HOUSE FINANCE COMMITTEE May 10, 1997 10:00 A.M. TAPE HFC 97-135, Side 1, #000 - end. TAPE HFC 97-135, Side 2, #000 - end. TAPE HFC 97-136, Side 1, #000 - end. CALL TO ORDER Co-Chair Hanley called the House Finance Committee meeting to order at 10:00 a.m. PRESENT Co-Chair Hanley Representative Kelly Co-Chair Therriault Representative Kohring Representative Davies Representative Martin Representative Davis Representative Moses Representative Foster Representative Mulder Representative Grussendorf ALSO PRESENT Nico Bus, Acting Director, Support Services Division, Department of Natural Resources; Kurt Parkan, Deputy Commissioner, Department of Transportation and Public Facilities; Glenda Straube, Director, Child Support Enforcement Division, Department of Health & Social Services; John Bitney, Alaska Housing Finance Corporation; Myrna Maynard, Staff, Senator Pearce; Ed Flanagan, Deputy Commissioner, Department of Labor; Art Chance, Contract, Senate Finance Committee. SUMMARY SB 107 "An Act making and amending capital and other appropriations and to capitalize funds; and providing for an effective date." SB 107 was HELD in Committee for further consideration. SB 151 "An Act relating to public employment labor relations; relating to the protection of the rights of public employees under the Public Employment Relations Act; establishing ethical standards for union representatives of public employees; and establishing disclosure requirements for public employee labor organizations." SB 151 was HELD in Committee for further consideration. SB 154 "An Act relating to paternity determination and child support; relating to reporting of and access to financial or other information for child support purposes; making changes to laws relating to occupational, recreational, or other licenses, permits, certificates, or other authorizations issued by the state to facilitate administration of child support laws; relating to the interest rate on judgments or decrees for child support; relating to immunity from civil liability for good faith compliance with reporting or other requirements for child support purposes; relating to voiding fraudulent transfers and to penalties for noncompliance with orders for child support purposes; amending Rules 4, 5, 35, 52, 58, 60(b), 78, 90.1, and 90.3, Alaska Rules of Civil Procedure; amending Rule 901, Alaska Rules of Evidence; amending Rules 3 and 5, Alaska Bar Association Rules; repealing the effective date of sec. 45, ch. 107, SLA 1996; and providing for an effective date." CSSB 154 (FIN)am was reported out of Committee with "no recommendation" and with a new fiscal impact note by the Alaska Court System, and with six zero fiscal notes, three by the Department of Health & Social Services, one by the Department of Administration, one by the Department of Revenue, and one by the Department of Revenue, all dated 4/29/97. SENATE BILL NO. 107 "An Act making and amending capital and other appropriations and to capitalize funds; and providing for an effective date." Representative Grussendorf Held Amendment 25. Representative Davies MOVED to adopt Amendment 26 (copy on file). Representative Kohring OBJECTED. Representative Davies explained that Amendment 26 would appropriate $1.5 million dollars from the Investment Loss Trust Fund for a ice arena in the North Pole area. He spoke in support of the amendment. He noted that the Fairbanks North Star Borough has already spent $200 thousand dollars for planning. The Fairbanks North Star Borough has pledged another $2 million dollars for the facility. Co-Chair Therriault noted that Amendment 1 appropriates $210 thousand dollars to complete design of the project. He expressed support for the project. A roll call vote was taken on the MOTION to adopt Amendment 26. IN FAVOR: Moses, Davies, Grussendorf, Therriault OPPOSED: Mulder, Davis, Foster, Kelly, Kohring, Martin, Hanley The MOTION FAILED (4-7). Representative Davies MOVED to adopt Amendment 27 (copy on file). He explained that the amendment would add $500 thousand dollars in the Department of Environmental Conservation, Operation and Maintenance Capacity Development. A roll call vote was taken on the MOTION to adopt Amendment 27. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Mulder, Therriault, Hanley Representative Martin was absent for the vote. The MOTION FAILED (3-7). Representative Grussendorf Held Amendment 28. Representative Davies MOVED to adopt Amendment 29 (copy on file). He noted that the amendment would appropriate $1 million dollars for at risk programs. He stressed that the success rate of the program is 85 percent. He pointed out that it is cheaper to support the At Risk Program than to pay for incarceration. Co-Chair Hanley noted that $250 thousand dollars is contained in the budget for the program. He observed that federal funding is in question. He noted that discussion will be needed to determine if the State will fund the program without the addition of federal funds. A roll call vote was taken on the MOTION to adopt Amendment 29. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Mulder, Therriault, Hanley Representative Martin was absent for the vote. The MOTION FAILED (3-7). Representative Grussendorf MOVED to adopt Amendment 30 (copy on file). Representative Kohring objected. Representative Grussendorf explained that the amendment would appropriate $120 thousand dollars for design of a Juneau Armory and Organizational Maintenance Shop. He noted that there will be $6.3 million dollars in federal funds in the next year. He noted that the current armory is on Mental Health Trust land. Co-Chair Hanley questioned if federal funding is available. Representative Grussendorf noted that a three-way land swap is under consideration. NICO BUS, ACTING DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF NATURAL RESOURCES explained that a site has been identified at seven mile, Glacier Highway. He stressed that design funding is needed to obtain federal funding. Representative Mulder expressed support for the project. He suggested that funding would be available in the supplemental budget. A roll call vote was taken on the MOTION to adopt Amendment 30. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder Co-Chair Hanley and Co-Chair Therriault were absent for the vote. The MOTION FAILED (3-6). Representative Davies MOVED to adopt Amendment 31 (copy on file). He explained that the amendment would restore funding for the Aviation Program. He pointed out that the operators approved the development plan. He emphasized that the amendment would restore a number of terminal rehabilitation projects to the level proposed by the operators. He stressed that life and safety issues are involved. He noted that the appropriation would be from airport funds approved by the operators. Representative Martin expressed concern with the impact of feeder lines. He suggested that the Legislative Budget and Audit Committee look at the issue. Representative Davies noted that the amendment would rehabilitate existing terminals. He maintained that there is no justification for legislative action. KURT PARKAN, DEPUTY COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES noted that the proposed projects are consistent with the operating agreement between the state and the airlines. Projects are discussed and voted on by the carriers. He stressed that this item is an on-going appropriation to address life and safety needs. He noted that automatic doors at the Anchorage Airport have a tendency to shut on passengers. He maintained that there are problems with fire doors and sprinkler systems. In response to a question by Representative Mulder, Mr. Parkan observed that a technical subcommittee group reviews projects and makes recommendations. He acknowledged that not all of the projects were supported by a majority of the members. A project must be opposed by two-thirds of the members to be vetoed. Representative Mulder noted that some of the proposals are controversial and at least one project was passed by a minimum of votes. In response to a question by Representative Davis, Mr. Parkan explained that there is an extensive public process. He added that there are life and safety issues that need to be addressed. Representative Martin maintained that Amendment 31 is a duplicate of Amendment 7. Representative Davies clarified that Amendment 31 would restore the plan adopted by the operators. Co-Chair Hanley summarized that projects are proposed by the airport management. Projects are adopted unless two-thirds of the signatories oppose the project. Mr. Parkan clarified that Amendment 31 pertains to rehabilitation projects. He noted that Amendment 7 addressed the concourse C expansion. He agreed that the interim would be a good time to discuss needs for a new terminal with the Legislative Budget and Audit Committee. (Tape Change, HFC 97-135, Side 2) Representative Davies referred to a letter by FedEx dated May 8, 1997 (copy on file). Mr. Wheeler, Vice President, Global Trade Services, FedEx expressed concern that legislative activity threatens the "integrity of the long-standing and well-accepted process set forth in the Airline Operating Agreement and Terminal Building Lease for developing these capital plans." He urged that adequate funding be authorized to maintain critical economic development elements at the Anchorage and Fairbanks airports. A roll call vote was taken on the MOTION to adopt Amendment 31. IN FAVOR: Davies, Grussendorf, Kelly, Moses OPPOSED: Davis, Foster, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (4-7). Representative Grussendorf MOVED to adopt Amendment 32 (copy on file). He explained that the amendment would fund $600 thousand dollars for a coal bed methane drilling test project in ED 36. He spoke in support of the amendment. He emphasized that the project could benefit economic development in rural Alaska. He noted that the project would be in the Fort Yukon area. Representative Davies noted that the Division of Geology and Geological Survey has locate a test site. Representative Kohring spoke in support of the project, but expressed concern with the funding source. A roll call vote was taken on the MOTION to adopt Amendment 32. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Therriault, Hanley Representative Mulder was absent from the vote. The MOTION FAILED (3-7). Representative Davies MOVED to adopt Amendment 33 (copy on file). Representative Martin objected. He maintained that the subject is out of order. Representative Davies noted that a previous amendment addressed the Alaska Craftsman Home Program. Amendment 33 would address low income housing weatherization. He spoke in support of the amendment. He emphasized that the program has been in operation for many years. He noted that money spent on weatherization can reduce heating costs. A roll call vote was taken on the MOTION to adopt 33. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Therriault, Hanley Representative Mulder was absent from the vote. The MOTION FAILED (3-7). Amendment 34 was not moved. Representative Davies MOVED to adopt Amendment 35 (copy on file). Co-Chair Hanley OBJECTED. Representative Davies explained that Amendment 35 would restore funding for the Senior Citizens' Housing Development Program as proposed by the Governor by deleting grants to named recipients. JOHN BITNEY, ALASKA HOUSING FINANCE CORPORATION explained that non- profit organizations apply each and every year. Projects are scored individually each year. He noted that the Senate added four designated grants to fund projects that applied but would not have been funded in FY 97. Projects not funded in FY 97 would compete in FY 98. Co-Chair Hanley noted that the projects would have been supported if additional funding was appropriated. Mr. Bitney noted that there is a question about the viability of some of the projects. He stressed that there are no funds for any competitive programs in FY 98 to develop new applications for on- going years. Representative Martin spoke in support of Amendment 35. A roll call vote was taken on the MOTION to adopt Amendment 35. IN FAVOR: Davies, Grussendorf, Kohring, Martin, Moses OPPOSED: Davis, Foster, Kelly, Mulder, Therriault, Hanley The MOTION FAILED (5-6). Representative Grussendorf MOVED to adopt Amendment 36 (copy on file). Co-Chair Hanley OBJECTED. Representative Grussendorf spoke in support of Amendment 36. Amendment 36 would allocated $1.2 million dollars for modifications on the Malaspina ferry. He noted that new funding is anticipated. He emphasized that other projects would not be affected. Co-Chair Hanley spoke against the amendment. He maintained that the new ferry has taken $80 million dollars in federal funds away from other areas of the state. He noted that the new ferry was presented as a replacement vessel. He stated that more discussion is needed. A roll call vote was taken on the MOTION to adopt Amendment 36. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder, Hanley The MOTION FAILED (3-7). SB 107 was HELD in Committee for further consideration. SENATE BILL NO. 154 "An Act relating to paternity determination and child support; relating to reporting of and access to financial or other information for child support purposes; making changes to laws relating to occupational, recreational, or other licenses, permits, certificates, or other authorizations issued by the state to facilitate administration of child support laws; relating to the interest rate on judgments or decrees for child support; relating to immunity from civil liability for good faith compliance with reporting or other requirements for child support purposes; relating to voiding fraudulent transfers and to penalties for noncompliance with orders for child support purposes; amending Rules 4, 5, 35, 52, 58, 60(b), 78, 90.1, and 90.3, Alaska Rules of Civil Procedure; amending Rule 901, Alaska Rules of Evidence; amending Rules 3 and 5, Alaska Bar Association Rules; repealing the effective date of sec. 45, ch. 107, SLA 1996; and providing for an effective date." GLENDA STRAUBE, DIRECTOR, DIVISION OF CHILD SUPPORT ENFORCEMENT (CSED), DEPARTMENT OF HEALTH AND SOCIAL SERVICES explained that SB 154 represents the minimal change needed to comply with federal mandates for welfare reform. She emphasized that the Child Support Enforcement Division could lose all of its federal funding if the legislation is not enacted. She added that the state Public Assistance Block Grant could be reduced by $3.2 million dollars if the legislation is not passed. Representative Martin suggested that the state allow the federal government to run the program. Ms. Straube noted that the program is funded primarily by the federal government. Representative Mulder summarized that the legislation is the lowest common denominator to match federal requirements. He questioned if federal requirements are reasonable. Ms. Straube stated that federal requirements aimed at getting children off welfare are reasonable. She explained that Congress and the President agreed on child support provisions of the welfare reform act. In response to a question by Co-Chair Therriault, Ms. Straube testified that the Division should be able to work with the federal government and avoid penalties. Representative Davies noted that the legislation would sunset in two years. Ms. Straube clarified that sunset provisions were inserted as a result of concerns regarding constitutionality. She noted that there was concern with the additional use of social security numbers on documents. She noted that there will not be an issue unless the legislation is repealed in two years. In response to a question by Representative Davies, Ms. Straube expressed the opinion that the legislation will work to improve collections. Ms. Straube noted that the federal government has mandated that: * Employers report money withheld from employees checks in 7 days; * Financial institutions and other entities match data quarterly with CSED; * Existing licensing statutes be are amended to: include commercial fishing crew members, and be revocable for noncompliance with subpoena or warrant; * Disbursed payments will go to Aid to Families with Dependent Children (AFDC) recipients for past child support payments before the state can collect to reimburse itself; * Social security numbers be identified on state licenses, permits and other documents, such as divorce decrees and death certificates. Social security numbers must be shared with all other state child support agencies; * Any entity that is providing information or honoring CSED actions are immune from prosecution as long as they are acting in good faith; * Paternity establishment requirements are expanded; * Parents must be informed of their rights and consequences of signing an acknowledgement of paternity; * Paternity establishments of other states must be accepted; * The putative father can request blood tests and establish paternity; * Paternity parties must provide employer information, so that the support order can be established and a withholding order can be sent quickly; * The location of the custodial parent or child can be withheld if there is a risk to health, safety or liberty; * The legislation must conform with all provisions of the Uniform Family Support Act; * Fraudulent transfers can be voided when used to evade child support collections; * The state has the authority to require delinquent obligers in AFDC to participate in appropriate work activities; and * There is no "statute of limitations" on reporting arrears to credit bureaus. Representative Foster MOVED to report CSSB 154 (FIN)am out of Committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. (Tape Change, HFC 97-136, Side 1) SENATE BILL NO. 151 "An Act relating to public employment labor relations; relating to the protection of the rights of public employees under the Public Employment Relations Act; establishing ethical standards for union representatives of public employees; and establishing disclosure requirements for public employee labor organizations." Work draft # 0-LS0675\P, 5/8/97 was adopted by the House Finance Committee on 5/8/97. ART CHANCE, CONTRACT, SENATE FINANCE COMMITTEE noted that the proposed amendment by Representative Davies, O-LS0675\P.2 dated 5/8/97 would delete section 4 of the bill (copy on file). In response to a question by Representative Mulder, Mr. Chance reviewed Amendment 1, by Representative Mulder (copy on file). He clarified that Amendment 1 addresses the fragmentation issue. The amendment eradicates a potential source of fragmentation by eliminating the requirement that employees that are prohibited from striking be segregated from employees that are not so prohibited. The non-affiliation requirement for peace officers, subsection (d), page 3, would be deleted. Peace officers would still be required to be in units comprised only of peace officers. However, they could be affiliated with any organization. Representative Mulder stressed that this is the current practice in regards to peace officers. Representative Davies stressed that efficiencies of scale can allow one management unit to deal with several bargaining units in terms of accounting and reporting functions. He noted that duplication of functions would exist if they were required to have a separate union. Mr. Chance explained that a "bargaining unit" is the description of the groups of employees that can be placed together based on a determination by the Alaska Labor Relations Agency of their sharing a community of interest. He noted that a union is a organization that represents a bargaining unit or units. The Alaska Labor Relations Agency has already decided that correctional officers, who are peace officers, share a separate and distinct community of interest. Amendment 1 would allow them to be represented by anyone they choose. If the Alaska State Employees Association (ASEA) wins the election this group would be one more bargaining unit within ASEA. There will not be a duplication of the actual organizational structure of the unit. Co-Chair Therriault noted that supervisors are required to be in a separate bargaining unit. Representative Mulder noted that the Teamsters represent a number of police officers in a particular city. The amendment would allow the Teamsters to continue to represent these officers. Mr. Chance observed that correctional officers have been a separate unit inside the General Governmental Unit (GGU) since the mid 1980's. They have had specific contract provisions. Representative Mulder referred to section 4 (c), page 3, line 11. He stressed that a unit does not necessitate a separate union. He emphasized that separate units can exist within a union. Mr. Chance agreed and cited examples. In response to a question by Representative Davies, Representative Mulder stressed that the legislation will codify current practice. Representative Davies questioned why the language is needed. Mr. Chance observed that there could be a conflict between groups, such as between supervisors and non-supervisors in the same unit. He noted that it has taken years for the Alaska Labor Relations Agency to arrive at definitive doctrine through their decisions on separations. He emphasized that the legislation will incorporate the evolved standards of the Alaska Labor Relations Agency and eliminate lawsuits. Representative Mulder MOVED to adopt Amendment 1. Representative Davies OBJECTED. Representative Mulder WITHDREW Amendment 1. Representative Davies MOVED to adopt Amendment 3. Amendment 3 would delete section 4. Representative Mulder OBJECTED for purposes of discussion. ED FLANIGAN, DEPUTY COMMISSIONER, DEPARTMENT OF LABOR stressed that the legislation has not been requested by a labor organization, employee or the state. The Department prefers that the supervisory definition be left to regulation. Mr. Flanigan stated that Amendment 1 would obligate the Department's primary objection to section 4. Representative Mulder maintained that Amendment 1 would diminish the cost of appeals. Mr. Flanigan acknowledged that the definition of "supervisor" may not be the best. He stated that the definition "catches too broad a net". He noted that 200 proposals to transfer positions between bargaining units have occurred in the first year of the definition change. He questioned if the definition should be codified. Mr. Chance stated that the issue is partly technical and partly economic. He noted that a person who is moved from one bargaining unit to another due to redesignation or a change in duties, takes with them the dues that they were paying from one organization to another organization. He explained that employees fill out a position description questionnaire. The questionnaire is reviewed by the commissioner, the department's human resource manager and their supervisor. The questionnaire is reviewed by the Department of Administration for bargaining unit placement. If the union disputes the determination it can petition the agency to make a decision on what is the appropriate bargaining unit. The employee cannot petition the agency to make a determination as to whether the position is in the appropriate unit. A roll call vote was taken on the MOTION to adopt Amendment 3. IN FAVOR: Moses, Davies, Grussendorf OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault Co-Chair Hanley was absent from the vote. The MOTION FAILED (3-7). SB 151 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 12:50 p.m. **FIN131AM