HOUSE FINANCE COMMITTEE April 28, 2001 9:10 A.M. TAPE HFC 01 - 104, Side A TAPE HFC 01 - 104, Side B TAPE HFC 01 - 105, Side A CALL TO ORDER Co-Chair Williams called the House Finance Committee meeting to order at 9:10 A.M. MEMBERS PRESENT Representative Bill Williams, Co-Chair Representative Eldon Mulder, 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 ALSO PRESENT Representative Norman Rokeberg; Representative Gary Stevens; Representative Beth Kerttula; Representative Joe Green; Janet Seitz, Staff, Representative Norman Rokeberg; Elmer Lindstrom, Special Assistant to the Commissioner, Department of Health and Social Services; Larry LaBolle, Staff, Representative Richard Foster; Guy Bell, Director, Division of Retirement and Benefits, Department of Administration; Melanie Lesh, Staff, Representative Bill Hudson. SUMMARY HB 4 An Act relating to offenses involving operating a motor vehicle, aircraft, or watercraft while under the influence of an alcoholic beverage or controlled substance; relating to implied consent to take a chemical test; relating to registration of motor vehicles; relating to presumptions arising from the amount of alcohol in a person's breath or blood; and providing for an effective date. CS HB 4 (FIN) was reported out of Committee with "individual" recommendations and with fiscal notes #5, #6, #11, and #12 by the Department of Health & Social Services and #16 by the Alaska Court System and new fiscal notes by the Department of Public Safety, the Department of Law, the Department of Corrections and two new notes by the Department of Administration. HB 37 An Act relating to reimbursement of certain student loans; and providing for an effective date. HB 37 was POSTPONDED for hearing at a latter date. HB 43 An Act relating to reimbursement of certain student loans; and providing for an effective date. HB 43 was HELD and HELD in Committee for further consideration. HB 53 An Act establishing the Alaska Seismic Hazards Safety Commission. HB 53 was reported out of Committee with a "do pass" recommendation and with a fiscal note #1 by Department of Natural Resources dated 3/30/01. HB 198 An Act relating to a post-retirement pension adjustment and cost-of-living allowance for persons receiving benefits under the Elected Public Officers Retirement System; and increasing the compensation of the governor. CS HB 198 (FIN) was reported out of Committee with "individual" recommendations and with a fiscal note by Department of Administration #1 dated 4/16/01 and a zero fiscal note #2 by the Office of the Governor dated 4/16/01. HB 239 An Act establishing a pilot program for a regional learning center. HB 239 was reported out of Committee with a "do pass" recommendation and with a fiscal note by Department of Education & Early Development #1 dated 4/25/01. HB 260 An Act requiring the owners or operators of certain passenger vessels operating in the marine waters of the state to register the vessels; establishing information-gathering, record keeping, and reporting requirements relating to the vessels' graywater and sewage; prohibiting the discharge of untreated sewage from the vessels unless exempted; placing limits on discharges of treated sewage and graywater from the vessels unless exempted; establishing a commercial passenger vessel coastal protection fund; establishing a fee on commercial passenger vessels, that are not exempt from the fee, for each voyage during which the vessels operate in the marine waters of the state based on the overnight accommodation capacity of the vessels determined with reference to the number of lower berths; establishing penalties for failure to comply with certain laws relating to the vessels; authorizing the Department of Environmental Conservation to encourage and recognize superior environmental protection efforts related to commercial passenger vessels; authorizing exemptions from some laws relating to discharges from the vessels and from the fee requirements related to the vessels; requiring a report from the Department of Environmental Conservation concerning matters relating to the vessels; and providing for an effective date. HB 260 was HEARD and HELD in Committee for further consideration. HOUSE BILL NO. 260 An Act requiring the owners or operators of certain passenger vessels operating in the marine waters of the state to register the vessels; establishing information-gathering, record keeping, and reporting requirements relating to the vessels' graywater and sewage; prohibiting the discharge of untreated sewage from the vessels unless exempted; placing limits on discharges of treated sewage and graywater from the vessels unless exempted; establishing a commercial passenger vessel coastal protection fund; establishing a fee on commercial passenger vessels, that are not exempt from the fee, for each voyage during which the vessels operate in the marine waters of the state based on the overnight accommodation capacity of the vessels determined with reference to the number of lower berths; establishing penalties for failure to comply with certain laws relating to the vessels; authorizing the Department of Environmental Conservation to encourage and recognize superior environmental protection efforts related to commercial passenger vessels; authorizing exemptions from some laws relating to discharges from the vessels and from the fee requirements related to the vessels; requiring a report from the Department of Environmental Conservation concerning matters relating to the vessels; and providing for an effective date. Co-Chair Mulder pointed out that one amendment had been incorrectly referenced during the previous meeting. Co-Chair Mulder MOVED to RESCIND action taken on adoption of Amendment #6. [Copy on File]. There being NO OBJECTION, the action was rescinded. Co-Chair Mulder MOVED to ADOPT the New Amendment #6 which references AS 09.25.450. [Copy on File]. There being NO OBJECTION, the amendment was adopted. HB 260 was HELD in Committee for further consideration. HOUSE BILL NO. 4 An Act relating to offenses involving operating a motor vehicle, aircraft, or watercraft while under the influence of an alcoholic beverage or controlled substance; relating to implied consent to take a chemical test; relating to registration of motor vehicles; relating to presumptions arising from the amount of alcohol in a person's breath or blood; and providing for an effective date. REPRESENTATIVE NORMAN ROKEBERG commented that Alaska has one of the toughest drunk driving laws in the United States, but many of drunk drivers are not getting the message. The proposed legislation would create the toughest set of driving under the influence laws in the country. He added that poor judgment and chemical dependency are the primary causes of habitual drinking and driving. Those people kill, injure and maim Alaskans causing untold grief, pain and suffering and economic loss. Estimates show that the average 1998 alcohol-related fatality in Alaska cost $5.1 million dollars, while the average 1998 injured survivor experienced approximated $126,000 in costs. He noted that those figures had been made available from the Public Services Research Institute and were produced under a National Highway Traffic Safety Administration partners with the Progress Cooperative Agreement. The figures are for Alaska. Representative Rokeberg added that the legislation would increase fines and jail time. The bill would: · Lower the blood alcohol content limit from .10 to .08; · Mandate treatment for prisoners; · Delete the five-year look-back provision while phasing a ten-year look-back; · Require immobilization or forfeiture of the vehicle on the second offense; · Forfeiture on third and subsequent offenses; · Require seizure of license plates; · Increase fees, fines, and cost caps in various areas of the law to enhance revenue to offset associated costs. Representative Rokeberg stated that HB 4 contains both the "stick" (punitive revision of law) in the House Majority's alcohol package and the "carrot" (flexibility for the judicial system to in giving out sentences and fines). The bill has several enhancements for the treatment of offenders. Enactment of the legislation would send a strong and clear message to "Not Drink and Drive". He noted that the fiscal impact was significant and urged support of the legislation. Representative Davies noted that Section 8 would change "intoxicated" to "under the influence of". He voiced concern that language could create a "loop-hole". Representative Rokeberg explained that consideration had been made in the House Judiciary Committee. He believed that the change was appropriate. He acknowledged that the net had been expanded. Representative Croft asked where the definition of intoxicated had previously been located. Representative Rokeberg replied that it was placed in Section 28, Page 16. Representative Davies stated that he would be more comfortable with a definitional clause being included which would identify "those things". He reiterated his concern with creating a specific list. JANET SEITZ, STAFF, REPRESENTATIVE NORMAN ROKEBERG, pointed out that under the current statute, a person would commit a crime listed in current law under AS 28.35.03(a): "While intoxicated if they are operating while under the influence of intoxicating liquor or any controlled substance". The expanded language would extend it to "under the influence of an alcoholic beverage, inhalant or controlled substance" and lowering the alcohol level to .08. Vice-Chair Bunde questioned that in expanding the definition of "driving while under the influence", would any person then, using any alcohol at all, be guilty. Representative Rokeberg replied that the bill establishes the blood alcohol content baseline. Vice-Chair Bunde voiced concern that even a tablespoon of alcohol would enter the blood stream. Representative Rokeberg explained that it was a matter of semantics. Vice-Chair Bunde discussed that even a responsible drinker could be "under the influence". Representative Rokeberg stated that there would have to be a certain level present for that indication. Vice-Chair Bunde questioned if there would be an increase of arrest when the blood alcohol amount was changed. Representative Rokeberg responded that there could be as much as a 10% increase. He added that the standards for apprehension would be provided and that there would need to be "probable cause" for the pull over. He believed that the number of arrests would be lower than projected by the Department and recommended that the Committee adopt the fiscal note which reflects only a 5% increase. Vice-Chair Bunde agreed that the public is concerned about the serious crimes associated with drunk driving. If there was an increase in drunk driving arrests, that would result from action taken by the Legislature. Representative Rokeberg pointed out that the bill would have substantial impact to current law. Representative Rokeberg reiterated the reasons for sponsoring the proposed legislation. He argued that the bar was not being lowered. Vice-Chair Bunde responded that the net was being widened, and stressed that would not impact behavior. Representative Croft asked the location of the impairment statute. Ms. Seitz replied that it was housed in Section 49, Page 31. Representative Croft questioned the chemical levels for controlled substances. He asked if case law had been well defined. Representative Rokeberg commented that there are occasional cases in current statute. Vice-Chair Bunde referenced the penalty phase. He asked about "probable cause" and impounding of the vehicle at that time. Representative Rokeberg replied that there would be no forfeiture until after the court hearing. For the public safety, there would be an immediate vehicle impoundment. The bill provides for a seizure of the license plate. Within seven days, there would have to be an administrative hearing. He pointed out that forfeiture was at the discretion of the third offense. Vice-Chair Bunde questioned if forfeiture would expand to all motorized vehicles. Representative Rokeberg replied that the bill would include all vehicles including watercraft and airplanes. Vice-Chair Bunde stated that he supported taking the license plates from the cars. He maintained that it would be difficult to know if a person was driving without a license, however, it is more visibly obvious if they are driving without a license plate. He questioned the interim step before conviction. Representative Rokeberg responded that testimony had not been received regarding that issue yet. Representative Lancaster asked if controlled substance would include prescription drugs or medication. Representative Rokeberg replied that it would not unless it was statutorily listed. He added that if a person was impaired while driving because being under the influence of any drug, would be determined by the police officer. Representative Lancaster discussed that under current law, the person would have had to commit a crime before they were charged. Representative Rokeberg suggested that the Committee adopt a lower fiscal note. Vice-Chair Bunde MOVED to ADOPT Amendment #1. [Copy on File]. Co-Chair Williams OBJECTED for discussion purposes. Representative Rokeberg explained that the amendment would change the fiscal notes. Representative Whitaker asked if there was data available to back up the fact that the change would be a fair reflection of the true costs. Representative Rokeberg responded that the amendment would only be a reduction to the fiscal notes. Representative Davies voiced concern with making that change. He advised that the information from which the change was based was a simplistic assumption. He pointed out that other states have indicated that there have been substantial increases in arrests and fatalities. He recommended that the Committee hear testimony from each of the departments affected by the change. Representative Rokeberg responded that his office had looked into the crime thoroughly, advising that it would be difficult to look into a one to one comparison. He referenced the enclosed fiscal changes to the bill. Representative Davies acknowledged that the change would signal a message regarding drunk driving behavior to the public. Also, he pointed out that this is the House Finance Committee and that it is the place where the fiscal impacts should be thoroughly discussed and determined. Representative Croft echoed Representative J. Davies' concern regarding departmental testimony on the fiscal notes. He asked, under the higher standards, what would the proposed changes be. He noted that there would be more tests in lowering the standards. Representative Croft stressed that if the Legislature is proposing the change, the funding must accompany implementing it. Vice-Chair Bunde suggested that the departments would do what needs to be done if the legislation is made into law. He added that the note would not keep the changes in law from going into effect. He added, then that the department could request supplemental funding. ELMER LINDSTROM, SPECIAL ASSISTANT TO THE COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, made comments to the fiscal note. He stressed that it was imperative to consider the Memo dated March 21, 2001, from the Department to Representative Rokeberg regarding treatment for the proposed concerns. He stressed the wait listed associated with treatment. He noted that no one on the Committee should assume that any given person convicted of a Drinking While Intoxicated (DWI) charge, might be able to participate in treatment, as it may not be available. There are waiting lists throughout the State for outpatient treatment and those waiting lists greatly understate the real demand for treatment. He stressed that the Department's fiscal note number was conservative. TAPE HFC 01 - 104, Side B    Mr. Lindstrom stressed that Department of Health and Social Services is seriously struggling with the issue of drug and alcohol funding at this time. He warned that if HB 4 moves forward, the fiscal note, which has been submitted must accompany it. Recess: 9:55 A.M. Reconvene: 10:55 A.M. Representative Rokeberg indicated that he would work with the departments in order to refine the fiscal concerns. Vice-Chair Bunde MOVED to WITHDRAW Amendment #1. There being NO OBJECTION, it was withdrawn. Representative Harris MOVED to adopt Amendment #2, Page 1, Lines 1-9. There being NO OBJECTION, it was adopted. Representative Hudson MOVED to report CS HB 4 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CS HB 4 (FIN) was reported out of Committee with a "individual" recommendations and with fiscal notes #5, #6, #11, and #12 by the Department of Health & Social Services and note #16 by the Alaska Court System and new fiscal notes by the Department of Public Safety, the Department of Law, the Department of Corrections and two new notes by the Department of Administration. HOUSE BILL NO. 239 An Act establishing a pilot program for a regional learning center. LARRY LABOLLE, STAFF, REPRESENTATIVE RICHARD FOSTER, st explained that the 21 Legislature through the Legislative Budget and Audit Committee (LBA) hearings, found indications of broad support for regional learning centers. Several communities have expressed interest in creating regional boarding programs focused on the special interests of their regions. He noted that the Bering Strait School District and the Nome City School District have been exploring the feasibility of a cooperative program that would utilize the existing Nome Beltz School complex to develop and operate a pilot regional learning program. Both these districts have taken actions to support the creation of a pilot program and to seek federal funding to help cover program planning and the initial operation costs. Mr. LaBolle pointed out that a conceptual overview of the program was contained in the March 20, 2001 letter from Dr. John Davis, Superintendent of the Bering Strait School District. [Copy on File]. That letter helps to define and support the concept proposed in the legislation. Representative Lancaster asked if the Department's report would be available to the Legislature. Mr. LaBolle replied that there would be a report available. He added that the program was accompanied by a sunset clause in order to review the concept. He noted that the districts had consented to provide a third party evaluation to the Department and to the Legislature. Representative Davies asked if the proposal would be similar to the boarding school concept as Mt. Edgecumbe. Mr. LaBolle explained that in the proposed program, the student would not be leaving their home village for any extended length of time. They would be learning independent living skills during short periods of time away from their homes. These skills would help the student with the transition from village life to larger community living. Representative Davies inquired the time frame, which the student would be living in the program. Mr. LaBolle replied that the initial program would look something like what the Bering Strait School district has been running but expanded. The legislation would expand that program and bring it into Nome, where there is a larger population. Representative J. Davies spoke in support of the program. Representative Foster MOVED to report HB 239 out of Committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 239 was reported out of Committee with a "do pass" recommendation and with a fiscal note by Department of Education & Early Development #1 dated 4/25/01. #HB198 HOUSE BILL NO. 198 An Act relating to a post-retirement pension adjustment and cost-of-living allowance for persons receiving benefits under the Elected Public Officers Retirement System; and increasing the compensation of the governor. REPRESENTATIVE BILL HUDSON explained that the proposed bill had resulted from an effort to contain costs on the most extreme cases requiring inequity correction between retirement benefit calculations for the Elected Public Officials Retirement System (EPORS) and Public Employees' Retirement System (PERS) members. A statistical review of EPORS retirees, or their surviving spouses, revealed that many members have or will be receiving a benefit adjustment but rather from changes in the salaries or additional allowances in the position from which they retired. The current language concentrates on narrowing the focus to members who have not had any cost of living or other benefit adjustments to their EPORS retirement benefits, as have their peers who retired under the PERS retirement system. Representative Hudson stated that HB 198 is a fair bill designed to equalize future benefits only of the few EPORS retirees and their surviving spouses who have not otherwise seen any change in retirement received for their service to the State of Alaska. Vice-Chair Bunde asked how many people would be involved with passage of the legislation. Representative Hudson replied five or less. He reiterated that the bill was an issue of "fairness". Vice-Chair Bunde MOVED to ADOPT Amendment #1. [Copy on File]. Representative Croft OBJECTED for an explanation. Vice-Chair Bunde explained that the Division of Retirement and Benefits had proposed the amendment. The amendment would limit the bill to the five people mentioned. In response to Representative J. Davies, Representative Hudson stated that there are only a few who have not received an increase in the last years. The language provided in Amendment #1 is necessary to isolate those five. There are approximately twenty-two EPORS retirees that have continued their employment with the State. Those people have been receiving their annual cost-of-living increases under the programs. The other five have not received anything for fifteen years and they would be covered under this bill. Co-Chair Mulder interjected that the legislation would be restricted. Representative Davies commented that he did not want it to be restrictive to only the favorites. Representative Hudson replied that some are still under the EPORS system, which has been responsible for those costs. Initially, there were 35 and now there are five. GUY BELL, DIRECTOR, DIVISION OF RETIREMENT AND BENEFITS, DEPARTMENT OF ADMINISTRATION, explained that the bill was designed to cover those people that have not received an increase for fifteen years. Effectively, there are only two people in that category. The retirement and benefit is based on the salary of the position that person last held. Those benefits have been fixed. All other EPORS members have received some increase. The increase is based on the salary and other compensation of the position that the person left. Representative Croft commented that it rest on the fact that the Governor's salary had not been increased since 1983. The legislation would provide a retirement benefit roughly equal to what Governor Hammond would have received if he had gone on to another system or his salary was raised. Mr. Bell replied that the legislation would provide a 75% change in the Consumer Price Index (CPI) since that benefit was last changed in 1983. The original bill raised the Governor's salary, which would have effectively increased the benefit, however, that section was dropped. He added, Section 2 of the bill guarantees that there is no "double dipping". Representative Croft inquired the situation of the other 25- 30 people that are on a similar track. Mr. Bell replied that the general theory behind EPORS was that overtime and salaries would increase. He noted that system was based on the judicial retirement system, which is effectively the same. The way that it works is that a person's retirement benefit is based on current salary of the position that they vacated. For the EPORS members that has been more erratic and for some, non-existent. He added that legislative salaries have increased. Mr. Bell explained that there was a challenge ballot measure, which was disapproved. There was an option to stay in. Some of those people have not yet retired and the remainder are drawing benefits for public service. Discussion followed between Representative Croft and Mr. Bell regarding the history of the Judicial Retirement statute. Vice-Chair Bunde clarified that the amendment would only effect retired persons under the EPORS system. Mr. Bell interjected that the person would have had to been retired for at least 15 years. Representative Hudson emphasized that the bill would provide equal treatment for the retiree and would bring those few people up to "speed". Representative Davies asked if the amendment would be excluding anyone. Mr. Bell stated that the Department was comfortable with the amendment because excluded persons would be eligible for an increased amount at a future date. He reiterated that there would a benefit at sometime in the future. There being NO OBJECTION, Amendment #1 was adopted. Representative Croft MOVED a conceptual amendment to the bill. He stated that the root of the problem was that the Governor's salary had not been increased in twenty years. He suggested that the language indicate that the Governor's salary be $100,000 dollars, effective with the swearing in of the next Governor. Representative Hudson OBJECTED. He commented that the bill simply was trying to make parity and pointed out that there is a salary bill to address other concerns. A roll call vote was taken on the motion. IN FAVOR: Croft, Davies, Moses OPPOSED: Foster, Harris, Hudson, Lancaster, Whitaker, Bunde, Mulder, Williams The MOTION FAILED (3-8). Representative Hudson MOVED to report CS HB 198 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. Representative Whitaker OBJECTED for further discussion. Representative Whitaker voiced concern if equality was being created with passage of the legislation. Mr. Bell responded that the system had been classified as EPORS. Representative Whitaker asked if the three persons who made the decision to stay, had been placed into that category with the option to "opt out". Mr. Bell acknowledged that was correct. Representative Whitaker indicated that he maintained his objection. A roll call vote was taken on the motion. IN FAVOR: Davies, Foster, Harris, Hudson, Lancaster, Moses, Bunde, Williams, Mulder OPPOSED: Whitaker, Croft The MOTION PASSED (9-2). CS HB 198 (FIN) was reported out of Committee with "individual" recommendations and with a fiscal note by Department of Administration #1 dated 4/16/01 and a zero fiscal note #2 by the Office of the Governor dated 4/16/01. #HB53 HOUSE BILL NO. 53 An Act establishing the Alaska Seismic Hazards Safety Commission. REPRESENTATIVE JOHN DAVIES explained that HB 53 would create a Seismic Hazards Safety commission. The Commission would be situated in the Governor's office. The Commissioner would be established to address pressing needs in providing a consistent policy framework and a means for ongoing coordination of programs and public safety practices related to seismic hazards. Current needs are not being addressed by any state government organization. The seismic Hazard Safety Commission would encourage long-term progress toward mitigating the effects of earthquakes. TAPE HFC 01 - 105, Side A  Representative J. Davies emphasized that there should be people within the State focusing on building code needs, which are cost effective. Members of the commission would be appointed by the Governor to represent the University, various governmental agencies, as well as members of the public who are knowledgeable in earthquake hazard mitigation. The Commission would recommend to the public and governmental sector goals and priorities for reducing earthquake effects. The authority and responsibility of other various state agencies, boards, councils, commissions and/or local governments would not be intended to be transferred to the Alaska Seismic Hazards Safety Commission. Co-Chair Williams pointed out that last year, the bill had passed through the House and made it to Senate Rules Committee. Representative Davies MOVED to report HB 53 out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 53 was reported out of Committee with a "do pass" recommendation and with a fiscal note #1 by Department of Natural Resources dated 3/30/01. HOUSE BILL NO. 43 An Act relating to reimbursement of certain student loans; and providing for an effective date. REPRESENTATIVE JOE GREEN commented that Alaska is facing a serious shortage of qualified teachers in both rural and urban areas. The shortage affects the quality of education for our young people and jeopardizes their ability to meet the challenges that lay ahead. Representative Green declared that the proposed legislation would be a method to attract and retain education professionals. In addition to attracting qualified teachers, it would provide an incentive for individuals to attend a college or university located within the State of Alaska. To be eligible for the forgiveness program an individual would have had to: · Have completed 60 credit hours; · Obtain a degree or take coursework towards a teaching certificate or endorsement from an in-state college or university; · Be employed in the teaching profession at a public elementary or secondary school; · Teach in a geographical area where there is a shortage or in a subject matter that is undeserved. The amount forgiven would be up to 100% on any loan taken after the individual had accumulated the 60 credit hours. He summarized that passage of the bill would ease the financial burden of post-secondary education, aide the recruitment efforts for teachers by making Alaska a more desirable place for teachers to stay and earn a living and it would make significant strides in relieving the current teacher shortage in Alaska. Representative Lancaster questioned the fiscal indication for FY2001. Representative Green explained that his office had nothing to do with that. Representative Croft referenced the fiscal note. He asked if only students who had gotten their degree from an Alaskan University, had been captured. Representative Green explained that HB 43 does not require a prior degree. He pointed out that there was a representative from the Alaska Student Loan Program who could better answer that question. Representative Hudson inquired if the legislation would bring more Alaskans back to the State in lieu of offering other recruitment attractions. Representative Green believed that it would. He suggested that the legislation was an additional application in how to get Alaska out of the current teaching dilemma. He acknowledged that the program was experimental. The program would help the State to focus on teaching, nursing and the engineering fields. All those fields are in great need of further incentive for the State of Alaska. HB 43 was HELD in Committee for further consideration. ADJOURNMENT The meeting was adjourned at 11:05 A.M.