HOUSE FINANCE COMMITTEE May 14, 1999 2:15 P.M. TAPE HFC 99 - 138, Side 1 TAPE HFC 99 - 138, Side 2 TAPE HFC 99 - 139, Side 1 TAPE HFC 99 - 139, Side 2 CALL TO ORDER Co-Chair Therriault called the House Finance Committee meeting to order at 2:15 p.m. PRESENT Co-Chair Therriault Representative Foster Co-Chair Mulder Representative Grussendorf Representative Austerman Representative Kohring Representative Bunde Representative Moses Representative J. Davies Representative Williams Representative G. Davis ALSO PRESENT Beth Havegig, Staff, Senator Wilkens; Margot Knuth, Department of Corrections; James Armstrong, Staff, Senator Donley; Catherine Reardon, Director, Division of Occupational Licensing, Department of Commerce and Economic Development; James Armstrong, staff, Senator Donley; Margot Knuth, Assistant Attorney General, Department of Corrections; Douglas Salik, Staff, Senator T. Kelly; Catherine Reardon, Director, Division of Occupational Licensing, Department of Commerce and Economic Development; Mike Tibbles, Staff, Representative Therriault; Gail Fenumiai, Election Program Specialist, Division of Election, Office of the Lieutenant Governor; TESTIFIED VIA TELECONFERENCE: Paul Costello, Land Management Director, Fairbanks North Star Borough; LARRY DIETRICK, Acting Director, Division of Spill Prevention and Response, Department of Environmental Conservation; Ardith Lynch, Attorney, Fairbanks North Star Borough; Craig Tillery, Assistant Attorney General, Environmental Section, Department of Law, Anchorage; Virgil Norton, Kenai SUMMARY CSSB 11(JUD) "An Act relating to good time credits for prisoners serving sentences of imprisonment for certain murders." CSSB 11(JUD) was heard and HELD in Committee for further consideration. CSSB 51(L&C) "An Act relating to barbers, hairdressers, manicurists, and cosmetologists; providing that the only qualification necessary for licensure as a manicurist, other than payment of fees, is completion of a class that is 12 hours in duration, addresses relevant health, safety, and hygiene concerns, and is offered through a school approved by the Board of Barbers and Hairdressers; and providing for an effective date." HCS CS 51 (L&C) was REPORTED out of Committee with "no recommendation" and a fiscal impact note by the Department of Commerce and Economic Development; and a fiscal impact note by the Department of Environmental Conservation, published date 3/26/99. CSSB 110(RLS) am "An Act relating to liability for the release of hazardous substances involving certain property acquired by a governmental entity; relating to making a determination as to when a hazardous substance release has occurred; relating to liability of a party other than the party responsible for the initial release of a hazardous substance; and providing for an effective date." HCS CSSB110 (JUD) was REPORTED out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Transportation and Public Facilities, published date 4/29/99. HB 141 An Act providing for preferential voting in state and local elections. HB 141 was heard and HELD in Committee for further consideration. NOMINATIONS TO THE ALCOHOL BEVERAGE CONTROL BOARD No action was taken. CS for SENATE BILL 110(RLS) am "An Act relating to liability for the release of hazardous substances involving certain property acquired by a governmental entity; relating to making a determination as to when a hazardous substance release has occurred; relating to liability of a party other than the party responsible for the initial release of a hazardous substance; and providing for an effective date." BETH HAVEGIG, STAFF, SENATOR WILKENS testified on behalf of the sponsor in support on SB 110. She read the sponsor statement: "This bill will assist municipalities in performing their statutory duty to enforce liens for delinquent real property taxes. Tax foreclosure is a mandatory process leading to the taking of a tax deed that places the title to a tax delinquent property in the municipality's name. Some properties with delinquent taxes are contaminated. Municipalities are concerned that they may be held liable for pre-existing contamination of foreclosed land with significant environmental remediation costs. The federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) exempts by definition state and local governments who acquire property through "bankruptcy, foreclosure, tax delinquency, abandonment, or similar means." However, the state law which addresses liability for damage caused by the release of hazardous substances, AS 46.03.822, does not precisely mirror the federal law. SB 110 will amend AS 46.03.822 to ensure that federal and state laws are similar in this respect. The municipality may therefore have title to the contaminated property without involuntary exposure to cleanup. Changes in the Senate also recognized the need to extend this courtesy to innocent third parties, which are not directly responsible for contaminating the property they have acquired. Subsection (m) clarifies state law to say that a person who acquires a facility without knowledge of prior existing contamination is not liable under AS 46.03.822 so long as they follow due diligence steps to begin operations to contain and clean up the hazardous substance." Ms. Havegig responded to questions by Co-Chair Therriault. She noted that section (m) only works if the person undertakes "all reasonable inquiries into the previous ownership and uses of the property consistent with good commercial or customary practice in an effort to minimize liability." The new owners must take steps of due diligence at the time of purchase. Representative Foster noted that a common citizen is not liable as long as they follow due diligence. He questioned if municipalities need to follow due diligence. Ms. Havegig responded that municipalities would be responsible for due diligence. Steps would have to be taken to assure that the spill doesn't get any worse. The new owner would not be responsible for passive leaching. Representative Austerman asked if there was discussion on making the provisions retroactive. Ms. Havegig stated that there had not been discussion on providing a retroactive clause. ARDITH LYNCH, ATTORNEY, FAIRBANKS NORTH STAR BOROUGH testified via teleconference. She explained that the legislation addresses municipal ownership in two different ways. In section (m) the municipality is in the same situation that a private person would be in if they purchase a piece of property. The municipality would still have to use due diligence to clean up a hazardous substance. Subsection (l) on page 2 deals with the limited issue of when a municipality acquires a piece of property through foreclosure. Foreclosure is a mandatory process that the borough must conduct when someone is delinquent in his or her real property taxes. In those cases the borough takes title to the property and puts it on the market for sale. The municipality is forced into the chain of title. The municipality would be responsible for taking steps to prevent additional obvious contamination. Representative J. Davies noted that the municipality effectively removes control of the land from the potentially liable person when it forecloses. He questioned if the municipality takes on liability to resolve the issue when it removes the responsible person. Ms. Lynch acknowledged that the municipality would have responsibility to take steps to address leakage that is discovered after the borough took possession of the title. Ms. Havegig stated that "person" is defined to mean "any individual, public or private corporation, political subdivision, government agency, municipality, industry, co- partnership, association, firm, trust, estate, or any other entity whatsoever." She concluded that subsections (m) and (l) could apply to municipalities. The issue is voluntary vs. involuntary ownership. In response to a question by Representative J. Davies, Ms. Lynch acknowledged that there are property owners that feel that the borough will not foreclose on property due to the risk of liability. In some cases private businesses are being operated on property without paying the property tax. This puts their competitors at a disadvantage. She reiterated that in the case of a foreclosure that the borough is not voluntarily taking on the burden. The borough should be liable for obvious problems such as leaking batteries. Representative Austerman questioned the definition of "vessel" on page 2, line 17. Ms. Havegig noted that "vessel" means every description of water craft or other artificial contrivance that is used or is capable of being used as a means of transportation on water, or that carries hazardous substance for the purpose of incineration of the hazardous substance. CRAIG TILLERY, ASSISTANT ATTORNEY GENERAL, ENVIRONMENTAL SECTION, DEPARTMENT OF LAW, ANCHORAGE testified via teleconference. He clarified that vessel would also apply to vehicles that have leaking batteries. He noted that the legislation provides a municipality with immunity for contaminates that are leaking on the property at the time the property is acquired. Municipalities would be responsible for addressing containers that are actively leaking at the time the property is acquired. VIRGIL NORTON, KENAI testified via teleconference. He provided information on the legislation. He noted that he worked with the Senate Judiciary Committee to add section (m). He maintained that AS 46.03.822 imposes obligations on property owners that discover contamination. He emphasized that cost recovery liability should be directed toward the person or the party that actually committed the act of pollution. The responsible party is the party that first released the contaminate into the environment. He observed that the average person does not have the resources to battle the Department of Environmental Conservation or the Department of Law. He maintained that if the property owner has incurred costs in acting responsibly that he should be able to recover from the guilty party. Co-Chair Therriault observed that there is a zero fiscal note from the Department of Transportation and Public Facilities. Representative Foster MOVED to report HCS CSSB110 (JUD) out of Committee with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HCS CSSB110 (JUD) was REPORTED out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Transportation and Public Facilities, published date 4/29/99. NOMINATIONS TO THE ALCOHOL BEVERAGE CONTROL BOARD Co-Chair Therriault handed out information pertaining to nominations to the Alcohol Beverage Control Board. He observed that there would be a joint session to address confirmations. He noted that members did not indicate a desire to hold a meeting on the nominations. CS FOR SENATE BILL 11(JUD) "An Act relating to good time credits for prisoners serving sentences of imprisonment for certain murders." JAMES ARMSTRONG, STAFF, SENATOR DONLEY testified on behalf of the sponsor in support of SB 11. He read from the sponsor statement: "Senate Bill 11 would reduce good time sentence reduction by one-half for individuals convicted of first and second degree murders. Under Alaska statute 33.20.10, a prisoner is entitled to a deduction of one-third of the term of imprisonment if the prisoner follows the rules of that correctional facility." Persons convicted of first and second degree murder would be dropped down to sixteen and a half percent. Vice-Chair Bunde noted that correctional facilities use "good time" as a bribe for good behavior. He questioned the motivation for the legislation. Senator Donley decided to introduce the legislation after being approached by families of crime victims at a crime victims' memorial. Thirty other states have implemented similar provisions. Some require at least 85% of the sentence be served. Co-Chair Therriault questioned if there is a problem under the equal protection provision. Mr. Armstrong noted that the original bill would have covered first and second degree attempted murder or conspiracy to commit murder in the first degree. These were removed. He did not think that there was a problem with the current legislation. Representative J. Davies observed that the state of Alaska already has longer sentences than most other states. Mr. Armstrong noted that the legislation targets the most heinous offenders. Co-Chair Therriault noted that the legislation is prospective. It would not affect current convictions. In response to a question by Representative Austerman, Mr. Armstrong clarified that the legislation would provide sentencing guidelines of 84.3 percent of sentence. Release for good time is currently at 66.3 percent of sentence. The Department of Corrections estimates that there will be a fiscal impact to the state in the year 2008. Representative J. Davies stated that the estimated impact is approximately $1.2 million dollars. Mr. Armstrong reviewed a handout demonstrating the affect of SB 11 on the current prison population (copy on file). Vice- Chair Bunde stressed that SB 11 "would make a life sentence, truly a life sentence." MARGOT KNUTH, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF CORRECTIONS provided information regarding the fiscal impacts of SB 11. The legislation would increase sentences for those convicted of murder 1 or 2. These sentences would have an impact starting in the year 2008. If these sentences had applied since statehood the accumulative impact would have been $50 million dollars to the state in additional incarceration time. She added that age 50 is considered old in prison life. The medical component greatly increases from age 50. There is no way to predict actual costs. She observed that pace makers range in cost from $15 to $50 thousand dollars and gave other examples of the cost of keeping elderly prisoners incarcerated. She emphasized that once a prisoner reaches the age of 43 their recidivism rate drops to 2 percent. The legislation moves release ages from the 50's and 60's to 70's and beyond. She referred to an article, "Should Elderly Convicts be Kept in Prison", which was taken off the Internet (copy on file). (Tape Change, HFC 99 - 138, Side 2) Ms. Knuth acknowledged that there are a few prisoners that receive relatively short sentences for murder 2, 15 - 20 years. She reiterated that the legislation will costly to the state. She pointed out that shorter sentences are generally accompanied by extenuating circumstances. Vice-Chair Bunde questioned how SB 11 affects medical parole. Ms. Knuth noted that there is a parole option for medical circumstances, but emphasized that prisoners have to be essentially a quadriplegic. Prisoners must be non- ambulatory. In response to a question by Representative G. Davis, Mr. Armstrong stressed that the core of the legislation is that murders should not be entitled to the same "good time" release as other prisoners. Ms. Knuth pointed out that Alaskans that are convicted of murder 1 or 2 serve on an average 467 months. This is longer than other states that have "truth in sentencing". Co-Chair Therriault questioned the cost of the legislation past the year 2008. Ms. Knuth responded that the cost would increase ten fold every 10 years. In FY 2008 it would be $35 thousand dollars. In FY 2018 it would increase to $533 thousand dollars. The cost would be closer to $5 million in FY 2028. This does not include geriatric costs. She added that murder 1 and 2 have the lowest recidivism rates of any criminal group. Sex offenders have poor recidivism rates. Mr. Armstrong argued that there is an issue of public policy versus the cost of the legislation. CSSB 11(JUD) was heard and HELD in Committee for further consideration CS for SENATE BILL NO. 51(L&C) "An Act relating to barbers, hairdressers, manicurists, and cosmetologists; providing that the only qualification necessary for licensure as a manicurist, other than payment of fees, is completion of a class that is 12 hours in duration, addresses relevant health, safety, and hygiene concerns, and is offered through a school approved by the Board of Barbers and Hairdressers; and providing for an effective date." DOUGLAS SALIK, STAFF, SENATOR T. KELLY testified on behalf of the sponsor in support of the legislation. He explained that the legislation changes "cosmetologist" to "esthetician" in multiple locations in the statutes. The legislation also requires a 12-hour hygiene class and a temporary license for those taking the class. The Board can add endorsement to the license for persons that complete an advance manicurist class. Reciprocity would be allowed with other states with similar classes. Senate Bill 51 also changes an instructor's license to a dual instructor's license. If further issues a temporary permit to persons that are licensed to practice the profession in another state. Students can have a permit to practice while they are continuing to learn the profession. In response to a question by Representative Foster, Mr. Salik noted that persons that do not comply with manicuring licensing requirements are guilty of a violation. "A person who practices barbering, hairdressing, or esthetics [COSMETOLOGY], or operates a shop, or operates a school of barbering, hairdressing, or esthetics [COSMETOLOGY], or teaches in a school of barbering, hairdressing, or esthetics [COSMETOLOGY], without a license, temporary permit, temporary license, or student permit and who is not exempt under AS 08.13.120 or under AS 08.13.160(d) is guilty of a class B misdemeanor." CATHERINE REARDON, DIRECTOR, DIVISION OF OCCUPATIONAL LICENSING, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT provided information on the legislation. The Division of Occupational Licensing provides staff support to the Board of Barbers and Hairdressers. She observed that the Board has supported licensing of manicurists. The Board recommended changes to the name. Co-Chair Therriault reviewed the accompanying fiscal notes. He noted that the Division has requested $8.5 thousand dollars for personal services and questioned the effect of not funding this amount. Ms. Reardon responded that there would be slower service in licensing. She noted that the Division is requesting less than a quarter position because they currently have a half-time position that can be expanded. There is also $3 thousand dollars in the Department of Commerce and Economic Development's fiscal note that will be collected in fees and paid to the Department of Environmental Conservation. The Department of Environmental Conservation is requesting $3 thousand dollars to cover the cost of writing the regulation. Representative Foster questioned if the class can be taken by correspondence. Ms. Reardon stated that the class could be offered by correspondence if the private sector offers the course. The legislation requires manicuring schools to offer the 12-hour course. Representative Foster expressed concern regarding the ability for rural residents to meet the requirements. Mr. Salik stated that it is the sponsor's intent to keep the requirements at 12 hours to allow rural residents to complete the training within a weekend. Representative J. Davies expressed concern with the use of "esthetics". Ms. Reardon explained that "cosmetologist" refers to persons that specialize in skin care. She noted that there is some confusion regarding the term. There is no grandfather clause. In response to a question by Representative Austerman, Mr. Salik stated that there is concern regarding the use of dental chemicals for manicures. The 12-hour health and safety hygiene class would address this issue. Ms. Reardon stressed that if there is a danger that everyone should have the training. Representative Williams spoke in support of a two-year grandfather clause. Mr. Salik spoke against the inclusion of a grandfather clause. Representative Grussendorf questioned if a problem exists. Ms. Reardon did not know if a problem exists. Vice-Chair Bunde stated that there is a problem on a national level. He felt that there was a reasonable need for the class requirement. Ms. Reardon noted that an exemption was included for communities of less than 1,000 people that are not within 25 miles of a community of more than 1,000. She observed that the worker is also at risk. Representative Austerman questioned if the legislation could be permissive. Mr. Salik stated that it is the sponsor's intent to assure that the safety and health of the public is protected. Ms. Reardon noted that there is an optional advance manicurist license. The 12-hour course is mandatory. (Tape Change, HFC 99 -139, Side 1) Representative J. Davies questioned if dangerous chemicals used by manicurist are available to the general public. Ms. Reardon did not think that there were state restrictions relating to the use of chemicals. Vice-Chair Bunde spoke in support of the legislation. Representative Foster questioned the need for the legislation. Representative Williams MOVED to report HCS CS 51 (L&C) out of Committee with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. HCS CS 51 (L&C) was REPORTED out of Committee with "no recommendation" and a fiscal impact note by the Department of Commerce and Economic Development; and a fiscal impact note by the Department of Environmental Conservation, published date 3/26/99. HOUSE BILL NO. 141 An Act providing for preferential voting in state and local elections. Work draft #1-LS0669\S, Kurtz, 4/19/99 was adopted on 4/20/99. Co-Chair Therriault provided members with Amendment 1(copy on file). MIKE TIBBLES, STAFF, REPRESENTATIVE THERRIAULT explained Amendment 1. Amendment 1 would insert on line 8, page 2 one" and delete "candidates" and insert "one candidate for each office." The amendment clarifies that only one write in candidate per election can be marked as a preference. Current law only allows for one write in candidate. The amendment allows one write in candidate to be included in the voter's preference. Representative J. Davies stated that the sentence is confusing. Co-Chair Therriault clarified that his motion would be conceptual and that the drafter could further clarify the language. There being NO OBJECTION, it was so ordered. Co-Chair Therriault MOVED to ADOPT Amendment 2 (copy on file.) Mr. Tibbles explained that the amendment came as a request from the sponsor Representative Kott. Amendment 2 would delete "first choice" on page 3, line 3. He explained that the language "first choice" would cause problems on the second and subsequent round of tabulation. GAIL FENUMIAI, ELECTION PROGRAM SPECIALIST, DIVISION OF ELECTION, OFFICE OF THE LIEUTENANT GOVERNOR provided information on HB 141. She clarified that after the first round elimination the next candidate that intention would be that the next candidate to be eliminated would be the candidate with the fewest votes, not the first choice least votes. She explained that after the first round, the candidate with the fewest first choice votes would have their second choice votes redistributed to the other candidates. If no candidate receives a majority then the candidate, in the remaining pool, that has the least number of votes would be eliminated and their second choice votes would be redistributed. Co-Chair Therriault questioned if the language would be clarified by the addition of "that tabulation". Ms. Fenumiai responded that "accumulative" could be added. Representative J. Davies summarized that the second choice becomes a first choice. Ms. Fenumiai observed that if there were five candidates and candidate number five had the least first choice votes then they would be eliminated and their second choice votes would be redistributed to candidates two, three and four. The candidate with the least remaining votes of these candidates would next be eliminated and their votes redistributed. Representative J. Davies recommended the addition of "retabulated" or some other modifier. KELLY SULLIVAN, STAFF, REPRESENTATIVE KOTT provided information on behalf of the sponsor. She noted that the sponsor supports the deletion of "first choice" on the advice of the Division. Representative J. Davies MOVED to AMEND Amendment 2 by adding, "retabulated" before "first choice". "First choice" would remain in the legislation. There being NO OBJECTION, it was so ordered. There being NO OBJECTION, Amendment 2 was adopted as amended. The new language read: "If no candidate receives a majority of the retabulated votes, then the remaining candidate with the fewest retabulated first choice votes shall be declared defeated." Representative J. Davies provided members with Amendment 3 (copy on file). Amendment 3 would add "for the offices of President and Vice-President of the United States." He noted that an Electoral College is used in the primary elections for President and Vice-President of the United States. Ms. Sullivan explained that the language was added to clarify that the preferential vote would be used for all elections. Representative J. Davies maintained that the system for selecting the President and Vice-President should be a nationally consistent process. Representative G. Davis pointed out that the legislation pertains to the popular vote not the Electoral College. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Williams OPPOSED: G. Davis, Austerman, Bunde, Mulder, Therriault Representatives Foster, Kohring, and Moses were absent from the vote. The MOTION FAILED (3-5). Mr. Tibbles reviewed the fiscal note. He noted that the cost for the election is every other year and is not needed in the first year. The fiscal note reflects $175 thousand dollars for software redesign. Ms. Fenuumiai responded that the fiscal note is inadequate to allow the Division to implement the legislation effectively. She added that the estimation for the software redesign was based on the first draft of the legislation, which did not contain the complex primary accounting mechanism. She did not think that the funding would be sufficient to get the programming enhanced. The remaining reduced amounts in subsequent years are not adequate. (Tape Change, HFC 99 - 139, Side 2) Representative J. Davies questioned why second choice votes are not counted. Co-Chair Therriault stressed that there would be no reason to switch to a person's second choice while their first choice is in the running. Representative J. Davies expressed further concerns with the legislation. He emphasized that it is difficult to anticipate the consequences of the system. He recommended that the legislation be held and discussed over the interim. He expressed concern that a person could get elected that had fewer first choice votes than another candidate did. He maintained that the issue is the number of registered voters that do not vote. Representative Austerman felt that the legislation should be in the form of a resolution. He emphasized that there should be a vote of the people. Representative Grussendorf spoke against moving the legislation. He pointed out that no other state has implemented the system for their elected officials. The system is only being used by the New York School Board, which is trying "to get out from under it." Representative Williams noted that the Division of Elections' fiscal note was reduced from $1.8 million dollars to $175 thousand dollars. Co-Chair Therriault pointed out that approximately $1 million dollars was included in the Division's fiscal note for new Accu-Vote machines for every voting location. The House Finance Committee fiscal note does not fund this request. Representative Williams noted the need to reduce additional spending. Co-Chair Mulder recommended that the legislation be held for further view. Representative G. Davis asked for more information regarding software needs. Ms. Fenumiai clarified that the current system that is responsible for tabulating ballots cannot accommodate the preferential voting system without substantial modification. HB 141 was heard and HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 4:20 p.m. House Finance Committee 13 5/14/99