 needs further clarification to identify money spent as capital matching money. JACK FARGNOLI, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR observed that language should be adopted to define that "10 percent of the total amount of money spent on land acquisition" applies to the appropriation or grant. Representative Brown provided members with AMENDMENT 4 (Attachment 4). She explained that Amendment 4 will clarify that no more than 10 percent of state money will go to the administrative cost for the whole project. Representative Brown MOVED to ADOPT AMENDMENT 4. There being NO OBJECTION, it was so ordered. 4 Representative Brown provided members with AMENDMENT 5 (Attachment 5). She explained that Amendment 5 will forward fund the program. The Office of Management and Budget would have the summer months to establish regulations. Representative Brown MOVED to ADOPT AMENDMENT 5. Co-Chair MacLean OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Brown OPPOSED: Grussendorf, Navarre, Hanley, Martin, Parnell, Therriault, MacLean, Larson The MOTION FAILED (8-1). Representatives Foster and Hoffman were not present for the vote. Representative Brown MOVED to ADOPT AMENDMENT 6 (Attachment 6). She MOVED to AMEND the Amendment to delete "originally" and "insert or other assets". She stated that the amendment to Amendment 5 would allow equipment obtained through state grants to be sold. There being NO OBJECTION, it was so ordered. Representative Brown MOVED to ADOPT AMENDMENT 5 as amended. Co-Chair Larson spoke in support of the amendment. There being NO OBJECTION, it was so ordered. Co-Chair MacLean provided members with AMENDMENT 7 (Attachment 7). (Tape Change, HFC 93-125, Side 1) Mr. Fargnoli explained that Amendment 7 is a "housekeeping" amendment which clarifies the definition of "local share". Co-Chair MacLean MOVED to ADOPT AMENDMENT 7. Co-Chair Larson asked who would be responsible for cost overruns. Mr. Stastny stressed that each community has the option of investing from their pool of funds. If a community has money in their account the state would provide a match at the same ratios. Co-Chair MacLean referred to fiscal notes accompanying HB 124. Mr. Fargnoli discussed fiscal notes for the Department of Community and Regional Affairs, Department of Administration and municipal impact. He noted that matching requirements will add to administrative costs in the Department of Community and Regional Affairs. Representative Navarre express concern that the departments will not have sufficient personnel to administrator the grants efficiently. He asked if Davis Bacon laws regarding pay scale cause difficulties. Mr. Fargnoli assured him that 5 Davis Bacon laws will not cause problems. Representative Grussendorf asked if the Department of Transportation and Public Facilities would be involved in projects. Mr Fargnoli agreed that the Department of Transportation and Public Facilities could be affected by projects but did not anticipate increased budget needs. Representative Foster MOVED to ADOPT the fiscal notes associated with CSSB 88 (FIN) for as House Finance Committee fiscal notes for HB 124. There being NO OBJECTION, it was so ordered. Representative Martin MOVED to report CSHB 124 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CSHB 124 (FIN) was reported out of Committee with "no recommendation" and with a zero fiscal note by the House Finance Committee and with two fiscal impact notes by the House Finance Committee. Representative Hanley expressed his desire to see administrative costs deducted from the grant. Mr. Stastny observed that overhead costs for the capital matching grants are absorbed in the affected agencies' budget. Co-Chair Larson agreed that increased agency costs should be included in the grant process. He stressed that it is the Committee's intent that costs be born by the grant program. There being NO OBJECTION, CSHB 124 (FIN) was moved from the Committee. HOUSE BILL NO. 187 "An Act authorizing the interception of private communications related to the commission of certain criminal offenses; making related amendments to statutes relating to eavesdropping and wiretapping; relating to the penalty for violation of statutes relating to eavesdropping and unauthorized interception, publication, or use of private communications; and providing for an effective date." DEAN GUANELI, CHIEF ASSISTANT ATTORNEY, DEPARTMENT OF LAW discussed HB 187. He explained that federal wire tapping law would not cover all occasions that the Department wants to pursue. He noted that the federal government will not get involved with murder cases unless interstate jurisdiction is involved. He observed that before a wire tap is established someone from the Department of Law must be involved. He emphasized that the standards apply as in 6 issuing a search warrant. He maintained that wire tapping will be the last resort employed in an investigation. CHARLES COLE, ATTORNEY GENERAL, DEPARTMENT OF LAW pointed out that wire tapping is allowed only in cases of murder in the first or second degree, kidnapping or a class A or unclassified felony drug offense. He noted that detailed requirements are contained on pages 2 - 4. He reviewed requirements and limitations of wire taps. He assured members that adequate safeguards exist. Representative Brown referred to page 11, line 25. She asked what procedures will be followed prior to interception of communications in electronic storage. She pointed out that the electronic storage could mean voice mail and bulletin board communications. She expressed concern that the legislation is being broadened to included computers. Mr. Guaneli stated that the procedures applying to paper storage would apply to computer storage. Representative Brown referred to page 9, line 20. She asked the meaning of "nonconstitutional violation". Mr. Guaneli stated that the intent is that the misapplication of one of the specific provisions required in the issuing of the warrant will not give rise to a lawsuit for damages unless there is a violation of an individual's constitutional rights. He noted that the provisions are detailed. Evidence collected improperly would not be admissable in trial. (Tape Change, HFC 93-125, Side 2) Representative Grussendorf asked what would happen if an investigation uncovered a crime which is not covered by the wire tapping warrant. Attorney General Cole noted that page 8, line 19 covers unanticipated interceptions. Representative Brown provided members with AMENDMENT 1 (Attachment 8). She explained that the amendment would make available to the Governor and the Legislature information regarding the use of wire tapping. She pointed out that confidential information would not be involved. Attorney General Cole did not object to the amendment. Representative Parnell MOVED to AMEND the Amendment to delete "for the Governor and the Legislature" and insert "and make available to the public." Representative Martin OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Grussendorf, Brown, Foster, Hanley, Parnell, Therriault, MacLean, Larson OPPOSED: Martin 7 Representatives Hoffman and Navarre were not present for the vote. The MOTION PASSED (8-1). Representative Brown MOVED to ADOPT AMENDMENT 1 as amended. Co-Chair Larson OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Grussendorf, Brown, Foster, Hanley, Parnell, Therriault OPPOSED: Martin, MacLean, Larson Representatives Hoffman and Navarre were not present for the vote. The MOTION PASSED (6-3). Representative Brown MOVED to ADOPT AMENDMENT 2 (Attachment 9). She stated that the amendment would clarify that cellular telephone communications be included. Attorney General Cole spoke against the amendment. He maintained that cellular phones would already be included. Representative Brown replied that page 16, line 6 excludes "any communication that is readily accessible to the general public." She noted that cellular phones are accessible to the general public. She asserted that the amendment is needed to prevent exclusion of cellular phones. Attorney General Cole disagreed that cellular phone transmissions are "readily" accessible. Representative Parnell spoke in support of Amendment 2. There being NO OBJECTION, Amendment 2 was adopted. Representative Brown MOVED to ADOPT AMENDMENT 3 (Attachment 10). She explained that Amendment 3 would include cordless phones. She maintained that cordless phones are excluded on page 15, line 29. She stressed that private phone calls should be kept private unless procedures are followed to obtain a wire tap warrant. Attorney General Cole spoke against Amendment 3. Representative Martin OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Brown, Grussendorf, Foster, Parnell, MacLean OPPOSED: Hanley, Martin, Therriault, Larson Representatives Hoffman and Navarre were not present for the vote. The MOTION PASSED (5-4). Representative Brown MOVED to ADOPT AMENDMENT 4 to insert 8 "Except for a party to a private conversation." Attorney General Cole agreed that the amendment clarifies existing statutes. There being NO OBJECTION, it was so ordered. Representative Parnell referred to page 11, line 14. He asked if the requirement to file reports would endanger officers. Attorney General Cole replied that the Alaska State Troopers have no objection to the requirement. Representative Foster asked for further clarification of unanticipated interception. Mr. Guaneli noted that officers are required to minimize interceptions not directly related to the investigation. Representative Brown referred to page 8, line 22. She suggested that approval for unanticipated interceptions be limited to crimes covered by AS 12.37.010. Representative Hanley argued for a broader interpretation. Representative Grussendorf noted that search warrants are harder to obtain and that evidence is more tangible. Attorney General Cole suggested that "felony" be inserted on page 8, line 22. Co- Chair Larson MOVED to AMEND Amendment 4 to insert "a felony". There being NO OBJECTION, it was so ordered. Co-Chair Larson MOVED to ADOPT AMENDMENT 4 as amended. There being NO OBJECTION, it was so ordered. Representative Martin MOVED to report CSHB 187 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CSHB 187 (FIN) was reported out of Committee with "no recommendation" and with a zero fiscal note by the Department of Law, dated 3/1/93; a zero fiscal note by the Department of Administration, dated 3/1/93; a fiscal impact note by the Alaska Court System; a fiscal impact note by the Department of Public Safety, dated 4/2/93; and with a fiscal impact note by the Department of Administration, dated 3/1/93. HOUSE BILL NO. 188 "An Act relating to forfeiture of certain property; and providing for an effective date." Co-Chair Larson noted that HB 188 would utilize asset forfeiture as a tool for combating drugs and violent crimes. Attorney General Cole suggested that page 7, line 2 be amended to read, "did not know before parting with the 9 property that the property would be used in the manner that resulted in it being subject to forfeiture." He noted that present law does not allow for the forfeiture of "real" property. He emphasized that drugs are produced and grown on "real" property. He clarified, in response to a question by Co-Chair MacLean, that the amendment would prevent the owner from forfeiture of rental property if they did not have knowledge of the crime. Representative Grussendorf pointed out that the property can still be seized until the owner proves his innocence. Attorney General Cole asserted that the legislation will curtail drug activity. Co-Chair MacLean suggested that on page 3, line 16 "indictment" be deleted and "conviction" inserted. Mr. Guaneli observed that other states do not require convictions. He noted that conviction is not dependent on whether an act took place. (Tape Change, HFC 93-126, Side 1). Attorney General Cole continued to discuss the forfeiture of property for use in drug crimes. Co-Chair MacLean referred to page 6, lines 11 - 18. She noted that up to 90 percent of the net value of seized property could be transferred to one or more agencies or political subdivisions of the state for use in furtherance of the administration of justice. Representative Grussendorf expressed concern that transfers would be under the jurisdiction of the commissioner of the Department of Public Safety. Mr. Guaneli discussed procedures used by federal law enforcement agencies. Attorney General Cole that the federal government currently takes real property seized in state cases. Representative Brown referred to testimony by Shelley Owens before the House Judiciary Committee. She noted that forfeiture of a persons bank account after indictment could eliminate the defendants ability to obtain independent defense counsel which would increase the burden on the Public Defender. Representative Brown quoted Ms. Shelley as saying, "one-half of people who lose property under forfeiture laws have not been charged with a crime, and 80 percent of people who lose their property don't or can't contest the forfeitures." Attorney General Cole emphasized that, if HB 188 is adopted, the state would initiate proceedings rather than deferring all drug forfeitures to the federal government. Co-Chair MacLean referred to page 1, lines 8 - 10, CSHB 188 (JUD). Attorney General Cole stressed that before property 10 is forfeited the owner must know that the property is being used in an illegal drug activity. Representative Brown argued that the burden of proof is on the person whose property is being seized. Mr. Guaneli clarified that property can be seized before guilt is ascertained. Representative Foster asked if HB 188 would go beyond federal forfeiture laws. He noted that grand juries generally support indictments. He did not support seizure on indictment. Representative Brown noted the difficulty of evicting tenants that may be involved in drug traffic. Co-Chair Larson MOVED to ADOPT language amending page 7, line 2 to read, "did not know before parting with the property that the property would be used in the manner that resulted in it being subject to forfeiture." Representative Brown noted that the amendment would include property from which the owner is not yet parted. There being NO OBJECTION, it was so ordered. Co-Chair MacLean MOVED to AMEND on page 3, line 16, to delete "indictment" and insert "conviction". Representative Hanley observed that the grand jury does not convict. Co- Chair MacLean MOVED to AMEND the motion to a conceptual amendment to make the legislation applicable after conviction not indictment. Representative Martin maintained that a criminal would have time to hide assets. Attorney General Cole stated that the amendment would make the legislation ineffectual. Representative Martin OBJECTED to the motion. Co-Chair MacLean asked that HB 188 be HELD in committee. Co-Chair MacLean WITHDREW HER AMENDMENT. HB 188 was HELD in Committee. SENATE BILL NO. 97 "An Act relating to enhanced 911 emergency reporting systems; and providing for an effective date." SB 97 was in a subcommittee consisting of chair Representative Parnell with members Representatives Brown and Foster. Representative Parnell provided members with work draft for HCS CSSB 97(FIN), #8-LS029\I, dated 4/22/93 (Attachment 11). KEN ERICKSON, LEGISLATIVE STAFF, SENATOR PEARCE stated that SB 97 would provide: 1) Immediate visual display of the location and telephone number of the caller. 11 2) Automatic routing to the appropriate emergency response unit. 3) Faster response time. 4) Curtailment of abuses of the emergency system by documenting callers. Mr. Erickson stated that Senator Pearce is in support of the work draft for HCS CSSB 97(FIN), #8-LS029\I, dated 4/22/93. Representative Parnell noted that the Subcommittee addressed the 911 surcharge imposed by municipalities to pay for enhanced 911 service. Mr. Erickson noted that page 5, line 4 the work draft defines village as containing 25 or more inhabitants. Representative Parnell explained that the work draft sunsets the surcharge after 3 years. He added that "may include the extraterritorial jurisdiction of a municipality in accordance with AS 29.35.020" was added on page 3, line 25. He explained that the amendment would allow statewide planning by the Telecommunications Information Council to continue. Representative Parnell MOVED to ADOPT work draft for HCS CSSB 97(FIN), #8-LS029\I, dated 4/22/93. There being NO OBJECTION, it was so ordered. Representative Brown provided members with AMENDMENT 1 (Attachment 12). She explained that the amendment would create an advisory committee to ascertain the feasibility of a statewide enhanced 911 system. Mr. Erickson noted the sponsor's concern that the amendment would result in a fiscal impact note. LIEUTENANT CHRIS STOCKARD, DEPARTMENT OF PUBLIC SAFETY testified that the Department does not anticipate that the amendment would result in additional cost to the Department. He stated that the Department is proceeding with statewide planning. Representative Parnell spoke in opposition to the amendment. He stated that the amendment would be redundant. A roll call vote was taken on the motion. IN FAVOR: Brown OPPOSED: Foster, Grussendorf, Hanley, Martin, Parnell, Therriault, MacLean, Larson Representatives Hoffman and Navarre were not present for the 12 vote. The MOTION FAILED (1-9). Representative Parnell MOVED to report HCS CSSB 97 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. Representative Brown maintained that the legislation will work against the creation of a statewide 911 enhanced system. There being NO OBJECTION, it was so ordered. HCS CSSB 97 (FIN) was reported out of Committee with "no recommendation" and with a zero fiscal note by the Department of Commerce and Economic Development, dated 2/24/93. ADJOURNMENT The meeting adjourned at 4:05 p.m. 13