MINUTES SENATE FINANCE COMMITTEE April 21, 1994 10:00 a.m. TAPES SFC-94, #77, Side 1 (000-end) SFC-94, #77, Side 2 (end-250) CALL TO ORDER Senator Drue Pearce, Co-chair, convened the meeting at approximately 10:00 a.m. PRESENT In addition to Co-chairs Pearce and Frank, Senators Rieger, and Kerttula were present. Senators Sharp, Jacko, and Kelly joined the meeting after it was in progress. ALSO ATTENDING: John Bitney, aide to Representative Ron Larson; Juanita Hensley, Chief, Driver Services, Division of Motor Vehicles, Department of Public Safety; Ron King, Project Manager for Mobile Sources, Environmental Specialist, Air Quality Management Section, Division of Environmental Quality, Department of Environmental Conservation; Randy Welker, Legislative Auditor, Legislative Audit Division; Jetta Whittaker, fiscal analyst, Mike Greany, Director, Legislative Finance Division; representatives of the media, aides to committee members and other members of the legislature. SUMMARY INFORMATION SCSCSHB 370(FIN): An Act making appropriations for the operating and loan program expenses of state government and to capitalize funds; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date. The committee rescinded its action of March 20, 1994 and returned SCSCSHB 370(FIN) to committee for a further amendment. Amendment 1 was ADOPTED. SCSCSHB 370(FIN) was REPORTED out of committee with a "do pass." SB 357: An Act relating to certain study, publication, and reporting requirements by and to state agencies; relating to certain fees for reports; and providing for an effective date. Amendments 1, 2, and 3 were ADOPTED. CSSB 357(FIN) was REPORTED out of committee with a "do pass," and zero fiscal notes for the following departments: Department of Revenue; Department of Commerce & Economic Development -(AIDEA), Occupational Licensing, & Banking, Sec. & Corps.; Department of Natural Resources; Department of Education - Community Schools & Postsecondary; Department of Administration -Computer Services; Department of Administration - APOC, Pioneers' Homes, Finance, & Telecommun- ications Services; Department of Public Safety - Violent Crimes & All; Department of Military & Veteran Affairs; and Office of the Governor. CSSB 365(STA): An Act relating to the improvement of state finances and fiscal accountability by increasing fees, by collecting additional revenue, by reducing certain program expenditures by changing services or eligibility requirements for programs, by changing certain statutory limitation periods, by providing for use of certain electronic records, by making changes to state agency functions or procedures including certain reporting and planning procedures, and by authorizing extensions for state leases for real property if certain savings can be achieved; and providing for an effective date. Amendments 1 and 6 were ADOPTED. Amendments 2 and 3 were HELD. Amendment 4 was ADOPTED and then the committee rescinded its action. Juanita Hensley spoke to amendment 4. Amendment 7 FAILED. CSSB 365(FIN) was REPORTED out of committee with a "do pass," zero fiscal notes for the Department of Public Safety - Fire Suppression, and Driver Services; Depart-ment of Administration - Leasing; Office of the Governor; Department of Transportation & Public Facilities; Department of Environmental Conservation - Water & Waste; Department of Labor - Workers' Compensation; Department of Corrections - Inmate Health Care; Department of Law; and two fiscal notes for the Department of Public Safety - Troopers, Admin. for $253.1 and Troopers, Detachments for $1,687.5. SB 376: An Act relating to fees charged by state agencies for certain services and to reimbursement for expenses incurred by the state in providing certain services; and providing for an effective date. Ron King, Project Manager for Mobile Sources, Environmental Specialist, Air Quality Management Section, Division of Environmental Quality, Department of Environmental Conservation, spoke to Co- chair Frank's concerns. Amendments 1, 2, and 3 were ADOPTED. CSSB 376(FIN) was REPORTED out of committee with a "do pass," zero fiscal notes for the Department of Public Safety-Fire, the Department of Corrections and the Department of Revenue (0.4 revenue), a fiscal note for the Department of Environmental Conservation for $128.0 ($670.2 revenue) and a fiscal note for the Department of Public Safety for $1.5. SB 377: An Act relating to state agency fiscal procedures; and providing for an effective date. Amendment 1, 3, 4, and 5 were ADOPTED. John Bitney, aide to Representative Larson, spoke to amendment 2. Amendment 2 was HELD. CSSB 377(FIN) was REPORTED out of committee with a "do pass," a zero fiscal note for the Department of Revenue, and a revenue fiscal note for the Department of Administration - Statewide for $(147.7). Senate CS FOR CS FOR House Bill 370(FIN): An Act making appropriations for the operating and loan program expenses of state government and to capitalize funds; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date. CO-CHAIR PEARCE announced that SCSCSHB 370(FIN) was before the committee. CO-CHAIR FRANK MOVED to rescind the committee's action in passing out SCSCSHB 370(FIN) for the purposes of a further amendment. No objection being heard, SCSCSHB 370(FIN) was again before the committee. Co-chair Frank MOVED amendment 1 regarding senior citizens disabled veterans' tax relief program and renter's equivalency rebate. He said it would be funded at $2M, the same level as last year. No objection being heard, amendment 1 was ADOPTED for incorporation into SCSCSHB 370(FIN). Co-chair Frank MOVED for passage of SCSCSHB 370(FIN) as amended from committee with individual recommendations. No objection being heard, SCSCSHB 370(FIN) as amended was REPORTED out of committee with a "do pass." Co-chairs Pearce and Frank, Senators Kelly, Rieger and Sharp signed "do pass." Senator Kerttula signed "no recommendation." CS FOR SENATE BILL NO. 365(STA): An Act relating to the improvement of state finances and fiscal accountability by increasing fees, by collecting additional revenue, by reducing certain program expenditures by changing services or eligibility requirements for programs, by changing certain statutory limitation periods, by providing for use of certain electronic records, by making changes to state agency functions or procedures including certain reporting and planning procedures, and by authorizing extensions for state leases for real property if certain savings can be achieved; and providing for an effective date. Co-chair Pearce announced that CSSB 365(FIN) version "K" had been adopted on April 14 and was before the committee. SENATOR RIEGER MOVED amendment 1. No objection being heard, amendment 1 was ADOPTED. Co-chair Pearce announced, with concurrence from Senator Sharp, that amendment 2 would not be offered. Co-chair Pearce announced amendment 3 by Senator Jacko would not fit under the present title. Senator Jacko was not present at the time this amendment was discussed. Amendment 3 was HELD. Co-chair Pearce announced that amendment 4 was proposed by the Department of Public Safety relating to farm vehicles. Senator Rieger MOVED amendment 4. No objection being heard, amendment 4 was ADOPTED. SENATOR KERTTULA asked for clarification of amendment 4. JUANITA HENSLEY, Chief, Driver Services, Division of Motor Vehicles, Department of Public Safety, said amendment 4 brought state statutes in compliance with the federal Motor Vehicle Safety Act. One section of the statue said farm vehicles can move within a 300-mile radius of the farm and another set said it can move within a 150-mile radius. Federal law mandated a 150-mile radius so that to be in compliance, there cannot be any more allowances over the 150-mile radius. Senator Kerttula said the 150-mile radius did not fit Delta to Anchorage or Delta to Homer but the 300 mile radius did. He opposed changing the statutes. Senator Kerttula MOVED to rescind the adoption of amendment 4. Co-chair Frank raised questions about federal compliance. Ms. Hensley said one of the problems was the statute related to commercial-sized vehicles and there were safety concerns. She went on to say that if the state did not come into federal compliance, which was tied to ISTEA, it jeopardized federal highway funds. This non-compliance needed to be cleared up so Department of Transportation & Public Facilities did not lose 10 percent of its highway funds. She said the federal government had put the state on notice that it was in non-compliance in this area. She did not know when the funds would be withheld. In answer to Co-chair Frank, Ms. Hensley said the federal government had looked at all statutes and discovered the discrepancy in two different statutes. Co-chair Pearce called for a show of hands on the motion to rescind the adoption of amendment 4. No objection being heard, the committee RESCINDED its action on adopting amendment 4. Senator Rieger proposed amendment 5. Co-chair Pearce OBJECTED for discussion purposes. She invited Randy Welker, Legislative Auditor, Legislative Audit Division, to join the committee at the table. Senator Rieger said he was prepared to withdraw the amendment since progress had been made with the Department of Transportation & Public Facilities regarding construction lists. Co-chair Pearce, however, asked Mr. Welker if he wanted to speak to Section 25. RANDY WELKER said he had been asked to look at two sections. One that dealt with extending leases to achieve savings, and the other allowing a small procurement code to apply to leases under $5,000 month. He felt both provisions were reasonable. Co-chair Pearce confirmed that amendment 5 was withdrawn. Senator Rieger agreed. Co-chair Pearce explained the provisions of amendment 6 which would require the Department of Transportation & Public Facilities to provide the legislature a construction forecast and proposed projects list rather than a single appropriation. Senator Rieger MOVED amendment 6. No objection being heard, amendment 6 was ADOPTED. CSSB 365(FIN) as amended was HELD until later in the meeting and the following action was taken. Co-chair Pearce announced that amendment 7 would be before the committee. Senator Kelly MOVED amendment 7. Co-chair Pearce OBJECTED for discussion purposes. Senator Kelly said amendment 7 insured that Hillside residents in Anchorage would pay something for police protection. Senator Rieger said he was opposed to the language in amendment 7. He asked for a few minutes to consider the amendment since it was the first time he had seen it. Recess 10:42am Reconvene 10:45am Senator Rieger OBJECTED to amendment 7. Co-chair Frank said he did not understand the whole concept of the problem but he had supported amendment 1 with assurance that those troopers would be paid for by the Hillside residents. Senator Kelly maintained that it was not clear that the service areas would vote to pay for troopers. This amendment would force them to pay for police protection even if they did not vote to pay for troopers. End SFC-93 #77, Side 1 Begin SFC-93 #77, Side 2 Co-chair Pearce called for a show of hands and amendment 7 FAILED to be ADOPTED. Co-chair Frank MOVED for passage of SB 365 as amended from committee. Senators Kelly and Kerttula OBJECTED. Senator Kelly spoke to his objections regarding amendment 1. Co- chair Pearce called for a show of hands and the motion carried on a vote of 5 to 2 (Co-chairs Pearce and Frank, Senators Sharp, Jacko, Rieger, were in favor, Senators Kelly and Kerttula were opposed). CSSB 365(FIN) was REPORTED out of committee with a "do pass," zero fiscal notes for the Department of Public Safety - Fire Suppression, and Driver Services; Department of Administration - Leasing; Office of the Governor; Department of Transportation & Public Facilities; Department of Environmental Conservation - Water & Waste; Department of Labor - Workers' Compensation; Department of Corrections - Inmate Health Care; Department of Law; and two fiscal notes for the Department of Public Safety - Troopers, Admin. for $253.1 and Troopers, Detachments for $1,687.5. Co-chairs Pearce and Frank, Senators Rieger and Jacko signed "do pass," Senators Kelly and Kerttula signed "no not pass," and Senator Sharp signed "no recommendation." SENATE BILL NO. 376: An Act relating to fees charged by state agencies for certain services and to reimbursement for expenses incurred by the state in providing certain services; and providing for an effective date. Co-chair Pearce announced that SB 376 was before the committee. She explained that SB 215 repealed the department's ability to prescribe fees for oil discharge financial responsibility or oil discharge contingency plans. To be consistent with SB 215, subsections (4) and (5) needed to be deleted from SB 376 on page 4, lines 19-20. Co-chair Frank MOVED for amendment 1 deleting (4) and (5). No objection being heard, amendment 1 was ADOPTED. Co-chair Frank said he was under the impression that the Department of Environmental Conservation was going to supply language that would be more specific on their regulation of motor fuels to control omissions, and also on the analysis of the public water system samples authorized for submission to the department. RON KING, Project Manager for Mobile Sources, Environmental Specialist, Air Quality Management Section, Division of Environmental Quality, Department of Environmental Conservation, said he believed Section 8 was rather specific as it was. He provided the committee with a handout (copy on file, Attachment A). He said the Department could not charge for just anything, it would have to be a program designed to regulate or control omissions from mobile sources. In answer to Co-chair Frank, Mr. King said the place this regulation would be used was for the low sulphur diesel petition. There was currently federal law to require low sulphur diesel fuel. In order to prepare a petition to be exempt from that law, the department would utilize this regulation. The only other program this regulation applied to was the oxygenated fuels program. It would not be under the vehicle inspection program. Those were recovered by fees in another area. In answer to Senator Rieger, Mr. King said that the fee would be paid by the distributors of the fuel or refiners of the fuel, not directly by the citizen. He pointed out though, in reality, those fees would be passed on to the consumer. Co-chair Frank reiterated that he would like the language narrowed so it was clear this was specific to those programs and done in consultation with the distributors. Mr. King said he would work on the language and assured the committee that the Department had worked with the distributors. Co- chair Frank said he did not want this provision to look like a blanket authority for the department. Co-chair Pearce announced that SB 376 would be HELD until language could be drafted by the Department on Sections 13 and 14. Later in the meeting, the committee returned to SB 376 and the following action was taken. Co-chair Frank MOVED amendment 2, amending page 5, line 6. No objection being heard, amendment 2 was ADOPTED. Co-chair Frank MOVED amendment 3, to clarify programs under this provision. No objection being heard, amendment 3 was ADOPTED. Recess 10:55am Reconvene 10:57am At the end of the meeting, the committee returned to SB 376. Co-chair Frank MOVED for passage of SB 376 as amended from committee with individual recommendations. No objection being heard, CSSB 376 was REPORTED out of committee with a "do pass," zero fiscal notes for the Department of Public Safety-Fire, the Department of Corrections and the Department of Revenue (0.4 revenue), a fiscal note for the Department of Environmental Conservation for $128.0 ($670.2 revenue) and a fiscal note for the Department of Public Safety for $1.5. Co-chairs Pearce and Frank, Senator Kelly, Rieger, Jacko and Sharp signed "do pass," and Senator Kerttula signed "do not pass." SENATE BILL NO. 377: An Act relating to state agency fiscal procedures; and providing for an effective date. Co-chair Pearce announced that SB 377 was before the committee. She said there were five suggested amendments. Co-chair Frank MOVED amendment 1 regarding prorating language consistent with language in last year's fee bill. No objection being heard, it was ADOPTED. JOHN BITNEY, aide to Representative Larson, said that amendment 2 would delete provisions within the statute that were currently being used to fund the catastrophic insurance functions of the state. He understood that currently what the state did was use lapsing general fund balances at the end of each fiscal year to fund the catastrophic insurance account. This language was drafted with the help of the Office of Management & Budget. This year the House Finance Committee budgeted it from the Constitutional Reserve Fund rather than from lapsing balances. He pointed out that section did fall out of the front section when it failed to get a three-quarters vote on the house floor. The House Finance Committee felt that these types of provisions that the administration had been using to sweep lapsing balances should be deleted in order to apply that lapsed money towards the deficit situation. Co-chair Pearce said amendment 2 would be HELD until Legal Services could be questioned. Mr. Bitney said that amendment 3 was another provision where House Finance Committee was looking to delete sections within the Executive Budget Act that authorized the Department of Administration to sweep lapsing balance accounts at the end of the FY. They would prefer these funds lapse back into the general fund each year. Co-chair Frank MOVED amendment 3. Senator Kerttula OBJECTED. Senator Kerttula WITHDREW his objection. No further objection being heard, amendment 3 was ADOPTED. Co-chair Pearce announced amendment 4 was before the committee. Mr. Bitney said the intention of amendment 4 was that when the Governor submitted his initial budget proposal to the legislature, under the repayment section, if an appropriation had been made as part of his budget recommendation to the legislature, the Governor shall propose the amounts that were available and what the payback provisions should be. Co-chair Frank MOVED amendment 4. No objection being heard, amendment 4 was ADOPTED. Co-chair Pearce said that amendment 5 was proposed by the Department of Health & Social Services in relation to the Infant Learning Program. Co-chair Frank MOVED amendment 5. No objection being heard, amendment 5 was ADOPTED. Co-chair Pearce announced that SB 377 as amended would be HELD until Legislative Legal Services spoke to amendment 2. At this time, the committee returned to SB 365 (see the section of meetings pertaining to SB 365). Co-chair Pearce announced that Legislative Legal Services had recommended that amendment 2 be withdrawn. Co-chair Frank MOVED for the passage of SB 377 as amended from committee with individual recommendations. No objection being heard, CSSB 377(FIN) was REPORTED out of committee with a "do pass," zero fiscal notes for the Department of Revenue, and the Department of Administration- Statewide also showing a revenue of $(147.7). Co-chairs Pearce and Frank, Senators Rieger, Jacko, Kelly and Sharp signed "do pass," and Senator Kerttula signed "do not pass." At this time the committee returned to SB 376 (see portion of minutes pertaining to SB 376). SENATE BILL NO. 357: An Act relating to certain study, publication, and reporting requirements by and to state agencies; relating to certain fees for reports; and providing for an effective date. Co-chair Pearce announced that SB 357 was before the committee and she proposed a packet of amendments given to members which included the additional repeal of certain annual reports. Senator Kelly MOVED amendment 1. No objection being heard, amendment 1 was ADOPTED. Senator Jacko MOVED amendment 2. No objection being heard, amendment 2 was ADOPTED. Senator Sharp MOVED amendment 3. No objection being heard, amendment 3 was ADOPTED. Senator Jacko MOVED for passage of SB 357 as amended from committee with individual recommendations. No objection being heard, CSSB 357(FIN) was REPORTED out of committee with a "do pass," and zero fiscal notes for the following departments: Department of Revenue; Department of Commerce & Economic Development - (AIDEA), Occupational Licensing, & Banking, Sec. & Corps.; Department of Natural Resources; Department of Education - Community Schools & Postsecondary; Department of Administration - Computer Services; Department of Administration - APOC, Pioneers' Homes, Finance, & Telecommun-ications Services; Department of Public Safety - Violent Crimes & All; Department of Military & Veteran Affairs; and Office of the Governor. Co-chairs Pearce and Frank, Senators Kelly, Jacko, Rieger, and Sharp signed "do pass," and Senator Kerttula signed "no recommendation." Co-chair Pearce noted that HB 421 and HJR 34 had been withdrawn from the agenda. ADJOURNMENT The meeting was recessed at approximately 11:15 a.m.