Legislature(1995 - 1996)
05/06/1996 12:25 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE BILL NO. 215 "An Act streamlining the functions of state government, including authorizing the commissioner of fish and game to award grants for certain resource activities; allowing agents selling fish and game licenses and tags to retain certain compensation; authorizing the Department of Health and Social Services to award grants for certain services for developmentally delayed or disabled children; relating to rabies control and administration of flour and bread standards by the Department of Environmental Conservation; repealing the Athletic Commission, the regulation of boxing and wrestling, the certification of professional geologists, and the Water Resources Board; repealing certain filing statements and bonds for enforcement and collection of certain taxes; and providing for an effective date." ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR noted that there are some legal concerns regarding portions of the legislation. Ms. Slagle provided members with a sectional analysis of CSSB 216 (FIN) am (copy on file). She review the sectional analysis. * Sections 1 & 2. Allows school districts to submit reports for their six year plans for capital maintenance and construction requirements to the Department of Education on a biennial basis. * Section 2. Allows the University of Alaska to 12 require employees to deposit paychecks directly into a bank, savings and loan or credit union. Processing cuts will be reduced. * Section 4. Allows the Department of Fish and Game to award grants for Kenai River drainage projects specifically appropriated for FY 94 and FY 96. Without this section the grants would have to be passed through another state organization with granting authority. * Sections 5, 6, and 8. Allows agents of sport fishing and hunting licenses and tags to retain the full 5 percent allowed for compensation for their services. Without these sections money would be paid to the State and then transferred back. * Section 7. Allows agents of sport fishing and hunting licenses and tags to assign a portion of their compensation to an in-state nonprofit fish or game association. This section was added in the Senate. * Sections 9 - 13. Allows the Department of Commerce and Economic Development to collect taxes on insurance premiums more frequently than on an annual basis and to be collected electronically. Representative Parnell asked if this change would effect insurance companies. Ms. Slagle stated that insurance industry representatives testified that they could accept quarterly collection, but did not want collections to be more frequent. * Section 14. Reduces the requirements for filing of credits for certain mining exploration costs. This would eliminated the annual filing and certification process and substitute a threshold of when a credit reaches $250.0 thousand dollars or the holder is ready to take the credit. * Section 15. Requires the Alaska Railroad Corporation to use competitive bidding on construction contracts over $25.0 thousand dollars, that the Department of Transportation and Public Facilities authorizes. This section was added in the Senate. * Section 16. Shortens the time limit on payment of warrants to 1 year. The current statute is for 2 years. This would be consistent with the 13 unclaimed property statutes. * Section 17. Calculates terminal leave payments based on annualized rate of pay. * Section 18. Is in conjunction with a repealer in Section 24 which eliminated the non-resident tax affidavit tax bond program. * Sections 19 & 20. Allows the Department of Health & Social Services granting authority for the Infant Learning Program. * Section 21. This section would restrict certain state corporations to contract for lobbying activities. This section is a duplication. * Section 22. Repeals the requirement that the Department of Environmental Conservation report and care for animals suspected of rabies and handle the disposal of rabid animals. Eliminates the requirement that the Department regulate the vitamin and mineral content of flour and bread sold in the State. This requirement is a duplication of federal regulations. Eliminates the requirement that employees that have separated from state government employment and rehired must repay leave received in cash at the time of separation. * Section 23. Eliminates the Athletic Commission, Boxing and Wrestling Commission. They have not been active in the past several years. Eliminates the requirement that professional geologists be certified by the Department of Commerce and Economic Development. Eliminates the Water Resources Board. * Section 24. Eliminates the calculation required to transmit remainder of vendor compensation for issuance of sport fishing and hinging licenses. Eliminates non-resident affidavit tax bond program. * Sections 25 and 26. These sections are transitional language. * Section 27. This section deals with the applicability of warrants issued on or after the effective date of Section 16. * Section 28. Restricts the payment of state money 14 to entities that are not incorporated under the laws of the State. * Sections 29 - 31. These sections implement effective dates Representative Brown referred to Section 5. She asked if there are provisions for auditing of vendors. KEVIN BROOKS, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF FISH AND GAME explained that there is a monthly reporting system with vendors. He stated that the Department is comfortable with the shift to a retained fee. He emphasized that the current system is redundant. Representative Brown referred to Section 14. She expressed concern that the certification be contemporaneous with when the money and records are available. She emphasized that it would not be sensible to allow records to be collected for 20 years before they are turned in. CAROL CAROLL, SPECIAL ASSISTANT, DEPARTMENT OF NATURAL RESOURCES pointed out that CPA certification would be required when credits reach $250.0 thousand dollars. Representative Brown noted that credits could be collected for a number of years. Ms. Caroll reiterated that credits would be turned in when they reach at least $250.0 thousand dollars or when production begins. She agreed that the language could be tightened. She explained that the Department did not want to require annual certification due to the amount of additional paperwork. Representative Brown noted that the credits are direct credits against obligations owed to the State. She noted that there is no requirement for the CPA to certify that credits are correct or that the expenditures actually took place. Ms. Caroll suggested a three year limit. Representative Brown referred to Sections 19 and 20. ELMER LINDSTROM, SPECIAL ASSISTANT, DEPARTMENT OF HEALTH AND SOCIAL SERVICES explained that these sections will allow the Department to continue the status quo. He noted that the addition of federal aid required regulations. The Department of Law reviewed the regulations and concluded that the Department of Health & Social Services did not have sufficient grant making authority. Representative Therriault provided members with Amendment 1 (copy on file). KEN BOYD, DIRECTOR, DIVISION OF OIL AND GAS, DEPARTMENT OF NATURAL RESOURCES discussed Amendment 1. He stressed that 15 the amendment should be considered a conceptional amendment. He explained that Section 17 clarifies under and over payment of royalties and how they are calculated. Section 18 sets up a period of time during which interest will accrue on overpayments. He observed royalty payments are for the preceding month. He noted that there are generally metering errors. He added that smaller royalty payers base their payments on the larger royalty payers. If the larger payer is wrong then the smaller companies are wrong. He noted that errors are generally cleared up in 60 days. He stressed that small adjustments are not worth the administrative overhead. The amendment would allow the Department to dismiss small over or under payments. The set interest rate is 11 percent. He maintained that "may" should be changed to "shall". Representative Parnell questioned the interest rate. Representative Therriault noted that the existing statutory language sets the interest rate. Amendment 1 was HELD. Representative Mulder MOVED to report CSSB 215 (FIN) am out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CS SB 215 (FIN) am was reported out of Committee with "no recommendation" and with three fiscal impact notes, one by the Department of Fish and Game, one by the Department of Revenue, dated 5/1/96, and one by the Department of Commerce and Economic Development, dated 1/12/96; and with four zero fiscal notes, one by the Department of Revenue, dated 5/1/96, one by the Department of Environmental Conservation, dated 1/12/96, one by the Department of Health & Social Services, dated 1/12/96, and one by the Department of Natural Resources, dated 5/1/96.