Legislature(1995 - 1996)
04/23/1996 04:50 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 215(RES) "An Act streamlining the functions of state government, including 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; relating to service of process on nonresident taxpayers; and providing for an effective date." Nancy Slagle, OMB was invited to join the committee. She said through the bill the Governor was trying to find efficiencies and economies wherever possible within the State government operations. Using the RES version she reviewed the bill before the committee. Sections 1, 2 and 3 dealt with the Department of Fish and Game in allowing vendors who sell sport fishing and hunting licenses and tags to retain the full 5% they are allowed to for compensation. For services at this time they are allowed only a portion and the remainder is transmitted to the Department for recalculation and then resubmission back to the vendor. Section 4 dealt with the Department of Commerce and Economic Development which eliminated the non- resident affidavit program also referenced in the repealer of section 9. Section 5 and 6 dealt with the Department of Health and Social Services and the infant learning program. It gave the department the ability to grant from the infant learning program for their services. Section 7 dealt with repealers. One portion dealt with the requirements for the Department of Environmental Conservation concerning the reporting and care of animals suspected of rabies and disposal of rabid animals. This eliminated the involvement of DEC. In response to Senator Phillips question about unorganized areas, Janice Adair informed the committee that these areas are dealt with through Public Health. Ms. Slagle continued and said the second part of section nine dealt with the vitamin and mineral content of bread and flour. Section 8 also dealt with several repealers which eliminated the Athletic Commission, Boxing and Wrestling, professional geologists and Water Resources Board. Section 9 was a repealer for Fish and Game which also ties to the vendor compensation tied to sections 1, 2 and 3. Section 10 was transitional language and section 11, 12 and 13 were the effective dates. Co-chairman Halford asked about the amendments. She indicated there were amendments #1, 2, 3, 4, 5 and 6; one of which dealt with calculation of terminal leave payments for State employees basing it on annualized rate of pay. Another dealt with the life of a warrant reducing the time by statute to one year which complied then with the unclaimed property statute. The next amendment had to do with collecting taxes on insurance premiums. Basically it is collected on an annual basis. It is now proposed to be done on a quarterly basis which is supported by the insurance industry. Co-chairman Halford at this time indicated his concern with the amendments in that they would add another section to the title. Ms. Slagle said in order to delete a portion of the title was a question for the legal department. The direction from the Department of Law was that the specific items be identified. Co-chairman Halford said he would rather not run a title a page long. He said he would consider the amendments with the understanding that the portion of each amendment that goes into the title would not be inserted unless necessary. He referred to amendment #1 which would authorize the Commissioner of Fish and Game to award grants for certain resource activities. Ms. Slagle explained that this amendment was in the original bill submitted. Senate RES removed this and the department has since worked with Senate President Pearce on more appropriate language. The department would now be able to provide grants where they have not had the authority previously. Specifically, it related to Exxon Valdez monies and other small grants through the National Marine Fisheries Service. Senator Sharp said he did not want to see Fish and Game become another department with grant authority. Co-chairman Halford asked if there were any grants proposed in the budget at this time through Fish and Game. Ms. Slagle said she knew the department was working with private property owners along the Kenai River in construction demonstration projects to restore and protect streamside habitat impacted by human development and they would be looking at small grants on the average of about $6,000 each. Those would be funded by the National Marine Fisheries Service. The department would have to either budget this at the legislative level or get approval from OMB for any type of line item transfer if monies needed to go for grants. Senator Sharp asked if the department would have the authority to give grants to regional authorities to manage fish and game and said he felt this was a problem. Senator Zharoff asked what type of grants would be given out. Co- chairman Halford indicated the presented information was all that was before the committee. Senator Zharoff moved amendment #1 and it failed to be adopted. Mike McMullen, Personnel Manager, Department of Administration was invited to join the committee and explained amendment #2. He said this amendment would deal with how terminal leave was paid. Currently depending on the balance and what time a person leaves a modest balance may cover five holidays or it may cover one holiday. This practice was developed to compensate the employee. Through collective bargaining most employees are paid for their balance time at their current rate. This amendment would do the same for everyone covered by statute and not the collective bargaining agreement. The second change eliminates the option of terminal leave payoffs in installments over a period of time. Most separated employees do not choose this form of termination and because of its' cumbersomeness the department would like to see it eliminated. The third change was the proposed inclusion in the repealer language of AS 39.20.250 (b) which currently provides an employee paid a terminal leave amount and then returns to work for the State during a period of time that terminal leave would have covered the time that the employee is required to buy back the leave payment and have that leave put back on the books. In one of the collective bargaining agreements this provision had been eliminated and the wisdom of that has been negotiated and this was being pursued in the statute. Senator Zharoff asked if the bargaining units agree with this and Mr. McMullen said that these statutes do not affect the bargaining units and their rights come from their own bargaining rights. In terms of similarities, the leave cash-in is available in almost all bargaining units. The lump sum payment is already in place, the elimination of payback is in place and those would not change with this law, but rather as future negotiations would change them. Co-chairman Halford asked if there was any fiscal impact with this amendment and Mr. McMullen advised there was. It would be .04 of 1% of the personal services budget spread over all the BRU's of the State. The funds for this came from the catastrophic reserve account and the Division of Finance would adjust that assessment against payroll as needed. Senator Sharp asked if this would save on leave accrual and Mr. McMullen said that leave accrual stops at the time of termination. Senator Sharp moved amendment #2 and without objection it was adopted excluding the title provision as per prior discussion. Joe Thomas, Division of Finance was invited to join the committee. He explained amendment #3 and said this would just change the statute for time limitation on payment of a warrant so that it would be consistent with the statute on unclaimed property. Currently the statute on unclaimed property considers warrants after one year to be unclaimed property. The statute worded for AS 37.05.180 says two years for stale dated. This amendment would make the two consistent. There would be no fiscal note regarding this amendment. Senator Phillips moved amendment #3 and without objection it was adopted excluding the title provision. Bob Bartholomew, Income & Excise Audit Division, Department of Revenue was invited to join the committee. He explained amendment #4 would resulted in two changes to the bill. One related to insurance companies that pay annually and in March submit a paper check to the Treasury Division and also to Commerce which would require electronic payment. The other change related to making the payment be quarterly which would be consistent with what most other states do. Department of Revenue had already submitted a fiscal note to SB 215 in which the department thought this amendment was already in. This bill would earn the state treasury an additional $600,000/year in interest income by going to quarterly payments. There would be a one-time boost in revenue for FY 97. Revenues would be up by $7 million. When the change would be made it would be almost five quarters after they collected. When brought current an extra quarter would be picked up. Senator Phillips moved amendment #4 and without objection it was adopted excluding the title provision. Ms. Slagle at this point voiced the position of the insurance industry limiting tax collections to at least annually but not more that once each quarter. Co-chairman Halford advised that the amendment had been adopted and would reflect the insertion of "no more than once each quarter". Senator Phillips moved the conceptual amendment and without objection it was adopted. Carol Carroll, Department of Natural Resources was invited to join the committee. She said that amendment #5 would modify the process for both industry and department to not have to report annual expenditure activity that may be less that a floor of $250,000. If a credit would be taken in excess of $40,000 the industry would have to get this certified by a CPA. She referred to section (e) and asked "September 30" be deleted and "within six months of the receipt of the request" be inserted. This would also take place under section (f). The amendment would then be internally consistent. Co-chairman Halford asked if the credit would still apply at whatever level it had applied before and Ms. Carroll concurred. This related only to the reporting of the expenditure and not credits. There would be an option of waiting until the amount was at $250,000 or at the time one wanted to take the credit at whatever the amount the expenditure activity was. There would be no limiting of the availability of the credit. Senator Sharp moved amendment #5 as amended and without objection it was adopted as amended. Nancy Slagle said that in amendment #6 the University of Alaska had requested this change of policy in order for them to direct deposit paychecks for employees. This would cut down on administrative costs and provide for a cost savings. Ms. Slagle advised the co-chairman that this was not a requirement but an option. The University perceived this amendment as an option rather than requirement. Co-chairman Halford said the way the language was stated if the University adopted this measure it would be a requirement. Senator Phillips suggested deleting the word "require" and state "may deposit". Ms. Slagle said she would research the matter of direct deposit being deposited in wrong account. Co-chairman Halford held the bill in committee for further review. ADJOURNMENT Co-chairman Halford recessed until 9:00 a.m. tomorrow.