Legislature(2005 - 2006)CAPITOL 106

04/04/2006 08:00 AM STATE AFFAIRS


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 496 CONTRIBUTIONS FROM PERM. FUND DIVIDENDS TELECONFERENCED
Moved CSHB 496(STA) Out of Committee
+= HB 461 LEGISLATIVE DISCLOSURES TELECONFERENCED
Heard & Held
+= HB 290 REQUIREMENTS FOR DRIVER'S LICENSE/I.D. TELECONFERENCED
Heard & Held
+= HB 438 INITIATIVE, REFERENDUM, RECALL PETITIONS TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
             HOUSE STATE AFFAIRS STANDING COMMITTEE                                                                           
                         April 4, 2006                                                                                          
                           8:07 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Paul Seaton, Chair                                                                                               
Representative Carl Gatto, Vice Chair                                                                                           
Representative Bob Lynn                                                                                                         
Representative Jay Ramras                                                                                                       
Representative Berta Gardner                                                                                                    
Representative Max Gruenberg                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Jim Elkins                                                                                                       
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 461                                                                                                              
"An  Act relating  to  disclosure to  the  Alaska Public  Offices                                                               
Commission  of  information  about  certain  income  received  as                                                               
compensation  for   personal  services  by   legislators,  public                                                               
members  of  the  Select Committee  on  Legislative  Ethics,  and                                                               
legislative directors  subject to  the provisions of  law setting                                                               
standards  of   conduct  for  legislative  branch   officers  and                                                               
employees; and providing for an effective date."                                                                                
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 290                                                                                                              
"An  Act relating  to  issuance of  identification  cards and  to                                                               
issuance of driver's licenses."                                                                                                 
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 496                                                                                                              
"An Act  relating to contributions from  permanent fund dividends                                                               
to certain  educational organizations  and to  certain charitable                                                               
organizations that provide a  positive youth development program,                                                               
workforce development,  aid to the  arts, or aid and  services to                                                               
the  elderly, low-income  individuals,  individuals in  emergency                                                               
situations,  disabled  individuals,  or individuals  with  mental                                                               
illness; and providing for an effective date."                                                                                  
                                                                                                                                
     - MOVED CSHB 496(STA) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 438                                                                                                              
"An Act relating to initiative, referendum, and recall                                                                          
petitions; and providing for an effective date."                                                                                
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 461                                                                                                                  
SHORT TITLE: LEGISLATIVE DISCLOSURES                                                                                            
SPONSOR(s): REPRESENTATIVE(s) GARDNER                                                                                           
                                                                                                                                
02/13/06       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/13/06       (H)       STA, JUD                                                                                               
03/30/06       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
03/30/06       (H)       Heard & Held                                                                                           
03/30/06       (H)       MINUTE(STA)                                                                                            
04/04/06       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
                                                                                                                                
BILL: HB 290                                                                                                                  
SHORT TITLE: REQUIREMENTS FOR DRIVER'S LICENSE/I.D.                                                                             
SPONSOR(s): REPRESENTATIVE(s) LYNN                                                                                              
                                                                                                                                
04/28/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/28/05       (H)       STA, JUD                                                                                               
03/09/06       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
03/09/06       (H)       -- Meeting Canceled --                                                                                 
03/16/06       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
03/16/06       (H)       Heard & Held                                                                                           
03/16/06       (H)       MINUTE(STA)                                                                                            
04/04/06       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
                                                                                                                                
BILL: HB 496                                                                                                                  
SHORT TITLE: CONTRIBUTIONS FROM PERM. FUND DIVIDENDS                                                                            
SPONSOR(s): STATE AFFAIRS                                                                                                       
                                                                                                                                
03/28/06       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/28/06       (H)       STA, FIN                                                                                               
04/04/06       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
BROOKE MILES, Executive Director                                                                                                
Alaska Public Offices Commission (APOC)                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the hearing on HB 461.                                                                    
                                                                                                                                
MATTHEW KERR                                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on behalf of himself in                                                                          
opposition to HB 290.                                                                                                           
                                                                                                                                
JAMES McCURTY                                                                                                                   
Kenai, Alaska                                                                                                                   
POSITION STATEMENT:  Testifying on behalf of himself during the                                                                 
hearing on HB 290.                                                                                                              
                                                                                                                                
DUANE BANNOCK, Director                                                                                                         
Division of Motor Vehicles                                                                                                      
Department of Administration                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the hearing on HB
290.                                                                                                                            
                                                                                                                                
KERRY HENNINGS, Driver Licensing                                                                                                
Director's Office                                                                                                               
Division of Motor Vehicles (DMV)                                                                                                
Department of Administration                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the hearing on HB
290.                                                                                                                            
                                                                                                                                
SHARON BARTON, Director                                                                                                         
Central Office                                                                                                                  
Permanent Fund Dividend Division                                                                                                
Department of Revenue                                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions during the hearing on HB
496.                                                                                                                            
                                                                                                                                
DIANE KAPLAN, President                                                                                                         
Rasmuson Foundation;                                                                                                            
Member                                                                                                                          
Operations Board, Four Acre Group                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the hearing on HB 496.                                                                    
                                                                                                                                
ROSEMARY HAGEVIG, Executive Director                                                                                            
Catholic Community Services (CCS)                                                                                               
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the hearing on HB 496.                                                                    
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  PAUL  SEATON  called  the  House  State  Affairs  Standing                                                             
Committee  meeting  to  order at  8:07:41  AM.    Representatives                                                             
Gatto,  Lynn, Gardner,  and Seaton  were present  at the  call to                                                               
order.    Representatives Ramras  and  Gruenberg  arrived as  the                                                               
meeting was in progress.                                                                                                        
                                                                                                                                
HB 461-LEGISLATIVE DISCLOSURES                                                                                                
                                                                                                                                
8:08:25 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON announced  that  the first  order  of business  was                                                               
HOUSE BILL NO. 461, "An Act  relating to disclosure to the Alaska                                                               
Public  Offices Commission  of information  about certain  income                                                               
received as  compensation for  personal services  by legislators,                                                               
public  members of  the Select  Committee on  Legislative Ethics,                                                               
and  legislative  directors  subject  to the  provisions  of  law                                                               
setting standards of conduct for  legislative branch officers and                                                               
employees; and providing for an effective date."                                                                                
                                                                                                                                
8:08:34 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER offered a synopsis  of HB 461, as sponsor.                                                               
She stated  that there  are disclosure laws  in place  related to                                                               
legislators.    She said,  however,  that  there is  a  loophole:                                                               
legislators  can report  income, but  they don't  have to  report                                                               
what  they did  for that  income.   She said  that is  incomplete                                                               
information  that  does  not  allow   the  voting  public  enough                                                               
information upon which to make  determinations about what kind of                                                               
work the legislature is doing.   That in turn, she added, affects                                                               
the  public's judgment  about legislators'  interests and  focus.                                                               
The proposed  legislation would  remove that  loophole, requiring                                                               
legislators to  describe "in  broad terms" the  work they  do and                                                               
the approximate amount of time spent on that work.                                                                              
                                                                                                                                
8:09:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO  asked Representative Gardner  to illustrate                                                               
the meaning of "disclosure in broad terms."                                                                                     
                                                                                                                                
8:10:12 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER  said, for example, if  a legislator owned                                                               
a  business  and  "had a  $10,000-a-year  support  contract  with                                                               
somebody," he/she would disclose that  amount, as well as saying,                                                               
"I provide  text support [and]  problem solving, and I  expect it                                                               
to take me five hours a month."                                                                                                 
                                                                                                                                
8:10:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO asked if it would  be enough to say, "I work                                                               
for an oil company,"  or if the person would have  to say, "I'm a                                                               
cook for the oil company," or  be even more specific and say what                                                               
meal he/she cooks.                                                                                                              
                                                                                                                                
REPRESENTATIVE GARDNER  noted that  if a  person is  an employee,                                                               
then  that would  be  reported  differently.   If  the person  in                                                               
question  was doing  contract work  for the  oil company,  he/she                                                               
could disclose how  many meals are provided and  over what period                                                               
of time.                                                                                                                        
                                                                                                                                
8:11:50 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  clarified  that  the bill  does  not  address  all                                                               
employment  or  businesses, but  solely  personal  services.   He                                                               
offered an example.                                                                                                             
                                                                                                                                
8:12:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO directed attention  to the phrase "income in                                                               
excess of  $5,000", shown on page  2, [line 3], of  the bill, and                                                               
he said he interprets that to mean "in your lifetime."                                                                          
                                                                                                                                
8:13:07 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER responded:                                                                                               
                                                                                                                                
     This is current  law; ... this is what  we already have                                                                    
     to  report to  [the  Alaska  Public Offices  Commission                                                                    
     (APOC)].  All my bill does  is simply say [that] to say                                                                    
     I earn $5,000  for consulting work is not  enough.  You                                                                    
     have  to  give a  brief  description  of what  kind  of                                                                    
     consulting work you're doing.                                                                                              
                                                                                                                                
CHAIR SEATON stated  his understanding that the  $5,000 refers to                                                               
an annual amount, because it pertains to the APOC report.                                                                       
                                                                                                                                
8:13:53 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  noted that an  amendment would  be made on  page 2,                                                               
line  4, [after  "personal  services"],  adding:   "and  as to  a                                                               
dividend  received  from  a   limited  liability  corporation  as                                                               
compensation for personal  services".  He said  he mentioned this                                                               
well ahead  of offering  the amendment so  that the  public would                                                               
know about the concept.                                                                                                         
                                                                                                                                
8:15:10 AM                                                                                                                    
                                                                                                                                
BROOKE   MILES,  Executive   Director,   Alaska  Public   Offices                                                               
Commission (APOC),  reviewed that  APOC administers  and enforces                                                               
the   disclosure  sections   of  the   Legislative  Ethics   Law.                                                               
Regarding,  "as  to  income  in  excess  of  $5,000  received  as                                                               
compensation for  personal services", she said  the language does                                                               
apply to "employment as well  as to self-employment."  She stated                                                               
her  greatest  concern  regarding  the  proposed  requirement  of                                                               
describing in detail the nature  of services performed is that it                                                               
is very broad.  She said  without a bright line showing "where we                                                               
must  request   this  additional  information,"  APOC   could  be                                                               
vulnerable  to  accusations  of   favoritism.    She  offered  an                                                               
example.                                                                                                                        
                                                                                                                                
8:17:34 AM                                                                                                                    
                                                                                                                                
MS. MILES also expressed concerned  with the language on [page 2,                                                               
beginning on  line 5], which  read:  "and the  approximate number                                                           
or  hours  that  have  been  or  will  be  spent  performing  the                                                           
services".  She continued:                                                                                                  
                                                                                                                                
     The  words   "or  will  be"  are   superfluous.    This                                                                
     requirement specifically states that  each filing - for                                                                    
     example the filing that each of  you made on March 15 -                                                                    
     represents  your financial  activities  for the  former                                                                    
     calendar year.   In other words, on March  15, you file                                                                    
     a  ... 2006  legislative financial  disclosure, and  it                                                                    
     encapsulates your  financial picture for  calendar year                                                                    
     2005.   Thus,  you're  not required  to be  prospective                                                                    
     with the disclosure.                                                                                                       
                                                                                                                                
8:18:59 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON,  after ascertaining that  there was no one  else to                                                               
testify, closed public testimony.                                                                                               
                                                                                                                                
8:19:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER  offered  her  understanding  that  under                                                               
current law,  legislators are  required to  report the  nature of                                                               
the services performed.   She asked if it meets  current law when                                                               
people write down contract or consulting work.                                                                                  
                                                                                                                                
8:19:50 AM                                                                                                                    
                                                                                                                                
MS. MILES  answered that those  who have disclosed,  for example,                                                               
that they were a consultant  have met the requirements of current                                                               
law.                                                                                                                            
                                                                                                                                
8:20:04 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER asked  Ms. Miles if she  could suggest the                                                               
bright line she is looking  for that would require legislators to                                                               
give more  information about  what kind  of consulting  work they                                                               
do.                                                                                                                             
                                                                                                                                
8:20:16 AM                                                                                                                    
                                                                                                                                
MS.  MILES responded  that  there  may be  a  direct  way to  ask                                                               
consultants,   business   managers,  management   services,   and                                                               
analysts,  for example,  for  more  detailed information  without                                                               
having to  ask, for example,  for more specific  information from                                                               
lawyers and  fishermen.  She said  she does not currently  have a                                                               
suggestion for how to do  that, but she expressed her willingness                                                               
to work with legislative staff on the issue.                                                                                    
                                                                                                                                
8:21:29 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON stated  that he thinks the existing  language of the                                                               
proposed bill is more encompassing  than the committee would like                                                               
to adopt, but he said he understands the issue at hand.                                                                         
                                                                                                                                
8:22:03 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   GARDNER    reemphasized   that    she   welcomes                                                               
suggestions.  Regarding "will be  spent performing the services",                                                           
she said she thinks there  are contracts and agreements for which                                                               
the contractor is  paid up front for work to  be performed over a                                                               
period of time, thus she said  it seems reasonable to require the                                                               
legislator  involved  to specify  that  the  contract covers  "X"                                                               
number of hours.                                                                                                                
                                                                                                                                
8:23:44 AM                                                                                                                    
                                                                                                                                
MS. MILES, in response to a  question from Chair Seaton, said she                                                               
thinks it  would be okay  for an  individual to report  a payment                                                               
that  was received  in  calendar year  2005,  for services  that,                                                               
after January 1, 2006, were  not completed; however, it would not                                                               
be "within the purview of  this chapter" to include "an agreement                                                               
to do something  in the next calendar year for  payment that will                                                               
be received in the next calendar year."                                                                                         
                                                                                                                                
8:24:16 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON said  he  thinks  the first  example  is "what  the                                                               
language  is  trying to  get  at."    He  opined, "I  think  it's                                                               
important that  the uncompleted work  estimate be there  as well,                                                               
so that we  don't give the public the misimpression  of a payment                                                               
received in one calendar year."   He asked Ms. Miles to work with                                                               
the sponsor on the language.                                                                                                    
                                                                                                                                
8:24:58 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  moved to adopt  Amendment 1, which read  as follows                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     Page 2, line 4, following "services,":                                                                                     
                                                                                                                                
          Insert "and, as to a dividend received from a                                                                     
     limited  liability  corporation,  as  compensation  for                                                                
     personal services,"                                                                                                    
                                                                                                                                
8:25:32 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG objected for discussion purposes.                                                                      
                                                                                                                                
8:25:42 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  explained   that  limited  liability  corporations                                                               
(LLCs) are  businesses - often  conducted as partnerships  - that                                                               
report income as dividends.  He said:                                                                                           
                                                                                                                                
     And, of course, ...  dividends and interest over $5,000                                                                    
     has to  be reported,  although the amounts  of dividend                                                                    
     or  interest over  $5,000  from a  source  are not  ...                                                                    
     reported.   But amounts over $5,000  from business that                                                                    
     you do  [are] reported as  the actual amount.   And so,                                                                    
     this just clears up a  little glitch in the system that                                                                    
     could get a  legislator in trouble, because  you have a                                                                    
     form that  says you  received this  as a  dividend, and                                                                    
     yet later  it could be  said, "Well, you  were actually                                                                    
     doing  this  as   a  partner  in  a   business."    And                                                                    
     therefore,   it  could   draw   an  ethical   question.                                                                    
     Whereas,  if we  clean it  up here,  it eliminates  the                                                                    
     problem  of  ethical   questions,  because  everybody's                                                                    
      fully aware of what a dividend from an LLC would --                                                                       
     how it would have to be reported.                                                                                          
                                                                                                                                
8:26:56 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER   questioned  the   need  for   the  word                                                               
"personal" in Amendment 1.                                                                                                  
                                                                                                                                
8:27:14 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON responded  that he  checked with  Legislative Legal                                                               
and Research Services  and was told that "to be  within the title                                                               
of the  bill, this  was the  way to  write it."   Notwithstanding                                                               
that, he indicated his willingness for other suggestions.                                                                       
                                                                                                                                
8:27:44 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   GRUENBERG  suggested   that  if   Representative                                                               
Gardner wants  to delete  the word "personal",  she could  do so,                                                           
and then an amendment could be made to the title of the bill.                                                                   
                                                                                                                                
8:27:49 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER  moved Amendment  1  to  Amendment 1,  to                                                               
delete  "personal"   from  Amendment   1,  and  also   to  delete                                                           
"personal" from the title of the bill on page 1, line 2.                                                                      
                                                                                                                                
8:28:17 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  objected to Amendment 1  to Amendment 1.   He noted                                                               
that Section  2 addresses personal  services.  He asked,  "So, if                                                               
we  remove  the  'personal  services'  there,  are  we  expanding                                                               
Section 2 beyond ... the intent of ... Section 2?"                                                                              
                                                                                                                                
8:29:09 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   GRUENBERG   suggested   making   the   amendment                                                               
conceptual and allowing the drafter to decide what to do.                                                                       
                                                                                                                                
8:29:27 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER asked  Ms. Miles if there  is a compelling                                                               
reason  to keep  the  term, "personal  services",  as opposed  to                                                               
"business services" or any other kind of service.                                                                               
                                                                                                                                
8:29:36 AM                                                                                                                    
                                                                                                                                
MS.  MILES  stated  her understanding  that  the  term  "personal                                                               
services"  has always  been used  to mean  self-employment.   She                                                               
said she  is not  certain if dropping  the word  "personal" would                                                               
expand the meaning, or not.                                                                                                     
                                                                                                                                
8:30:08 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON asked  Ms. Miles  if, perhaps,  "personal services"                                                               
refers to  self-employed work,  whereas "services"  might include                                                               
all employees.                                                                                                                  
                                                                                                                                
8:30:31 AM                                                                                                                    
                                                                                                                                
MS. MILES replied:                                                                                                              
                                                                                                                                
     This  is  the  section  where  regular  employees  also                                                                    
     report.   So,  "personal services"  are for  people who                                                                    
     are regularly employed when they're  not serving in the                                                                    
     legislature, as  well.  "Services",  I think,  could be                                                                    
     broader  than that,  but  certainly  would not  include                                                                    
     services for  which no payment was  received or payment                                                                    
     [was]  $5,000,  or  less.    But  it  just  seems  that                                                                    
     "services"  perhaps could  be broader  than that.   I'd                                                                    
     need to ... talk it  over with [the] Department of Law,                                                                    
     who advises us.                                                                                                            
                                                                                                                                
8:31:15 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON said  he  would  like to  withdraw  Amendment 1  to                                                               
Amendment 1,  then withdraw  Amendment 1, and  hold the  bill for                                                               
the sponsor  to work on  the language before the  committee hears                                                               
the bill again.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  GRUENBERG  said  he   has  in  mind  a  technical                                                               
amendment for Amendment 1.                                                                                                      
                                                                                                                                
8:32:07 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER  withdrew her motion to  adopt Amendment 1                                                               
to Amendment 1.                                                                                                                 
                                                                                                                                
8:32:26 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG moved to  adopt Amendment 2 to Amendment                                                               
1, as follows:                                                                                                                  
                                                                                                                                
     Between "and" and "as"                                                                                             
     Insert ","                                                                                                             
                                                                                                                                
     Between "corporation" and "as"                                                                                     
     Insert ","                                                                                                             
                                                                                                                                
8:33:00 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON asked if there was  any objection to [Amendment 2 to                                                               
Amendment 1].  There being none, it was so ordered.                                                                             
                                                                                                                                
8:33:35 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON withdrew [Amendment 1, as amended].                                                                                
                                                                                                                                
8:34:06 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON noted that at the  next hearing of the bill he would                                                               
reopen public testimony to accommodate  someone he had missed who                                                               
had wanted to testify.                                                                                                          
                                                                                                                                
[HB 461 was heard and held.]                                                                                                    
                                                                                                                                
HB 290-REQUIREMENTS FOR DRIVER'S LICENSE/I.D.                                                                                 
                                                                                                                                
8:34:37 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON announced that the  next order of business was HOUSE                                                               
BILL  NO. 290,  "An Act  relating to  issuance of  identification                                                               
cards and to issuance of driver's licenses."                                                                                    
                                                                                                                                
8:36:02 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LYNN, as  sponsor, reviewed  that the  bill would                                                               
require a  person to have a  legal presence in the  U.S. in order                                                               
to  be issued  an Alaska  driver's license.   He  stated that  he                                                               
would hate to see the bill complicated with several amendments.                                                                 
                                                                                                                                
8:36:58 AM                                                                                                                    
                                                                                                                                
MATTHEW KERR testified  on behalf of himself in  opposition to HB
290.  He paraphrased from  his written testimony [included in the                                                               
committee packet],  which read  as follows  [original punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
      Good morning once again, Mr. Chairman and Committee                                                                       
     Members!                                                                                                                   
                                                                                                                                
     Thank  you for  having me  here. This  process has  all                                                                    
     been very educational. I've been  thinking that maybe I                                                                    
     should quit my day job!                                                                                                    
                                                                                                                                
     I'm sure all of you are  aware of my opposition to this                                                                    
     bill.  I've done  a lot  of  research in  the past  few                                                                    
     weeks, and so  I'm not here just to  repeat my previous                                                                    
     testimony. I hope  it will be as interesting  to you as                                                                    
     it was for me to write it.                                                                                                 
                                                                                                                                
     Before  I start,  I want  to give  a fuller  disclosure                                                                    
     about why  I've chosen  to oppose this  bill. I  am not                                                                    
     for  illegal  immigration, and  I  do  in fact  support                                                                    
     criminally charging  employers who hire  illegal labor,                                                                    
     and  removing  illegal  immigrants in  most  situations                                                                    
     when  they  are  discovered.  I am  friends  with  some                                                                    
     legally-present  foreign students,  but that  has given                                                                    
     me far  more insight  than bias.  The reasons  I oppose                                                                    
     this bill are actually much more selfish.                                                                                  
                                                                                                                                
8:39:47 AM                                                                                                                    
                                                                                                                                
     This bill  does not  discourage illegal  immigration or                                                                    
     terrorism. It targets  the wrong people, and  it is not                                                                    
     enforceable.  In  reality,   passing  this  bill  would                                                                    
     actually  decrease our  public safety.  I will  explain                                                                    
     these reasons to you.                                                                                                      
                                                                                                                                
     This bill  does not  discourage illegal  immigration. I                                                                    
     cannot  imagine  that  people intending  to  stay  here                                                                    
     illegally  would present  themselves to  the DMV  for a                                                                    
     license in  the first  place. Even  if they  did, early                                                                    
     expiration   of  their   driver's  license   would  not                                                                    
     realistically   cause  them   to  leave.   California's                                                                    
     current  illegal population  is  prima  facie proof  of                                                                    
     this.  They  are  not starved  for  identification,  as                                                                    
     passports  and foreign  licenses  are completely  valid                                                                    
     documents used for driving, flying,  buying a beer, and                                                                    
     opening a bank account.                                                                                                    
                                                                                                                                
     This  bill does  not discourage  terrorism. Fifteen  of                                                                    
     the  nineteen hijackers  were legally  present on  Sept                                                                    
     11.  If  those  last  four hadn't  had  their  driver's                                                                    
     licenses,  they  would  have used  their  passports  to                                                                    
     board their flights. Also, more  acts of terrorism have                                                                    
     been  committed in  this country  by American  citizens                                                                    
     than  by   foreigners.  Remember  Ted   Kaczynski  (the                                                                    
     Unabomber),   David  Koresh,   Timothy  McVeigh,   some                                                                    
     members  of  PETA,  the Animal  Liberation  Front,  the                                                                    
     Earth Liberation Front, etc.                                                                                               
                                                                                                                                
     In  the  Senate   Finance  Committee,  Senator  Huggins                                                                    
     recalled the recent sad  events involving Mohammed Reza                                                                    
     Taheri-Azar, the UNC graduate  who drove his rental car                                                                    
     into a  group of  students "to  avenge Muslims,"  as an                                                                    
     example  of   terrorism  that  this  bill   could  have                                                                    
     prevented. This  man immigrated  to the  US in  1985 as                                                                    
     was either a  permanent resident or a  U.S. citizen. He                                                                    
     was kicked out of his  fraternity due to excessive drug                                                                    
     and  alcohol use.  His problems  are related  to mental                                                                    
     illness; not his nationality  or immigration status. He                                                                    
     would  not have  been affected  by this  legislation in                                                                    
     any way.                                                                                                                   
                                                                                                                                
     This brings us to my  next point. This bill targets the                                                                    
     wrong people.  By far, our  largest group  of long-term                                                                    
     non-immigrant  visitors is  foreign students.  They are                                                                    
     the  ones  that will  be  subject  to repeated,  annual                                                                    
     license   renewals.  Foreign   students  are   a  major                                                                    
     presence in the US at  the graduate level in the fields                                                                    
     of math,  engineering, and science. They  are typically                                                                    
     the cream  of the crop  from their home  countries, and                                                                    
     it  gets  even  better.  They're paying  full  price  -                                                                    
     subsidizing tuition  rates for our students!  - because                                                                    
     they  are   not  usually  eligible   for  scholarships,                                                                    
     financial  aid, or  resident  tuition pricing.  Foreign                                                                    
     students generate $13 billion  in yearly revenue in the                                                                    
     US. They  are the model of  the kind of person  we want                                                                    
     immigrating to our country (legally, of course).                                                                           
                                                                                                                                
     Unfortunately,  the extra  paperwork and  processing at                                                                    
     the national  level has  already caused  these students                                                                    
     to  study  elsewhere.  Berkeley had  950  international                                                                    
     graduate students in 1999, and  425 - less than half! -                                                                    
     by  2005. Last  April,  Bill Gates  announced during  a                                                                    
     Library of  Congress forum  that Microsoft  is shifting                                                                    
     more  work  overseas  as  a   direct  result  of  fewer                                                                    
     foreigners  studying and  staying  in the  US. I  agree                                                                    
     with  valid security  measures to  keep out  terrorists                                                                    
     during the visa process,  but this bill doesn't prevent                                                                    
     terrorism. There  is already a federal  computer system                                                                    
     named  "SEVIS"   to  monitor  the  status   of  foreign                                                                    
     students in the  US. It would certainly turn  me off of                                                                    
     a  new country  if I  got to  spend the  night in  jail                                                                    
     because I  overlooked my annual license  renewal during                                                                    
     finals week.  Forcing foreign  students to  renew their                                                                    
     driver's license  annually does not make  me any safer,                                                                    
     but it  does add  another bureaucratic hoop  that might                                                                    
     make a student decide to go somewhere more tolerant.                                                                       
                                                                                                                                
     This bill is  not enforceable. I am  holding a passport                                                                    
     of a legally-present foreign  student. Inside, there is                                                                    
     no  US  visa.  This  country, like  many  others,  only                                                                    
     issues  passports  for five  years,  so  it had  to  be                                                                    
     renewed  while the  student was  already  here. The  US                                                                    
     does not issue visas  domestically. This piece of paper                                                                    
     is the form  that makes the student  legally present in                                                                    
     the US. It  is hardly a tamper-proof  document. It's no                                                                    
     surprise that our immigration law  is very complex, and                                                                    
     many,   many   different   types   of   documents   and                                                                    
     combinations thereof can prove  legal status. When this                                                                    
     student  recently   re-entered  the  US,   the  federal                                                                    
     immigration officer had  to scratch her head  for a few                                                                    
     minutes  to  recall  the  rules  before  approving  the                                                                    
     entry. I  don't believe  that the DMV  will be  as well                                                                    
     equipped  to  make  that  determination.  Imagine  that                                                                    
     scenario at the DMV in your mind.                                                                                          
                                                                                                                                
     So far,  I've told you  about what this bill  won't do.                                                                    
     What this bill  will do is reduce public  safety on our                                                                    
     roads.   This  reasoning   applies  to   all  long-term                                                                    
     foreigners and  not just students.  How many  people in                                                                    
     the  US   have  been  killed  or   injured  by  illegal                                                                    
     immigrants or acts  of terrorism?  How  many people are                                                                    
     killed or injured  on our roads each day  due to unsafe                                                                    
     driving and uninsured drivers?   The primary fallacy of                                                                    
     this  bill is  that  it assumes  that  people can  only                                                                    
     drive here  legally with  a domestic  driver's license.                                                                    
     The  standard operating  procedure to  get licensed  in                                                                    
     Moscow involves handing  a nice, crisp $50  bill to the                                                                    
     test  examiner.  You  can see  this  in  their  traffic                                                                    
     fatality  rates.   We  would   all  love   for  illegal                                                                    
     immigration to  disappear overnight.  But realistically                                                                    
     speaking, would you rather be  driving on the road next                                                                    
     to  an  illegal  immigrant   with  an  Alaska  driver's                                                                    
     license  and driving  record, or  an illegal  immigrant                                                                    
     without either?                                                                                                            
                                                                                                                                
8:42:59 AM                                                                                                                    
                                                                                                                                
     I have  one last piece  of research on that  topic. The                                                                    
     DMV official who testified in  this committee last time                                                                    
     said  that  it  was possible  for  foreign-licensed  or                                                                    
     unlicensed  drivers to  obtain  liability insurance.  I                                                                    
     called Geico, State Farm, Allstate,  and AIG. I had one                                                                    
     "No,"  two "I  don't  think so;  call  later," and  one                                                                    
     "Only for 30 days." For  all intents and purposes, that                                                                    
     effectively  means that  an illegal  immigrant with  an                                                                    
     expired license  would not be able  to obtain liability                                                                    
     insurance. For those reasons,  this bill would decrease                                                                    
     public safety.                                                                                                             
                                                                                                                                
     Currently, our  DMV checks  for legal  entry to  the US                                                                    
     when a  foreigner applies for  a license, and  they are                                                                    
     treated the same way as  everyone else thereafter. This                                                                    
     system works fine.  It's a good balance  and it doesn't                                                                    
     need to be changed.                                                                                                        
                                                                                                                                
     This legislation adds some bureaucracy  at the DMV with                                                                    
     the  laudable goal  of  preventing illegal  immigration                                                                    
     and/or terrorism. Unfortunately,  it effectively trades                                                                    
     away  a small  piece of  our safety  without preventing                                                                    
     either.  It  is  not  enforceable.  It  makes  it  more                                                                    
     difficult  for  people   that  are  legitimately  here,                                                                    
     without  adding any  actual  deterrent  to someone  who                                                                    
     isn't. I  won't even bring  up again the  data security                                                                    
     issues indirectly caused by this bill.                                                                                     
                                                                                                                                
     Thank you  again, Mr.  Chairman and  committee members,                                                                    
     for  your consideration  of  my  testimony. I  provided                                                                    
     some of your offices  with supporting documentation for                                                                    
     my  earlier testimony,  and I  have  some spare  copies                                                                    
     with me today if any of you are interested.                                                                                
                                                                                                                                
8:44:03 AM                                                                                                                    
                                                                                                                                
     One last item: The New  Hampshire bill against the Real                                                                    
     ID Act  has passed  their House with  a vote  of 270-84                                                                    
     and is now going through their Senate committees.                                                                          
                                                                                                                                
     I ask  all of you  again to  vote against this  bill. I                                                                    
     would be happy to answer any questions.                                                                                    
                                                                                                                                
8:44:15 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN asked  Mr. Kerr if, through  his research, he                                                               
has been able  to ascertain if any one  could immigrate illegally                                                               
to Canada or Mexico and be able to get a driver's license there.                                                                
                                                                                                                                
8:45:00 AM                                                                                                                    
                                                                                                                                
MR.  KERR  responded that  it  would  not  be difficult  to  live                                                               
illegally  in  Canada  or  Mexico, because  a  person  could  use                                                               
his/her domestic licenses and passports  and would not be subject                                                               
to many  immigration checks.   As for  other countries,  Mr. Kerr                                                               
said he does not know the  licensing requirements, but he said he                                                               
is aware anecdotally of an  American citizen spending an extended                                                               
time in Russia who obtained a license there.                                                                                    
                                                                                                                                
8:45:28 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LYNN specified,  "If  I  illegally immigrated  to                                                               
Mexico, would I be able to get a Mexican driver's license?"                                                                     
                                                                                                                                
8:45:54 AM                                                                                                                    
                                                                                                                                
MR. KERR  answered that  corruption is a  major issue  in Mexico,                                                               
and he speculated that if  someone were to present him/herself at                                                               
the Mexican  department of motor vehicles,  he/she would probably                                                               
not have any trouble obtaining  a driver's license, regardless of                                                               
immigration status.                                                                                                             
                                                                                                                                
8:46:22 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  said he  thinks  the  witness  is being  asked  to                                                               
speculate beyond the scope of his research.                                                                                     
                                                                                                                                
8:47:24 AM                                                                                                                    
                                                                                                                                
MR. KERR,  in response to  a question from  Representative Gatto,                                                               
said the passport  he brought with him is a  current passport for                                                               
a foreign student legally present in  the U.S., and it was issued                                                               
within the U.S. by the foreign embassy of the student's country.                                                                
                                                                                                                                
8:47:51 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO asked Mr. Kerr  if he knows the reasons that                                                               
New Hampshire voted down a similar bill.                                                                                        
                                                                                                                                
8:48:23 AM                                                                                                                    
                                                                                                                                
MR. KERR replied that New  Hampshire was voting against a broader                                                               
bill that  encapsulated other parts  of the federal Real  ID Act,                                                               
including the gathering of  licensing information into nationally                                                               
accessible databases.                                                                                                           
                                                                                                                                
8:49:08 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON recalled  that  Mr. Bannock,  the  director of  the                                                               
Division  of  Motor  Vehicles,  had  testified  during  the  last                                                               
hearing of HB 290 that the  division is planning to scan, verify,                                                               
and archive  information from the  documents that  people present                                                               
for identification when applying for a license.                                                                                 
                                                                                                                                
8:49:21 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN said he remembers the same.                                                                                 
                                                                                                                                
8:49:35 AM                                                                                                                    
                                                                                                                                
MR.  KERR indicated  that he  had just  received a  document that                                                               
addresses  the  "nonidentification  [driving] certificate."    He                                                               
said,  "It seems  to me  like  it could  be a  reasonable way  of                                                               
solving  the  problem,  although  I haven't  looked  into  it  in                                                               
depth."                                                                                                                         
                                                                                                                                
8:49:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GATTO related  that he  knows a  foreign exchange                                                               
student  from Norway  who got  a  driver's license  in the  U.S.,                                                               
because it  was so much  less expensive  than getting one  in her                                                               
country, and it  would be valid in her country.   He asked, "Does                                                               
that compromise  the Real ID [Act],  the fact that ...  it was so                                                               
easy for her to get a driver's license in this country?"                                                                        
                                                                                                                                
8:51:17 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON told Mr.  Kerr that he does not want  him to feel he                                                               
has to testify beyond the area of his research or expertise.                                                                    
                                                                                                                                
8:51:21 AM                                                                                                                    
                                                                                                                                
MR.  KERR  responded  by  saying  he  believes  it  typically  is                                                               
standard that  driver's licenses are based  on "usual residence,"                                                               
irrespective  of  citizenship.   He  stated,  "Because a  foreign                                                               
license  is  ...  valid  in  most  other  countries  up  to  some                                                               
specified  time,  ...  this effectively  means  that  if  someone                                                               
wanted to  drive legally in the  U.S., ... they could  ... easily                                                               
use their  home license  effectively, indefinitely,  because it's                                                               
not marked on  your license exactly when you  enter the country."                                                               
He added,  "Also, it would  be possible  for someone to  obtain a                                                               
license  in  any  number  of   third  countries  that  have  less                                                               
stringent procedures than ours."                                                                                                
                                                                                                                                
8:52:53 AM                                                                                                                    
                                                                                                                                
JAMES  McCURTY, testifying  on behalf  of himself,  addressed the                                                               
bill's proposed language related  to identification that would be                                                               
required  to obtain  a  commercial license.    He indicated  that                                                               
there would be much time  involved and inconvenience for a person                                                               
to  prove that  he/she  is  a U.S.  citizen.    He mentioned  the                                                               
original  Patriot   Act.    Mr.  McCurty   stated,  "The  federal                                                               
government has  not done their  job.   It's been pushed  onto the                                                               
state, and  then you're just  trying to dump  it into my  lap, to                                                               
reaffirm that I'm an American, and a loyal American."                                                                           
                                                                                                                                
8:58:58 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON,  after ascertaining that  there was no one  else to                                                               
testify, closed public testimony.                                                                                               
                                                                                                                                
9:00:10 AM                                                                                                                    
                                                                                                                                
DUANE BANNOCK,  Director, Division of Motor  Vehicles, Department                                                               
of Administration, in response to  a question from Representative                                                               
Gruenberg, confirmed that the current fiscal note is accurate.                                                                  
                                                                                                                                
9:00:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG referred  to an article in  The New York                                                             
Times,  dated  July  19,  2005,   from  the  National  Governors'                                                             
Conference  [included in  the  committee packet].    He said  the                                                               
article shows that various governors  are concerned that the Real                                                               
ID Act will have significant  negative economical impact on state                                                               
governments, will  take considerable  time to implement,  and was                                                               
"poorly thought  through."  He asked  Mr. Bannock if he  is aware                                                               
of those  concerns and, if so,  why he has not  addressed them in                                                               
his fiscal note.                                                                                                                
                                                                                                                                
9:02:10 AM                                                                                                                    
                                                                                                                                
MR.  BANNOCK  explained  that the  concerns  that  Representative                                                               
Gruenberg highlighted  have to do  with the Real ID  Act, whereas                                                               
his fiscal note relates solely to  HB 290.  He directed attention                                                               
to the  last line  in the  analysis section  of the  fiscal note,                                                               
which read:  "Other costs may  be associated with the Real ID Act                                                               
that will  not be noted  until later."   He said his  own opinion                                                               
mirrors  that  of  49  other  DMV directors,  and  that  is  that                                                               
regulations are not sufficient "in  order to be compliant in this                                                               
section with this Real ID Act";  statutes are necessary.  He said                                                               
what is being made law is  already current DMV practice.  He said                                                               
the bill  would also allow  the DMV to  affix an expiration  on a                                                               
license  for a  legal alien  to match  the end  of that  person's                                                               
legal  stay in  the U.S.   Currently,  all driver's  licenses and                                                               
identification  cards issued  by  the DMV  expire  "on the  fifth                                                               
following birthday after issuance."                                                                                             
                                                                                                                                
9:05:50 AM                                                                                                                    
                                                                                                                                
MR. BANNOCK,  in response to  Representative Gruenberg  and Chair                                                               
Seaton, said the regulations to  which he previously alluded are:                                                               
13 AAC  08.330.  He said  the regulations have been  around for a                                                               
while.  He stated, "If a  person is in America legally, they will                                                               
have documents as required by that regulation today."                                                                           
                                                                                                                                
9:07:01 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  said he is  concerned about requiring DMV  staff to                                                               
determine the validity of  documents without sufficient training.                                                               
He asked if  Mr. Bannock is saying that the  DMV staff is already                                                               
conducting those checks.                                                                                                        
                                                                                                                                
MR. BANNOCK answered yes.                                                                                                       
                                                                                                                                
9:08:11 AM                                                                                                                    
                                                                                                                                
MR.  BANNOCK,  in  response   to  questions  from  Representative                                                               
Gruenberg,  said  the  DMV, by  regulation,  is  already  denying                                                               
licenses to illegal aliens, and  the statutory authority for that                                                               
regulation is, he guessed, AS 28.15.221.                                                                                        
                                                                                                                                
9:09:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  said  he  is not  aware  of  any  such                                                               
statute and,  thus, is  wondering if either  the DMV's  policy or                                                               
regulation exceeds its statutory authority.                                                                                     
                                                                                                                                
9:09:28 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER  asked Mr.  Bannock  to  tell her,  under                                                               
current policy and  practice, what the function and  purpose of a                                                               
driver's license is.                                                                                                            
                                                                                                                                
9:09:45 AM                                                                                                                    
                                                                                                                                
MR. BANNOCK said  having a driver's license proves  that a person                                                               
has both the knowledge and the skill to operate an automobile.                                                                  
                                                                                                                                
9:10:29 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LYNN  stated  his  understanding  that  having  a                                                               
driver's license is a privilege, not a right.                                                                                   
                                                                                                                                
MR. BANNOCK said [the DMV] subscribes to the same concept.                                                                      
                                                                                                                                
9:11:02 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG said he had  looked up AS 28.15.221, and                                                               
it addresses the point system.                                                                                                  
                                                                                                                                
MR. BANNOCK  corrected his  previous estimation  to say  that the                                                               
statute is actually [AS 28.15.061].                                                                                             
                                                                                                                                
9:11:20 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  asked Mr.  Bannock to specify  where in                                                               
the statute  it gives authority  to the  DMV to deny  licenses to                                                               
illegal aliens.                                                                                                                 
                                                                                                                                
9:11:34 AM                                                                                                                    
                                                                                                                                
MR. BANNOCK answered (b)(5), which read as follows:                                                                             
                                                                                                                                
                                                                                                                                
       (5) contain other information that the department                                                                        
      may reasonably require to determine the applicant's                                                                       
     identity, competency, and eligibility.                                                                                     
                                                                                                                                
9:11:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  opined  that  none  of  the  terms  in                                                               
paragraph (5) give the DMV the aforementioned legal authority.                                                                  
                                                                                                                                
9:12:32 AM                                                                                                                    
                                                                                                                                
MR. BANNOCK said  that by regulation, if an  illegal alien showed                                                               
up at  the DMV, he/she would  not have the document  that the DMV                                                               
has  the authority  to use  by regulation  in order  to establish                                                               
his/her identity.                                                                                                               
                                                                                                                                
CHAIR  SEATON said  the committee  will ask  for a  legal opinion                                                               
from the Department of Law.                                                                                                     
                                                                                                                                
9:13:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO asked  if there is anything  beyond taking a                                                               
written test and a driving test  that a person must do to qualify                                                               
to receive a driver's license.                                                                                                  
                                                                                                                                
9:13:36 AM                                                                                                                    
                                                                                                                                
MR. BANNOCK  answered that  it is also  necessary to  verify both                                                               
the  person's age  and identity.    Some states  use high  school                                                               
yearbook photos,  for example, a  practice that Mr.  Bannock said                                                               
the Alaska DMV has no intention  of adopting.  An application for                                                               
a driver's  license must  contain the  licensee's name,  date and                                                               
place of  birth, and  both mailing and  residence addresses.   He                                                               
said,  "So,   before  we   issue  the   license  based   on  that                                                               
information, is it  reasonable to suggest that we  have some sort                                                               
of verification of  that before we issue the license?   I suggest                                                               
that, yes, we do."                                                                                                              
                                                                                                                                
9:14:54 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GATTO related  that  his son  had  applied for  a                                                               
license  using   his  student   identification  to   support  his                                                               
identity.   He indicated that he  was with his son  at the school                                                               
at the time  and merely verified verbally his  son's identity and                                                               
date of birth.  He questioned  the DMV using something that seems                                                               
so "flimsy" for its verification.                                                                                               
                                                                                                                                
9:16:04 AM                                                                                                                    
                                                                                                                                
MR. BANNOCK deferred the question  to Kerry Hennings, the manager                                                               
of DMV's Driver Licensing.                                                                                                      
                                                                                                                                
9:16:18 AM                                                                                                                    
                                                                                                                                
KERRY HENNINGS, Driver Licensing,  Director's Office, Division of                                                               
Motor   Vehicles  (DMV),   Department  of   Administration,  told                                                               
Representative Gatto  that in  lieu of  a birth  certificate, DMV                                                               
accepts  a  parent's  affidavit  and  identification,  which  she                                                               
surmised is  what Representative  Gatto offered during  his son's                                                               
application  for his  school  ID.   In response  to  a remark  by                                                               
Representative Gatto,  she indicated that this  manner of issuing                                                               
an ID is  not common, but is  an exception for people  who do not                                                               
have  their  birth  certificate  but  are  accompanied  by  their                                                               
parents.                                                                                                                        
                                                                                                                                
REPRESENTATIVE GATTO  offered more  details regarding  that visit                                                               
with his son.   He explained that he wants to  ferret out ways to                                                               
cheat the system, because if there is a way, someone will.                                                                      
                                                                                                                                
9:18:37 AM                                                                                                                    
                                                                                                                                
MS.  HENNINGS,  not  having been  present  during  Representative                                                               
Gatto's  experience   with  his   son,  surmised  that   all  the                                                               
information  that Representative  Gatto  brought  with him  would                                                               
have been considered.                                                                                                           
                                                                                                                                
9:19:00 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  referred to  a  handout  in the  committee  packet                                                               
showing "13  AAC 08.330 Requirements  of applicant."  One  of the                                                               
methods currently accepted  as proof of date of birth  is an out-                                                               
of-state driver's license.   He asked Ms. Hennings  if that would                                                               
change.                                                                                                                         
                                                                                                                                
MS. HENNINGS said the DMV  has written new regulations it expects                                                               
to be adopted  during summer of 2006, at which  point the out-of-                                                               
state  driver's   license  will  not   be  used  as  a   form  of                                                               
identification,  but only  will  be  used to  show  proof of  the                                                               
knowledge and skills to operate an automobile.                                                                                  
                                                                                                                                
9:20:06 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON noted  other items listed under  13 AAC 08.330(b)(4)                                                               
that he  thought may  no longer  be accepted  should the  bill be                                                               
adopted:   a  credit card,  a  life insurance  policy, or  "other                                                               
evidence  of  comparable  validity."    He  said  he  presumes  a                                                               
parent's affidavit would also be excluded.                                                                                      
                                                                                                                                
MS. HENNINGS said Chair Seaton is correct.                                                                                      
                                                                                                                                
CHAIR  SEATON asked,  "If this  bill  becomes law,  what are  the                                                               
single pieces  of documentation  that you can  use to  prove U.S.                                                               
citizenship before you can get an Alaska driver's license?"                                                                     
                                                                                                                                
9:20:58 AM                                                                                                                    
                                                                                                                                
MS. HENNINGS said  she doesn't currently have a draft  of the new                                                               
regulations before  her; however, she  said she would get  a list                                                               
to the  committee.   That list includes:  a birth  certificate, a                                                               
passport, and proof of birth abroad.                                                                                            
                                                                                                                                
9:21:40 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  asked Mr.  Bannock if  he can  point to                                                               
any authority for the DMV to  eliminate the ability of an illegal                                                               
alien to get a driver's license.                                                                                                
                                                                                                                                
9:22:34 AM                                                                                                                    
                                                                                                                                
MR.  BANNOCK  responded that  he  does  not  have an  answer  for                                                               
Representative Gruenberg without researching the issue.                                                                         
                                                                                                                                
CHAIR SEATON asked  Mr. Bannock to do that research  and get back                                                               
to the committee with it.                                                                                                       
                                                                                                                                
9:23:20 AM                                                                                                                    
                                                                                                                                
MR.   BANNOCK,   in   response  to   follow-up   questions   from                                                               
Representative Gruenberg,  said he  has not changed  policy since                                                               
taking on  the position  of director  of the  DMV, and  there was                                                               
written  policy   in  effect  when  he   became  director,  which                                                               
established [denying driver's licenses to illegal aliens].                                                                      
                                                                                                                                
9:23:45 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  asked Mr. Bannock  to send that information  to the                                                               
committee, as well.                                                                                                             
                                                                                                                                
9:25:20 AM                                                                                                                    
                                                                                                                                
MR.  BANNOCK,  in  response   to  questions  from  Representative                                                               
Gardner, said  a person from Canada  who did not have  a Canadian                                                               
driver's license could,  with a passport and  one other secondary                                                               
piece of  identification take  both the  written and  skills test                                                               
and be  issued an Alaska driver's  license.  He said  this method                                                               
is particular  to Canada  only.  Someone  from any  other country                                                               
outside the U.S. who did not have  a visa and was in the U.S. for                                                               
a  short visit  probably  would not  be able  to  qualify for  an                                                               
Alaska driver's license.                                                                                                        
                                                                                                                                
9:26:08 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER  noted that  there  are  people who  have                                                               
social security cards that are  stamped valid for employment with                                                               
INS  authorization only.    She  asked Mr.  Bannock,  "Is that  a                                                               
document that you would accept  for purposes of identification in                                                               
issuing a driver's license?"                                                                                                    
                                                                                                                                
9:26:23 AM                                                                                                                    
                                                                                                                                
MR.  BANNOCK said,  "We have  defined our  list into  primary and                                                               
secondary.   You will be forwarded  a copy of that  list.  Social                                                               
security ...  cards are considered  a secondary item,  and [yes],                                                               
it would be accepted."                                                                                                          
                                                                                                                                
9:26:45 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LYNN remarked  the committee  is considering  the                                                               
merits and possible demerits of HB  290; the DMV is not on trial.                                                               
Second,  he stated  that  the issue  is simple  and  a matter  of                                                               
common sense:  "Either we comply with  the ... Real ID Act, or we                                                               
do not, whether we like that Act  or not.  ... In addition, we're                                                               
either present legally in the  U.S. and, by extension, Alaska, or                                                               
not.   And if we're  not here legally, we  don't have a  right to                                                               
... any privilege - driver's license or anything else."                                                                         
                                                                                                                                
9:27:31 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON requested that a  committee member offer Amendment 1                                                               
so that it is available for the public's perusal.                                                                               
                                                                                                                                
9:27:43 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG moved to  adopt Amendment 1, labeled 24-                                                               
LS0981\Y.2, Luckhaupt/Cook, 4/3/06, which read as follows:                                                                      
                                                                                                                                
     Page 1, line 5:                                                                                                            
          Delete "not"                                                                                                          
                                                                                                                                
     Page 1, line 6:                                                                                                            
          Delete "not"                                                                                                          
                                                                                                                                
     Page 1, line 10:                                                                                                           
          Delete all material.                                                                                                  
          Insert "(i) The department may issue an"                                                                              
                                                                                                                                
     Page 2, following line 8:                                                                                                  
     Insert a new subsection to read:                                                                                           
          "(j)  The department may issue an identification                                                                      
     card under  (a) of  this section to  a person  who does                                                                    
     not present  documentary evidence  under (h) or  (i) of                                                                    
     this   section.  The   identification   card  must   be                                                                    
     different in color  from those issued under  (h) or (i)                                                                    
     of  this  section  and  must   bear  on  its  face  the                                                                    
     following notice: "This identification  card may not be                                                                    
     accepted   by   any    federal   agency   for   federal                                                                    
     identification or any other official purpose.""                                                                            
                                                                                                                                
     Page 2, line 31:                                                                                                           
          Delete "(7) [OR (8)]"                                                                                             
          Insert "or                                                                                                            
               (7)  [(8)]"                                                                                                  
                                                                                                                                
     Page 3, line 1:                                                                                                            
          Delete "; or"                                                                                                     
          Insert "."                                                                                                            
                                                                                                                                
     Page 3, line 2, through page 4, line 1:                                                                                    
          Delete all material and insert:                                                                                       
        "*  Sec. 3.  AS 28.15  is amended  by  adding a  new                                                                
     section to read:                                                                                                           
          Sec. 28.15.033. Form of drivers' licenses. (a)                                                                      
     The department  shall issue, renew, or  reinstate to an                                                                    
     otherwise qualified person a  driver's license that may                                                                    
     be used  as identification by  a federal agency  if the                                                                    
     person  presents to  the  department valid  documentary                                                                    
     evidence that  the person  is a  citizen of  the United                                                                    
     States,  a  national  of the  United  States,  a  legal                                                                    
     permanent  resident   of  the   United  States,   or  a                                                                    
     conditional  resident alien  of  the  United States.  A                                                                    
     person who  is seeking a  renewal of, duplicate  of, or                                                                    
     change of legal  name on a license is  presumed to meet                                                                    
     the requirements of this subsection  if the license has                                                                    
     not expired  or been  cancelled, suspended,  or revoked                                                                    
     and  the   person  has   not  been   disqualified  from                                                                    
     obtaining  a  license.  If   the  department  has  been                                                                    
     notified  by  a  local, state,  or  federal  government                                                                    
     agency that the person  seeking a renewal of, duplicate                                                                    
     of,  or change  of legal  name on  a license  is not  a                                                                    
     citizen of the  United States or is not  legally in the                                                                    
     United States,  then the presumption available  in this                                                                    
     subsection  does  not  apply.  The  department  may  by                                                                    
     regulation specify what  is valid, documentary evidence                                                                    
     under this  subsection, except that the  department may                                                                    
     not specify  that a matricula  consular card  is valid,                                                                    
     documentary evidence.                                                                                                      
          (b)  The department shall issue, renew, or                                                                            
     reinstate to  an otherwise qualified person  a driver's                                                                    
     license  that  may  be  used  as  identification  by  a                                                                    
     federal   agency  if   the  person   presents  to   the                                                                    
     department  in person  valid,  documentary evidence  of                                                                    
     the person's  legal status and  presence in  the United                                                                    
     States. A  license issued under this  subsection may be                                                                    
     renewed  only  on  presentation of  valid,  documentary                                                                    
     evidence that the status by  which the person qualified                                                                    
     for the license has been  extended by the proper United                                                                    
     States  government authority.  A change  of name  for a                                                                    
     license issued  under this subsection may  be made only                                                                    
     on  presentation of  valid,  documentary evidence  that                                                                    
     the person's name  has been changed with  regard to the                                                                    
     status by  which the person qualified  for the license.                                                                    
     A  duplicate license  for a  license issued  under this                                                                    
     subsection  may  be  issued  only  on  presentation  of                                                                    
     valid,  documentary evidence  that the  person's status                                                                    
     by which  the person qualified for  the license remains                                                                    
     valid and  in effect. The department  may by regulation                                                                    
     specify what is valid,  documentary evidence under this                                                                    
     subsection, except that the  department may not specify                                                                    
     that a  matricula consular  card is  valid, documentary                                                                    
     evidence.                                                                                                                  
          (c)  The department shall issue, renew, or                                                                            
     reinstate a driver's license  to an otherwise qualified                                                                    
     person who does not  present documentary evidence under                                                                    
     (a)  or  (b)  of  this section.  The  license  must  be                                                                    
     different in color  from those issued under  (a) or (b)                                                                    
     of this section  and must clearly bear on  its face the                                                                    
     following  notice: "This  driver's license  may not  be                                                                    
     accepted   by   any    federal   agency   for   federal                                                                    
     identification or any other official purpose.""                                                                            
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 4, line 9:                                                                                                            
          Delete "AS 28.15.031(b)(8)(B)"                                                                                        
     Insert "AS 28.15.033(b)"                                                                                                   
                                                                                                                                
9:28:10 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN AND CHAIR SEATON objected.                                                                                  
                                                                                                                                
9:28:19 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON announced that HB 290 was heard and held.                                                                          
                                                                                                                                
                                                                                                                                
                             DRAFT                                                                                            
                                                                                                                                
HB 496-CONTRIBUTIONS FROM PERM. FUND DIVIDENDS                                                                                
                                                                                                                                
9:28:38 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON announced that the  last order of business was HOUSE                                                               
BILL NO.  496, "An Act  relating to contributions  from permanent                                                               
fund  dividends  to  certain  educational  organizations  and  to                                                               
certain charitable  organizations that  provide a  positive youth                                                               
development program,  workforce development, aid to  the arts, or                                                               
aid  and   services  to  the  elderly,   low-income  individuals,                                                               
individuals  in emergency  situations,  disabled individuals,  or                                                               
individuals with  mental illness; and providing  for an effective                                                               
date."                                                                                                                          
                                                                                                                                
CHAIR SEATON highlighted  the purpose of the  bill, [as described                                                               
in the  first paragraph of  the sponsor statement, which  read in                                                               
part as follows]:                                                                                                               
                                                                                                                                
     This  bill establishes  a check-off  on the  electronic                                                                    
     Permanent  Fund Dividend  application  form that  would                                                                    
     allow an  applicant to  donate a  portion of  their PFD                                                                    
     check  to   an  eligible  charitable   organization,  a                                                                    
     community foundation, each campus  of the University of                                                                    
     Alaska,  and  postsecondary  education  and  vocational                                                                    
     training organizations.                                                                                                    
                                                                                                                                
CHAIR SEATON  noted that HB 496  is a House version  of a similar                                                               
Senate bill.   He pointed out  that there are letters  of support                                                               
included  in the  committee packet,  including  letters from  the                                                               
Rasmuson  Foundation  and  from  Samantha  Castle  Kirstein,  the                                                               
executive director of the Fairbanks Community Food Bank.                                                                        
                                                                                                                                
9:31:15 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  said there  are differences  between the  House and                                                               
Senate  versions  of the  bill.    First,  the  title of  HB  496                                                               
includes  community   foundations,  and  the   following  related                                                               
language has  been added  to page  3, line 9:   "for  a community                                                               
foundation, benefits  to a defined  geographic area".   The other                                                               
change is on  page 3, line 18, which read:   "this paragraph does                                                               
not  apply to  a community  foundation".   He indicated  that the                                                               
latter reference  would be subject  to "a couple  of amendments."                                                               
He  directed  attention to  page  4,  line  7, which  includes  a                                                               
definition of community foundation as follows:                                                                                  
                                                                                                                                
          (i) For purposes of this section, "community                                                                          
     foundation"    means     a    nonprofit,    autonomous,                                                                    
     philanthropic   institution  that   is  organized   and                                                                    
     operated  primarily   as  a  permanent   collection  of                                                                    
     endowed funds  for the long-term  benefit of  a defined                                                                    
     geographic  area  within  one or  more  municipalities,                                                                    
     that has  a long-term goal of  increasing its permanent                                                                    
     unrestricted charitable  endowment to benefit  the area                                                                    
     served,  that  primarily  provides benefits  by  making                                                                    
     grants and  may also provide other  forms of charitable                                                                    
     services,  that makes  grants that  are not  limited to                                                                    
     providing  one  type  of  benefit  or  to  serving  one                                                                    
     population segment,  and that makes grants  to multiple                                                                    
     grantees.                                                                                                                  
                                                                                                                                
9:32:33 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  moved to  adopt the  proposed committee                                                               
substitute  (CS), Version  24-LS1793\Y, Cook,  4/3/06, as  a work                                                               
draft.                                                                                                                          
                                                                                                                                
9:33:10 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON objected for discussion purposes.                                                                                  
                                                                                                                                
9:33:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN  said the bill  makes the act of  donating to                                                               
charity convenient  and he  sees no  particular problem  with the                                                               
bill.                                                                                                                           
                                                                                                                                
9:33:41 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  said there are  some restrictions; it  only applies                                                               
to those people who file  their PFD electronically, and there are                                                               
certain terms the nonprofit agencies  must meet [as listed in the                                                               
bill].                                                                                                                          
                                                                                                                                
9:34:24 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG revealed that his  wife is involved in a                                                               
nonprofit   organization  called,   "Anchorage  Unleashed,"   and                                                               
because of that  he declared a conflict of interest  and asked to                                                               
be excused from "everything with this bill."                                                                                    
                                                                                                                                
9:34:56 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN objected.                                                                                                   
                                                                                                                                
                                                                                                                                
9:35:07 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  removed his previous objection;  therefore, Version                                                               
Y was before committee.                                                                                                         
                                                                                                                                
9:35:31 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON disclosed  that his  family has  a fund  within the                                                               
homeless community  foundation, which, he  said, is why  he knows                                                               
that community foundations are worthwhile.                                                                                      
                                                                                                                                
9:35:36 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER objected.                                                                                                
                                                                                                                                
9:35:46 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO  asked how  a person's donation  through the                                                               
PFD application would be treated  by the Internal Revenue Service                                                               
(IRS).                                                                                                                          
                                                                                                                                
9:36:14 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  said he  would call  forwarded a  representative of                                                               
the  Permanent  Fund  Division  to answer  that  question.    Not                                                               
withstanding that, he offered his  understanding that relating to                                                               
taxes, there is  no difference between checking off a  box on the                                                               
PFD and donating the money directly to a charity.                                                                               
                                                                                                                                
9:36:45 AM                                                                                                                    
                                                                                                                                
SHARON BARTON, Director, Central  Office, Permanent Fund Dividend                                                               
Division, Department  of Revenue,  directed attention to  page 2,                                                               
[beginning on line 23, through line 26], which read as follows:                                                                 
                                                                                                                                
      In addition, the educational organization, community                                                                      
     foundation, or charitable organization                                                                                     
               (1) must apply for inclusion on the                                                                              
     contribution list for the current  dividend year on the                                                                    
     form required by the department  before August 1 of the                                                                    
     qualifying year;                                                                                                           
                                                                                                                                
MS. BARTON said  the August 1 deadline needs to  be moved back to                                                               
June  15,  particularly in  the  first  year,  in order  for  the                                                               
division to make  computer changes and other  adjustments, and to                                                               
allow  time for  foundations to  evaluate whether  certain groups                                                               
meet the set criteria.  Then, she  said, she will need time to go                                                               
through  the applications  and the  information provided  by "the                                                               
agent" to make  an independent decision on each  application.  In                                                               
response to  a question from  Chair Seaton regarding the  June 15                                                               
date, she said that date would  allow the United Way and Rasmuson                                                               
Foundation  45  days for  consideration,  but  she recalled  that                                                               
originally they had wanted more  time; therefore, she recommended                                                               
the committee check with those organizations.                                                                                   
                                                                                                                                
9:40:42 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  asked if there  would be anything that  would limit                                                               
the   [educational   organization,   community   foundation,   or                                                               
charitable  organization] from  making their  applications before                                                               
June 15.                                                                                                                        
                                                                                                                                
9:41:19 AM                                                                                                                    
                                                                                                                                
MS.  BARTON responded  that  she  views the  June  15  date as  a                                                               
deadline, not a window of  opportunity; therefore, she said those                                                               
entities would certainly be allowed  to apply before the deadline                                                               
of June 15.                                                                                                                     
                                                                                                                                
9:42:09 AM                                                                                                                    
                                                                                                                                
MS.  BARTON recommended  that the  committee look  at the  random                                                               
order requirement  on page 2,  [beginning on line 9],  which read                                                               
as follows:                                                                                                                     
                                                                                                                                
          (b) The department shall list each campus of the                                                                      
     University of  Alaska and  shall list  each educational                                                                    
     organization,   community  foundation,   or  charitable                                                                    
     organization eligible under (c)  or this section on the                                                                    
     contribution list in random order,  and the order shall                                                                    
     be changed each year.                                                                                                      
                                                                                                                                
MS.  BARTON  suggested  that  the   random  order  will  make  it                                                               
difficult for members  of the public to find  their charity among                                                               
a  list that  possibly includes  500-700 charities.   She  talked                                                               
about making the system user-friendly for the public.                                                                           
                                                                                                                                
9:43:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GATTO  asked  if the  information  regarding  the                                                               
identity  of  the  PFD  applicants who  check  off  a  particular                                                               
charity, for example, would be shared with that charity.                                                                        
                                                                                                                                
9:44:07 AM                                                                                                                    
                                                                                                                                
MS. BARTON replied that that is  a question that the division has                                                               
not yet  worked through.  She  said the division will  provide to                                                               
the agent a  list of those who have contributed,  the amount they                                                               
have  contributed,  and  the  organization  to  which  they  have                                                               
contributed.   She  stated her  assumption that  the agent  would                                                               
inform the organization who those  contributors are, but she said                                                               
she has not yet confirmed that.                                                                                                 
                                                                                                                                
MS.  BARTON,  in response  to  a  remark made  by  Representative                                                               
Gatto, explained that the division  issues 1099 forms to everyone                                                               
"for  their   dividend  itself,"  and  she   indicated  that  the                                                               
charitable gift will be reflected on that 1099 form.                                                                            
                                                                                                                                
9:46:16 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  referred back to the  August 1 deadline                                                               
and  asked if  the division  will require  the organizations  and                                                               
foundations to prove that they  ... "already have their 501(c)(3)                                                               
approved by the IRS before you'll put them on the list."                                                                        
                                                                                                                                
9:46:55 AM                                                                                                                    
                                                                                                                                
MS. BARTON answered yes.                                                                                                        
                                                                                                                                
9:46:59 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  directed attention  to  page  2, [paragraph]  (3),                                                               
which  would  require  the organization  or  foundation  to  have                                                               
qualified for  tax exempt status  "during the two  calendar years                                                               
that  immediately precede  the year  the  application is  filed".                                                               
Chair  Seaton  pointed  out,  "So, this  is  not  something  that                                                               
somebody  can  just go  out  and  say,  'I'm  going to  form  and                                                               
organization today  and get  somebody to  check off  those things                                                               
tomorrow.'"                                                                                                                     
                                                                                                                                
9:47:14 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  said in a previous  year, the committee                                                               
dealt  with  the  issue  of  a  rolling  ballot,  and  there  was                                                               
testimony  that in  an election  there may  be some  advantage to                                                               
being  first on  the  list.   He  said he  is  wondering if  that                                                               
positional bias  applies to  a check-off list  of charities.   If                                                               
not, he said he suggests the  committee amend the bill to put the                                                               
list in alphabetical order.                                                                                                     
                                                                                                                                
9:48:30 AM                                                                                                                    
                                                                                                                                
MS. BARTON suggested  that the Rasmuson Foundation  or United Way                                                               
would be better able to answer that concern.                                                                                    
                                                                                                                                
9:50:48 AM                                                                                                                    
                                                                                                                                
DIANE KAPLAN,  President, Rasmuson Foundation of  Alaska; Member,                                                               
Operations  Board, Four  Acre Group,  in response  to a  question                                                               
from Chair Seaton regarding the  previously suggested date change                                                               
from August 1 to June 15, stated:                                                                                               
                                                                                                                                
     The United  Way in Anchorage  is really the  most adept                                                                    
     organization  in  terms  of  handling  these  kinds  of                                                                    
     transactions.    They   currently  administer  the  ...                                                                    
     "SHARE"  campaign  for  Alaska.    And  my  sense  from                                                                    
     Michelle Brown,  the president of  United Way,  is they                                                                    
     would   try  and   work   within  whatever   timelines.                                                                    
     Originally we were  looking at August 1.   I think June                                                                    
     15  would  be  a  little  tight,  but  not  impossible,                                                                    
     according to  Michelle.  And  what we would try  and do                                                                    
     is ... maybe get together  and start working on some of                                                                    
     the documents  right now, so  that they could  be ready                                                                    
     to roll out as soon as the bill was signed.                                                                                
                                                                                                                                
9:52:28 AM                                                                                                                    
                                                                                                                                
MS. KAPLAN,  in response  to a question  from Chair  Seaton, said                                                               
although she did not receive a  copy of Version Y, she thinks she                                                               
grasps the general thrust of the  bill.  In response to a follow-                                                               
up question from  Chair Seaton, she emphasized  that the Rasmuson                                                               
Foundation  is a  strong supporter  of community  foundations and                                                               
has  created a  fund  itself at  the  Alaska statewide  community                                                               
foundation to  encourage private  donations for parks  and trails                                                               
around  the  Anchorage  area,  as  well as  for  a  Rotary  civic                                                               
project.   She  listed  other areas  of the  state  in which  the                                                               
Rasmuson Foundation  has given support.   She talked  about funds                                                               
that are bequeathed  to children who later leave  Alaska, and she                                                               
stressed the importance of community  foundations as an important                                                               
part of community development.                                                                                                  
                                                                                                                                
9:53:55 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  asked Ms.  Kaplan if  she sees  any problem  in the                                                               
bill language [on page 3, lines 17-19], which read as follows:                                                                  
                                                                                                                                
               (9) may not make grants or contributions to                                                                      
     an organization  that is exempt from  taxation under 26                                                                    
     U.S.C. 501(c)(4) or (6); this  paragraph does not apply                                                                    
     to a community foundation.                                                                                                 
                                                                                                                                
CHAIR  SEATON indicated  that there  is  an amendment  yet to  be                                                               
offered related to this language.                                                                                               
                                                                                                                                
9:54:46 AM                                                                                                                    
                                                                                                                                
MS.  KAPLAN stated,  "I think  we're  all in  agreement that  the                                                               
objective here  is to get donations  to [create a bona  fide] ...                                                               
charitable  organization.    ...   There  are  some  groups  like                                                               
Chambers  who  do  a  lot of  charitable  activities  in  certain                                                               
communities.  ... Personally, I  can't imagine that we would have                                                               
a problem  with those, but I  think it's something you'd  have to                                                               
look at carefully."                                                                                                             
                                                                                                                                
9:55:26 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON   said,  "This  was  just   relating  to  community                                                               
foundations,  because they  do offer  some  grants through  those                                                               
kind of organizations."   He asked Ms. Kaplan to  explain for the                                                               
committee  the Rasmuson  Foundation's  aide  in implementing  the                                                               
bill.                                                                                                                           
                                                                                                                                
9:55:50 AM                                                                                                                    
                                                                                                                                
MS. KAPLAN responded as follows:                                                                                                
                                                                                                                                
     The  foundation ...  has become  aware  over time  that                                                                    
     Alaskans that  are lower income and  middle income tend                                                                    
     to give very generously  to charitable organizations in                                                                    
     the  state  - at  least  around  the median  for  other                                                                    
     states  - but  the wealthier  Alaskans actually  do not                                                                    
     give as  much as they could.   ... In fact,  Alaska has                                                                    
     ranked  49th  or  50th  in the  country,  in  terms  of                                                                    
     charitable donations  from people who earn  $100,000 or                                                                    
     greater.                                                                                                                   
                                                                                                                                
     So, we've  been looking at  a lot of strategies  on how                                                                    
     to encourage people who have  done well in Alaska to do                                                                    
     well  for Alaska,  and  community  foundations are  one                                                                    
     strategy.   We often  do a lot  of challenge  grants to                                                                    
     organizations,  where   if  they  can  raise   so  many                                                                    
     dollars,  we'll match  them ....    And the  idea of  a                                                                    
     permanent fund  check-off, of course,  was successfully                                                                    
     utilized by one  of our former board  members ... years                                                                    
     ago  for the  Olympics bid.   There  have been  several                                                                    
     other attempts  to do a  permanent fund  check-off, but                                                                    
     they've all seemed  to have fallen down  because of the                                                                    
     fiscal   note   and  the   idea   that   the  cost   of                                                                    
     administration to the state would be too great.                                                                            
                                                                                                                                
     So,  the idea  was  if you  could  find an  independent                                                                    
     source of nonstate funds  to support the administrative                                                                    
     expenses so  there wouldn't be  any costs to  the state                                                                    
     for the initial  term, and 100 percent  of those monies                                                                    
     people donated would go directly  to the charities, ...                                                                    
     that would give something like  that a better chance of                                                                    
     succeeding.   So, our  board committed  - if  the state                                                                    
     legislature ...  and the  governor [was  interested] in                                                                    
     having  something like  this -  to provide  the initial                                                                    
     expenses for  the first three  years, hoping  that that                                                                    
     would provide some comfort to  give it some time to get                                                                    
     going.                                                                                                                     
                                                                                                                                
9:57:58 AM                                                                                                                    
                                                                                                                                
ROSEMARY   HAGEVIG,   Executive  Director,   Catholic   Community                                                               
Services  (CCS),  told the  committee  that  CCS is  a  501(c)(3)                                                               
nonprofit  organization  that provides  a  wide  array of  social                                                               
services, including  services for  senior citizens,  families and                                                               
children,  and hospice  and home  health  care.   She stated  her                                                               
support  of HB  496, as  well as  for its  companion bill  in the                                                               
Senate.    She  complimented  the  Rasmuson  Foundation  and  the                                                               
Foraker Group  for moving forward  and making  the recommendation                                                               
to the  legislature.   She reported that  the statistics  she has                                                               
had the  opportunity to view indicate  that if only 5  percent of                                                               
the recipients of the permanent fund  in Alaska were to give $100                                                               
a year,  within  five  years there would  be $50 million  in this                                                               
fund.                                                                                                                           
                                                                                                                                
MS. HAGEVIG stated  that she thinks the means  for donations that                                                               
the  bill proposes  is  something that  the  nonprofit sector  in                                                               
Alaska needs.   She  said that sector  has become  dependent upon                                                               
grants for  contracts, and  it is a  challenge to  be continually                                                               
having to raise funds while  simultaneously providing services to                                                               
people.  She continued:                                                                                                         
                                                                                                                                
     I also never miss the  opportunity to share with policy                                                                    
     makers  the  fact  that because  of  the  unique  local                                                                    
     government  structure  in  Alaska, what  the  nonprofit                                                                    
     sector provides  in the  way of  services in  our state                                                                    
     represents  the  work  that is  traditionally  done  by                                                                    
     county  governments  in other  states.    And the  huge                                                                    
     difference  between that,  of  course,  is that  county                                                                    
     governments  have taxation  authority, and,  of course,                                                                    
     nonprofit organizations do not.   ... It is what it is,                                                                    
     but  it  does  present  those  of us  who  are  in  the                                                                    
     business  of providing  the services  with a  number of                                                                    
     really significant challenges.                                                                                             
                                                                                                                                
MS.  HAGEVIG concluded  by saying  she  applauds the  committee's                                                               
interest in  the bill,  and she offered  CCS's support  in moving                                                               
the bill forward.                                                                                                               
                                                                                                                                
10:01:09 AM                                                                                                                   
                                                                                                                                
MS.  HAGEVIG,  in  response  to  a  question  from  Chair  Seaton                                                               
regarding the issue of random  versus alphabetical listing of the                                                               
organizations  and  foundations,  speculated  that  the  kind  of                                                               
people  who would  take advantage  of the  opportunity to  donate                                                               
probably have a  good idea of where they would  like to see their                                                               
funds go,  thus, she  said alphabetical  order would  probably be                                                               
the most effective and practical approach.                                                                                      
                                                                                                                                
10:02:15 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE GARDNER said she is  stunned by the statistic that                                                               
Alaska ranks 49th  or 50th in the country  [as related previously                                                               
by Ms. Kaplan].   She said she thinks perhaps  many people intend                                                               
to donate money but  don't get around to it.   She asked if there                                                               
would be  advertising to let  people know about  [the opportunity                                                               
to donate through the check-off box  on the PFD application].  If                                                               
so, she added,  she said she thinks sharing  that statistic would                                                               
be valuable.                                                                                                                    
                                                                                                                                
10:02:56 AM                                                                                                                   
                                                                                                                                
MS. HAGEVIG said  she has not had an opportunity  to consider the                                                               
idea.  Notwithstanding  that, with the involvement  of United Way                                                               
and  the  affiliation  that  most   of  the  501(c)(3)  nonprofit                                                               
organizations have  with organizations such as  the Foraker Group                                                               
and  the Rasmuson  Foundation, she  said she  thinks [CCS]  would                                                               
participate  in   some  sort  of   collaborative  effort.     She                                                               
continued:                                                                                                                      
                                                                                                                                
     Each  of the  organizations that  I'm aware  of already                                                                    
     [do]   a   flurry   of  advertising   and   independent                                                                    
     fundraising, and  in fact, I would  imagine that you've                                                                    
     noticed that  one of the  target times, in  addition to                                                                    
     the holiday season, is the  flurry of requests that you                                                                    
     get in  the mail  just prior to  the PFD  checks coming                                                                    
     out.    So, the  nonprofit  sector  is already  acutely                                                                    
     aware  of the  influx  into the  economy of  additional                                                                    
     money at this  time, and it is close enough  to the end                                                                    
     of  the year  that  ... we  encourage  people to  think                                                                    
     about  their IRS  situation, and  that this  is a  good                                                                    
     opportunity  to share  this piece  of public  wealth in                                                                    
     the  state  of  Alaska  with those  ...  who  are  less                                                                    
     fortunate.                                                                                                                 
                                                                                                                                
REPRESENTATIVE GARDNER stated, "It seems to  me that if this is a                                                               
new way  of doing  it that  would happen when  you apply  for the                                                               
PFD,  it actually  would give  nonprofits  a second  bite of  the                                                               
apple, and it's easier for people  to say yes when it's something                                                               
in the future.  We know that  for commitments of time, as well as                                                               
money."                                                                                                                         
                                                                                                                                
10:04:38 AM                                                                                                                   
                                                                                                                                
MS. HAGEVIG responded:                                                                                                          
                                                                                                                                
     I  can't  speak  for  my colleagues  in  the  nonprofit                                                                    
     sector, but  I know that  our board of  directors works                                                                    
     very hard  and tries never  to miss an  opportunity ...                                                                    
     to  raise  friends   and  funds.    And   much  of  our                                                                    
     fundraising efforts  are to get our  mission out there,                                                                    
     to make people aware of  the work that we're doing and,                                                                    
     in  fact, to  encourage volunteer  participation, which                                                                    
     we value just as much,  if not more, than the financial                                                                    
     contribution that people make.                                                                                             
                                                                                                                                
10:06:31 AM                                                                                                                   
                                                                                                                                
MS.  KAPLAN,  in  response  to  a  question  from  Representative                                                               
Gruenberg, agreed  that many people write  their charity donation                                                               
checks  at year's  end.    She said  there  will  continue to  be                                                               
marketing toward  the end  of the  year, but  providing a  box to                                                               
check  on  the  PFD  will just  provide  another  opportunity  to                                                               
donate.                                                                                                                         
                                                                                                                                
10:07:29 AM                                                                                                                   
                                                                                                                                
MS. HAGEVIG  said people have  to turn in their  PFD applications                                                               
by the last  day of March, which  is close to [the  April 15] IRS                                                               
tax  filing  deadline.   She  suggested  that people's  financial                                                               
situation is  at the forefront of  their minds when they  write a                                                               
check to the  IRS, and she added that "we,  of course, would like                                                               
to share in the IRS's wealth."                                                                                                  
                                                                                                                                
10:08:45 AM                                                                                                                   
                                                                                                                                
CHAIR SEATON,  after ascertaining that  there was no one  else to                                                               
testify, closed public testimony.                                                                                               
                                                                                                                                
10:08:57 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE GRUENBERG  noted that currently there  is a check-                                                               
off box on  the PFD application for the  college savings program.                                                               
He asked why the donation can only be made up to 50 percent.                                                                    
                                                                                                                                
MS. BARTON said  she would research an  answer for Representative                                                               
Gruenberg.                                                                                                                      
                                                                                                                                
10:10:07 AM                                                                                                                   
                                                                                                                                
CHAIR SEATON  moved to adopt  Amendment 1, which read  as follows                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     Page 4, line 10                                                                                                            
                                                                                                                                
     Delete "one or more municipalities,"                                                                                       
                                                                                                                                
     Insert "municipality,"                                                                                                     
                                                                                                                                
10:10:16 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE GRUENBERG  objected for  discussion purposes.   He                                                               
moved  to adopt  Amendment 1  to Amendment  1, so  that the  word                                                               
"one" is not deleted and  the phrase would be "one municipality".                                                               
He described that as a technical amendment.                                                                                     
                                                                                                                                
CHAIR  SEATON objected  and  recommended  using "a  municipality"                                                               
instead of "one municipality".                                                                                                  
                                                                                                                                
REPRESENTATIVE  GRUENBERG stated  his  agreement, and  therefore,                                                               
Amendment 1 to Amendment 1 read as follows:                                                                                     
                                                                                                                                
     Page 4, line 10                                                                                                            
                                                                                                                                
          Delete "one or more municipalities,"                                                                                  
                                                                                                                                
          Insert "a municipality,"                                                                                              
                                                                                                                                
CHAIR  SEATON asked  if there  was  any objection.   There  being                                                               
none, Amendment 1 to Amendment 1 was adopted.                                                                                   
                                                                                                                                
10:11:14 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  GRUENBERG talked  about the  development of  Cook                                                               
Inlet in  the Anchorage  area, and  he stated,  "I would  hate to                                                               
have this  limited to only one  municipality.  It would  seem you                                                               
very  well might  have a  community foundation  that would  cover                                                               
more than one."                                                                                                                 
                                                                                                                                
10:12:37 AM                                                                                                                   
                                                                                                                                
CHAIR SEATON, in response  to Representative Gruenberg's remarks,                                                               
withdrew Amendment 1, as amended.                                                                                               
                                                                                                                                
10:12:51 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  GARDNER  said in  trying  to  imagine a  type  of                                                               
foundation that would expand  municipalities, suggested a highway                                                               
safety group that works on the entire Kenai Peninsula.                                                                          
                                                                                                                                
CHAIR  SEATON clarified  that a  city within  a borough  does not                                                               
count as more than one municipality under the definition.                                                                       
                                                                                                                                
10:13:23 AM                                                                                                                   
                                                                                                                                
CHAIR SEATON  moved to adopt  Amendment 2, which read  as follows                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     Page 3, line 19, following "foundation."                                                                                   
                                                                                                                                
     Delete "."                                                                                                                 
                                                                                                                                
     Insert "unless  a majority of  its funds over  the past                                                                    
     two calendar  years that  immediately precede  the year                                                                    
     the  application  is  filed  went  to  an  organization                                                                    
     exempt from taxation under 26 U.S.C.501(c)(4) or (6)."                                                                     
                                                                                                                                
10:14:02 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE LYNN objected for discussion purposes.                                                                           
                                                                                                                                
10:14:10 AM                                                                                                                   
                                                                                                                                
CHAIR  SEATON moved  Amendment 1  to  Amendment 2,  to delete  "a                                                               
majority" and replace it with "more than 10 percent".                                                                           
                                                                                                                                
10:14:32 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE LYNN  withdrew his  objection [to Amendment  1, as                                                               
amended].                                                                                                                       
                                                                                                                                
10:14:42 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE GARDNER  objected to Amendment 2,  as amended, for                                                               
discussion purposes.  She asked for further clarification.                                                                      
                                                                                                                                
10:14:55 AM                                                                                                                   
                                                                                                                                
CHAIR  SEATON  explained, "What  this  would  be  is that  if  an                                                               
organization  had more  than  10  percent of  its  grants in  the                                                               
previous  two years  to  an organization  that  did 501(c)(4)  or                                                               
(c)(6) items, then they wouldn't qualify to be on this list."                                                                   
                                                                                                                                
10:16:21 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE GARDNER removed her objection.                                                                                   
                                                                                                                                
10:16:28 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE GRUENBERG [objected for  discussion purposes].  He                                                               
questioned  the phrase,  "an organization".    He explained  that                                                               
there  could be  a 501(c)(3)  organization "that  is basically  a                                                               
funnel that  gives to a  number of organizations that  are (c)(4)                                                               
or (c)(6),  and that's all  that it does."   He added,  "And they                                                               
would escape under this."                                                                                                       
                                                                                                                                
10:16:39 AM                                                                                                                   
                                                                                                                                
CHAIR  SEATON said  he  would  accept Representative  Gruenberg's                                                               
suggestion as  [Amendment 2 to  Amendment 2], which  would strike                                                               
"an organization"  and insert "organizations"  in its place.   He                                                               
asked if there  was any objection to [Amendment 2  to Amendment 2                                                               
was adopted].  There being none, it was so ordered.                                                                             
                                                                                                                                
CHAIR SEATON asked if there was  any objection to Amendment 2 [as                                                               
amended].  [Representative Gruenberg's  objection to Amendment 2,                                                               
as  amended, was  treated as  removed.]   There being  no further                                                               
objection, Amendment 2, as amended, was adopted.                                                                                
                                                                                                                                
10:18:12 AM                                                                                                                   
                                                                                                                                
CHAIR SEATON moved to adopt Amendment [3], as follows:                                                                          
                                                                                                                                
     On page 2, line 25:                                                                                                        
                                                                                                                                
          Delete "August 1"                                                                                                     
          Insert "June 15"                                                                                                      
                                                                                                                                
REPRESENTATIVE GRUENBERG  objected for  discussion purposes.   He                                                               
said  he would  like  the opinions  of both  Ms.  Barton and  Ms.                                                               
Kaplan.                                                                                                                         
                                                                                                                                
10:19:25 AM                                                                                                                   
                                                                                                                                
MS. BARTON  said both  the Rasmuson  Foundation and  the division                                                               
need to  have enough time  to review documents, because  they can                                                               
expect  appeals.    Until  the   division  knows  the  number  of                                                               
organizations, it  will need to  "plug those  organizations right                                                               
in to the computer programs."   She said she thinks June 15 would                                                               
work for the division.                                                                                                          
                                                                                                                                
10:21:03 AM                                                                                                                   
                                                                                                                                
MS. KAPLAN  said June 15 would  be a tight timeline,  because the                                                               
Rasmuson Foundation does not have  any control regarding when the                                                               
bill is signed.  She expressed a preference for July 15.                                                                        
                                                                                                                                
CHAIR SEATON explained  that based on what he has  heard from the                                                               
division, without an early enough  date, "we're going to miss the                                                               
entire year."                                                                                                                   
                                                                                                                                
10:22:22 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE GRUENBERG  removed his  objection to  Amendment 3.                                                               
There being no further objection, Amendment 3 was adopted.                                                                      
                                                                                                                                
10:22:51 AM                                                                                                                   
                                                                                                                                
CHAIR SEATON moved Amendment 4, which read as follows:                                                                          
                                                                                                                                
     On page 2, line 11:                                                                                                        
                                                                                                                                
          Delete "random"                                                                                                       
          Insert "alphabetical"                                                                                                 
                                                                                                                                
CHAIR SEATON asked if there was any objection.  There being                                                                     
none, Amendment 4 was adopted.                                                                                                  
                                                                                                                                
10:23:09 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE GARDNER moved to report CSHB 496, Version 24-                                                                    
LS1793\Y,  Cook,  4/3/06,  as  amended,  out  of  committee  with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There being no  objection, CSHB 496(STA) was reported  out of the                                                               
House State Affairs Standing Committee.                                                                                         
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
State Affairs Standing Committee meeting was adjourned at                                                                       
10:23:47 AM.                                                                                                                  

Document Name Date/Time Subjects