SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE March 10, 1997 1:35 p.m. MEMBERS PRESENT Senator Jerry Mackie, Chairman Senator Gary Wilken, Vice Chairman Senator Dave Donley Senator Randy Phillips Senator Lyman Hoffman MEMBERS ABSENT All members present COMMITTEE CALENDAR SENATE BILL NO. 34 "An Act giving notice of and approving a lease-purchase agreement with the City of Soldotna for a maintenance facility of the Department of Transportation and Public Facilities." -- SB 34 MOVED OUT OF COMMITTEE SENATE BILL NO. 50 "An Act relating to administrative penalties for violation of public water supply system requirements; amending Alaska Rule of Civil Procedure 82 regarding attorney's fees; and providing for an effective date." -- CSSB 50(CRA) ADOPTED & MOVED OUT OF COMMITTEE PREVIOUS SENATE COMMITTEE ACTION SB 34 - No previous action to record. SB 50 - Community & Regional Affairs minutes dated 2/5/97, 3/7/97. WITNESS REGISTER Senator John Torgerson State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of SB 34 Forrest Browne, Debt Manager Treasury Division Department of Revenue P.O. Box 110405 Juneau, AK 99811-0405 POSITION STATEMENT: Outlined department's concerns with SB 34 Sam Kito, Special Assistant to Commissioner Perkins Department of Transportation & Public Facilities 3132 Channel Drive Juneau, AK 99801-7898 POSITION STATEMENT: Department supports SB 34 Bob Knight, Staff to Senator Gary Wilken State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Offered information on CSSB 50(CRA) Keith Kelton, Director Division of Facility Construction & Maintenance Department of Environmental Conservation 410 Willoughby Ave., Suite 105 Juneau, AK 99801-1795 POSITION STATEMENT: Responded to questions on CSSB 50(CRA) ACTION NARRATIVE TAPE 97-10, SIDE A Number 001 CHAIRMAN MACKIE called the Senate Community & Regional Affairs Committee meeting to order at 1:35 p.m. All committee members were present. CHAIRMAN MACKIE brought SB 34 before the committee as the first order of business. SB 34 DOT MAINTENANCE FACILITY AT SOLDOTNA  SENATOR TORGERSON , prime sponsor of SB 34, explained the legislation was introduced to facilitate the moving of the Department of Transportation & Public Facilities maintenance facility off of the Kenai River in downtown Soldotna to a location that is off the river and away from any possibility of contaminating the Kenai River. He added that this project has been around for many years and has had the support of a lot of administrations, but it has never been put on any of their project lists. SB 34 authorizes the City of Soldotna to sell revenue bonds and to enter into a lease-purchase agreement with the state of Alaska so that it can finance and build a new maintenance facility on a new site. Senator Torgerson pointed out there are changes that need to be made to the legislation in the financing structure as well as to the fiscal note. He said he hoped the committee would take up just the issue of whether or not to move the bill out of committee and then the financial portion of it could be handled in the Finance Committee. Number 050 SENATOR PHILLIPS asked if there was any potential opposition to the legislation other than by DOT. SENATOR TORGERSON replied there wasn't; everybody wants to see the facility moved out of downtown Soldotna because it is a contaminated site and it is leaking hydrocarbons into the river. Responding to questions from Chairman Mackie, SENATOR TORGERSON explained that the City of Soldotna would finance and build the facility and enter into a lease-purchase agreement with DOT, so the state would eventually be the owner of the facility. He also clarified it would be built on borough land, but if the state or city was to be required to own the property for State Bond Committee then the land could be transferred to either the state or the city. He added that the is borough ready to do whatever is necessary to make the land available for the site. Number 097 SENATOR DONLEY asked if the state owns the land where the facility is now located, and if there is any plan for the use of that land after the facility moves. SENATOR TORGERSON acknowledged that the state owns the land, and future use of the land depends on whether it is cleaned up and to what specifications the hydrocarbons are cleaned up. The City of Soldotna has a great deal of interest in the land to make it a greenbelt or park, etc., but they are afraid of the underlying liability that would come from a piece of property if additional cleanup was required. Number 120 CHAIRMAN MACKIE noted that a new fiscal note had been received from the Department of Revenue as well as a suggested committee substitute. SENATOR TORGERSON said he had just received the committee substitute and that he doesn't agree with much of it. He added that if a committee substitute is to come before the committee, he would rather it be something that he'd generate. Number 140 FORREST BROWNE , Debt Manager, Treasury Division, Department of Revenue, said the department suggests the sponsor and the committee consider a somewhat less restrictive statement as it has to do with the financing. The bill, as written, indicated that the lease- financing be through the city. The department has found in the past that if the State Bond Committee has some flexibility in these financings, they can effect some cost savings. If the bill was less restrictive and it specify who the issuer would be, they may be able to effect some cost savings by packaging some of these smaller financings when they go to market. The department recommends making it a fairly generic approval, set a limit on the project cost and what the annual and the total lease payments would be, but perhaps give the State Bond Committee the option to package it in the most cost-effective manner. Number 185 CHAIRMAN MACKIE asked if the draft committee substitute with Senator Torgerson's name on it was prepared by the department. MR. BROWNE acknowledged that the department's legal counsel prepared it strictly as a draft. He also apologized that the department had not discussed their suggested committee substitute with the sponsor prior to the hearing, but he assured the Chairman that that they would do so. CHAIRMAN MACKIE asked if the Department of Revenue supports the legislation. MR. BROWNE responded that the project is doable in terms of the financing, but they don't have that much familiarity with the project itself. Number 225 SAM KITO , Special Assistant to Commissioner Perkins, Department of Transportation & Public Facilities, voiced the department's strong support for SB 34 and their interest in continuing to work with the sponsor in an effort to refine some of the financing aspects of the legislation. He said the department is very interested in relocating the maintenance station to a new location. There being no further testimony on SB 34, CHAIRMAN MACKIE asked for the pleasure of the committee. SENATOR WILKEN moved SB 34 and the accompanying fiscal notes be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 245  SB 50 PUBLIC WATER SUPPLY VIOL: ADMIN PENALTIES CHAIRMAN MACKIE brought SB 50 back before the committee, noting that a subcommittee consisting of Senator Wilken and Senator Hoffman along with their staffs had been working on bill with the Department of Environmental Conservation and had come with a proposed committee substitute. SENATOR WILKEN moved adoption of CSSB 50(CRA) for discussion purposes. Hearing no objection, the Chairman stated the committee substitute was before the committee. SENATOR WILKEN stated he was satisfied with the provisions in the committee substitute that protect the public against what he would call arbitrary imposition of administrative procedures. It now requires the department has to go through delineated steps that protect the interests of the people as well as the interests of the state. Number 262 CHAIRMAN MACKIE requested a brief overview on the changes made in the committee substitute. BOB KNIGHT , staff to Senator Wilken, explained a reference to the court rule change has been referenced in the title because of a request to include the use of the district court as a place to file an appeal. The original bill limited it to superior court. At the prior hearing on the bill, there was concern that the level of fines was limited to $1,000 per day for the larger communities and $750 per day for the smaller communities. The committee substitute breaks it into three levels so that the minimum required by the federal legislation and the federal rules is a $1,000 per day fine for communities over 10,000 people, for communities over 1,000 people up to 10,000 people the fine has been reduced from $750 to $500 per day, and for communities under 1,000 people the maximum penalty is $100 per day. Section 2, subsection (f) addresses Senator Hoffman's concern to permit the filing of appeals in district court. The normal filing in the superior court is covered under subsection (e). Subsection (c) increases the time for filing appeals from 30 days to 45 days. Section 3 changes Rule 602(b) of the Alaska Rules of Appellate Procedure to permit filing an administrative appeal in district court. Mr. Knight noted the Alaska Court System has some concern about this procedural change. In the past the court system has taken the position that to allow filing in district court might then begin to change the nature of the whole court system on where to file and how to file. However, Janice Adair of DEC has estimated that this change might involve one case every five years that would go all the way to the appeal level. Section 5 requires the department to circulate copies of proposed regulations to all legislators at least 30 days prior to such regulations going into effect. Number 350 SENATOR DONLEY referred to subsection (j) in Section 2, which provides that if the department prevails in a collection action, the court shall order the person to pay attorney fees and costs incurred by the department. He asked if a citizen wins, why isn't the citizen entitled to their full reasonable attorney fees. SENATOR HOFFMAN answered that the issue had not been raised during discussions on the bill. SENATOR WILKEN referred to page 3, lines 5 and 6, subsection (c), which increases the time for filing an appeal from 30 to 45 days, and suggested the Finance Committee may want to look at tightening up that time to about 15 days when the bill is before them. Number 379 CHAIRMAN MACKIE informed the committee that Janice Adair of DEC was not able to participate in the hearing via the teleconference network because all of the circuits were tied up with other teleconferences, but she did send a letter stating that the department had worked with Senator Wilken and Senator Hoffman on drafting the committee substitute and that they don't have any problems with it. He then asked Keith Kelton of DEC if he could address Senator Donley's question relating to attorney fees. KEITH KELTON , Director, Division of Facility Construction & Maintenance, Department of Environmental Conservation, said he agreed with Senator Donley's concern and he would have an answer to that question when the bill is before the Finance Committee. SENATOR DONLEY suggested deleting the section, and then if the department makes its case that it should be in the bill, the Finance Committee can then consider adding it back in. Number 390 SENATOR DONLEY moved that on page 4, beginning on line 27, delete subsection (j) in its entirety and renumber subsequent sections accordingly. Hearing no objection, the amendment was adopted. Number 400 SENATOR WILKEN moved that CSSB 50(CRA), as amended, and the accompanying fiscal notes be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. There being no further business to come before the committee, CHAIRMAN MACKIE adjourned the meeting at 2:02 p.m.