HOUSE FINANCE COMMITTEE January 19, 2001 1:42 PM TAPE HFC 01 - 16, Side A TAPE HFC 01 - 16, Side B CALL TO ORDER Co-Chair Mulder called the House Finance Committee meeting to order at 1:42 PM. MEMBERS PRESENT Representative Eldon Mulder, Co-Chair Representative Bill Williams, Co-Chair Representative Con Bunde, Vice-Chair Representative Eric Croft Representative John Davies Representative Carl Moses Representative Richard Foster Representative John Harris Representative Bill Hudson Representative Ken Lancaster Representative Jim Whitaker MEMBERS ABSENT None ALSO PRESENT Larry Persily, Deputy Commissioner, Department of Revenue; Mike Maher, Director, Division of Administrative Services, Department of Revenue; John Jenks, Chief Investment Officer, Treasury Division, Department of Revenue. PRESENT VIA TELECONFERENCE Marla Greenstein, Executive Director, Alaska Commission on Judicial Conduct GENERAL SUBJECT (S): Review of Departments Accomplishments Department of Revenue Alaska Commission on Judicial Conduct The following overview was taken in log note format. Tapes and handouts will be on file with the House Finance Committee through the 22nd Legislative Session, contact 465- 2156. After the 22nd Legislative Session they will be available through the Legislative Library at 465-3808.   LOG SPEAKER DISCUSSION   ALASKA COMMISSION ON JUDICIAL CONDUCT  TAPE HFC 00 - 16  SIDE A  000 MARLA GREENSTEIN, Noted that the Commission is the smallest EXECUTIVE DIRECTOR, and most limited in the judicial branch. ALASKA COMMISSION ON The Commission operates as the ethical JUDICIAL CONDUCT committee for judges.  263 Ms. Greenstein Noted that the Commission will have a small supplemental for FY01 due to a case involving incarceration of a witness.  327 Ms. Greenstein Explained that a recommendation for discipline has been made to the state supreme court. The judge is appealing the decision.  364 Ms. Greenstein Added that the Commission also issues advice to judges.  436 Representative Questioned where their budget is located.  Hudson 453 Ms. Greenstein Explained that the Commission has its own budget but that it is generally associated with the Alaska Court System's budget.  488 Co-Chair Mulder Clarified that the Commission generated general fund revenues.   DEPARTMENT OF REVENUE  525 LARRY PERSILY, Reviewed highlights of the department. He DEPUTY COMMISSIONER, observed that the department handles DEPARTMENT OF 60,000 Child Support Enforcement cases. REVENUE More than 600,000 Alaskans are served through the permanent fund dividend. He added that 160 municipalities receive shared taxes.  727 Mr. Persily Discussed the Office of the Commissioner. Dividend questions are answered within a week. Child support cases are answered within two weeks.  782 Mr. Persily The number of cases waiting for formal hearings has been reduced to 70 for child support cases and 170 for dividend appeals.  820 Mr. Persily Noted that the state's tax laws were developed with oil in mind, not gas.  845 Representative Clarified that child support questions Hudson are answered in Anchorage and asked if there is a 1-800 number.  873 Mr. Persily Clarified that the 1-800 number rings in Anchorage but that there are offices in Juneau, Fairbanks and other areas.  903 Mr. Persily Discussed the Division of Administrative Services. There have been no grievances  overturned. There is one that has not been resolved. There have been no penalties.  937 Mr. Persily Reviewed the Tax Division; 95 percent of assessed taxes have been collected. `  1002 Mr. Persily Discussed the merger of the Oil and Gas and Excise Tax divisions. Concluded that this has improved workflow.  1044 Mr. Persily Noted that the department collected more than $440 million dollars. A BP settlement represented the greatest portion.  1152 Co-Chair Mulder Discussed the ability to discern the value of the settlement. Confidential hearings could occur to brief the committee.  1245 Representative Pointed out the difficulty of Whitaker establishing a definitive approach.  1260 Representative Croft Asked the disputed amount of the settlement. Mr. Persily did not have the number.  1281 Representative Observed that it was a long-standing Whitaker dispute.  1334 Mr. Persily Noted that revisions to the tax division were initiated.  1377 Mr. Persily Reviewed the Permanent Fund Division. He noted that 97.1 percent of the estimated payable dividends were issued. He observed that 25 percent of the appeal inventory exceeded six months. The goal is to do a better job screening reviews. Direct deposit is up to 67 percent. Applications can now be filed on line. Random audits will occur this year. The intent is to pull 1,000 applications. Out of 600,000 applications, 50,000 are reviewed. The rest are not reviewed. When 700 applications were randomly reviewed discrepancies were found.  1621 Representative Noted that a number of checks are sent Hudson outside of Alaska  1644 Mr. Persily Pointed out that checks sent out of state are already reviewed.  1659 Vice-Chair Bunde Gave the example of a constituent that is required to be out of state 6 months of the year for their employment. They have a home in Alaska but are not eligible. Military residents only need to return to the state of Alaska for 72 hours every 2 years.  1696 Representative Asked for more information regarding Hudson allowable absences.  1713 Mr. Persily Reviewed the Division of the Treasury. Collections for the general fund, CBR, Alaska Children's Trust and the Public School Trust Fund exceeded their benchmarks. The International Airports Revenue Fund did not.  1800 Mr. Persily Discussed the Alaska Municipal Bond Bank Authority. He concluded that they had a good year.  1830 Mr. Persily PRS and TRS exceeded their benchmarks.  JOHN JENKS, CHIEF Discussed the CBR fund. There was a INVESTMENT OFFICER, little more than a 2 percent loss. TREASURY DIVISION, Approximately 41 percent is invested in DEPARTMENT OF equities. He continued to discuss REVENUE performance of equity holdings.  2017 Mr. Persily Discussed the Child Support Enforcement Division. There was a record collection of $85 million dollars. There is $29 dollars in collection for every state one dollar spent.  2064 Mr. Persily There are 47.3 ongoing cases receiving checks on time.  2096 Representative Questioned the funding source  Hudson 2126 Mr. Persily Noted that $118,000 dollars is straight GF; GFPR (the state's share of collections) makes up the rest of state funding.  2172 Mr. Persily Discussed the backlog in accounting; 6,500 cases have been reduced to 2,300. He provided additional information on adjustments in response to a question by Representative Croft.  2255 Vice-Chair Bunde Noted that some clients have paid ahead and not received credit for their extra payments.  2281 Mr. Persily Explained that extra payment amount, under the law, is considered a gift. He continued to discuss performance of the Child Support Enforcement Division.     TAPE HFC 01 - 16,  Side B  39 Mr. Persily In response to a question by Vice-Chair Bunde, discussed prosecution and collections. He stressed the need to retain the public's trust.  104 Vice-Chair Bunde Asked if there were additional measure that the state could take in collecting from self employed persons owing child support.  236 Mr. Persily Noted that the state can require them to apply for a permanent fund dividend but  that it is difficult to collect from these individuals.  309 Co-Chair Mulder Observed that people will shirk their responsibility and questioned how far state government can go to force their participation.  347 Representative Noted that collection has been tied to Hudson business licenses and questioned if it has been successful  386 Mr. Persily Stated that it has helped but that there are individuals that continue to work without licenses and that enforcement is time consuming.  434 Mr. Persily There is a 3 - 4 minutes average hold time for assistance calls. The department is looking to options for improved phone services that would tell the time estimated for the hold. He noted that the department would like to repeal sunset laws for child support enforcement.  716 Mr. Persily Discussed the Alaska Mental Health Trust Authority.  755 Mr. Persily Reviewed the Alcoholic Beverage Control Board. He noted that there was a cost of $159 dollars per license. There were 100 noncompliant license cases in FY00. The board inspected 244 licensed premises.  884 Representative Questioned if it were a local collection Lancaster problem.  916 Representative Observed that complaints go to the Whitaker municipality and the municipality turns the problem over to the state.  1032 Co-Chair Mulder Noted that subcommittees will review missions and measures and report back to the committee their recommendations. Discussion occurred regarding the on-line version and the need to coordinate the data to prevent duplication of effort.  1216 Representative Stressed the benefit of missions and Hudson measures. He recommended coordination between departments.  1380 Co-Chair Mulder Agreed and pointed out that there has been an attempt to do so.  1409 Representative John Stated that it would be helpful to Davies receive the data prior to the committee meeting.  1427 Denny Dewitt, Staff, Explained that the intent is to work with Co-Chair Mulder departments on the mission and measure reports during the creation of the budget in the fall. Subcommittee staff has been asked to avoid rewriting and changing measures, but were instructed to tweak  existing measures. The intent is to address where measures do not succeed.  1577 ADJOURNMENT The meeting was adjourned at 2:55 p.m.