Legislature(2017 - 2018)HOUSE FINANCE 519

04/04/2017 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
+ HB 146 SCHOOL TAX; PFD PAYMENT FOR SCHOOL TAX TELECONFERENCED
Heard & Held
+= HB 31 SEXUAL ASSAULT EXAMINATION KITS TELECONFERENCED
Moved CSHB 31(FIN) Out of Committee
+ HB 144 EXTEND BOARD OF VETERINARY EXAMINERS TELECONFERENCED
Heard & Held
+= HB 137 ST. COUNCIL ON THE ARTS: PUBLIC CORP. TELECONFERENCED
Moved HB 137 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 4, 2017                                                                                            
                         9:07 a.m.                                                                                              
                                                                                                                                
9:07:39 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 9:07 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Scott Kawasaki                                                                                                   
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Sam Kito  III,  Sponsor;  Kris Kris  Curtis,                                                                    
Legislative Auditor,  Alaska Division of  Legislative Audit;                                                                    
Janey   Hovenden,   Director,  Division   of   Corporations,                                                                    
Business   and   Professional   Licensing,   Department   of                                                                    
Commerce,   Community  and   Economic  Development;   Rachel                                                                    
Bergngartt, Doctor  of Vetrinary Medicine and  Board Member;                                                                    
Ms.  Kranendonk,  Staff,  Representative  Harriet  Drummond;                                                                    
Alexei Painter,  Analyst, Legislative Finance  Division; Ben                                                                    
Brown,  Chairman,   Alaska  State   Council  on   the  Arts;                                                                    
Representative  Matt Claman,  bill  sponsor; Owen  Phillips,                                                                    
staff,  Representative  Claman;  Ken  Alper,  Director,  Tax                                                                    
Division, Department of  Revenue; Representative Geran Tarr,                                                                    
Sponsor; Kelly Howell,  Director, Division of Administrative                                                                    
Services,  Department   of  Public   Safety;  Representative                                                                    
Colleen Sullivan-Leonard.                                                                                                       
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
Eric Jayne, Doctor of Veterinarian, Hawaii; Brandon S.                                                                          
Spanos, Deputy Director, Tax Division, Department of                                                                            
Revenue; Paul Kendall, Self, Anchorage.                                                                                         
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 31     SEXUAL ASSAULT EXAMINATION KITS                                                                                       
                                                                                                                                
          CSHB 31(FIN) was REPORTED out  of committee with a                                                                    
          "do  pass"  recommendation  and with  a  new  zero                                                                    
          fiscal  note by  the House  Finance Committee  for                                                                    
          the  Department of  Public Safety  and with  a new                                                                    
          zero fiscal note.                                                                                                     
                                                                                                                                
HB 137    ST. COUNCIL ON THE ARTS: PUBLIC CORP.                                                                                 
                                                                                                                                
          HB 137  was REPORTED out  of committee with  a "do                                                                    
          pass"  recommendation  and  with  two  new  fiscal                                                                    
          impact notes  by the  House Finance  Committee for                                                                    
          the    Department   of    Education   and    Early                                                                    
          Development.                                                                                                          
                                                                                                                                
HB 144    EXTEND BOARD OF VETERINARY EXAMINERS                                                                                  
                                                                                                                                
          HB  144  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
HB 146    SCHOOL TAX; PFD PAYMENT FOR SCHOOL TAX                                                                                
                                                                                                                                
          HB  146  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
Co-Chair Foster reviewed the agenda for the meeting.                                                                            
                                                                                                                                
HOUSE BILL NO. 144                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the Board of                                                                     
     Veterinary Examiners; and providing for an effective                                                                       
     date."                                                                                                                     
                                                                                                                                
9:09:29 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SAM KITO III, SPONSOR, read the sponsor                                                                          
statement:                                                                                                                      
                                                                                                                                
     House  Bill 144  extends the  termination date  for the                                                                    
    Board of Veterinary Examiners until June 30, 2025.                                                                          
                                                                                                                                
     Legislative Audit conducted their  review of this board                                                                    
     and  determined  that  "the board  is  serving  in  the                                                                    
     public's   interest   by  effectively   licensing   and                                                                    
     regulating  veterinarians  and veterinary  technicians.                                                                    
     The board  monitors licensees and works  to ensure only                                                                    
     qualified individuals practice.  Furthermore, the board                                                                    
     develops   and  adopts   regulations  to   improve  the                                                                    
     veterinarian and  veterinary technician  occupations in                                                                    
     Alaska. In  accordance with  AS 08.03.010(c)  (22), the                                                                    
     board is  scheduled to terminate  on June 30,  2017. We                                                                    
     recommend  that  the  legislature  extend  the  board's                                                                    
     termination date to June 30, 2025."                                                                                        
                                                                                                                                
     The board  currently oversees 784 active  licensees and                                                                    
     is made  up of  five members.  State law  requires four                                                                    
     board  positions be  filled  by licensed  veterinarians                                                                    
     that have  been engaged  in the practice  of veterinary                                                                    
     medicine in the state for  at least five years prior to                                                                    
     appointment. The remaining position  is to be filled by                                                                    
     an individual from the general public.                                                                                     
                                                                                                                                
     The continuation  of the Board of  Veterinary Examiners                                                                    
     is important to the health  and safety of Alaska's pets                                                                    
     and livestock.                                                                                                             
                                                                                                                                
     Thank you for your support of House Bill 144.                                                                              
                                                                                                                                
Representative Kito  reported that  an issue  regarding lack                                                                    
of rural  veterinary care was  identified in the  audit. The                                                                    
issue  was indirectly  related to  the board  and was  not a                                                                    
primary  function. He  indicated  that providing  veterinary                                                                    
care   in   rural   areas   was   fiscally   difficult   for                                                                    
veterinarians.  The  House   Labor  and  Commerce  Committee                                                                    
committed  to meet  during the  interim to  address possible                                                                    
options  and formulate  recommendations for  improving rural                                                                    
veterinary care. The  board sunset June 30,  2017 and needed                                                                    
approval to continue its licensing functions in the state.                                                                      
                                                                                                                                
9:12:22 AM                                                                                                                    
                                                                                                                                
Representative  Wilson ascertained  that  the  board was  in                                                                    
arrears   for   $25.8   thousand   and   noted   the   audit                                                                    
recommendation to reduce fees.  She wondered how the deficit                                                                    
was  created. Representative  Kito  spoke  to the  bi-annual                                                                    
license  renewal cycle  affecting the  board's balance  each                                                                    
year.  The Department  of Commerce,  Community and  Economic                                                                    
Development  (DCCED)  were  required  to  review  a  board's                                                                    
accounting each  year and adjust  fees every other  year, or                                                                    
each   biennium,   to   keep   reserves   close   to   zero.                                                                    
Representative Wilson asked whether  increasing fees was one                                                                    
of  the audit  findings.  Representative  Kito deferred  the                                                                    
answer to the department.                                                                                                       
                                                                                                                                
9:14:22 AM                                                                                                                    
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE  AUDIT, summarized  the findings  of the  audit.                                                                    
She  reported that  "the board  is serving  in the  public's                                                                    
interest   by    effectively   licensing    and   regulating                                                                    
veterinarians  and veterinary  technicians" and  recommended                                                                    
the maximum allowable extension of  8 years. She referred to                                                                    
page 7 of the audit and cited the only recommendation:                                                                          
                                                                                                                                
     "The board  chair should review  the annual  report for                                                                    
     accuracy  and completeness  before final  submission to                                                                    
     the  Department  of  Commerce, Community  and  Economic                                                                    
     Development."                                                                                                              
                                                                                                                                
Ms.  Curtis indicated  that  the  department staff  examiner                                                                    
erroneously included  information from a different  board in                                                                    
the board's  annual report and  submitted the report  on the                                                                    
board's  behalf  without  review  by the  board  chair.  She                                                                    
referred to  a chart on page  5 of the audit  (copy on file)                                                                    
that depicted the  total licenses issued from  FY 13 through                                                                    
February 2016 and noted a  57 percent increase in licensees.                                                                    
She directed attention  to a chart on page  6 containing the                                                                    
schedule  of revenues  and expenditures  from FY  13 through                                                                    
February 29,  2016. She explained that  at the end of  FY 13                                                                    
the  board  was  running  a   surplus  of  $108.8  thousand,                                                                    
resulting  in a  fee  reduction. Conversely,  the board  was                                                                    
currently  running   a  deficit   of  $25.8   thousand.  She                                                                    
determined that "overall" the board was well-run.                                                                               
                                                                                                                                
Representative Wilson asked about  a prior sunset audit that                                                                    
recommended  the  governor  fill  vacant board  seats  in  a                                                                    
timely manner.  Ms. Curtis responded that  Legislative Audit                                                                    
did not discover any extended vacancies.                                                                                        
                                                                                                                                
Co-Chair  Foster  noted  that  Co-Chair  Seaton  joined  the                                                                    
meeting.                                                                                                                        
                                                                                                                                
Representative   Wilson  requested   an   answer  from   the                                                                    
department  about how  the deficit  was  being handled.  She                                                                    
thought  that the  significant increase  in licensees  would                                                                    
result in a surplus rather than a deficit.                                                                                      
                                                                                                                                
9:18:07 AM                                                                                                                    
                                                                                                                                
JANEY   HOVENDEN,   DIRECTOR,  DIVISION   OF   CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE, COMMUNITY AND  ECONOMIC DEVELOPMENT, reported that                                                                    
fees  were  substantially  increased for  the  last  renewal                                                                    
period. The  veterinary license fees increased  from $300 to                                                                    
$500  and the  fees for  technicians increased  from $50  to                                                                    
$100.  The current  FY 17  second quarter  report ending  on                                                                    
December 13, 2017 reported a surplus of $25.3 thousand.                                                                         
                                                                                                                                
Co-Chair  Foster noted  that Representative  Coleen Sullivan                                                                    
Leonard, Representative Kito  and Representative Claman were                                                                    
present.                                                                                                                        
                                                                                                                                
9:19:19 AM                                                                                                                    
                                                                                                                                
Co-Chair Foster OPEND Public Testimony for HB 144.                                                                              
                                                                                                                                
9:19:41 AM                                                                                                                    
                                                                                                                                
RACHEL BERGNGARTT,  DOCTOR OF  VETRINARY MEDICINE  AND BOARD                                                                    
MEMBER,  related  that  the  board  engaged  in  "extensive"                                                                    
discussions over the  past year on ways  to improve services                                                                    
and remedy the budgetary  issues. She reminded the committee                                                                    
that  the   board  existed  to  license   veterinarians  and                                                                    
technicians  and  not  dictate  where  licensees  needed  to                                                                    
practice.  She  voiced  that options  for  rural  veterinary                                                                    
services existed. She  pointed out that the  board's job was                                                                    
to  enable  licensees to  practice  in  the areas  of  their                                                                    
choosing  and the  board never  denied a  license to  anyone                                                                    
appropriately  qualified  regardless  of what  area  of  the                                                                    
state they worked in. The  board did not track where Alaskan                                                                    
veterinarians practiced. She  communicated that private non-                                                                    
profits  like  the  The  Alaska  Veterinary  Rural  Outreach                                                                    
offered  spay, neuter,  and well  pet services  in over  200                                                                    
Alaskan communities. She furthered  that the board offered a                                                                    
courtesy   license   for  out-of-state   veterinarians   for                                                                    
approximately $75  to veterinarians who travel  to Alaska to                                                                    
assist  Alaskan  veterinarians  on a  temporary  basis.  She                                                                    
indicated  there  were  over 30  out-of-state  veterinarians                                                                    
that helped with the Iditarod.                                                                                                  
9:24:24 AM                                                                                                                    
                                                                                                                                
ERIC   JAYNE,   DOCTOR    OF   VETERINARIAN,   HAWAII   (via                                                                    
teleconference), asserted  that the  board had  attempted to                                                                    
control  veterinary services  in  rural  Alaska through  the                                                                    
provisions  that allowed  non-profit groups  to work  in the                                                                    
state. He communicated  that the board offered  two types of                                                                    
temporary licenses  that allowed  out-of-state veterinarians                                                                    
to practice  in Alaska. One  type, good  for a period  of 60                                                                    
days,  was  called  "a temporary  permit"  used  for  relief                                                                    
veterinarians.  The temporary  permit was  offered at  a low                                                                    
cost, easy  to apply  for, did  not require  board approval,                                                                    
and did  not limit the  scope of  practice. The other  was a                                                                    
"special  event courtesy  license." He  maintained that  the                                                                    
board inserted  a provision that allowed  veterinarians from                                                                    
non-profit spay  neuter groups from out-of-state  to perform                                                                    
services  in  communities  off the  road  system  under  the                                                                    
license. He  contended that  the courtesy  licensing process                                                                    
was  very   arduous,  and  he   discovered  that   only  two                                                                    
veterinarians applied for the  license. He reported that the                                                                    
fee was  large, the license  was subject to  board approval,                                                                    
and limited to  only spay and neuter  services. He currently                                                                    
worked for  8 spay-neuter clinics. He  ascertained that many                                                                    
other veterinarians from  out-of-state would volunteer their                                                                    
services  in  rural Alaska  if  they  felt welcomed  by  the                                                                    
board.  He  believed  the   board's  special  event  license                                                                    
provisions  inhibited non-profits  from  operating in  rural                                                                    
Alaska and  that the board  wanted to protect  the financial                                                                    
interest of Alaskan veterinarians.  He also pointed out that                                                                    
the  cost  for  the  lack   of  rural  veterinary  care  was                                                                    
"tremendous"  and "spent  unnecessarily."  He  cited that  7                                                                    
children  were  mauled to  death  since  1994 in  the  Yukon                                                                    
Kuskokwim Delta.  He spoke  of hundreds  of bite  wounds and                                                                    
the  associated  costs  that  were  treated  using  Medicaid                                                                    
dollars.  He maintained  that there  were several  different                                                                    
policy  changes the  board could  implement to  mitigate the                                                                    
problem.  He  recommended allowing  a  rural  member on  the                                                                    
board.                                                                                                                          
                                                                                                                                
Co-Chair Foster CLOSED Public Testimony.                                                                                        
                                                                                                                                
Co-Chair  Foster  indicated  that  amendments  were  due  on                                                                    
Friday, April 7, 2017.                                                                                                          
                                                                                                                                
HB  144  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 137                                                                                                            
                                                                                                                                
     "An Act  redesignating the Alaska State  Council on the                                                                    
     Arts   as  a   public   corporation  and   governmental                                                                    
     instrumentality of  the state; defining the  powers and                                                                    
     duties  of  the  Alaska  State  Council  on  the  Arts;                                                                    
     providing  exemptions  from  certain statutes  for  the                                                                    
     Alaska  State Council  on the  Arts; making  conforming                                                                    
     amendments; and providing for an effective date."                                                                          
                                                                                                                                
9:32:11 AM                                                                                                                    
                                                                                                                                
MS.  KRANENDONK,  STAFF,  REPRESENTATIVE  HARRIET  DRUMMOND,                                                                    
provided a  brief summary  of the bill  by reading  from the                                                                    
sponsor statement as follows:                                                                                                   
                                                                                                                                
     House  Bill  137   quasi-privatizes  the  Alaska  State                                                                    
     Council on  the Arts  (ASCA) by  restructuring it  as a                                                                    
     public  corporation  in  order  to  help  the  ASCA  to                                                                    
     continue  its work  with self-employed  Alaskan artists                                                                    
     and  art  businesses  during these  challenging  fiscal                                                                    
     times. This new status will  allow the ASCA to increase                                                                    
     its  ability to  leverage  funds from  non-governmental                                                                    
     contributors and better adapt  to the shifting economic                                                                    
     climate.  This   effort  responds  to   the  widespread                                                                    
     interest in governmental entities,  as much as they are                                                                    
     able, to at least  partially privatize their operations                                                                    
     and increase their operating efficiency.                                                                                   
                                                                                                                                
Representative   Wilson   wanted    confirmation   that   no                                                                    
additional state funding was appropriated  for the bill. Ms.                                                                    
Kranendonk replied  that the bill reallocated  the funds but                                                                    
did not  add any funding.  She noted that  current employees                                                                    
would be reclassified as exempt.                                                                                                
                                                                                                                                
Co-Chair  Foster indicated  there  were  no amendments  from                                                                    
committee members.                                                                                                              
                                                                                                                                
9:34:23 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara reviewed  the associated  fiscal note  from                                                                    
Department of  Education and  Early Development  (DEED): FN2                                                                    
(EED). He noted that the  appropriation was in the amount of                                                                    
$2.768 million in FY 2018.  He read the breakdown of funding                                                                    
sources  and noted  that  he was  unfamiliar  with the  AAIP                                                                    
fund.                                                                                                                           
9:36:17 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:38:31 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair Gara clarified that AIPP  stood for Art in Public                                                                    
Places. He  moved to  the second new  fiscal note  from DEED                                                                    
allocated  to   ASCA.  He  related  that   the  fiscal  note                                                                    
transferred the funding  to the new Alaska  State Council on                                                                    
the Arts' public corporation.                                                                                                   
                                                                                                                                
Co-Chair Foster  invited Mr. Painter  to clarify  the fiscal                                                                    
notes.                                                                                                                          
                                                                                                                                
ALEXEI  PAINTER,  ANALYST,   LEGISLATIVE  FINANCE  DIVISION,                                                                    
explained that creating a public  corporation meant ASCA was                                                                    
a separate legal entity from  the state, which required that                                                                    
the appropriation had its  own component. The administration                                                                    
was  prohibited  from  transferring  money  to  and  from  a                                                                    
corporation.  Fiscal note  number 2:  FN2 (EED)  deleted the                                                                    
funding from  the existing appropriation and  moved the same                                                                    
funding to the  new appropriation. He stated  that there was                                                                    
no net change in the funding.                                                                                                   
                                                                                                                                
9:38:31 AM                                                                                                                    
                                                                                                                                
Representative  Wilson  asked  whether the  money  could  be                                                                    
reappropriated  or if  the fund  was dedicated.  Mr. Painter                                                                    
responded that  the fund was  not dedicated, but  a transfer                                                                    
of any  money within  the appropriation was  restricted. The                                                                    
legislature retained the ability  to appropriate the funding                                                                    
as it desired.                                                                                                                  
                                                                                                                                
9:39:19 AM                                                                                                                    
                                                                                                                                
BEN  BROWN,  CHAIRMAN, ALASKA  STATE  COUNCIL  ON THE  ARTS,                                                                    
confirmed   that   it   would   remain   the   legislature's                                                                    
prerogative,  under  the  Executive Budget  Act  whether  to                                                                    
appropriate funding for the council.                                                                                            
                                                                                                                                
Co-Chair  Seaton MOVED  to report  HB 137  out of  Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
notes.                                                                                                                          
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
HB  137 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation and with  two new fiscal impact  notes by the                                                                    
House Finance Committee for the  Department of Education and                                                                    
Early Development.                                                                                                              
                                                                                                                                
9:41:12 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:41:34 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster indicated that Representative Guttenberg                                                                        
had joined the meeting.                                                                                                         
                                                                                                                                
HOUSE BILL NO. 146                                                                                                            
                                                                                                                                
     "An  Act imposing  a school  tax on  net earnings  from                                                                    
     self-employment  and  wages;   relating  to  a  payment                                                                    
     against  the   school  tax  from  the   permanent  fund                                                                    
     dividend disbursement;  and providing for  an effective                                                                    
     date."                                                                                                                     
                                                                                                                                
9:41:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MATT CLAMAN, BILL SPONSOR, read the sponsor                                                                      
statement:                                                                                                                      
                                                                                                                                
     Good morning members of the  Committee, for the record,                                                                    
     my  name   is  Matt   Claman,  and   I  am   the  State                                                                    
     Representative   for   House   District  21   in   West                                                                    
     Anchorage. I  would like to  thank you all  for hearing                                                                    
     House Bill 146.                                                                                                            
                                                                                                                                
     Alaska faces  major financial  challenges. Our  goal in                                                                    
     proposing  House   Bill  146,   a  School  Tax,   is  a                                                                    
     responsible action  plan to meet those  challenges. The                                                                    
     Alaska Constitution,  Article VII, Sec. 1  requires the                                                                    
     legislature  to "establish  and  maintain  a system  of                                                                    
     public  school." The  public supports  a strong  public                                                                    
     school system, and an investment  in our students is an                                                                    
     investment in our future.                                                                                                  
     When  asked  about  the possibility  of  a  broad-based                                                                    
     school tax, many people wanted  to know what such a tax                                                                    
     would look  like. The School Tax  in HB 146 sets  a tax                                                                    
     based on  adjusted gross income on  federal tax returns                                                                    
     for  every  person  who earns  income  in  Alaska.  All                                                                    
     Alaskans and out-of-state residents  who work in Alaska                                                                    
     would help solve our  financial challenges. The minimum                                                                    
     tax would  be $100 a  year, for those who  make $20,000                                                                    
     or less. In this way, the  school tax is similar to the                                                                    
     school  head  tax-everyone  contributes. The  tax  then                                                                    
     increases on  a graduated scale based  on income. Those                                                                    
     making between $50,000  and $75,000 a year  would pay a                                                                    
     school tax  of $750.   The  revenue collected  from the                                                                    
     school  tax  would  be  designated  to  support  public                                                                    
     education in  Alaska. It is  not a dedicated  tax fund,                                                                  
     which would  violate our  constitution. (Because  it is                                                                    
     well below  the budget amount,  there would be  no need                                                                    
     to argue the designation as well.)                                                                                         
                                                                                                                                
     The  values of  the tax  range  from 1%  in the  lowest                                                                    
     bracket  to 3.4%  at the  uppermost  bracket. There  is                                                                    
     also  a  cap  on  the  uppermost  level,  allowing  the                                                                    
     highest earners to reinvest in  the economy and support                                                                    
     a positive investment climate.                                                                                             
                                                                                                                                
     We  based  our  values   off  a  $1000  permanent  fund                                                                    
     dividend.  Everyone   is  able  to   contribute,  while                                                                    
     individuals  who  depend on  the  PFD  still receive  a                                                                    
     reasonable portion. To make payment  of the tax simple,                                                                    
     the bill  includes a provision  allowing use  of future                                                                    
     Permanent Fund Dividends to pay the tax.                                                                                   
                                                                                                                                
     I would  like to close  by saying that this  school tax                                                                    
     bill responds  to public concern  about the  funding of                                                                    
     education  in challenging  times. It  is a  transparent                                                                    
     way  to produce  new revenue  and create  a responsible                                                                    
     action  plan for  Alaska. At  full implementation,  the                                                                    
     school  tax bill  is projected  to raise  $540 million-                                                                    
     approximately  one  third  of  the  state  funding  for                                                                    
     education. We  believe that  if the  public has  a more                                                                    
     direct  investment  in  funding  education,  they  will                                                                    
     become more involved in the  education that we deliver.                                                                    
     The school tax is not  a proposal to increase education                                                                    
     funding. The intent  is to raise revenue  to help close                                                                    
     the budget  deficit, designate  those funds  to support                                                                    
     education,  and reduce  the  undesignated general  fund                                                                    
     appropriation  for  education  on  a  dollar-for-dollar                                                                    
     basis.                                                                                                                     
                                                                                                                                
9:44:49 AM                                                                                                                    
                                                                                                                                
OWEN PHILLIPS, STAFF, REPRESENTATIVE  CLAMAN, noted that the                                                                    
only change between the sponsor  substitute and the original                                                                    
bill was  in the title.  He relayed  that the old  title did                                                                    
not include out-of-state residents or specify income.                                                                           
                                                                                                                                
Mr. Phillips reviewed the sectional analysis:                                                                                   
                                                                                                                                
     Section 1:                                                                                                                 
                                                                                                                                
     Section 2: AS 43.45.011 School tax imposed; payment by                                                                     
     dividend:                                                                                                                  
                                                                                                                                
         Adds new chapter: Chapter 45. School Tax.                                                                              
                                                                                                                                
          Adds new section AS 43.45.011:                                                                                        
                                                                                                                                
          a) Tax imposed on adjusted gross income (AGI) of:                                                                     
          (1) residents and (2) non-residents with income                                                                       
          from in-state source                                                                                                  
          b) Lists tax liability for individuals based on                                                                       
          tiered AGI levels                                                                                                     
          c) Stipulates that                                                                                                    
          (1) the AGI of                                                                                                        
               (A)  a  resident  is the  total  AGI  of  the                                                                    
               resident                                                                                                         
               (B)  a nonresident  or part-year  resident is                                                                    
               the amount  attributable to  a source  in the                                                                    
               state                                                                                                            
          (2) the DOR shall assess the tax due on the   AGI                                                                     
          of                                                                                                                    
               (A) individuals, for individual returns                                                                          
               (B)   2+   individuals   for   joint   filing                                                                    
               (including dependents)                                                                                           
               (C) individual, if return is not filed                                                                           
               d) Tasks the DOR  with adopting procedures to                                                                    
               allow  use  of PFD  to  pay  the school  tax,                                                                    
               including  refunding  amounts  exceeding  the                                                                    
               tax                                                                                                              
               e) Defines regulations for the tax payer                                                                         
               f) The department shall adopt regulations:                                                                       
                    (1) Delinquent payment annual interest                                                                      
                    rate is 18%                                                                                                 
                    (2) Establish fee of up to $2,500 for                                                                       
                    the cost of collecting delinquent tax                                                                       
                    (3) Allow for a 90-day extension past                                                                       
                    due date (at the DOR's discretion)                                                                          
                    (4) Determine AGI subject to tax for                                                                        
                    joint filers if one of the filers is                                                                        
                    not a resident of the state                                                                                 
                    g) Tax penalties shall be deposited                                                                         
                   into the general fund                                                                                        
                    h) "adjusted gross income" has the                                                                          
                    meaning given in 26 U.S.C. 62                                                                               
                                                                                                                                
     Section 3: Uncodified Law: Amended: REGULATIONS. DOR                                                                       
     may adopt regulations to implement section 2                                                                               
                                                                                                                                
    Section 4: Effective Date: Section 3 - Immediately                                                                          
                                                                                                                                
     Section 5: Effective Date: All other sections - Jan 1,                                                                     
     2018                                                                                                                       
                                                                                                                                
Mr. Phillips  delineated that the effective  date in Section                                                                    
5 included the tax component of the bill.                                                                                       
                                                                                                                                
9:48:10 AM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton  cited  page  2,   line  26  and  read  the                                                                    
following:                                                                                                                      
                                                                                                                                
     …an individual if the individual does not file a tax                                                                       
     return…                                                                                                                    
                                                                                                                                
Co-Chair  Seaton  wondered  how adjusted  gross  income  was                                                                    
determined  for  someone who  did  not  file a  federal  tax                                                                    
return. Representative  Claman responded that  the provision                                                                    
would   be   subject   to  Department   of   Revenue   (DOR)                                                                    
regulations.                                                                                                                    
                                                                                                                                
Representative  Guttenberg asked  what  the House  Education                                                                    
Committee's  feedback or  actions were  regarding the  bill.                                                                    
Representative   Claman  responded   that   there  were   no                                                                    
amendment made in the education committee.                                                                                      
                                                                                                                                
9:49:26 AM                                                                                                                    
                                                                                                                                
Representative   Pruitt  mentioned   that  another   revenue                                                                    
measure was being considered in  the House. He asked whether                                                                    
the  bill   would  be   an  addition   to  an   income  tax.                                                                    
Representative  Claman responded  that  the legislation  was                                                                    
intended as an alternative  to an income tax. Representative                                                                    
Pruitt  asked whether  the bill  was another  version of  an                                                                    
income   tax.  Representative   Claman   responded  in   the                                                                    
negative.  He  clarified  that the  school  tax  combined  a                                                                    
capped head  tax with  graduated rates  between the  low and                                                                    
high ends of  income. He delineated that the  tax included a                                                                    
mandatory minimum  on the low end  and a cap on  the maximum                                                                    
payment   and   was   not    considered   an   income   tax.                                                                    
Representative  Pruitt countered  that the  tax fell  within                                                                    
the definition  of an income  tax but included  the language                                                                    
that the  revenue "may" be appropriated  for education. Rep.                                                                    
Claman declined to "argue the policy question."                                                                                 
                                                                                                                                
Representative Grenn  cited page  2, lines  4 through  13 of                                                                    
the  bill. He  asked what  formula  was used  to create  the                                                                    
income  brackets.  Representative  Claman  replied  that  he                                                                    
began with the premise to  establish a minimum tax, from the                                                                    
desire  that everyone  should be  part of  the solution.  He                                                                    
assumed that based on a  $1000 PFD (Permanent Fund Dividend)                                                                    
it was  reasonable to  request a  $100 minimum  payment. The                                                                    
other   brackets   were   developed  similarly;   with   the                                                                    
consideration that,  certain income levels should  receive a                                                                    
certain portion  of their income  and retain the  ability to                                                                    
also  contribute above  the limit.  He considered  "economic                                                                    
levels of  income at which  the statistical  likelihood that                                                                    
the PFD was  critical to their family  economics became less                                                                    
important."                                                                                                                     
                                                                                                                                
9:52:33 AM                                                                                                                    
                                                                                                                                
Representative  Wilson asked  about  using  a percentage  of                                                                    
income versus a  flat fee. She provided an  example from the                                                                    
tax brackets. Representative Claman  responded that the goal                                                                    
of  the bracket  fees  was  to create  clarity  and make  it                                                                    
easier for the public to  understand what they were expected                                                                    
to  pay versus  calculating percentages.  He agreed  that by                                                                    
using step  increments a taxpayer  at the lower limits  of a                                                                    
higher  bracket  would pay  much  more  in relation  to  the                                                                    
previous bracket versus using a  percentage of income but at                                                                    
the  expense  of  clarity and  a  straightforward  approach.                                                                    
Representative Wilson  asked whether the  representative had                                                                    
information  regarding the  "correlation between  the public                                                                    
paying the  fee and how  it would impact what  was happening                                                                    
in the  schools." Representative  Claman did  not understand                                                                    
her  question.  Representative  Wilson wondered  if  he  had                                                                    
accessed  information  from  other states  that  employed  a                                                                    
similar tax  on correlation between the  tax and educational                                                                    
outcomes.  Representative  Claman  responded  that  that  he                                                                    
concluded  from  anecdotal  information that  the  community                                                                    
felt that the more they  invested in education the more they                                                                    
would become  interested in outcomes.  Representative Wilson                                                                    
did not agree  because the system was not the  same for all;                                                                    
not all  children go  to public school  and she  doubted the                                                                    
correlation. She  asked for further data  from other states.                                                                    
Representative  Claman remarked  that no  other state  had a                                                                    
school tax similar to the proposal  in HB 146 and doubted he                                                                    
could provide any further information.  He believed that all                                                                    
segments  of  the community  were  concerned  about how  the                                                                    
state invested in public education.                                                                                             
                                                                                                                                
9:56:26 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara thanked  the  sponsor  for introducing  the                                                                    
bill. He asked whether  Rep. Claman supported an alternative                                                                    
way  to raise  revenue without  taxing  the PFD  as part  of                                                                    
income.  Representative  Claman  replied that  the  PFD  was                                                                    
included in adjusted  gross income on the  federal level. He                                                                    
expressed  concerns  about  complicating the  bill  for  the                                                                    
public  as exceptions  and "layers"  were added.  Vice-Chair                                                                    
Gara asked  whether the  income and tax  levels in  the bill                                                                    
were adjusted  over time. Representative Claman  wondered if                                                                    
he was  asking about inflation adjustments.  Vice-Chair Gara                                                                    
responded affirmatively.  Representative Claman  answered in                                                                    
the negative.                                                                                                                   
                                                                                                                                
Co-Chair  Foster noted  Representative  Thompson had  joined                                                                    
the meeting.                                                                                                                    
                                                                                                                                
Vice-Chair Gara  asked whether single  and joint  tax payers                                                                    
with  or   without  dependents  all   paid  the   same  tax.                                                                    
Representative Claman  responded that  the tax was  based on                                                                    
the return versus on an individual basis.                                                                                       
                                                                                                                                
9:59:22 AM                                                                                                                    
                                                                                                                                
Co-Chair Seaton referred  to page 2 lines 26  through 30 and                                                                    
read the following:                                                                                                             
                                                                                                                                
     (C)  an individual, if the individual does not file a                                                                      
     federal income tax return.                                                                                                 
                                                                                                                                
     (d)    The   department    shall   adopt    regulations                                                                    
     establishing procedures for  an individual eligible for                                                                    
     a dividend under AS 43.23.005  to direct the department                                                                    
     to hold all or a part  of the amount of the dividend to                                                                    
     pay the tax due under this section.                                                                                        
                                                                                                                                
Co-Chair  Seaton asked  whether  an individual  who did  not                                                                    
file income  tax had an  adjusted gross income  and wondered                                                                    
how much  money would  be generated  under the  $100 minimum                                                                    
tax from individuals who only  get a PFD for income purposes                                                                    
and  do  not  file  a federal  form.  Representative  Claman                                                                    
responded  that   the  fiscal  note  was   prepared  by  the                                                                    
department using proprietary  information regarding how many                                                                    
tax returns were filed for  each income bracket. He deferred                                                                    
to  DOR for  additional information.  He furthered  that the                                                                    
department had  information regarding  who filed for  a PFD.                                                                    
Therefore, it would  be known to the department  if a person                                                                    
had not filed a tax return but filed for a PFD.                                                                                 
                                                                                                                                
10:01:59 AM                                                                                                                   
                                                                                                                                
Representative Wilson ascertained that  the state would take                                                                    
$100    minimum   tax    from   everyone    even   children.                                                                    
Representative Claman  answered that it depended  on how the                                                                    
family  chose  to manage  their  children's  PFD income.  He                                                                    
furthered  that if  parents  included  their children's  PFD                                                                    
income on their return the only  school tax due was based on                                                                    
the  parent's tax  return.  Representative Wilson  responded                                                                    
that the bill  did not reference tax  returns; only adjusted                                                                    
gross  income.  Representative  Claman pointed  to  page  2,                                                                    
lines 24 and 25 and read the following:                                                                                         
                                                                                                                                
     (B)  two or more individuals, including dependents, if                                                                     
     those individuals file one federal income tax return                                                                       
     together;                                                                                                                  
                                                                                                                                
Representative  Claman specified  that the  language applied                                                                    
to   the  scenario   in   question.  Representative   Wilson                                                                    
referenced page 2, lines 26 and 27 and read the following:                                                                      
                                                                                                                                
     (C)  an individual, if the individual does not file a                                                                      
     federal income tax return.                                                                                                 
                                                                                                                                
Representative  Wilson  guessed  that most  individuals  not                                                                    
filing  had a  disability or  incomes so  low they  were not                                                                    
required to  file a return  and would be difficult  to track                                                                    
if not  for the PFD  data base. She deemed  that individuals                                                                    
who  did not  file  a return  or  file for  a  PFD would  be                                                                    
"almost  impossible"  to  track. Representative  Claman  was                                                                    
unfamiliar  with the  area  of tax  law  she was  discussing                                                                    
regarding disability  benefits. He  agreed that it  would be                                                                    
arduous to  find people who  did not  file a return  or file                                                                    
for a PFD.                                                                                                                      
10:05:07 AM                                                                                                                   
                                                                                                                                
Representative Pruitt  asked whether the intent  was for the                                                                    
PFD  to pay  the  tax or  if an  individual  would "write  a                                                                    
check,"   since  there   was   no   withholding  of   funds.                                                                    
Representative Claman  replied that a payroll  tax component                                                                    
was not included to minimize  the administrative expense. He                                                                    
explained that non-payment of the  tax was subject to a high                                                                    
interest rate (18 percent) and  fines up to $2.5 thousand to                                                                    
incentivize timely  payment for  those in the  higher income                                                                    
brackets.  He  wanted  the  tax collected  once  a  year  to                                                                    
provide an  easier administrative process for  the state. He                                                                    
envisioned that the  tax could be paid for with  the PFD for                                                                    
tax  payers  in  lower  income brackets.  The  goal  was  to                                                                    
fashion the  tax similar to  a property  tax. Representative                                                                    
Pruitt  thought that  the assumption  was  made that  people                                                                    
could manage  their money  to have  enough when  the payment                                                                    
was due.  He thought  a yearly  payment was  challenging for                                                                    
people who didn't budget their money adequately.                                                                                
                                                                                                                                
10:08:36 AM                                                                                                                   
                                                                                                                                
Vice-Chair   Gara  recognized   that   there  were   several                                                                    
different policies  under consideration.  He liked  that the                                                                    
bill clearly defined  how much people would  be taxed versus                                                                    
a tax  based on percentages. Representative  Claman provided                                                                    
an example  from personal experience  to illustrate  how the                                                                    
fees and  penalties would  encourage payment  compliance. He                                                                    
hoped that the  department would graduate the  fines so that                                                                    
those  that  owe more  paid  higher  fines. He  voiced  that                                                                    
collection issues occurred for any tax.                                                                                         
                                                                                                                                
10:10:34 AM                                                                                                                   
                                                                                                                                
Co-Chair Seaton asked Mr. Alper  about the administration of                                                                    
the  tax  and  wondered  whether the  bill  provided  enough                                                                    
guidance.                                                                                                                       
                                                                                                                                
10:10:55 AM                                                                                                                   
                                                                                                                                
KEN ALPER,  DIRECTOR, TAX  DIVISION, DEPARTMENT  OF REVENUE,                                                                    
explained  that  the bill  had  a  blanket authorization  to                                                                    
write  regulations. He  stated  that  many technical  issues                                                                    
were not  addressed in the bill  but could be dealt  with in                                                                    
regulation.  He spoke  to the  issue of  non-resident income                                                                    
generated  in the  state and  requested more  definition and                                                                    
additional  language   should  the   bill  advance   in  the                                                                    
legislative process. He believed  that lawsuits would ensue,                                                                    
if  the bill  was  adopted, regarding  what was  effectively                                                                    
definable through  regulation versus statute. He  noted that                                                                    
enough  guidance was  contained in  the bill  concerning tax                                                                    
forms, tax  rates, and defining  tax payers.  The department                                                                    
would fill in the details through regulations.                                                                                  
                                                                                                                                
Co-Chair Seaton  reiterated his  question regarding  page 2,                                                                    
line 26 of the bill, dealing  with an individual who did not                                                                    
file a federal tax return  but had adjusted gross income. He                                                                    
asked  how  the  department  would  administer  the  tax  to                                                                    
Alaskan   residents.  Mr.   Alper  guessed   that  all   PFD                                                                    
recipients not included in a  filed tax return would owe the                                                                    
$100  minimum  tax. The  threshold  for  a larger  household                                                                    
exempted from  filing a tax  return was under  $20 thousand;                                                                    
and these households  could fall under the  higher $250 tax.                                                                    
He surmised that the department  would rely on the 1040 form                                                                    
for the administration  of the tax and added  that a process                                                                    
would be necessary to identify non-filers.                                                                                      
                                                                                                                                
10:14:42 AM                                                                                                                   
                                                                                                                                
BRANDON   S.   SPANOS,   DEPUTY  DIRECTOR,   TAX   DIVISION,                                                                    
DEPARTMENT OF REVENUE (via  teleconference), noted that each                                                                    
year, there  were certain individuals  that just  refused to                                                                    
file a  tax return  or did not  for other  reasons. However,                                                                    
employers  were required  to file  a W-2  that would  act as                                                                    
documentation of  income for the department.  The department                                                                    
would  use  the W-2  information  in  coordination with  the                                                                    
Internal Revenue Service (IRS) to determine assessments.                                                                        
                                                                                                                                
10:15:49 AM                                                                                                                   
                                                                                                                                
Co-Chair Seaton  referenced the  following language  on page                                                                    
2, lines  1 and  2 and page  2, lines 20  through 27  of the                                                                    
bill:                                                                                                                           
                                                                                                                                
     (1) resident individual; and                                                                                               
     (2) nonresident and part-year resident individual with                                                                     
     income from a source in the state.                                                                                         
                                                                                                                                
     (2)  the department shall assess the tax due on the                                                                        
     adjusted gross income of                                                                                                   
          (A) an individual, if the individual files a                                                                          
          federal   income   tax    return   only   on   the                                                                    
          individual's own behalf;                                                                                              
          (B)   two    or   more    individuals,   including                                                                    
          dependents, if those individuals file one federal                                                                     
          income tax return together;                                                                                           
          (C) an individual, if the individual does not                                                                         
          file a federal income tax return.                                                                                     
                                                                                                                                
Co-Chair Seaton  queried whether  the language  ensured that                                                                    
the tax was  applied to tax returns and  not each individual                                                                    
included in the  tax return. Mr. Alper  interpreted that the                                                                    
first  section  allowed  a  joint  filer  to  pay  a  single                                                                    
household  tax. He  surmised that  DOR  would interpret  the                                                                    
language in the same manner.                                                                                                    
                                                                                                                                
Mr. Spanos  added that federal  rules required that  a child                                                                    
file  their own  return in  some cases.  He thought  further                                                                    
definitions would  be beneficial  clarifying when  the state                                                                    
would also require a dependent to pay their own school tax.                                                                     
                                                                                                                                
10:18:56 AM                                                                                                                   
                                                                                                                                
Representative  Guttenberg referred  to line  2, page  2 and                                                                    
inquired how crew shares fit  into the definition of income.                                                                    
He  thought that  the bill  gave  the department  "a lot  of                                                                    
leeway to  make decisions and write  regulations." Mr. Alper                                                                    
suggested  that   DOR  would   have  to   craft  regulations                                                                    
specifically   for   S  Corporations,   partnerships,   sole                                                                    
proprietorships, and  contract work. He furthered  that crew                                                                    
shares  qualified as  a 1099  contractor  when received  for                                                                    
work done  in Alaska  or paid by  an Alaska  owned business.                                                                    
The  department would  have the  non-resident crew  member's                                                                    
tax   information,  apply   formulas   from  regulation   to                                                                    
determine the  Alaskan portion of the  adjusted gross income                                                                    
for  tax   assessment  purposes.  He  reiterated   that  the                                                                    
question   was  whether   the   regulation  language   could                                                                    
withstand  a  court   challenge.  Representative  Guttenberg                                                                    
wondered  if the  division would  have enough  authority and                                                                    
guidance  to  make  the  decisions  required  to  write  the                                                                    
regulations.   Mr.  Alper   replied  that   enough  guidance                                                                    
existed,  but he  was uncertain  whether DOR  had the  legal                                                                    
authority. He wanted to consult  with the state's attorneys.                                                                    
He cautioned  that taxes were prohibited  from being imposed                                                                    
via  regulation  and  he  was  uncertain  how  specific  the                                                                    
regulations could be written.                                                                                                   
                                                                                                                                
10:22:08 AM                                                                                                                   
                                                                                                                                
Co-Chair Seaton referred  to Page 2, lines 12 and  13 of the                                                                    
legislation and read the following:                                                                                             
                                                                                                                                
     (8) $200,000 or more, but less than $250,000, the tax                                                                      
     is $6,500 a year;                                                                                                          
     (9) $250,000 or more, the tax is $8,500 a year.                                                                            
                                                                                                                                
Co-Chair Seaton  asked whether someone  who made  $5 million                                                                    
per  year would  pay  $8.5 thousand  in tax.  Representative                                                                    
Claman confirmed  that the  statement was  correct. Co-Chair                                                                    
Seaton  inquired  if  an  individual  with  income  at  $251                                                                    
thousand would pay $2 thousand  more than an individual with                                                                    
income of  $248 thousand. Representative Claman  answered in                                                                    
the affirmative.                                                                                                                
                                                                                                                                
Vice-Chair  Gara  favored  the provision  that  the  revenue                                                                    
would be deposited in the  Education Fund. He noted that the                                                                    
language in the bill used  the word "may" versus "shall" due                                                                    
to  the  constitutional   prohibition  on  dedicated  funds.                                                                    
Representative  Claman  confirmed  that  the  statement  was                                                                    
correct.                                                                                                                        
                                                                                                                                
Co-Chair Foster OPENED Public Testimony.                                                                                        
                                                                                                                                
10:23:42 AM                                                                                                                   
                                                                                                                                
PAUL   KENDALL,   SELF,  ANCHORAGE   (via   teleconference),                                                                    
provided public  testimony. He favored an  "open" discussion                                                                    
regarding the  bill. He spoke  against using  property taxes                                                                    
to pay  for any public employee's  salaries or compensation.                                                                    
He spoke to items and beliefs  outside of the context of the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Co-Chair   Foster  interrupted   to   clarify  that   public                                                                    
testimony was being  heard on HB 146.  Mr. Kendall continued                                                                    
to provide testimony unrelated to HB 146.                                                                                       
                                                                                                                                
Co-Chair Foster CLOSED Public Testimony.                                                                                        
                                                                                                                                
HB  146  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 31                                                                                                             
                                                                                                                                
     "An Act requiring the Department of Public Safety to                                                                       
     develop a tracking system and collection and                                                                               
     processing  protocol  for  sexual  assault  examination                                                                    
     kits;  requiring  law   enforcement  agencies  to  send                                                                    
     sexual assault  examination kits for testing  within 18                                                                    
     months  after collection;  requiring  an inventory  and                                                                    
     reports  on untested  sexual assault  examination kits;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
10:30:02 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  GERAN  TARR,  SPONSOR,  explained  that  the                                                                    
Committee Substitute  (CS) accomplished  three things:   The                                                                    
bill established  mandatory sexual assault training  for all                                                                    
law  enforcement  officials.   The  legislation  required  a                                                                    
statewide  audit  to  determine   the  "true"  inventory  of                                                                    
backlogged untested  sexual examination  kits. Third,  HB 31                                                                    
established  a  "gold  standard" in  reporting  options  for                                                                    
sexual assault.                                                                                                                 
                                                                                                                                
10:31:30 AM                                                                                                                   
                                                                                                                                
Co-Chair Foster MOVED to ADOPT Amendment 1.                                                                                     
                                                                                                                                
     Page 1, line 9, following "and":                                                                                           
     Insert "at least 12 hours of instruction regarding"                                                                        
                                                                                                                                
     Page 1, line 9, following "assault":                                                                                       
     Insert ":1."                                                                                                               
                                                                                                                                
     Page 3, lines 2 - 3:                                                                                                       
     Delete "16 years of age or older"                                                                                          
     Insert "18 years  of age or older and  not a vulnerable                                                                    
     adult"                                                                                                                     
                                                                                                                                
     Page 3, following line 24:                                                                                                 
     Insert a new bill section to read:                                                                                         
     "*  Sec. 5.  AS 18.68.020  is amended  by adding  a new                                                                    
     subsection to read:                                                                                                        
     (c)  In  this  section,   "vulnerable  adult"  has  the                                                                    
     meaning given in AS 47.24.900." 15                                                                                         
     Renumber the following bill sections accordingly. 17                                                                       
     Page 4, line 21:                                                                                                           
     Delete "Section 5"                                                                                                         
     Insert "Section 6" 21                                                                                                      
     Page 4, line 22:                                                                                                           
     Delete "sec. 6"                                                                                                            
     Insert "sec. 7"                                                                                                            
                                                                                                                                
Representative   Wilson   OBJECTED   for  the   purpose   of                                                                    
discussion.                                                                                                                     
                                                                                                                                
Representative Tarr  spoke to  the amendment.  She explained                                                                    
that the  amendment added more  specificity to the  bill and                                                                    
contained three  components. The first  provision delineated                                                                    
that the  training was  12 hours for  sexual assault  and 12                                                                    
hours  for  domestic  violence.  The  Department  of  Public                                                                    
Safety  (DPS)  supported  the amount  of  training  and  the                                                                    
fiscal  note  had factored  in  the  12-hour trainings.  She                                                                    
indicated  that   existing  statute  called   for  mandatory                                                                    
reporting of sexual assault for  anyone under the age of 18,                                                                    
which  was  considered sexual  abuse  of  a minor,  and  for                                                                    
vulnerable adults.  The second  piece of the  amendment made                                                                    
age changes to clarify and conform to the existing statute.                                                                     
                                                                                                                                
Representative  Wilson  cited  AS  47.24.900  regarding  the                                                                    
definition of  vulnerable adults. She wondered  who made the                                                                    
determination that  an individual was a  vulnerable adult in                                                                    
sexual   assault    cases.   She   asked    for   additional                                                                    
clarification for when the  classification of vulnerable was                                                                    
established. Representative Tarr  answered that a vulnerable                                                                    
adult  would  have  already  been  established  by  a  court                                                                    
process before the assault occurred.                                                                                            
                                                                                                                                
10:34:20 AM                                                                                                                   
                                                                                                                                
Representative   Wilson  asked   about   the  other   change                                                                    
regarding  a  minimum  of  12   hours  of  instruction.  She                                                                    
wondered whether  the amendment  clarified that  the 12-hour                                                                    
requirement  was mandated  for  both  domestic violence  and                                                                    
sexual     assault.     Representative    Tarr     responded                                                                    
affirmatively.                                                                                                                  
                                                                                                                                
Co-Chair Seaton  asked whether the  total hours  of training                                                                    
were 24 hours. Representative Tarr answered affirmatively.                                                                      
                                                                                                                                
Representative Wilson WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
There being NO OBJECTION, Amendment 1 was ADOPTED.                                                                              
                                                                                                                                
Vice-Chair Gara reviewed  the new zero fiscal  note from the                                                                    
Department of Public Safety.                                                                                                    
                                                                                                                                
Representative  Wilson   asked  about  the  24   hours.  She                                                                    
wondered whether the state already offered the training.                                                                        
                                                                                                                                
10:36:46 AM                                                                                                                   
                                                                                                                                
KELLY   HOWELL,   DIRECTOR,   DIVISION   OF   ADMINISTRATIVE                                                                    
SERVICES, DEPARTMENT  OF PUBLIC  SAFETY, indicated  that the                                                                    
training  was already  being provided  by the  Public Safety                                                                    
training academy.                                                                                                               
                                                                                                                                
10:37:16 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Gara  MOVED  to  report   CSHB  31(FIN)  out  of                                                                    
Committee  as amended  with  individual recommendations  and                                                                    
the accompanying fiscal note.                                                                                                   
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
CSHB 31(FIN) was REPORTED out  of committee with a "do pass"                                                                    
recommendation and with a new  zero fiscal note by the House                                                                    
Finance Committee for the Department of Public Safety.                                                                          
                                                                                                                                
Co-Chair  Foster  reviewed  the  agenda  for  the  following                                                                    
meeting.                                                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
10:38:30 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:38 a.m.                                                                                         
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB144 Legislative Audit.pdf HFIN 4/4/2017 9:00:00 AM
HB 144
HB144 Sponsor Statement.pdf HFIN 4/4/2017 9:00:00 AM
HB 144
HB144 Supporting Letters 032817.pdf HFIN 4/4/2017 9:00:00 AM
HB 144
HB146 Opposing Documents 3.27.17.pdf HFIN 4/4/2017 9:00:00 AM
HB 146
HB146 Opposing Document 3.27.17.PDF HFIN 4/4/2017 9:00:00 AM
HB 146
HB146 Sectional Analysis ver O 3.27.17.pdf HFIN 4/4/2017 9:00:00 AM
HB 146
HB146 Supporting Documents 3.27.17.pdf HFIN 4/4/2017 9:00:00 AM
HB 146
HB146 Sponsor Statement 3.27.17.pdf HFIN 4/4/2017 9:00:00 AM
HB 146
HB 31 Amendment 1.PDF HFIN 4/4/2017 9:00:00 AM
HB 31
Testimony Jayne HB 144 April 3.pdf HFIN 4/4/2017 9:00:00 AM
HB 144
HB31 - Supporting (040617).pdf HFIN 4/4/2017 9:00:00 AM
HB 31