HOUSE FINANCE COMMITTEE JANUARY 30, 1995 1:35 P.M. TAPE HFC 95 - 12, Side 1, #000 - end. TAPE HFC 95 - 12, Side 2, #000 - #510. CALL TO ORDER Co-Chair Mark Hanley called the House Finance Committee meeting to order at 1:35 P.M. PRESENT Co-Chair Hanley Representative Kohring Co-Chair Foster Representative Martin Representative Mulder Representative Navarre Representative Brown Representative Parnell Representative Grussendorf Representative Kelly Representative Therriault was not present for the meeting. ALSO PRESENT Mike Greany, Director, Legislative Finance Division; Pat Pourchot, Legislative Director, Office of the Governor; Representative John Davies; Representative Ivan Ivan. SUMMARY HCR 1 Creating the Long Range Financial Planning Commission. CS HCR 1 (FIN) was HELD in Committee for further consideration. HOUSE CONCURRENT RESOLUTION 1 Creating the Long Range Financial Planning Commission. Co-Chair Hanley acknowledged that long-range financial planning would be essential if we are to attain some financial stability for Alaska's future. He stated that creating the Long-Range Financial Planning Commission would be a crucial first step in that direction and requested the Committee's support of HCR 1. Representative Parnell MOVED to adopt work draft, #9- LS0021\G, Bannister, dated 1/30/95, as the version before the Committee. There being NO OBJECTIONS, it was adopted. 1 Representative Parnell, Subcommittee Chair, explained the changes made to HCR 1, committee substitute. On Page 1, Lines 14 - 16 language was added to highlight economic stability by diversifying the State's economy. On Page 2, Lines 4 - 13 language would change the composition of the Commission's members. The Commission's direction was further explained in the committee substitute on Page 2 & 3, Sections 1 - 12. Representative Martin distributed Amendments #1 & #2. [Attachments #1 & #2]. He noted that Amendments #1 & #2 would permit high school and college students to be members of the Commission. Representative Martin MOVED that Amendments #1 & #2 be adopted by the Committee. Representative Navarre voiced his support of high school and college students participation although advised that the number of Commission members would be small. He thought students should participate while not having voting rights. Co-Chair Hanley agreed, advising that many small groups will be affected by decisions of the Commission. It would be difficult to have every interest in the State represented and still maintain a workable sized group. Representative Mulder offered a conceptual amendment to Amendments #1 & #2 which would clarify that students be non voting members. Discussion followed regarding concerns of non voting members. Representative Mulder WITHDREW THE MOTION to amend. There being NO OBJECTION, it was withdrawn. Following discussion among Committee members, Representative Martin WITHDREW THE MOTION to adopt Amendment #1 and #2. There being NO OBJECTION, it was withdrawn. Representative Martin MOVED to adopt Amendment #3. [Attachment #3]. The amendment addresses the issue of forward funding the budget. Representative Parnell responded that Section (8) of Amendment #3 had been previously addressed in the legislation. He continued, Section (5) would provide for a review of future earnings of the Permanent Fund. He advised that this concern was not as as fundamental as forward funding. Representative Navarre commented that the Commission should not be delegated responsibility to evaluate the intent of the Permanent Fund. Co-Chair Hanley noted that Permanent Fund earnings should be considered with those of AIDEA, AHFC and the Alaska Railroad. He added, Page 2 identifies all State income sources and includes all the State's assets. 2 Representative Parnell OBJECTED to adoption of Amendment #3. A roll call vote was taken on the MOTION. IN FAVOR: Martin, Brown, Foster. OPPOSED: Grussendorf, Kelly, Kohring, Mulder, Navarre, Parnell, Hanley. Representative Therriault was not present for the vote. The MOTION FAILED, (3-7). Representative Brown MOVED to adopt Amendment #4. [Attachment #4]. She explained that Amendment #4 would be a technical change in order to clarify that the "people" entitled to compensation would be the "public" members of the Commission. That language change would consist of inserting "public" following language "FURTHER RESOLVED that the". There being NO OBJECTION, Amendment #4 was adopted. Representative Navarre provided the Committee with Amendment member from the House and Senate Minority Caucus be chosen for the Commission. Co-Chair Hanley acknowledged that there was an intent to have minority representation on the Commission. Representative Navarre emphasized that a partisan Commission would be ineffective. Representative Navarre WITHDREW THE MOTION to adopt Amendment #5. There being NO OBJECTION, it was withdrawn. Representative Parnell requested that relationship of faith and trust be exercised by the people making the selections, guaranteeing that there would be a partisan and regional balance sought. Representative Navarre recommended that the Commissioner of Revenue or the Director of the Office of Management and Budget be included with Governor, the Speaker of the House and the Senate President to choose the nine public members of the Commission. He pointed out that appointment would create a party balance in the selection committee. Representative Brown suggested adding language to assure a consensus. She recommended a language change made to Page 2, Line 7, deleting "a committee composed of" and adding "consensus by". Co-Chair Hanley asked to consult the Speaker of the House, Representative Phillips in regards to her intent. Representative Parnell MOVED Amendment #6, Page 2, Line 28, inserting language following "identify" and adding "and evaluate", while deleting the "evaluate" following "and". There being NO OBJECTION, it was adopted. 3 Representative Parnell recommended adding language to Page 3, Line 11, following "providing services", and inserting "and raising revenue". The change would address local governments off-setting the loss of state revenue. Representative Parnell MOVED to adopt Amendment #7. There being NO OBJECTION, it was adopted. Representative Brown MOVED to adopt Amendment #8, Page 2, Line 7, deleting the language "a committee composed of" and inserting "consensus by". There being NO OBJECTION, it was adopted. (Tape Change, HFC 95 - 12, Side 2). PAT POURCHOT, LEGISLATIVE DIRECTOR, OFFICE OF THE GOVERNOR, pointed out that "consensus" would not indicate unanimity. Representative Brown stated that adding the language "unanimous agreement of" would be specific to the intent. Representative Brown MOVED TO RESCIND previous action taken on Amendment #8. There being NO OBJECTION, it was so ordered. Representative Brown MOVED a language change to Page 2, Line 7, deleting "a committee composed of" and inserting "unanimous agreement of" as the new language for Amendment #8. There being NO OBJECTION, it was adopted. Co-Chair Hanley distributed the fiscal note compiled by the Senate. That note would provide adequate funding for hearings throughout the State. The note would also include funds to contract one position to coordinate Commission activities. The staff financial work would be handled by either the Office of Management and Budget or Legislative Finance. Those costs would be borne by the Legislative Budget and Audit Committee. Co-Chair Hanley advised that the Senate fiscal note would deal with the real costs of the Commission and would include the addition of funds for one contract position to coordinate activities. Representative Mulder suggested a statewide mailing would be valuable and should be included in the fiscal note. Representative Brown agreed that a statewide mailing would be an effective way to reach all people in the State. She recommended that the $6 thousand dollar allocation for the computer and printer should instead be covered out of the Legislature's surplus, emphasizing that the Legislature has a lot of surplus equipment. She added, a statewide mailing would cost several hundred thousand dollars. Co-Chair Hanley pointed out that the cost of the mailing would be prohibitive. Representative Parnell suggested providing public service announcements through the local public service broadcasting stations. Representative Brown 4 suggested that the Commission should have funds available if they determine the mailing would be important to the information they require for the decision process. Representative Grussendorf rejected the idea of a statewide mailing, pointing out the already numerous responsibilities of the Commission. He suggested that the additional responsibility of dealing with complicated issues would be a larger task than the Commission would be able to perform by the established deadline. Co-Chair Hanley agreed that the public should have access to the report of the Commission. Co-Chair Hanley summarized the fiscal need for the Commission. Travel costs, contractual and postage funds are necessary. He noted that the Legislative budget could handle costs amounting to $50 to $60 thousand dollars for services accrued in 1995 thus eliminating a supplemental request. Representative Navarre scrutinized the need for all members to travel to all site locations. He suggested a better use of funds would be to use the teleconference system already established. Representative Martin agreed. Representative Kohring observed that finding qualified persons for the Commission will be a extensive responsibility given the required time commitment. CS HCR 1 (FIN) was HELD in Committee for further discussion on the fiscal note. MIKE GREANY, DIRECTOR, LEGISLATIVE FINANCE, noted that the budget books to the December version of the proposed Hickel budget would be available the first week in February. The proposed Hickel budget is a base maintenance budget, although it builds in increments for non general fund sources. Co-Chair Hanley clarified that the Legislative Finance Division provided the detail work to the proposed Hickel budget. He added that some of those details would be opposed by the current Administration. ADJOURNMENT The meeting adjourned at 2:50 P.M.