HOUSE STATE AFFAIRS STANDING COMMITTEE March 1, 1994 8:00 a.m. MEMBERS PRESENT Representative Al Vezey, Chairman Representative Pete Kott, Vice-Chairman Representative Gary Davis Representative Harley Olberg Representative Jerry Sanders Representative Fran Ulmer MEMBERS ABSENT Representative Bettye Davis COMMITTEE CALENDAR HCR 27: Relating to support for the National Rifle Association's gun safety program for children. PASSED OUT OF COMMITTEE *HB 404: "An Act relating to the authority of the commissioner of natural resources to reconvey, or relinquish an interest in, land to the United States if that land or interest being reconveyed or relinquished is identified in an amended application for a land allotment under federal law and the original claim for an allotment described land that is now within, or managed as a unit of, the state park system." PASSED OUT OF COMMITTEE SB 128: "An Act relating to legislative audits." CSSB 128(STA) HEARD AND HELD OVER *HB 407: "An Act relating to issuance of commemorative gold rush motor vehicle license plates." HEARD AND HELD OVER (* First public hearing.) WITNESS REGISTER REPRESENTATIVE CON BUNDE Alaska State Legislature Alaska State Capitol, Room 112 Juneau, AK 99811 Phone: 465-4843 POSITION STATEMENT: Sponsor of HCR 27 ROGER McKOWAN, Staff Representative Lyman Hoffman Alaska State Legislature Alaska State Capitol, Room 503 Juneau, AK 99811 Phone: 465-4453 POSITION STATEMENT: Gave an overview of HB 404 for prime sponsor TOM HAWKINS, Senior V.P. & CEO Bristol Bay Native Corporation P.O. Box 100220 Anchorage, AK 99510 Phone: 278-3602 POSITION STATEMENT: Offered information on HB 404 (Spoke via offnet) SHELBY STASTNY, Director Office of Management and Budget P.O. Box 110020 Juneau, AK 99811-0020 Phone: 465-3568 POSITION STATEMENT: Testified against CSSB 128 RANDY WELKER, Legislative Auditor Legislative Audit Division Legislative Affairs Agency P.O. Box 113300 Juneau, AK 99811-3300 Phone: 465-3830 POSITION STATEMENT: Answered questions on CSSB 128 DUGAN NIELSON, Realty Officer Bristol Bay Native Association P.O. Box 310 Dillingham, AK 99576 Phone: 842-2743 POSITION STATEMENT: Testified via teleconference in favor of HB 404 PERRY AHSOGEAK, Realty Director Tanana Chiefs Conference 122 1st Ave., Suite 600 Fairbanks, AK 99701 Phone: 452-8251, ext. 3239 POSITION STATEMENT: Testified via offnet in favor of HB 404 PETE PANARESE Chief of Field Operations Alaska State Parks Division Department of Natural Resources P.O. Box 107001 Anchorage, AK 99510 Phone: 762-2603 POSITION STATEMENT: Testified via teleconference in favor of HB 404 LARRY LABOLLE, Staff Representative Richard Foster Alaska State Legislature Alaska State Capitol, Room 410 Juneau, AK 99811 Phone: 465-3789 POSITION STATEMENT: Gave sponsor statement from HB 407 JUANITA HENSLEY Division of Motor Vehicles Department of Public Safety P.O. Box 20020 Juneau, AK 99802 Phone: 465-2650 POSITION STATEMENT: Answered questions on HB 407 PREVIOUS ACTION BILL: HCR 27 SHORT TITLE: SUPPORT NRA GUN SAFETY PROGRAM SPONSOR(S): REPRESENTATIVE(S) BUNDE JRN-DATE JRN-PG ACTION 01/18/94 2096 (H) READ THE FIRST TIME/REFERRAL(S) 01/18/94 2096 (H) STATE AFFAIRS 02/22/94 (H) STA AT 08:00 AM CAPITOL 102 02/22/94 (H) MINUTE(STA) 03/01/94 (H) STA AT 08:00 AM CAPITOL 102 BILL: HB 404 SHORT TITLE: NATIVE ALLOTMENTS IN STATE PARKS SPONSOR(S): REPRESENTATIVE(S) HOFFMAN,Foster,Williams JRN-DATE JRN-PG ACTION 01/26/94 2155 (H) READ THE FIRST TIME/REFERRAL(S) 01/26/94 2155 (H) STATE AFFAIRS, RESOURCES 03/01/94 (H) STA AT 08:00 AM CAPITOL 102 BILL: SB 128 SHORT TITLE: LEGISLATIVE AUDITS SPONSOR(S): RULES BY REQUEST OF LEGISLATIVE BUDGET AND AUDIT JRN-DATE JRN-PG ACTION 02/22/93 440 (S) READ THE FIRST TIME/REFERRAL(S) 02/22/93 440 (S) STATE AFFAIRS, FINANCE 03/10/93 (S) STA AT 09:00 AM BUTROVICH ROOM 205 03/10/93 (S) MINUTE(STA) 03/17/93 (S) STA AT 09:00 AM BUTROVICH ROOM 205 03/17/93 (S) MINUTE(STA) 03/18/93 845 (S) STA RPT CS 1DP 3NR SAME TITLE 03/18/93 846 (S) ZERO FISCAL NOTE TO SB & CS (S.STA/GOV) 04/12/93 (S) FIN AT 09:00 AM SENATE FINANCE ROOM 518 04/12/93 (S) MINUTE(FIN) 04/14/93 1353 (S) FIN RPT 6DP 1NR (STA)CS 04/14/93 1354 (S) PREVIOUS ZERO FN (S.STA/GOV) 04/14/93 1353 (S) LETTER OF INTENT WITH FIN REPORT 04/13/93 (S) MINUTE(FIN) 04/14/93 (S) FIN AT 08:30 AM SENATE FINANCE 518 04/14/93 (S) MINUTE(FIN) 04/14/93 (S) MINUTE(RLS) 04/17/93 (S) MINUTE(SSA) 04/23/93 1693 (S) RULES 3 CAL 1NR 4/23/93 04/23/93 1694 (S) READ THE SECOND TIME 04/23/93 1694 (S) STA CS ADOPTED UNAN CONSENT 04/23/93 1695 (S) ADVANCE TO THIRD READING FAILED Y12 N8 04/23/93 1695 (S) THIRD READING 4/24 CALENDAR 04/24/93 1741 (S) READ THE THIRD TIME CSSB 128(STA) 04/24/93 1741 (S) (S) ADOPTED FIN LETTER OF INTENT 04/24/93 1741 (S) PASSED Y20 N- 04/24/93 1746 (S) TRANSMITTED TO (H) 04/27/93 1552 (H) READ THE FIRST TIME/REFERRAL(S) 04/27/93 1552 (H) STATE AFFAIRS, FINANCE 01/29/94 (H) STA AT 08:00 AM CAPITOL 102 01/29/94 (H) MINUTE(STA) 02/15/94 (H) STA AT 08:00 AM CAPITOL 102 02/15/94 (H) MINUTE(STA) 03/01/94 (H) STA AT 08:00 AM CAPITOL 102 BILL: HB 407 SHORT TITLE: COMMEMORATIVE GOLD RUSH LICENSE PLATES SPONSOR(S): REPRESENTATIVE(S) FOSTER,Toohey JRN-DATE JRN-PG ACTION 01/27/94 2166 (H) READ THE FIRST TIME/REFERRAL(S) 01/27/94 2166 (H) STATE AFFAIRS, FINANCE 01/31/94 2207 (H) COSPONSOR(S): TOOHEY 03/01/94 (H) STA AT 08:00 AM CAPITOL 102 BILL: HB 328 SHORT TITLE: BIENNIAL VEHICLE REGISTRATION SPONSOR(S): REPRESENTATIVE(S) MARTIN,BARNES,Phillips,B.Davis JRN-DATE JRN-PG ACTION 01/03/94 2013 (H) PREFILE RELEASED 01/10/94 2013 (H) READ THE FIRST TIME/REFERRAL(S) 01/10/94 2013 (H) STATE AFFAIRS, FINANCE 01/13/94 2054 (H) COSPONSOR(S): B. DAVIS 01/22/94 (H) STA AT 08:00 AM CAPITOL 102 01/22/94 (H) MINUTE(STA) 01/29/94 (H) MINUTE(STA) 02/08/94 (H) STA AT 08:00 AM CAPITOL 102 02/08/94 (H) MINUTE(STA) 03/01/94 (H) STA AT 08:00 AM CAPITOL 102 BILL: HB 438 SHORT TITLE: DOG MUSHING VANITY PLATES SPONSOR(S): REPRESENTATIVE(S) DAVIES,Bunde JRN-DATE JRN-PG ACTION 02/04/94 2256 (H) READ THE FIRST TIME/REFERRAL(S) 02/04/94 2256 (H) STATE AFFAIRS, FINANCE 02/11/94 2359 (H) COSPONSOR(S): BUNDE 03/01/94 (H) STA AT 08:00 AM CAPITOL 102 ACTION NARRATIVE TAPE 94-18, SIDE A Number 000 HCR 27 - SUPPORT NRA GUN SAFETY PROGRAM CHAIR AL VEZEY called the meeting to order at 8:00 a.m. Members present were REPRESENTATIVEs KOTT, SANDERS and OLBERG. CHAIR VEZEY opened HCR 27 for discussion and asked REPRESENTATIVE CON BUNDE for his presentation. He distributed an assortment of books to the committee to look over while they watched a video. (REPRESENTATIVE G. DAVIS joined the committee at 8:01 a.m.) Number 031 REPRESENTATIVE CON BUNDE, Prime Sponsor of HCR 27, thanked CHAIR VEZEY for rehearing HCR 27 and gave a brief overview of the HCR 27 video and the materials distributed to the committee. He stated the materials were a sample of teaching aids available to the schools. The safety information is presented in a coloring book and comic book fashion, of which the video is used in conjunction with. He noted all of the materials are free to school districts who choose to use them. Number 050 REPRESENTATIVE PETE KOTT made the observation that the Representative (Fran Ulmer) who requested the additional information about HCR 27 was not present. He wanted to move HCR 27 out of committee without seeing the video tape because he had already seen it. Number 056 CHAIR VEZEY preferred to view the tape, stating it would only take seven minutes. Number 058 REPRESENTATIVE BUNDE stated CHAIR VEZEY was correct. CHAIR VEZEY paused the meeting to watch the EDDIE EAGLE PROGRAM video tape at 8:03 a.m. (REPRESENTATIVE ULMER joined the meeting at 8:07 a.m.) Number 062 CHAIR VEZEY resumed the meeting at 8:09 a.m. The Eddie Eagle video tape had been watched and the additional literature had been reviewed and discussed. He asked the committee if there was a motion. Number 074 REPRESENTATIVE KOTT moved that HCR 27 be passed from committee with individual recommendations, asking unanimous consent. Number 081 CHAIR VEZEY recognized the motion. The committee secretary called the roll, and HCR 27 passed unanimously with individual recommendations from the House State Affairs Committee. CHAIR VEZEY announced REPRESENTATIVE ULMER had arrived. HB 404 - NATIVE ALLOTMENTS IN STATE PARKS Number 106 CHAIR VEZEY opened HB 404 for discussion. He announced the Sponsor for HB 404 was REPRESENTATIVE LYMAN HOFFMAN, and Co- Sponsors were REPRESENTATIVES FOSTER and WILLIAMS. Number 124 ROGER McKOWAN, STAFF, REPRESENTATIVE LYMAN HOFFMAN, gave an overview of HB 404. He said the Department of Natural Resources (DNR) and a number of Native allotment holders in state parks have recently focused on changes to Title 38. Title 38 has a technical change which would allow the state of Alaska to reconvey land back to the Bureau of Land Management (BLM), in the hopes to expedite the relocation of allotments in state parks. The Bristol Bay Native Corporation and the Bristol Bay Native Association notified REPRESENTATIVE HOFFMAN that efforts to rectify the transfer situation have halted. More than a hundred applications have been waiting for transfer for 20 years and without HB 404 they may wait much longer. MR. McKOWAN stated, for technical questions, that TOM HAWKINS, SENIOR V.P. & CEO of BRISTOL BAY NATIVE CORPORATION; CHARLIE BUNCH, ASSISTANT AREA DIRECTOR for TRUST LANDS DIVISION, BUREAU OF INDIAN AFFAIRS; and DUGAN NIELSON, REALTY OFFICER of BRISTOL BAY NATIVE ASSOCIATION, were available to testify. Number 160 CHAIR VEZEY asked if anyone was present from DNR who could familiarize the committee with Title 38. Number 165 MR. McKOWAN stated he was under the impression there would be someone present; however, TOM HAWKINS may be able to answer the committee's questions about Title 38. Number 170 CHAIR VEZEY stated there had been problems with the offnet teleconference connections. Number 185 TOM HAWKINS, SENIOR V.P. & CEO BRISTOL BAY NATIVE CORPORATION, testified in favor of HB 404. He said HB 404 would be an important tool for state land managers. By allowing them to reconvey allotments, which have been relocated to avoid public interest conflicts, litigation could be avoided, the state will save money, and it will speed up the transfer of land to private ownership. He stated the Department of the Interior projects it will be 40 years before the adjudication survey and final patents of these lands will be completed. The technical change to Title 38 allows the allottee, the state, and the federal government, if in agreement, to relocate the Native allotment and move it over to avoid public interest conflicts. He stated AS 38.05.035(b)9 then allows the commissioner to reconvey land back to the BLM, if erroneously conveyed to the state by the BLM and if the Native allotment has been validly filed. In 1991, Congress gave the BLM the flexibility to make this change, but current law inhibits the state from exercising this flexibility. He pointed out that HB 515 from the DNR has similar language as an overall Title 38 update, although it has several provisions and committee referrals. He urged the committee to support HB 404. Number 243 REPRESENTATIVE KOTT stated page 1, line 10, suggests the commissioner may establish "reasonable" procedures and adopt "reasonable" regulations. He asked MR. HAWKINS to define "reasonable," believing the word could have different meanings to different people. Number 251 CHAIR VEZEY reminded REPRESENTATIVE KOTT that page 1, line 10, was existing statute. He said the amendment regards the Administrative Procedure Act. Number 255 REPRESENTATIVE KOTT thought it might be a good time to clear up the language. Number 259 MR. HAWKINS responded that the commissioner of DNR, upon request of the BLM, has to determine that it is in the best interest of the state to reconvey land to the federal government. "Reasonable" is focused toward accomplishing this best interest claim and making sure the public and affected parties has reviewed the decision before the commissioner determines the best interest. He felt the legislation, which sets up the decision making process, was satisfactory and the term "reasonable" was not a point of controversy. Number 281 CHAIR VEZEY reiterated "reasonable" is the most litigated word in the American court system. Number 291 REPRESENTATIVE ULMER questioned the list of possible of conveyances, referencing a December 9, 1993, memo faxed from Mr. Hawkins to Mr. Ron Swanson (on file). She asked if he was familiar with it. Number 297 MR. HAWKINS did not have the document. Number 299 REPRESENTATIVE ULMER stated it listed the number of possible allotment applications in each of the park systems. She asked, of the total 150 possible applications, how many would be authorized again and become effective? Number 312 MR. HAWKINS replied it would be too difficult to make a judgement on unadjudicated claims and he would not do it. The ability to relocate and avoid conflict may not be an appropriate choice in all cases. He expected about 25 percent of the applicants would avail themselves to relocation to work with the state and federal government. He noted this was a "very ball park estimate." CHAIR VEZEY placed the teleconference sites on listen only. SHELBY STASTNY arrived to testify on CSSB 128, therefore CHAIR VEZEY paused discussion on HB 404 and opened CSSB 128 for discussion. SB 128 - LEGISLATIVE AUDITS Number 340 SHELBY STASTNY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET (OMB), offered his concerns on CSSB 128. He said CSSB 128 requires the Division of Audit and Management Services (AMS), OMB, to follow up legislative audit reports. He felt this should be done, however, in a cooperative manor between the AMS and the Division of Legislative Audits (DLA) to agree which audits should be followed up on. MR. STASTNY said statutorily requiring a follow up will completely redirect the efforts of the AMS. The AMS has only eight to ten auditors, whereas the DLA has nearly 30 working year round. He felt the appropriate function of the AMS was to work primarily on audits under the executive branch and redirecting the AMS to the DLA would not be proper. The executive branch does, however, feel the DLA audits should be followed up. MR. STASTNY stated the function of the auditors is to sell their recommendations to the agencies. The subject matter is very familiar to those who did the audit, and the OMB feels those people ought to be working on the acceptability and implementation of the recommendations. Another entity added to the process would require them to be duly informed of the recommendations, of which it would require an overview of almost the entire audit. He felt this would be an inefficient process to use the AMS. If the recommendation is not good enough for the agency to follow, even the executive branch would have the same difficulty as the DLA in convincing an agency. MR. STASTNY noted the DLA has an Anchorage office where many of the audits are performed. The OMB sends people to Anchorage sometimes, but requiring follow up on these reports may result in significant amounts of travel. MR. STASTNY said the OMB is concerned that, with the additional work load, they would have to hire more employees. He felt three people would be required to carry out the current work load and distribute the additional work load. The AMS currently regularly follows up their reports after six months to determine whether or not the agencies have accepted their recommendations. He felt this was a good idea for the DLA also. He noted the AMS would be willing to work with recommendations where the governor's office, for example, agrees there is a good idea which an agency is reticent to follow. (REPRESENTATIVE SANDERS left the meeting at 8:30 a.m.) Number 424 CHAIR VEZEY stated he had difficulty interpreting the wording. CHAIR VEZEY asked MR. STASTNY to clarify if he was implying that on page 2 the OMB will be at the direction of the Legislative Budget and Audit Committee (LB&A)? He commented that he did not interpret page 2 in this way. Number 435 MR. STASTNY responded that the words do not say it, but they believe it will be the result. The words say the OMB shall monitor the implementation and recommendations made by the LB&A. He stated Mr. Welker wrote a letter to Senator Steve Frank basically saying through some administrative procedures they would be able to take care of some of the OMB's concerns. He believed the letter also mentioned the legislative auditor will work in concert with OMB to balance the resources reasonably available; the legislative auditor will prioritize items according to significance; and basically the legislative auditor and OMB will work with the resources available. Number 453 CHAIR VEZEY asked if MR. STASTNY stated that the LB&A currently has 30 auditors working. Number 454 MR. STASTNY replied around 30. Number 455 CHAIR VEZEY thought they only had two to three. He asked how many auditors the AMS had. Number 459 MR. STASTNY answered the AMS has eight to ten. Number 461 CHAIR VEZEY clarified the AMS would have to add approximately four people to keep up the work load. Number 462 MR. STASTNY corrected that their fiscal note stated three. Number 466 CHAIR VEZEY noted CSSB 128 mandates additional work will be done; however, there is a question as to whether additional people are required. This was of concern to him considering the current budget pressures. He wondered how much work could be created with two agencies cyclicly deriving work for each other to keep checking on. Number 480 MR. STASTNY agreed with CHAIR VEZEY. He stated the DLA operates at the direction of the legislature on larger tasks and the AMS primarily works at the request of the governor's office or an agency if a department has asked for an audit of their procedures. Number 497 REPRESENTATIVE ULMER asked if MR. STASTNY had an alternative recommendation. She believed the Senate State Affairs Committee meant for LB&A, after an audit, analysis and recommendation, to see action because LB&A and the legislature cannot really enforce the recommendation. She stated the LB&A has the option of withholding funds to an agency. CHAIR VEZEY asked if withholding funds would be the "ultimate hammer." Number 505 REPRESENTATIVE ULMER said yes, but the "ultimate hammer" may also hurt the LB&A, as well as the agency. The legislature often chooses between not giving the agency money, even though they want them to do the work. She believed CSSB 128 would involve the AMS in the work while being one step short of withholding all funds. The executive branch could implement the agency in direction. She said CSSB 128 states that recommendations will be directed to the AMS to either implement or respond why they would rather not. Number 520 MR. STASTNY stated the recommendations of the LB&A are heard; however, they are not always agreed with. He said the OMB would like to work with LB&A to find things they agree on. He felt the AMS should not be put in the middle of the auditor and the audited agency. He felt if the agencies were not on task they should be dealt with through the budget or legislative process. Procedural detail is up to the executive branch and there may be differences of opinion as to how policy is carried out. Number 545 CHAIR VEZEY asked if the LB&A and the legislature has been frustrated with this problem in the past. Number 548 REPRESENTATIVE ULMER responded that the chair of the Senate State Affairs Committee introduced a bill to deal with frustrations he or the LB&A feels. She said SENATOR PHILLIPS, Chair of LB&A, would have to answer why the bill was introduced. REPRESENTATIVE ULMER said generally the executive branch responds positively to the recommendations of LB&A. Sometimes an audit uncovers a practice which frustrates the will, then if the people get mad enough, they turn to the budget process and try to take away funding. Number 573 MR. STASTNY replied the alternative proposal would be to possibly meet on a regular basis to discuss concerns not currently voiced. He said the OMB values the efficient management of their departments and prefers an informal form of action. Number 587 REPRESENTATIVE ULMER asked if MR. STASTNY ever meets with RANDY WELKER. Number 588 MR. STASTNY did not know how regularly, but thought GARY ANDERSON, DIRECTOR OF OMB AUDIT DIVISION, meets with MR. WELKER. Number 589 CHAIR VEZEY asked REPRESENTATIVE ULMER, member of LB&A, why she had not introduced this type of legislation. Number 591 REPRESENTATIVE ULMER did not feel it was a big problem. She said the agencies had generally been responsive in terms of responding to the initial audit and in implementing reasonable requests. She stated Senator Phillips may be aware of something she was not. Number 598 CHAIR VEZEY asked if the demand on services would influence REPRESENTATIVE ULMER's decision. A zero fiscal note from Senate Rules and the House State Affairs Committee was before the committee, as was a modest fiscal note from OMB of about $206,000 a year, escalating every year of three people. He stated auditors create a lot of work and, with the offices working together, there could be a lot of jobs created. These jobs would have to be funded. Number 610 REPRESENTATIVE ULMER felt it would be appropriate to ask RANDY WELKER how many times there has been a problem, and if CSSB 128 was necessary. Number 614 CHAIR VEZEY stated zero fiscal note bills have been known to show impacts. He asked how much work would be driven by CSSB 128. Number 622 MR. STASTNY responded that the submitted fiscal note was prepared by the AMS, which indicated possibly 20 percent of the recommendations of LB&A would be followed up. This would amount to about 3,600 hours for the AMS, which would take three auditors. Number 633 REPRESENTATIVE KOTT questioned how many audited agencies agree with the recommendations of the LB&A. He noted, if the audited agency agrees with the recommendation, the AMS will be responsible for monitoring the implementation. He wondered what it would take to follow up the implementation. Number 640 MR. STASTNY said he did not know, but he could possibly find out from RANDY WELKER. Number 642 REPRESENTATIVE KOTT asked if there were a lot of disagreements. Number 645 MR. STASTNY said not really; LB&A does good work and the agencies generally agree with their work. Number 647 REPRESENTATIVE KOTT clarified that 80-90 percent could perhaps be in agreement with recommendations by LB&A, therefore, the AMS would have to implement these recommendations. MR. STASTNY said the AMS would have to become familiar with the implementation, and this is why he felt the DLA would be better to do the implementation because they prepared the audit. Number 658 CHAIR VEZEY stated there does not seem to be any recourse, and the LB&A would be free to request services from another branch of government's budget without restraint. He said government would drive government in cost. He asked for a recommendation to temper this effect, perhaps a set number of auditors who would respond to the LB&A requests. The legislature could choose whether or not to fund those auditors. Number 671 MR. STASTNY recommended there be monthly meetings with DLA, as an informal method, and not statutory requirements. Number 676 REPRESENTATIVE G. DAVIS asked if "monitoring" was an auditing term with specific meaning. Number 679 MR. STASTNY believed "monitoring" was used just in general English language. Number 681 REPRESENTATIVE G. DAVIS stated CSSB 128 directed the AMS to "monitor," and it could have different meanings to different people. Number 685 MR. STASTNY replied that "monitor" does not have special meaning. Number 686 CHAIR VEZEY introduced RANDY WELKER as the next person to testify. Number 692 RANDY WELKER, LEGISLATIVE AUDITOR, LEGISLATIVE AUDIT DIVISION, LEGISLATIVE AFFAIRS AGENCY, answered questions on CSSB 128. He addressed CHAIR VEZEY and said there is not an urgent need for CSSB 128, but SENATOR PHILLIPS was primarily interested because there could be a better success rate on LB&A recommendations. TAPE 94-18, SIDE B Number 000 MR. WELKER believed SENATOR PHILLIPS was looking for a long term mechanism to not only improve implementation rate, but also keep significant recommendations before the LB&A. He said a formal mechanism provides a systematic review. MR. WELKER addressed REPRESENTATIVE KOTT and said he did not know the specific number of agreements because it was constantly changing. The DLA has a high success rate in getting agencies to agree with recommendations, but their follow up in implementation does not always match. The agencies may have a matter of priority within their shop or they may not have the resources to implement the recommendations. He suspected some agencies may even agree with the recommendation to have the audit come to a smooth end. Some agencies simply disagree. He stated CSSB 128 is designed to involve the OMB and the recommendations the LB&A thinks are important for policy matters. To create continuity, the LB&A would like the perspective of the governor's office on recommendations it decides to forward to the OMB. Number 077 REPRESENTATIVE G. DAVIS asked what sort of responses from the OMB does the DLA get. Number 097 MR. WELKER responded that the current DLA involvement with the OMB implementations is limited. A copy of all DLA audit reports is supplied to the OMB for their files. Currently, the DLA and the AMS are working on different things; however, they do communicate to make sure work is not duplicated. Number 100 REPRESENTATIVE ULMER asked MR. WELKER's reaction to MR. STASTNY's recommendation to have informal meetings. Number 107 MR. WELKER thought MR. STASTNY's idea would eliminate a formal mechanism to bring recommendations before the LB&A. With a concern for administration changes, CSSB 128 would assure a continued program. Number 128 CHAIR VEZEY asked MR. WELKER to comment on the fiscal notes, feeling CSSB 128 obviously has the potential of creating more work. He asked, Would the administration have to hire more people and appropriate money to allow for this, or would the legislature address it as though, since extra money was not appropriated, they do not expect the OMB to respond to the bill this year? Number 144 MR. WELKER responded that Senate State Affairs discussed this issue and resolved it with a zero fiscal note. He stated the current fiscal note is similar to the 1993 version and Senate State Affairs felt there would be flexibility in dealing with the resource limitations. He thought three people, present or additional, were not necessary. He said AMS would have to adjust and communicate with the DLA on the amount of work they receive. Since the majority of the recommendations received will have the affected agencies in agreement, he felt the agencies would have to be monitored, not intensely reaudited. The agencies need to know they are not going to slide through without changes, he said. CHAIR VEZEY asked what the penalty would be for violating this statute if CSSB 128 were to pass. Number 184 MR. WELKER answered, not criminal penalties, but the LB&A may bring on pressure through the budget processes. He said CSSB 128 does not include specific penalties. Number 194 CHAIR VEZEY asked why CSSB 128 should be put into statute if it did not have a means of enforcement. He asked if the legislative "hammer" was increasing and the administrative "hammer" was decreasing. He asked what CSSB 128 is improving. Number 208 MR. WELKER replied the intent is not to change the balance of power, but further a goal that both the legislature and administration share to improve state government. Number 214 CHAIR VEZEY asked what the "tool" would be in CSSB 128 to enforce the statute. Number 218 MR. WELKER answered there are several laws without specific penalties, but their formal expression of policy by the legislature gives them recognition so as agencies will follow them. He said CSSB 128 would not be an ineffective law. Number 229 REPRESENTATIVE G. DAVIS asked if MR. WELKER gets frustrated with the OMB when he has to relate to them. Number 234 MR. WELKER replied that over the years there have been shifts in implementation and the DLA has no specific concern with the current OMB. He said CSSB 128 is an accumulation of frustration by some LB&A members and also the frequent sight of good recommendations not taken advantage of. He stated the DLA should take care of implementation, and he did not strongly disagree, but implementation of recommendations is ultimately the responsibility of the administration. (REPRESENTATIVE ULMER left the meeting at 9:05 a.m.) Number 257 REPRESENTATIVE KOTT asked about current audits on agencies and implementation followed up by the DLA. Number 262 MR. WELKER stated the DLA's primary large audit, the State Single Audit, which is the financial audit of the State of Alaska in its entirety, averages 70-75 significant recommendations. The DLA follows up on the recommendations they made to the state in the previous year. The DLA makes recommendations on special audits looking at particular areas of concern requested by the LB&A, but they may not return to those areas for several years. He said CSSB 128 is focused towards these special audits. Number 285 REPRESENTATIVE KOTT asked for clarification that the DLA does not reevaluate if the recommendations have been implemented. He asked if anyone does. Number 288 MR. WELKER said there is no formal mechanism and CSSB 128 would help in this area. Noting the sunset process, the DLA is sometimes asked to revisit agencies several times. In these cases the DLA has the advantage of file history. Number 304 REPRESENTATIVE KOTT questioned why the DLA would not want to reevaluate agencies to see if the recommendation had been implemented. Does lack of funding or man power limit the DLA? He felt the follow up should not be that difficult. Number 318 MR. WELKER responded that he has no control over his workload and he probably has 15-20 requested special audits, which he has not even been able to start yet. He noted that even if he did follow up on the special audits, he still has no enforcement mechanism, and he would have to relay the same recommendation that the agency ought to do it. He thought pressure from the executive branch would create pressure and help in quick direct implementation. The problem is a resource issue, he said. (REPRESENTATIVE ULMER rejoined the meeting at 9:24 a.m.) Number 335 REPRESENTATIVE KOTT asked MR. WELKER to comment on the number of audits he was responsible for in the 18th Legislature, as compared to the 17th Legislature. He asked if this was a new problem. Number 340 MR. WELKER answered no, the DLA has always been busy. Number 349 Hearing no more questions, CHAIR VEZEY announced CSSB 128 would be held in committee and called for a short recess at 9:12 a.m. CHAIR VEZEY called the meeting back to order 9:18 a.m. and reopened HB 404 for discussion. REPRESENTATIVE G. DAVIS was present. HB 404 - NATIVE ALLOTMENTS IN STATE PARKS Number 365 DUGAN NIELSON, REALTY DEPARTMENT, BRISTOL BAY NATIVE ASSOCIATION, testified in favor of HB 404. He stated that the remaining Native allotment applications are in conflict with state land selections. He stated resolutions are found by going before the Interior Board of Land Appeals and tend to be a great expense to both parties. He said HB 404 will help avoid years of litigation and great expense. He noted HB 404 provides a mechanism of resolution in situations of land ownership uncertainty. (REPRESENTATIVE OLBERG rejoined the meeting at 9:20 a.m.) Number 387 CHAIR VEZEY asked why they restrained from making more changes to Title 38 than they did in HB 404 to really facilitate the process. Number 399 MR. NIELSON stated SB 293 had been introduced, which does take more action than HB 404, and it may expedite the process even further. (REPRESENTATIVE KOTT rejoined the meeting at 9:21 a.m.) Number 404 CHAIR VEZEY understood that the first change in Section 1 establishes the Administrative Procedure Act which will govern how the commissioner will set regulations. Number 412 MR. NIELSON agreed. Number 414 CHAIR VEZEY classified MR. NIELSON as a user of these services and asked if he endorsed this method of adopting regulations. He noted there were not many other options. Number 430 MR. NIELSON said he did not understand the question. Number 434 CHAIR VEZEY stated there is a process to adopt regulations, and the commissioner does not have to pay attention to the public input process, but failure to do so could be grounds for litigation. He asked if HB 404 was creating another source of adjudication by incorporating the Administrative Procedures Act. Number 444 MR. NIELSON thought the best-interest determination would preclude the public from expressing too much concern. Number 447 CHAIR VEZEY asked if MR. NIELSON was comfortable with this as a user. Number 448 MR. NIELSON stated he had no other options. If it does not work, it will need to be fixed again. Number 455 CHAIR VEZEY moved to the Fairbanks offnet site. Number 460 PERRY AHSOGEAK, REALTY DIRECTOR, TANANA CHIEFS CONFERENCE (TCC), testified in favor of HB 404. He said TCC provides land management services under contract to the Bureau of Indian Affairs (BIA) for Native allotment holders within the TCC region. He related that he has worked on conflict cases in the past, and resolving land conflicts requires an extensive amount of time for both the state and the BIA contractors involved. He said HB 404 would alleviate this problem by allowing allottees and the state to negotiate the location of the allotments presently within the park system. The state benefits from spending less staff time and finally resolving the conflict. The allottee benefits from obtaining their title, within their current lifetime, of lands they are entitled to under the Native Allotment Act. He said the TCC supports HB 404. Number 483 CHAIR VEZEY, feeling HB 404 had a very limited scope, asked ROGER McKOWAN, REPRESENTATIVE LYMAN HOFFMAN'S STAFF, if he would characterize it the same way. Number 490 MR. McKOWAN said he would. Number 491 CHAIR VEZEY clarified that HB 404 only deals with land in a state park or management system. Number 492 MR. McKOWAN agreed with CHAIR VEZEY. Number 493 CHAIR VEZEY understood the problem is that the Native allotment has a grant from the federal government. Number 500 MR. McKOWAN clarified the problem is due to AS 38.05.035, which precludes the state from transferring the alternative allotment outside the state park back to BLM, who in turn makes the actual switch. He described an example in which the original parcel, parcel A, would be inside the park and an alternative parcel has been selected elsewhere; the allottee then transfers their ownership from parcel A to the alternative land. Currently, the state is precluded from taking the alternative and giving it back to the BLM so they can make the switch and take the allottee out of the state park and put them on the alternative land. Number 518 REPRESENTATIVE G. DAVIS asked if the titles are designed to be under federal paperwork. He said if the alternative were on state land, the state could convey the Native allotment, but the state does not have that authority. Number 525 MR. McKOWAN believed the BLM has to make the actual transfer. He stated page 2, paragraph (B),(i), says "the occurrence of the error or omission," and these Native lands are not allotted in error, so only those allotted in error can be reconveyed. Theoretically they cannot be transferred under the statute. Number 535 CHAIR VEZEY said he understood MR. McKOWAN'S testimony, but he did not read the statute the same. He said paragraph 8 states the commissioner may "reconvey or relinquish land, or an interest in land to the federal government if the land is described in an amended application for an allotment under 43 U.S.C. 1617 and the land described in the original application for an allotment is within or otherwise managed, or subject to management, as a unit of the state park system;..." He felt the land addressed in paragraph 8, line 25, is not the same as land addressed in line 26 of the original application. Number 552 REPRESENTATIVE ULMER felt the explanation was clear. She showed the committee an analogy on the committee table with cups. She thought HB 404 should be clear to the committee and they should take action. Number 569 CHAIR VEZEY asked if the state would lose land to the federal government with HB 404. (REPRESENTATIVE ULMER left the meeting at 9:34 a.m.) Number 578 MR. McKOWAN clarified that the land is now federal land located in state parks. Number 579 CHAIR VEZEY stated the allotment is a federal land in a state park system. REPRESENTATIVE OLBERG added that the land has been selected by the state in its entirety. Number 583 CHAIR VEZEY continued that the federal government was reluctant to transfer the land to the Native allotment holder. REPRESENTATIVE OLBERG stated the federal government cannot give the Native allotment holder the alternative land, because the state is entitled to it. Number 588 CHAIR VEZEY asked what is to preclude the federal government from completing the transfer of the original Native allotment within the state management unit, and then the state and allottee could perform the swap? CHAIR VEZEY called for a brief at-ease at 9:35 a.m. to allow the teleconference operator to reconnect CHARLIE BUNCH, in Anchorage, so as he could testify. The meeting resumed at 9:37 a.m. CHAIR VEZEY asked if MR. BUNCH was present to testify. Number 602 MR. HAWKINS replied MR. BUNCH was absent. Number 616 PETE PANARESE, CHIEF OF FIELD OPERATIONS, ALASKA STATE PARKS DIVISION, DEPARTMENT OF NATURAL RESOURCES, testified in favor of HB 404 from Anchorage. He said allowing applicants to relocate the state land outside the state parks will reduce public impact and speed finalization of applications. He noted some applications have been pending for over 30 years. He clarified that the current Native allotments are on state land. He said DNR received "temporary, or T.A., to the land, with the state, then the allotment applications were filed on top of that." They want to provide a mechanism for the commissioner to move these allotments to state lands located outside the state parks. Number 637 CHAIR VEZEY asked if the state received a conveyance of the land before the allotment was granted. Number 639 MR. PANARESE responded yes, before the land was applied for. Number 641 CHAIR VEZEY felt it was not good legal sense, since the state received conveyance of the land from the federal government, then under the federal Native Allotment Act, the allotment was applied for. Number 644 MR. PANARESE replied the allotments was under the premise that their use existed prior to the establishment of the park, and prior to the state receiving the land from BLM. Number 646 CHAIR VEZEY clarified the actual application occurred after the state received conveyance. Number 647 MR. PANARESE confirmed that CHAIR VEZEY was correct. Number 648 REPRESENTATIVE OLBERG stated the applicant felt he/she had an interest prior to the state and applied on the off-chance they might get the land. He said HB 404 would provide a way to get them other land because the land does not fall under "errors and omissions." Number 651 CHAIR VEZEY commented that he liked REPRESENTATIVE OLBERG's description. CHAIR VEZEY asked the committee's pleasure. Number 656 REPRESENTATIVE OLBERG moved that HB 404 be passed from committee with individual recommendations, a zero fiscal note, and unanimous consent. Number 659 CHAIR VEZEY recognized the motion. The committee secretary called the roll. HB 404 passed unanimously from the House State Affairs Committee with individual recommendations. REPRESENTATIVES ULMER, B. DAVIS and SANDERS were absent. (REPRESENTATIVE OLBERG left the meeting at 9:45 a.m.) CHAIR VEZEY decided to move over HB 328, and opened HB 407 for discussion. HB 407 - COMMEMORATIVE GOLD RUSH LICENSE PLATES Number 679 LARRY LABOLLE, STAFF, REPRESENTATIVE RICHARD FOSTER, Prime Sponsor of HB 407, presented the sponsor statement. He said HB 407 would establish a commemorative plate in recognition of the gold rush centennial currently being planned across Alaska. He said REPRESENTATIVE FOSTER offered a committee substitute for HB 407 to suit the desires of the Division of Motor Vehicles and better accomplish the Centennial Plate. Number 687 CHAIR VEZEY confirmed a committee substitute had been presented. He moved that CSHB 407 be adopted, stating that the Uniform Rules would allow the CS to be adopted with only three committee members present. Hearing no objection, CSHB 407 was adopted. Number 697 MR. LABOLLE stated that CSHB 407 would make the issuance of the commemorative plate the standard issue for license plates from 1996-2000. TAPE 94-19, SIDE A Number 012 CHAIR VEZEY asked for a clarification of the CSHB 407 time frame. MR. LABOLLE stated that page 2, Section 3, says "Section 2 of this act takes effect on January 1, 2000," which would be the end of the period. Except for a provision of Section 3, which says "takes effect January 1, 1996," this would be the date CSHB 407 would become effective. Number 031 JUANITA HENSLEY, DIVISION OF MOTOR VEHICLES (DMV), DEPARTMENT OF PUBLIC SAFETY, answered questions on CSHB 407. She said the original HB 407 was adding a special plate without setting provisions in the statute that would allow the DMV to charge anything other than the normal registration fee for that plate. She said making the design would have been very costly to the state and the DMV would have to add an additional plate to its inventory. MS. HENSLEY, working with MR. LABOLLE to make changes, understood the time limit of gold rush plates to be from January 1, 1996, to December 31, 1999, during which a special design plate would be made to take the place of the existing blue and gold plates. She said the existing design of the blue and gold plate is currently set in statute and HB 407 would allow anyone applying for or changing their registration plate to receive a special plate. In the year 2000, the statute would revert back to the mandated Alaska flag, the traditional blue and gold color. MS. HENSLEY said she had not prepared a fiscal note for CSHB 407 because it was not adopted and the DMV wanted to continue working with the sponsor, REPRESENTATIVE FOSTER. She felt CSHB 407 would be more cost effective. She explained that the approximate cost to the state for yearly license plate orders is $313,000 for replacement or new plates, and CSHB 407 would add approximately 25 percent, or $78,000, to this cost. The DMV would base the addition over a period of time. She expected more people would apply for the special plates, needing personnel services; however, additional positions would not be needed. She noted that time expenses would be a factor. Number 102 CHAIR VEZEY understood there would only be one license plate during the four year period, but he thought MS. HENSLEY stated it would be optional. Number 110 MS. HENSLEY clarified that the commemorative gold rush plate would be the only plate, aside from the other optional plates which are already available. The original HB 407 would have made an additional optional plate available, and this would be costly to the state. Number 119 CHAIR VEZEY asked how long the current license plate design had been in effect. Number 121 MR. HENSLEY believed the design had been in effect since 1978. Number 123 CHAIR VEZEY thought it began in the 1980's. He thought there was currently a design selection process underway to select a new license plate for Alaska. Number 129 MS. HENSLEY replied that the only plates the DMV would be able to redesign, without a statute change, would be personalized or vanity plates. The statute prohibits the DMV from redesigning a license plate, with the exception of specialty plates offered. Number 136 CHAIR VEZEY asked about the votes taken in Fairbanks during the summer on license plate designs. Number 140 MS. HENSLEY answered there was a proposal to change the license plate in 1993, but it was voted down on the House floor. Number 144 CHAIR VEZEY asked about the fiscal note. Number 146 MS. HENSLEY expected 25 percent of the people who presently have license plates to reapply for the new plate. She stated that CSHB 407 will also bring in revenue for the state. She did not have the exact numbers. Number 154 CHAIR VEZEY clarified that all new plates issued would be the new design. He asked how the old plates would still be valid. Number 157 MS. HENSLEY said it was optional whether or not a person would want to change their plates. Traditional plates would revert back on January 1, 2000. Number 161 CHAIR VEZEY asked if the fiscal note would increase or decrease if the time limit was extended or even made the plates indefinite. Number 165 MS. HENSLEY answered it would be CHAIR VEZEY's prerogative. The statute would have to be changed to redesign the plate. She said she has seen plates with expiration stickers throughout the state. Some plates even have the stickers all over, whereby the plate cannot be read. Number 179 REPRESENTATIVE G. DAVIS stated that CSHB 407 would be an opportunity to change the plates completely for everyone. He then asked how this would affect the fiscal note. Number 185 MS. HENSLEY replied that the DMV would then probably want to phase people into the change, which would be less costly to the state. CHAIR VEZEY referred to the $78,000 a year MS. HENSLEY had mentioned in the fiscal note. Number 197 MS. HENSLEY clarified that $78,000 was the additional cost to the normal plate order cost. She said there will be a small amount of personnel services costs mainly due to overtime. If the new plate was mandated for everyone there would be additional cost. Number 204 CHAIR VEZEY asked if CSHB 407 was amended to phase the new design in and left the new design in statute, until changed by the legislature, the fiscal would be less than the currently assumed in CSHB 407. Number 209 MS. HENSLEY said no, currently replacement plates are being ordered for people who lose their plates or are just coming into the state. She said last year's order was $312,000. Number 218 CHAIR VEZEY asked if last year's order was for approximately 60,000 plates. Number 219 MS. HENSLEY said she did not know the exact number, but each plate roughly cost $6.50 a set. The order would have to increase with the phase-in because everyone would have to replace their license plates, as opposed to only 25 percent. She commented that the costs for the phase-in could be spread over a two year period, FY 96 and FY 97. If the whole design of the license plate was changed and mandated for everyone, the existing order for the new plates reissued every year would be added to the 606,000 vehicles already registered, she said. Number 248 CHAIR VEZEY felt CSHB 407 could be amended by deleting Section 3, in which case only new plates issued would be of the new design and the Alaska flag plates would no longer be inventoried. People could keep the plates for ten years if they wanted. He asked if this scenario would provide a lesser fiscal note than the existing assumption of CSHB 407. Number 256 MS. HENSLEY responded yes; the DMV would not have to continue ordering the Alaska flag plates and the Alaska commemorative gold rush plates, beginning January 1, 1996, could be continued. The fiscal note would be less; however, the additional 25 percent to reapply for the new plates would probably still exist. She noted in 1993 the proposal was amended, and when they tried to delete Section 3 it was voted down. CHAIR VEZEY asked how long the current inventory of plates would last. MS. HENSLEY said the DMV orders plates every year at a cost of $312,000. Number 279 CHAIR VEZEY clarified that the DMV would now be ordering plates for FY 95. Number 281 MS. HENSLEY felt it was good that CSHB 407 did not take effect until January 1, 1996. Number 283 CHAIR VEZEY thought the DMV would still have to make another order of the Alaska flag plates to last until 1996. Number 285 MS. HENSLEY commented they would last through January 1, 1996. She stated a full year's order would not have to be made, only the required amount. Number 291 CHAIR VEZEY stated that a fiscal note would not be requested immediately and the committee would work on a committee substitute. He said a subcommittee would be appointed with CHAIR VEZEY and REPRESENTATIVE FOSTER to discuss the recommendations of the committee. Number 299 MS. HENSLEY stated there is a gold rush centennial committee who has sent JAY DULANY, DIRECTOR OF THE DIVISION OF MOTOR VEHICLES, designs as suggestions of what might be used. She said the DMV could try to get 3M Corporation, who creates the designs and does the coverings, to make up sample plates with the designs to show the committees. Number 309 CHAIR VEZEY adjourned the House State Affairs Committee at 10:03 a.m. BILLS NOT HEARD TODAY: HB 328 - BIENNIAL VEHICLE REGISTRATION *HB 438 - DOG MUSHING VANITY PLATES