HOUSE FINANCE COMMITTEE February 28, 2000 1:48 P.M. TAPE HFC 00 - 42, Side 1 TAPE HFC 00 - 42, Side 2 CALL TO ORDER Co-Chair Therriault called the House Finance Committee meeting to order at 1:48 p.m. PRESENT Co-Chair Therriault Representative Foster Vice Chair Bunde Representative Grussendorf Representative Austerman Representative Moses Representative J. Davies Representative Phillips Representative G. Davis Representative Williams Co-Chair Mulder ALSO PRESENT Kevin Hand, Staff, House Transportation Committee and Representative Halcro; Karen Crane, Director, Division of Libraries, Archives and Museums; Kevin Brooks, Director, Division of Administrative Services, Department of Fish and Game; Bea Sheppard, Board Member, Museums Alaska, Juneau; Geron Bruce, Legislative Liaison, Department of Fish and Game; John Manly, Staff, Representative Harris; Mike Tibbles, Staff, Representative Therriault; TESTIFIED VIA TELECONFERENCE Donna Mathews, Executive Director, Museums Alaska, Anchorage; Diane Brenner, Archivist, Anchorage Museum of History and Art, Anchorage. SUMMARY HB 206 "An Act relating to the migratory game bird conservation tag, to a nonresident combined sport fishing and hunting license, to the nonresident military small game and sport fishing license, to applications for certain licenses, tags, and permits issued by the Department of Fish and Game, and to duplicate crewmember licenses." HB 206 was heard and HELD in Committee for further consideration. HB 206 was assigned to a subcommittee consisting of: Representative Mulder as chair and Representatives Phillips and Grussendorf. HB 218 "An Act relating to property loaned to or held by museums." zero fiscal note by the Department of Education and Early Development. HB 243 "An Act relating to taxes on motor fuel used in or on boats and watercraft; and providing for an effective date." HB 243 was heard and HELD in Committee for further consideration. HOUSE BILL NO. 243 "An Act relating to taxes on motor fuel used in or on boats and watercraft; and providing for an effective date." KEVIN HAND, STAFF, HOUSE TRANSPORTATION COMMITTEE AND REPRESENTATIVE HALCRO testified in support of the legislation on behalf of the sponsor. He observed that the State of Alaska has currently been attempting to divest itself of the ownership and maintenance and operation obligations for many of Alaska's harbors. He maintained that the legislation encourages local governments to assume that responsibility. The legislation generates revenue for municipalities that assume local responsibility of ownership for their port and harbor facilities. Mr. Hand emphasized that the bill reduces the state marine fuel tax in a qualified municipality to 2 cents from the current 5 cents, and allows the local governing body to impose their own 3 cent tax, the revenue from which could then be used for maintenance and operation obligations. Mr. Hand observed that this process comes with specific caveats required of the local entity. A qualified municipality must: - Assume possession and responsibility for operation and maintenance of all state port and harbor facilities within its boundaries - except those owned by a public corporation or a state agency and used for state purposes: the Alaska Marine Highway System and the Alaska Railroad corporation (both operate dock facilities around the state). - The state shall not retain any maintenance and operation obligation or liability for the operation of these facilities - The local government must adopt municipal ordinances that dedicate these revenues to be used in their harbors. Mr. Hand asserted that the legislation represents an efficient "user-pay" system since part of the revenue generated from fuel purchases will return to benefit the harbor where the fuel was purchased. The tax on the consumer remains constant; the effective 5-cent tax per gallon will remain consistent throughout the state. Mr. Hand maintained that the implementation of HB 243 would encourage small communities around the state to gain local control of their harbors and free the Department of Transportation and Public Facilities of maintenance and operation obligations. He acknowledged that the legislation, in its current form, has some working difficulties. He suggested that the bill be placed in a subcommittee to hash out the remaining problems. Co-Chair Therriault noted that the legislation only pertains to maintenance and operation. He observed that the intent has been to turn facilities over to municipalities and asked that the subcommittee consider if there is a way to dedicate a revenue stream for local municipalities to pay for improvements, in order to remove the state from the process a step earlier. He noted that Co-Chair Mulder has expressed concern over the loss of revenues to the state of Alaska and noted that revenue loss needs to be balanced with a reduction in responsibility. In response to a question by Representative Foster, Mr. Hand observed that there is an indeterminate fiscal note. The tax is imposed at the local level. The department estimates a possible loss of $3.7 million dollars. Co-Chair Therriault appointed a subcommittee consisting of Representative Mulder as chair and Representatives Phillips and Grussendorf. HB 206 was heard and HELD in Subcommittee for further consideration. HOUSE BILL NO. 206 "An Act relating to the migratory game bird conservation tag, to a nonresident combined sport fishing and hunting license, to the nonresident military small game and sport fishing license, to applications for certain licenses, tags, and permits issued by the Department of Fish and Game, and to duplicate crewmember licenses." JOHN MANLY, STAFF, REPRESENTATIVE HARRIS testified in support of the legislation. He noted that the legislation is a general cleanup bill for technical problems within the Department of Fish and Game. A significant portion of the bill deals with changing "waterfowl" conservation tags to "migratory game bird" tags. The definition would be expanded to include snipes and cranes, which are not currently covered. Mr. Manly noted that other sections of the bill would make statutes consistent with current practices. Section three requires formerly exempt holders of $5 licenses and free disabled veteran licenses to register in the National Migratory Bird Harvest Information Program, through one of two methods. Section 4 would create a combination 7-day hunting and fishing license for nonresidents, a popular combination that is more convenient for those visitors who want to hunt and fish during a short stay. Section 5 would equalize the fees paid by nonresident military personnel for small game and sport fishing licenses. Currently, the fee for a nonresident military license is higher than the fee for ordinary nonresidents. The final significant change in section 16 would authorize the Department of Fish and Game to issue a duplicate commercial-fishing crewmember license for $5. Co-Chair Therriault clarified that section 16 is a replacement fee in case of loss. Additional language was added to conform statutes to changes made in section 3. In response to a question by Representative Austerman, Mr. Manly clarified that wording in section 4 utilizes current statutory language. Representative Phillips noted that the legislation joins crew licenses and migratory birds. She questioned if the legislation would run afoul of the single subject rule. Mr. Manley did not think the legislation would conflict with the single subject rule. GERON BRUCE, LEGISLATIVE LIAISON, DEPARTMENT OF FISH AND GAME observed that the legislation was offered on behalf of the Department of Fish and Game. He explained that the change would help with conservation efforts. Snipes and cranes are harvested in a number of states. Their inclusion would provide information on their harvest and the impact of harvest. They are not included under current statutes. Mr. Bruce referred to sections 8 and 9. He observed that vendors must swear an oath; vendors essentially act as a notary. Since vendors are not setup to swear oaths, the provision has not been enforced. This language would be deleted. Co-Chair Therriault referred to section 4. He emphasized that the legislature must make the policy decision of whether or not to authorize consolidated licenses. There is no discount for the combination of licenses. He noted that any combination of licenses could occur. If the language is retained an amendment would be needed on page 3, line 12 to clarify that it is a seven day sport fishing and "annual" hunting license. Mr. Bruce emphasized that the department has heard from vendors and guides, who support this combination. The combination would be convenient for persons visiting the state of Alaska. It is a customer driven combination. Vice Chair Bunde noted that residents can currently buy a number of combination licenses. There is only one accommodation for non-residents. Co-Chair Therriault observed that residents do not have the time limit. He did not think requiring two licenses would be a burden. Vice Chair Bunde stressed that the combination license would save administrative time and money. Representative Phillips echoed remarks of Vice Chair Bunde and added that she has sold licenses and stressed that one piece of paper is more convenient. Representative Austerman spoke in support of the combination license. He questioned if a game animal outside of the license could be taken under section 4. Mr. Bruce explained that nonresident hunters can already take a different game animal. The language is included for consistency. In response to a question by Representative Austerman, Mr. Bruce affirmed that an elk hunter could shoot a deer while hunting for elk. Co-Chair Therriault suggested that section 5 be amended to list the cost of each type of license. Mr. Bruce noted that nonresident military personnel stationed in the state of Alaska can purchase a small game hunting license for $20 dollars, the same rate as a resident; and nonresident military personnel stationed in the state of Alaska can purchase a sport fishing license for $15 dollars, at the same rate as a resident. Co-Chair Therriault MOVED to ADOPT "annual" on line 12, page 3 before "hunting". There being NO OBJECTION, it was so ordered. Co-Chair Therriault MOVED to ADOPT a conceptional amendment to clarify that nonresident military personnel stationed in the state of Alaska may obtain a small game hunting license for $20 dollars and an annual sport-fishing license for $15 dollars. In response to a question by Representative Austerman, Mr. Bruce explained that the intent is to offer the license at the lowest rate available. Representative Austerman questioned if the amendment was necessary. Mr. Bruce clarified that when the license fees for residents and nonresidents were raised, the resident rate for a small game-hunting license became more expensive than a nonresident license. The intent is to offer nonresident military personnel stationed in the state of Alaska the lowest rate. The license only authorizes hunting of small game such as rabbits and birds. Vice Chair Bunde observed that the license would allow persons to enjoy hunting at a reasonable rate until they get their residency. Co-Chair Therriault WITHDREW his amendment. Representative Phillips questioned if there is a problem with the single subject rule. Mr. Bruce stated that the drafter has not indicated that there would be a problem with the single subject law. Representative Austerman stated that he understood the intent but felt that military personnel already receive sufficient perks. Co-Chair Therriault asked if the legislation was offered to meet federal law mandating fees charged to military personnel. KEVIN BROOKS, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF FISH AND GAME provided information relating to HB 206. He explained that the legislation would comply with federal law. Co-Chair Therriault noted that federal law might dictate the perks. HB 206 was heard and HELD in Committee for further consideration. HOUSE BILL NO. 218 "An Act relating to property loaned to or held by museums." Co-Chair Therriault provided members with a proposed committee substitute, work draft 1-LS0786\D, 2/28/00 (copy on file). Mr. Hand testified in support of the legislation on behalf of the sponsor. He acknowledged the good job that Alaska's many museums do in preserving the state's rich cultural heritage. Unfortunately, there are numerous artifacts in Alaska's museums that are currently in a quandary because the owners or lender of the property have lost contact with the museum. Lenders pass away or move without maintaining notice with the museum. Sometimes, there is little or no documentation as to the origins of items. This leaves museums in a difficult position since without contact with the lender or defined ownership by the museum, it is very difficult to properly care for these artifacts. Artifacts require care and maintenance over time. Some artifacts require maintenance/upkeep that could be potentially damaging to the property. It is even possible that an item has degenerated to a point where the best thing to do, is to dispose of the property. Without contact with the lender, museums are put in the unenviable position of having to care for these items without authority to do so. He maintained that museums cannot reasonably be expected to properly care for an item while simultaneously incurring liability for doing so. House Bill 218 establishes a process through which museums may clarify title on unclaimed objects. Mr. Hand outlined the process through which museums may clarify title on unclaimed objects. At least 7 years must have passed after the expiration date of the loan without any contact between the lender and museum. The museum must first send a notice by certified mail, return receipt requested, to the lender's last known address. If, after 30 days, no notice of delivery has been received, the museum then publishes notices for a period of 4 weeks in a general circulation newspaper in the area of the museum and in the area of the lender's last known address: - The notice states that the museum intends to take title to the property. - The bill specifically stipulates the information that must be included in the notices. Mr. Hand explained that if no response is received within a period of 65 days, the museum then sends another certified mailing to the last known address of the lender. If again there is no response, the museum then undertakes another round of newspaper notices for a period of two weeks. A lender still has legal recourse through a reclamation period of 2 years after the museum has taken title to the property. The bill also stipulates that a museum must take responsible steps in order to keep proper written records regarding loaned property, including notifying any lenders about a change of location of the museum. Also, under this act, museums must notify all new lenders of this statute. Mr. Hand concluded that the legislation provides for a course of action museums can follow in order to alleviate very serious problems that seemingly every museum in the state is encountering. There is strong support from those in the museum community who are working very hard to preserve Alaska's cultural heritage. Vice Chair Bunde questioned if notification costs could be absorbed with a zero fiscal note. He questioned how many certified letters would be sent to artifact owners. Mr. Hand observed that the department felt that the cost of newspaper notification would be minimal and could be included in the cost of doing business. He did not know how many letters would have to be sent. Vice Chair Bunde asked if loan contract agreements have provisions for forfeiture. Mr. Hand did not know. He added that the legislation would address undocumented items. MIKE TIBBLES, STAFF, REPRESENTATIVE THERRIAULT provided information regarding the proposed committee substitute. He noted that the first change occurred in section 2 of the bill. Section 2(a)(1) and (2) differentiate between loans with and without expiration dates. Redundant language was taken out of section 2(a)(2); the museum can take possession if there is no expiration date and seven years have passed. The telephone number of the museum representative was added in subsection (b) on line 11, page 2. Mr. Tibble continued to explain changed made in the proposed committee substitute. The third change occurred on line 21, page 2: "or" was added to clarify that notice would be provided by newspaper in the judicial district the museum is located and in the judicial district in which the lender's last known address or the county, borough or geographical organization of their last known address. The final change was on page 3, line 9: "at least" before "once a week" was added to provide consistency. Mr. Hand observed that the requirement for a telephone number was also added on page 4, line 5; and "at least" was also added page 4 and line 10. The sponsor agreed with the changes made in the proposed committee substitute. Vice Chair Bunde MOVED to ADOPT work draft 1-LS0786\D, 2/28/00. There being NO OBJECTION, it was so ordered. Representative Austerman questioned how estates would be handled. Mr. Hand clarified in the case of an estate that the heirs would be the titleholder of the property. Representative Phillips questioned why seven years was chosen and asked if it would be retroactive. Mr. Hand explained that the provision would be in affect for items that have been in the museum's custody for the previous seven years without contact from the lender. They would not have to begin another 7-year period. The seven-year period was chosen arbitrarily based on provisions in other states. KAREN CRANE, DIRECTOR, DIVISION OF LIBRARIES, ARCHIVES AND MUSEUMS spoke in support of HB 218. She observed that out of 25,000 objects that there are 85 objects that would be affected; 24 are unclaimed; the rest are undocumented. (TAPE CHANGE, HFC 00 - 42, SIDE 2) Ms. Crane explained that the cost of contacting owners would occur over a number of years. She did not anticipate that all 85 objects would be addressed in the first year. She observed that old airplane parts are among the unclaimed objects. These could be transferred or sold. It is expensive to maintain objects that the state does not hold title to. The legislation would cleanup problems encountered by the department. Representative J. Davies asked if there is a problem with the affective date of the bill. Ms. Crane indicated that effective date is not a problem. Vice Chair Bunde asked about forfeiture provisions. Ms. Crane responded that there is a forfeiture provision containing the same seven-year period. The timeline chosen for the legislation was modeled after the American Association of Museums. DONNA MATHEWS, EXECUTIVE DIRECTOR, MUSEUMS ALASKA, ANCHORAGE testified via teleconference in support of the legislation. She noted that the legislation would affect private museums around the state. All museums have some items that cannot be cared for, disposed of or transferred to other interested parties. The legislation provides strong guidelines for future practices and is clear and specific. DIANE BRENNER, ARCHIVIST, ANCHORAGE MUSEUM OF HISTORY AND ART, ANCHORAGE testified via teleconference in support of the legislation. She noted that in 1969 an old organ was brought to the museum for a temporary display. The owners disappeared. The museum wishes to dispose of the organ. The legislation would allow for disposal. BEA SHEPPARD, BOARD MEMBER, MUSEUMS ALASKA, JUNEAU testified in support of the legislation. She noted that Museums Alaska has supported the change for many years. She observed that abandoned property must be handled by an auction. In many cases museums wish to retain the property or turn them over to other museums. Representative Austerman questioned if there is a policy of trying to contact heirs. Ms. Sheppard responded that in many cases the museum does not know whom to contact. Co-Chair Therriault asked if the current practice is to enter into a written agreement. Ms. Crane explained that the current practice is to accept loans for a period of a year; if the museum desires to keep the object longer the loan is renegotiated. It is easier to find the heirs to the estate or the legal owners after only a year. Co-Chair Therriault provided members with a timeline showing the proposed schedule for acquisition (copy on file). He questioned if the process could be streamlined. Ms. Crane stressed the relationship of trust with owners and donors. Ms. Sheppard observed that the legislation is based on similar legislation in other states. She felt that the legislation is a good compromise and emphasized the need for private institutions. Vice Chair Bunde asked if the contract requires owners to be contacted at the end of a year. Ms. Crane noted that the obligation is on the museum to contact donors. Notification occurs before the year has ended. Vice Chair Bunde observed that museums would obtain title to objects that are in need of care and that there would be additional costs associated with the assumption of these objects. Co-Chair Therriault asked if the museum could take possession prior to seven years. Ms. Crane interpreted the legislation to require the museum to wait for seven years before taking possession. Ms. Crane felt that seven years is a reasonable period and reiterated the need to maintain trust with owners. She did not feel that the problem would occur in the future. Ms. Sheppard noted that the one-year period only pertained to the state museum and that there are up to 70 other museums in the state. Representative J. Davies asked if the legislation would preclude museums from entering into different contract arrangements. Ms. Crane responded that the museum would follow state guidelines. Co-Chair Therriault did not know if passage of the legislation would preclude other contractual provisions. Co-Chair Therriault observed that the museum would take possession before the requirement for the second notice expired. Ms. Crane thought that the legislation would provide for possession after the 65th day. Co-Chair Therriault questioned if the Committee would prefer a timeline that would be shorter and less expensive. Vice Chair Bunde spoke in support of a compromise between 60 days and seven years. Co-Chair Therriault clarified that it was not his intent for the museum to take possession as soon as the expiration of the contract occurred. Vice Chair Bunde noted that the Department of Public Safety has a one-year time period for dealing with property that comes into their possession. Vice Chair Bunde asked how many items the state museum has acquired in the last seven years without a contract. Ms. Crane stated that there have not been any acquisitions without a contract in the last seven years. Representative G. Davis pointed out that the statute would be unnecessary after the backlogs of past acquisitions have been addressed. Representative J. Davies expressed concern that museums not be precluded from entering into shorter contracts. Page 5, line 11 states that the provisions in the legislation would govern over conflicts in other state law. Co-Chair Therriault did not expect that the museum would hear from anyone that has not contacted them over the past seven years. He questioned if the expense of two newspaper notifications was warranted. He stressed that the intent is to take care of the backlog of items and felt that the legislation could be streamlined to shorten the time period and reduce the costs of notification. Ms. Crane acknowledged that the intent of the legislation is to address old objects. Ms. Sheppard agreed that the concern is to take care of the backlog. Co-Chair Therriault acknowledged that the intent is to address backlog but pointed out that the legislation would pertain to future purchases as well. HB 218 was heard and HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 3:05 p.m. House Finance Committee 11 2/28/00