Legislature(2007 - 2008)SENATE FINANCE 532

05/12/2007 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 01:30 pm --
+= HB 177 NATURAL GAS PIPELINE PROJECT TELECONFERENCED
Moved Out of Committee 5/11/07
+ HCR 6 CIVICS EDUC/ CITIZENS ADVISORY TASK FORCE TELECONFERENCED
Moved SCS CSHCR 6(SED) Out of Committee
+ HB 113 OPTOMETRISTS' USE OF PHARMACEUTICALS TELECONFERENCED
Heard & Held
+ HB 90 CRIMES/CRIM PROCEDURE/SENTENCING TELECONFERENCED
Moved SCS CSHB 90(FIN) Out of Committee
+= HB 162 MORTGAGE LENDING TELECONFERENCED
Moved CSHB 162(FIN) Out of Committee
+ HB 166 CONTRIBUTIONS FROM PERM. FUND DIVIDENDS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                            MINUTES                                                                                           
                    SENATE FINANCE COMMITTEE                                                                                  
                          May 12, 2007                                                                                        
                           9:16 a.m.                                                                                          
                                                                                                                                
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair  Bert  Stedman  convened the  meeting  at  approximately                                                               
9:16:39 AM.                                                                                                                   
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Kim Elton                                                                                                               
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
Senator Fred Dyson                                                                                                              
                                                                                                                                
Also  Attending:  REPRESENTATIVE  RALPH  SAMUELS;  REPRESENTATIVE                                                             
BILL  THOMAS; REPRESENTATIVE  BILL STOLTZ;  TOM WRIGHT,  Staff to                                                               
Representative   John    Harris;   SIDNEY   MORGAN,    Staff   to                                                               
Representative Ralph  Samuels; MARK DAVIS, Director,  Division of                                                               
Banking  &  Securities,  Department of  Commerce,  Community  and                                                               
Economic Development;  JESSE KIEHL,  Staff to Senator  Kim Elton;                                                               
RICK SNOBODNY,  Chief Assistant Attorney General,  Legal Services                                                               
Section-Juneau,  Criminal  Division,  Department  of  Law;  DAVID                                                               
GREISEN,  Staff to  Senator Bert  Stedman; KACI  HOTCH, Staff  to                                                               
Representative    Bill   Thomas;    JERRY   BURNETT,    Director,                                                               
Administrative   Services  Division   and  Legislative   Liaison,                                                               
Department of  Revenue; EDDY JEANS, Director,  School Finance and                                                               
Facilities   Section,   Department   of   Education   and   Early                                                               
Development; BOB  LOESCHER; DR. MICHAEL BENNETT,  Optometrist and                                                               
President,  Alaska  Optometric  Association; DR.  JILL  MATHESON,                                                               
Optometrist and Chair, Alaska State Board of Optometry                                                                          
                                                                                                                                
Attending  via  Teleconference:   From  Offnet  Locations:  DAVID                                                             
SCHADE, Director,  Division of Statewide Services,  Department of                                                               
Public Safety;  DR. DAVID CHAMBERLAIN, Ophthalmologist;  DR. ERIC                                                               
COULTER,  Ophthalmologist; DR.  CARL  ROSEN, Ophthalmologist  and                                                               
President, Alaska  Society of  Ophthalmology; From  Mat-Su: CHRIS                                                               
SKINNER, Owner,  Kelstar Alaska  Mortgage Company  and President,                                                               
Alaska Association of Mortgage Brokers                                                                                          
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
HCR 6-CIVICS EDUC/ CITIZENS ADVISORY TASK FORCE                                                                                 
                                                                                                                                
The Committee  heard from the  resolution's sponsor  and reported                                                               
the resolution from Committee.                                                                                                  
                                                                                                                                
HB 113-OPTOMETRISTS' USE OF PHARMACEUTICALS                                                                                     
                                                                                                                                
The  Committee heard  from  the bill's  sponsor  and took  public                                                               
testimony. The bill was held in Committee.                                                                                      
                                                                                                                                
HB 162-MORTGAGE LENDING                                                                                                         
                                                                                                                                
The Committee  heard from the  Department of  Commerce, Community                                                               
and Economic  Development and took public  testimony. A committee                                                               
substitute and two amendments were  adopted and the bill reported                                                               
from Committee.                                                                                                                 
                                                                                                                                
HB 90-CRIMES/CRIM PROCEDURE/SENTENCING                                                                                          
                                                                                                                                
The Committee heard  from the bill's sponsors,  the Department of                                                               
Law, and the Department of  Public Safety. A committee substitute                                                               
was adopted and the bill reported from Committee.                                                                               
                                                                                                                                
HB 166-CONTRIBUTIONS FROM PERM. FUND DIVIDENDS                                                                                  
                                                                                                                                
The Committee  heard from the  bill's sponsor and  the Department                                                               
of Revenue. A  committee substitute was adopted and  the bill was                                                               
held in Committee.                                                                                                              
                                                                                                                                
SB 178-EDUCATION FUNDING                                                                                                        
                                                                                                                                
The Committee heard  an overview of the bill  from the Department                                                               
of  Education  and  Early  Development.  The  bill  was  held  in                                                               
Committee.                                                                                                                      
                                                                                                                                
9:17:05 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman reviewed the day's agenda.                                                                                     
                                                                                                                                
9:17:48 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE CONCURRENT RESOLUTION NO. 6(SED)                                                                
     Relating to civics education and a citizens' advisory task                                                                 
     force.                                                                                                                     
                                                                                                                                
                                                                                                                                
This  was the  first hearing  for this  resolution in  the Senate                                                               
Finance Committee.                                                                                                              
                                                                                                                                
9:18:04 AM                                                                                                                    
                                                                                                                                
TOM  WRIGHT,  Staff to  Representative  John  Harris, the  bill's                                                               
sponsor by  request of the  Alaska Association of  School Boards,                                                               
explained that this resolution would  establish a six person task                                                               
force to  review the findings  of the 2006 Alaska  Civic Learning                                                               
Assessment  Project  (ACLAP)  which  had been  conducted  at  the                                                               
direction  of the  Legislature.  The proposed  task force,  which                                                               
would consist of two individuals  appointed by the Speaker of the                                                               
House, two  appointed by the  Senate President, one  appointed by                                                               
the Governor  and one member  of the Department of  Education and                                                               
Early Development,  would develop a list  of recommendations that                                                               
would be provided to the Legislature  within the first 30 days of                                                               
the 2008 Legislative Session.                                                                                                   
                                                                                                                                
Mr. Wright  reminded the Committee  that the ACLAP  was conducted                                                               
the  prior  year to  discuss  how  the State's  education  system                                                               
"could improve  civics learning among  K-12 students". A  copy of                                                               
the ACLAP  "Final Report  and Policy  Brief" dated  November 2006                                                               
[copy on file] had been included in Members' packets.                                                                           
                                                                                                                                
9:19:23 AM                                                                                                                    
                                                                                                                                
In  response  to  a  question from  Senator  Thomas,  Mr.  Wright                                                               
affirmed that  civics was currently  taught in  schools. However,                                                               
the   Alaska   Association   of  School   Boards   (AASB)   asked                                                               
Representative Harris  to sponsor  this legislation in  an effort                                                               
"to  enhance and  encourage curriculum  development  in order  to                                                               
help  better  prepare students  as  far  as civics  education  is                                                               
concerned".                                                                                                                     
                                                                                                                                
9:19:51 AM                                                                                                                    
                                                                                                                                
Senator  Huggins, a  member of  the  Senate Education  Committee,                                                               
disclosed  that  one  issue  discussed  during  that  Committee's                                                               
hearings  on this  resolution was  whether  "this would  manifest                                                               
itself as  a mandatory  curriculum" component.  The determination                                                               
was that it  would not: AASB assured the Committee  that it would                                                               
be viewed as "a convincing argument" rather than a mandate.                                                                     
                                                                                                                                
9:20:39 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  moved to report  the resolution  from Committee                                                               
with individual recommendations and accompanying fiscal notes.                                                                  
                                                                                                                                
9:20:59 AM                                                                                                                    
                                                                                                                                
Without objection, SCS CS HCR  6(SED) was REPORTED from Committee                                                               
with two previous  fiscal notes: $18,500 fiscal note  #1 from the                                                               
Legislative Affairs  Agency and  $3,000 fiscal  note #2  from the                                                               
Department of Education and Early Development.                                                                                  
                                                                                                                                
9:21:47 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 113(L&C)                                                                               
     "An Act relating to the prescription and use of                                                                            
     pharmaceutical agents, including controlled substances, by                                                                 
     optometrists; and providing for an effective date."                                                                        
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
9:22:08 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RALPH SAMUELS, the  bill's sponsor, identified the                                                               
State's  geography  and small  population  base  as factors  that                                                               
limit  access  to health  care  in  the  State. This  bill  would                                                               
enhance health care services  by extending prescriptive authority                                                               
to optometrists.  Alaska would  join 45  other states  that allow                                                               
similar practice.                                                                                                               
                                                                                                                                
Representative  Samuels declared  that expanding  the ability  of                                                               
optometrists, who  far outnumber  ophthalmologists in  the State,                                                               
"to do more" would benefit Alaskans.                                                                                            
                                                                                                                                
Representative Samuels stated that  the experience of states that                                                               
allow  optometrists  to  have  prescriptive  authority  has  been                                                               
positive.                                                                                                                       
                                                                                                                                
9:24:02 AM                                                                                                                    
                                                                                                                                
Senator Thomas  understood that college level  optometry training                                                               
programs include  instruction on the  use of needles as  a matter                                                               
of routine. Thus, the seven  hours of training identified in this                                                               
legislation would be in addition to that training.                                                                              
                                                                                                                                
9:25:07 AM                                                                                                                    
                                                                                                                                
Representative Samuels  could not speak  to that matter,  but was                                                               
confident  it   could  be  addressed   by  one  of   the  medical                                                               
professionals who would be testifying on the bill.                                                                              
                                                                                                                                
9:25:15 AM                                                                                                                    
                                                                                                                                
Senator Olson  asked how the  bill before the  Committee differed                                                               
from the original bill.                                                                                                         
                                                                                                                                
9:25:44 AM                                                                                                                    
                                                                                                                                
Representative  Samuels  stated that  changes  were  made to  the                                                               
education requirements.                                                                                                         
                                                                                                                                
9:25:57 AM                                                                                                                    
                                                                                                                                
In response to a follow-up  question from Senator Olson, Co-Chair                                                               
Stedman and  Representative Samuels  advised that the  seven hour                                                               
training   requirement  for   injecting  nontopical   therapeutic                                                               
pharmaceutical agents,  specified in Section 2  subsection (d)(2)                                                               
on page 2 lines 16 and 17, was added to the bill.                                                                               
                                                                                                                                
Representative  Samuels also  noted that  language pertaining  to                                                               
the use of  Botox was added as specified in  Section 3 subsection                                                               
(a)(1)(E) page 3 lines 2 through 4.                                                                                             
                                                                                                                                
9:26:14 AM                                                                                                                    
                                                                                                                                
SIDNEY  MORGAN, Staff  to Representative  Ralph Samuels,  further                                                               
discussed the various provisions that  had been added to the bill                                                               
to  address concerns  about injectibles  including the  provision                                                               
that would  specify a  January 1, 2009  effective date  for their                                                               
use.                                                                                                                            
                                                                                                                                
Ms. Morgan also noted that numerous  changes had been made by the                                                               
House  Health, Education  & Social  Services (HES)  Committee, so                                                               
much so that  the bill increased from two to  four pages. The HES                                                               
amendments  addressed  such  things  as the  types  of  types  of                                                               
narcotics that could be prescribed  and limited the duration of a                                                               
prescribed medication to four days.                                                                                             
                                                                                                                                
9:28:37 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  asked whether the bill's  sponsor was confident                                                               
that  the  zero fiscal  note  from  the Department  of  Commerce,                                                               
Community and Economic  Development was a true  reflection of the                                                               
costs associated with the bill.                                                                                                 
                                                                                                                                
9:28:58 AM                                                                                                                    
                                                                                                                                
Representative Samuels affirmed the accuracy of the fiscal note.                                                                
                                                                                                                                
In response  to a question  from Senator Olson,  Co-Chair Stedman                                                               
disclosed  that numerous  ophthalmologists  and optometrists  had                                                               
signed up to testify on the bill.                                                                                               
                                                                                                                                
9:29:48 AM                                                                                                                    
                                                                                                                                
DR.   DAVID    CHAMBERLAIN,   Ophthalmologist,    testified   via                                                               
teleconference  from   an  offnet   location  and   informed  the                                                               
Committee that  he has practiced in  the State for more  than ten                                                               
years.                                                                                                                          
                                                                                                                                
Dr.  Chamberlain  sought  to  correct  misstatements  made  by  a                                                               
[unspecified]  testifier  before  another committee  of  referral                                                               
regarding  access to  health care.  Contrary  to that  testimony,                                                               
ophthalmologists  do travel  to  small communities  in the  State                                                               
such as Klawock and Craig.                                                                                                      
                                                                                                                                
Dr.  Chamberlain stressed  that this  correction is  important as                                                               
supporters of  the bill tout  lack of  access as "a  big problem"                                                               
and thus,  reason to  support this  bill. This  is not  true. For                                                               
example, either he  or his practice partner  conducts eye clinics                                                               
in Klawock once  or twice a year. Furthermore,  he also regularly                                                               
conducts clinics through  his job with the  Alaska Native Medical                                                               
Center,  in  other  small  communities  including  Barrow,  Nome,                                                               
Kotzebue, Bethel, Dillingham, and  Kodiak, and Sitka. The clinics                                                               
are conducted in a cooperative  effect with optometrists in those                                                               
areas.                                                                                                                          
                                                                                                                                
Dr.  Chamberlain  pointed  out  that the  Alaska  Native  Medical                                                               
Center  also  employs  optometrists throughout  the  State.  They                                                               
serve both their community and its surrounding area.                                                                            
                                                                                                                                
Dr. Chamberlain continued. When a  person with an eye problem "is                                                               
sick enough  to require an  oral or an injectible  medicine", the                                                               
community's optometrists  or village health aide  or physician or                                                               
nurse practitioner  call an ophthalmologist. The  State typically                                                               
has  two  ophthalmologists or  medical  doctors  on call  at  all                                                               
times. The point was that this  bill "does not increase access to                                                               
an  optometrist,  and  actually  it may  decrease  access  to  an                                                               
ophthalmologist, accidentally."                                                                                                 
                                                                                                                                
Dr. Chamberlain  professed that this  bill would  reduce training                                                               
requirements pertaining  to injecting and  prescribing medicines.                                                               
It  would  also   force  a  redefinition  of   the  role  between                                                               
ophthalmologists and optometrists.                                                                                              
                                                                                                                                
9:33:34 AM                                                                                                                    
                                                                                                                                
Dr. Chamberlain declared that he  has a good working relationship                                                               
with optometrists  throughout that State  and that a  good system                                                               
is in place to address the State's eye care needs.                                                                              
                                                                                                                                
Dr. Chamberlain  advised that medical issues  concerning eye-care                                                               
are  complex.  Oftentimes,  an eye  problem  is  associated  with                                                               
another  medical issue  such as  diabetes;  few medicines  "treat                                                               
just the eye". A topical  medication applied by an optometrist in                                                               
a remote area would allow for sufficient eye examination.                                                                       
                                                                                                                                
Dr.  Chamberlain declared  that safeguards  must be  in place  to                                                               
protect  patients from  eye injuries  due to  "inadvertent intra-                                                               
ocular injections". This "accidental  perforation of the eyeball"                                                               
can   occur   even   when   the   procedure   is   conducted   by                                                               
ophthalmologists  and  anesthesiologists.  However,  the  highest                                                               
percent   of  this   incidence  occurs   when  an   injection  is                                                               
administered by someone other than an ophthalmologist.                                                                          
                                                                                                                                
9:35:17 AM                                                                                                                    
                                                                                                                                
Dr. Chamberlain  contended that access  to quality  medical "care                                                               
would be  reduced" under this bill.  Furthermore, "the complexity                                                               
of  the human  organism is  such that  we need  to listen  to the                                                               
best" medical  advice including that of  the Controlled Substance                                                               
Advisory    Committee    and    the    State    Medical    Board.                                                               
"Ophthalmologists  are  uniquely  qualified  to  provide  medical                                                               
information,  particularly  in  regards   to  when  it  would  be                                                               
acceptable  for  a  non-ophthalmologist   to  perform  a  medical                                                               
procedure.                                                                                                                      
                                                                                                                                
9:36:10 AM                                                                                                                    
                                                                                                                                
DR. ERIC  COULTER, Ophthalmologist, testified  via teleconference                                                               
from an offnet  location to voice concern  about the legislation.                                                               
He rebuffed  the argument that  this legislation would  assist in                                                               
addressing the "lack of care" in  the State. He also thought that                                                               
adopting this  legislation would reduce  the quality of  eye care                                                               
in  the State  as allowing  optometrists "to  delve into  greater                                                               
therapeutic options  without proper training" would  likely delay                                                               
referral to an ophthalmologist.                                                                                                 
                                                                                                                                
Dr.  Coulter  pointed  out  that  topical  eye  drops  and  other                                                               
therapeutic medicines currently utilized  by optometrists are the                                                               
standard   medical    response   to   eye   problems    even   by                                                               
ophthalmologists. The need for  injectibles is relatively ""rare"                                                               
and,  when  administered,   is  typically  in  the   form  of  an                                                               
intravenous antibiotic. A person requiring  that level of care is                                                               
likely receiving in-patient hospital care.                                                                                      
                                                                                                                                
Dr. Coulter  contended that  a medical  situation occurring  in a                                                               
remote  area  that required  more  than  topical treatment  would                                                               
likely require  more extensive medical  care than  an optometrist                                                               
could provide.                                                                                                                  
                                                                                                                                
Dr. Coulter advised  the Committee that he  had submitted written                                                               
remarks [copy  on file] which  outlined many of his  concerns. It                                                               
also overviewed  the optometry field's  attempt to  broaden their                                                               
scope  of practice  nationwide. One  of their  arguments is  that                                                               
Alaska  is behind  the times  because it  has not  passed similar                                                               
legislation. To  that point,  he thought  that each  state should                                                               
address its needs independently.                                                                                                
                                                                                                                                
Dr. Coulter  shared that the American  Academy of Ophthalmology's                                                               
research  department considered  this legislation  to be  "a more                                                               
loosely written"  and broader bill  than any  but five of  the 45                                                               
States that have adopted legislation on this issue.                                                                             
                                                                                                                                
Dr. Coulter urged  the Committee to conduct a  thorough review of                                                               
the  bill  before  taking  action on  it;  specifically  in  that                                                               
passage of  the bill in  its current form might  have" unintended                                                               
consequences". The  argument that  "a lack of  care in  the State                                                               
warrants expanded  pharmacologic privileges, in my  mind, is just                                                               
misleading". He  urged the Committee to  seek supporting evidence                                                               
to  that claim,  particularly in  respect to  rural areas  of the                                                               
State.                                                                                                                          
                                                                                                                                
Dr. Coulter  argued that many communities  experience regular eye                                                               
care  service  and  referrals  to  ophthalmologists  are  readily                                                               
available.                                                                                                                      
                                                                                                                                
Dr. Coulter shared  that an ophthalmologist who  practiced on the                                                               
Kenai Peninsula for more than 30  years found very little use for                                                               
injectibles and even let his narcotics license expire.                                                                          
                                                                                                                                
9:41:38 AM                                                                                                                    
                                                                                                                                
Dr.  Coulter  urged  the Committee  to  respect  "the  historical                                                               
validity  of our  medical  system  and try  not  to rewrite  what                                                               
constitutes  competent  medical  care  in  our  communities."  He                                                               
reminded the Committee  that the Alaska State  Medical Board, the                                                               
Alaska  State  Medical   Association,  the  Alaska  Ophthalmology                                                               
Society,  and  the  American Academy  of  Ophthalmology  did  not                                                               
support this bill.                                                                                                              
                                                                                                                                
9:42:14 AM                                                                                                                    
                                                                                                                                
Senator  Thomas  would  have expected  the  American  Academy  of                                                               
Ophthalmology  to  be  against the  bill.  Continuing,  he  asked                                                               
whether the concern is that  "some obscure eye diseases would not                                                               
be diagnosed  properly based on"  a patient being  treated solely                                                               
by an  optometrist and  that the patient  would not  seek further                                                               
care  because   they  had   been  treated   by  an   eye  doctor,                                                               
irrespective   of  the   fact   the  eye   doctor   was  not   an                                                               
ophthalmologist.                                                                                                                
                                                                                                                                
9:43:00 AM                                                                                                                    
                                                                                                                                
Dr.   Coulter  stated   that  the   concern   goes  beyond   that                                                               
circumstance; it includes the complete  evaluation of such things                                                               
as "whose training is more adequate."                                                                                           
                                                                                                                                
Dr.  Coulter  affirmed  there was  a  good  working  relationship                                                               
between  the two  professions as  evidenced by  the fact  that he                                                               
refers patients to  optometrists and they refer  patients to him.                                                               
The  concern  "is  not so  much  a  turf  battle"  as it  is  the                                                               
misconception that  expanded pharmacologics  is somehow  going to                                                               
improve the  care in  rural areas  if it  is delivered  by people                                                               
that are more accessible.                                                                                                       
                                                                                                                                
Dr.  Coulter  agreed  that  there  were  more  optometrists  than                                                               
ophthalmologists' practicing  in the State,  but that is  true in                                                               
every  State in  the nation  "because of  the different  training                                                               
requirements".  The   concern  is   not  that   optometrists  are                                                               
incapable  of  utilizing pharmacologics,  it  is  to the  "casual                                                               
comments about the lack of  care in communities because there are                                                               
so few ophthalmologists". This is a misguided argument.                                                                         
                                                                                                                                
Dr. Coulter  reiterated that a  person who does not  respond well                                                               
to the  topical medications  currently available  to optometrists                                                               
is likely  a person  with a serious  medical condition.  Thus, if                                                               
the intent is to enhance the  quality of care in communities, the                                                               
Committee should  consider the fact  that this  legislation might                                                               
be "counter-intuitive"  to the  goal: it  might actually  delay a                                                               
referral to a specialist.                                                                                                       
                                                                                                                                
9:45:03 AM                                                                                                                    
                                                                                                                                
DR. CARL ROSEN, Ophthalmologist  and President, Alaska Society of                                                               
Ophthalmology,  testified  via   teleconference  from  an  offnet                                                               
location. He reviewed his extensive  medical background and noted                                                               
that  as a  result of  his experience  he had  "a unique  vantage                                                               
point" regarding eye injections.                                                                                                
                                                                                                                                
Dr. Rosen stated  that the Society considers this a  bad bill for                                                               
a number  of reasons. "One is  that it is so  extremely difficult                                                               
to  acquire  acceptance  into a  medical  school";  ophthalmology                                                               
programs  are  very selective  and  once  admitted, students  are                                                               
subjected to six years of rigorous training.                                                                                    
                                                                                                                                
Dr.   Rosen  also   pointed   out   that,  unlike   optometrists,                                                               
ophthalmologists  have hospital  privileges  and  are on-call  in                                                               
case of  an emergency. This has  been the practice for  more than                                                               
30 years.                                                                                                                       
                                                                                                                                
9:47:15 AM                                                                                                                    
                                                                                                                                
Dr. Rosen informed the  Committee that ophthalmologists typically                                                               
undergo 24,000  hours of clinical training;  optometrists however                                                               
typically undergo 2,000 hours of such training.                                                                                 
                                                                                                                                
Dr.  Rosen declared  that this  bill  would expand  optometrists'                                                               
"scope of  practice enormously," specifically  their prescriptive                                                               
authority. They would  be authorized to prescribe  Class III, IV,                                                               
and V  medications, including codeine, pain  medications, valium,                                                               
cardiac,  diabetic,  and  anti-seizure medications  to  children,                                                               
pregnant women, infants, and the elderly.                                                                                       
                                                                                                                                
Dr. Rosen recommended  the formation of a  committee to determine                                                               
"exactly what is  needed". Their task should include  a review of                                                               
current health  care services, timetables, limitations,  and even                                                               
what diseases should  be addressed. He was confident  that such a                                                               
committee could  develop workable  solutions to the  issues, with                                                               
"better limits and boundaries that  the ophthalmology and medical                                                               
community can live with".                                                                                                       
                                                                                                                                
9:49:45 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BILL THOMAS  declared that this bill  is about the                                                               
availability  of  adequate  eye  care,  specifically  for  people                                                               
living  in rural  communities.  A person  living  in Haines,  for                                                               
example, would be required to  spend approximately $1,000 dollars                                                               
to get  their child  to Juneau or  Anchorage for  treatment. Such                                                               
costs  would  be alleviated  where  there  an opportunity  to  be                                                               
treated by an optometrists in their community.                                                                                  
                                                                                                                                
Representative  Thomas observed  that  the Legislature  routinely                                                               
strives to  allow those in  the medical field to  "maximize their                                                               
abilities".  Rather than  this  being "a  turf  war", the  effort                                                               
should be on taking care of people.                                                                                             
                                                                                                                                
Representative  Thomas discussed  a problem  a family  member had                                                               
with   treatment  provided   by   an   ophthalmologist.  It   was                                                               
exacerbated  by the  fact that  she had  to travel  from a  rural                                                               
community to Juneau for treatment.                                                                                              
                                                                                                                                
Representative   Thomas  respected   the  services   provided  by                                                               
ophthalmologists  and  urged them  to  respect  the abilities  of                                                               
optometrists.  The  on-going   challenge  of  attracting  medical                                                               
professionals to the State could  be lessened by allowing them to                                                               
perform duties they were trained for.                                                                                           
                                                                                                                                
Representative Thomas urged  the Committee to pass  the bill. "It                                                               
is important to small communities."                                                                                             
                                                                                                                                
9:53:05 AM                                                                                                                    
                                                                                                                                
BOB LOESCHER testified in Juneau  and informed the Committee that                                                               
as  a legally  blind man,  he  has received  treatment from  both                                                               
optometrists and ophthalmologists.                                                                                              
                                                                                                                                
Mr. Loescher, on behalf of  health care consumers, questioned the                                                               
reason  the  bill was  not  accompanied  by  a fiscal  note  that                                                               
addressed whether this legislation  would increase costs or risks                                                               
to consumers.                                                                                                                   
                                                                                                                                
Mr. Loescher  provided a  list of questions  [copy on  file] that                                                               
should be  asked on  behalf of consumers.  He contended  that the                                                               
legislation would  impact the  Department of  Commerce, Community                                                               
and Economic Development since they  administer and assist boards                                                               
pertinent to  this legislation  such as  the State  Medical Board                                                               
and the  Board of Optometry  Examiners. New  regulations, testing                                                               
and monitoring pertaining  to the expanded scope  of practice for                                                               
optometrists would be required.                                                                                                 
                                                                                                                                
Mr.  Loescher agreed  that  the bill  would  increase service  to                                                               
people living  in rural  Alaska. However,  there is  concern that                                                               
this expanded  service might  increase the  cost of  Medicaid for                                                               
young  people and  the elderly.  This  should be  addressed in  a                                                               
fiscal note.                                                                                                                    
                                                                                                                                
Mr.  Loescher  has spent  considerable  time  tracking this  bill                                                               
during its progression through the  Legislature. The questions he                                                               
has provided  have been well-researched and  should be addressed.                                                               
For  instance, this  bill would  require optometrists  to undergo                                                               
continuing  education;  the  question  is  where  and  who  would                                                               
provide that training. This might  require the involvement of the                                                               
Department  of  Labor  and  Workforce  Development.  Other  State                                                               
agencies and departments might also be affected by this bill.                                                                   
                                                                                                                                
9:58:46 AM                                                                                                                    
                                                                                                                                
Mr. Loescher summarized his goals.  One is that adequate consumer                                                               
protection  be  provided. This  would  require  State boards  and                                                               
agencies  to be  involved in  certifying and  monitoring doctors.                                                               
The  other  goal would  be  to  ensure  that  the State  has  the                                                               
"highest qualify  medical care for all  Alaska citizens performed                                                               
by the  most qualified persons." State  government is responsible                                                               
for insuring these standards.                                                                                                   
                                                                                                                                
Mr.  Loescher  concluded  that  these  responsibilities  must  be                                                               
addressed in a fiscal note and reviewed by the Committee.                                                                       
                                                                                                                                
9:59:56 AM                                                                                                                    
                                                                                                                                
Senator Elton  informed the Committee  he had previously  met and                                                               
discussed  this  bill  with  Mr.  Loescher, who  is  one  of  his                                                               
constituents. During that discussion,  Mr. Loescher asked Senator                                                               
Elton to  read his list  of questions to the  Committee, however,                                                               
Senator Elton did  not deem that necessary now as  it was part of                                                               
the record and  each Member of the Committee had  received a copy                                                               
of it.                                                                                                                          
                                                                                                                                
Senator  Elton  stated  that  the list  of  questions  was  quite                                                               
extensive and  an immediate response was  unlikely. Therefore, he                                                               
committed  to  being  responsible  for  getting  the  appropriate                                                               
entities to respond.                                                                                                            
                                                                                                                                
Co-Chair  Stedman  acknowledged.  Time   would  be  available  to                                                               
further address  concerns since the  intent was to hold  the bill                                                               
in Committee.                                                                                                                   
                                                                                                                                
10:00:54 AM                                                                                                                   
                                                                                                                                
Senator Huggins  addressed the concern  raised in a May  11, 2007                                                               
letter [copy on  file] from Mr. Loescher  that optometrists would                                                               
be  allowed  to  administer  Botox:  optometrists  would  not  be                                                               
allowed  to  administer that  drug  under  the Senate  Labor  and                                                               
Commerce version of the bill before the Committee.                                                                              
                                                                                                                                
Mr.  Loescher  appreciated  the clarification.  Optometrists  had                                                               
been allowed  to administer  Botox in an  earlier version  of the                                                               
bill.                                                                                                                           
                                                                                                                                
10:02:01 AM                                                                                                                   
                                                                                                                                
DR.   MICHAEL   BENNETT,   Optometrist  and   President,   Alaska                                                               
Optometric  Association  testified in  Juneau  on  behalf of  the                                                               
Association's 107 members and their patients.                                                                                   
                                                                                                                                
Dr. Bennett  considered the  scope of  the bill  to be  "far more                                                               
limited" than it  was being portrayed. Nine  states have approved                                                               
legislation  allowing optometrists  to  utilize injectibles  with                                                               
zero requirements  and limitations.  At least  ten states  do not                                                               
impose limits on  the length of time a drug  could be prescribed.                                                               
The  variety  of approaches  taken  by  states  on this  type  of                                                               
legislation makes comparisons difficult.                                                                                        
                                                                                                                                
Dr. Bennett  expressly clarified that  this bill "does  not grant                                                               
surgical privileges"  to optometrists.  Such privileges  were not                                                               
being sought by  optometrists. There was no desire  "to usurp the                                                               
position" of ophthalmologists.                                                                                                  
                                                                                                                                
10:04:27 AM                                                                                                                   
                                                                                                                                
Dr. Bennett reviewed the education  received by optometrists. The                                                               
"four  rigorous years"  of training  beyond that  required for  a                                                               
bachelors'   degree,  qualified   them  as   a  "doctoral   level                                                               
profession". The  200 hours  of pharmacological  training enables                                                               
them to  be well-qualified for  the prescriptive  rights provided                                                               
in  this bill.  Other training  they receive  is closely  aligned                                                               
with that required of doctors and dentists.                                                                                     
                                                                                                                                
Dr. Bennett  stated that  the 2,000  hours of  "supervised direct                                                               
patient contact"  optometrists undergo is not  limited to healthy                                                               
young individuals. A large number  of eye care problems "arise in                                                               
people who are  older or have other  debilitating diseases." This                                                               
is reflected  in the patient contact  training. Optometrists also                                                               
participate in hospital-based training.                                                                                         
                                                                                                                                
Dr. Bennett  informed the Committee  that optometrists  conduct a                                                               
complete medical background, including  a review of the patient's                                                               
medications, on  each patient's  initial visit.  Optometrists are                                                               
also trained to spot signs of  such things as high blood pressure                                                               
during an  eye examination. Optometrists  also work  closely with                                                               
patients' primary care doctors on a variety of health issues.                                                                   
                                                                                                                                
Dr. Bennett  clarified that  the course  work identified  in this                                                               
bill, such as  the seven hour training  requirement pertaining to                                                               
the  injection of  nontopical therapeutic  pharmaceutical agents,                                                               
should be  viewed as  "refresher" training,  as that  training is                                                               
conducted in optometry school.                                                                                                  
                                                                                                                                
Dr. Bennett stated that the use  of these new privileges would be                                                               
rather limited and  would not be utilized on a  day to day basis.                                                               
Typical infection treatment  would tend to be  an oral antibiotic                                                               
or  a topical  medication.  Extreme cases  would  continue to  be                                                               
referred to another doctor.                                                                                                     
                                                                                                                                
10:08:44 AM                                                                                                                   
                                                                                                                                
Senator  Olson asked  the Board  of Optometry's  position on  the                                                               
bill.                                                                                                                           
                                                                                                                                
Dr. Bennett deferred to the next  testifier, who was the Chair of                                                               
that Board.                                                                                                                     
                                                                                                                                
Senator Olson, a medical doctor,  asked regarding the training an                                                               
optometrist would  have in respect  to treating a person  who had                                                               
an anaphylactic shock response to an injection.                                                                                 
                                                                                                                                
Dr.  Bennett  clarified   that  the  most  common   cause  of  an                                                               
anaphylactic  reaction   in  an  optometrist's  office   is  from                                                               
dilating  agents.  This risk  is  ever-present  to him  since  he                                                               
conducts  an average  of ten  dilations  a day  in his  practice.                                                               
Current law  prohibits him from  even using an EpiPen  to address                                                               
an anaphylactic situation  even though "anyone with  a bee string                                                               
allergy" can. This could be  considered one of "the most critical                                                               
aspects" of this bill.                                                                                                          
                                                                                                                                
10:10:22 AM                                                                                                                   
                                                                                                                                
Senator Olson inquired to the  number of optometrists who possess                                                               
an Advanced  Cardiac Life Support  (ACLS) certification,  as that                                                               
would allow them to administer to an anaphylactic individual.                                                                   
                                                                                                                                
Dr. Bennett did not know.                                                                                                       
                                                                                                                                
Senator  Olson  spoke  to the  testimony  proclaiming  that  this                                                               
legislation would provide optometrists  in Alaska the authorities                                                               
granted them  in other states.  Oklahoma, which is  considered to                                                               
have some of  "the most liberal" regulations in  this regard, has                                                               
experienced some negative repercussions.                                                                                        
                                                                                                                                
Senator  Olson  asked Dr.  Bennett  to  compare the  prescriptive                                                               
authority this bill would provide  to those of other states. Even                                                               
though the  sponsor statement indicates that  marijuana use would                                                               
not  be  allowed  under  this  legislation,  he  understood  that                                                               
marijuana is reportedly effective in treating glaucoma.                                                                         
                                                                                                                                
Dr.  Bennett  affirmed that  marijuana  has  been used  to  treat                                                               
glaucoma; however, other medications are more effective.                                                                        
                                                                                                                                
Senator Olson asked how this  legislation compared to legislation                                                               
adopted by other states.                                                                                                        
                                                                                                                                
Dr. Bennett noted  that Alaska currently ranks around  48th of 50                                                               
states   in  the   authority   granted   to  optometrists.   This                                                               
legislation  would place  Alaska  in the  fifteenth to  twentieth                                                               
place range.                                                                                                                    
                                                                                                                                
Senator Olson  asked how  the State  would rank  in terms  of the                                                               
prescriptive authority granted in this legislation.                                                                             
                                                                                                                                
Dr. Bennett would provide that information.                                                                                     
                                                                                                                                
10:12:26 AM                                                                                                                   
                                                                                                                                
DR. JILL MATHESON,  Optometrist and Chair, Alaska  State Board of                                                               
Optometry, addressed  a question  asked earlier by  Senator Olson                                                               
by stating  that the Board,  which consists of  four optometrists                                                               
and one  member of the  public, was  in unanimous support  of the                                                               
bill.                                                                                                                           
                                                                                                                                
Dr.  Matheson next  addressed some  of the  fiscal concerns  that                                                               
have been  raised. The Board  of Optometry is  self-sufficient in                                                               
that  any expenses  incurred  to it  by this  bill  or any  other                                                               
function it  undertakes, are  covered by  optometrists' licensing                                                               
fees. Therefore any  expense incurred by the  Department of Labor                                                               
and  Workforce   Development  or  the  Department   of  Commerce,                                                               
Community  and   Economic  Development   as  a  result   of  this                                                               
legislation would be addressed in that manner.                                                                                  
                                                                                                                                
Dr. Matheson also clarified that  no expense would be incurred to                                                               
the State  for any continuing education  programs as optometrists                                                               
pay those themselves.                                                                                                           
                                                                                                                                
Dr.  Matheson informed  the  Committee  that current  regulations                                                               
mandate  that  any  continuing   education  program  utilized  by                                                               
optometrists be from an accredited  school of optometry. Since no                                                               
such school  is located in  State, the  Board would search  for a                                                               
national  program that  could  provide  the continuing  education                                                               
courses required by this bill.                                                                                                  
                                                                                                                                
10:15:09 AM                                                                                                                   
                                                                                                                                
Dr. Matheson  addressed the expense this  legislation might incur                                                               
to patients, insurance companies, and  to Medicaid. Some of those                                                               
costs might be reduced. For  example, expanding the scope of what                                                               
an optometrist could do would  negate costs a patient might incur                                                               
by  having  to undergo  another  exam  when referred  to  another                                                               
provider.                                                                                                                       
                                                                                                                                
10:15:52 AM                                                                                                                   
                                                                                                                                
Senator Olson  asked the level  of disciplinary action  the Board                                                               
has taken during Dr. Matheson's tenure on it.                                                                                   
                                                                                                                                
10:16:08 AM                                                                                                                   
                                                                                                                                
Dr. Matheson stated  that no disciplinary action  has occurred in                                                               
the two and a half to three years  she has been on the Board. The                                                               
open cases currently under review  primarily deal with failure to                                                               
renew a license.                                                                                                                
                                                                                                                                
Senator  Olson observed  that the  lone fiscal  note accompanying                                                               
the bill is  a zero fiscal note from the  Department of Commerce,                                                               
Community and  Economic Development.  He asked  whether expanding                                                               
the  scope  of what  optometrists  could  do might  increase  the                                                               
number of disciplinary actions coming before the Board.                                                                         
                                                                                                                                
Dr. Matheson  expressed that  the Board would  be billed  for any                                                               
legal expenses  incurred by the  Department of  Law's involvement                                                               
in a disciplinary case.                                                                                                         
                                                                                                                                
Senator  Olson  directed  attention  to  language  in  Section  4                                                               
subsection  (a)(2)(B), page  3 lines  9 through  13 of  the bill,                                                               
which   references   a   licensee's  federal   Drug   Enforcement                                                               
Administration registration number  for controlled substances. He                                                               
asked how many optometrists currently have such a license.                                                                      
                                                                                                                                
Dr.  Matheson responded  that  no  such license  is  held by  any                                                               
optometrist in the  State because they currently do  not have the                                                               
authority to prescribe controlled substances.                                                                                   
                                                                                                                                
Senator  Olson next  directed attention  to Section  3 subsection                                                               
(a)(1)(E),  page  3  line  2,  which  specifically  excludes  the                                                               
prescription of a certain type  of drug. The question was whether                                                               
this  language  could  be expanded  to  also  exclude  "synthetic                                                               
Botox-type drugs".                                                                                                              
                                                                                                                                
Dr. Matheson was unsure.                                                                                                        
                                                                                                                                
Senator Olson  expressed that this could  be further investigated                                                               
since the bill would be held in Committee.                                                                                      
                                                                                                                                
There being no further questions  or testimony to come before the                                                               
Committee, Co-Chair Stedman ordered the bill HELD in Committee.                                                                 
                                                                                                                                
AT EASE 10:18:40 AM / 10:19:02 AM                                                                                           
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 162(L&C)                                                                                             
     "An  Act relating  to  mortgage  lenders, mortgage  brokers,                                                               
     mortgage  originators,  state  agents  who  collect  program                                                               
     administration  fees,  and  other   persons  who  engage  in                                                               
     activities  relating   to  mortgage  lending;   relating  to                                                               
     mortgage loan  activities; relating  to an  originator fund;                                                               
     relating  to fees  for  mortgage  loan transactions;  making                                                               
     certain  violations  unfair  trade  practices;  relating  to                                                               
     persons who are  licensed under the Alaska  Small Loans Act;                                                               
     and providing for an effective date."                                                                                      
                                                                                                                                
                                                                                                                                
This was  the third hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
Co-Chair   Stedman  acknowledged   the   significant  amount   of                                                               
testimony this bill has generated.  The Committee has worked with                                                               
the bill's sponsor  Representative Bob Lynn, and  the Division of                                                               
Banking and  Securities in the Department  of Commerce, Community                                                               
and Economic  Development as  well as  Senator Elton's  office to                                                               
develop  a new  committee  substitute.  The committee  substitute                                                               
primarily  corrects   drafting  errors   as  opposed   to  making                                                               
substantive changes.                                                                                                            
                                                                                                                                
Senator  Huggins  moved  to adopt  Finance  committee  substitute                                                               
Version  25-LS0070\T,  Bannister,  dated  May 11,  2007,  as  the                                                               
working document.                                                                                                               
                                                                                                                                
There being  no objection, the  Version "T"  committee substitute                                                               
was ADOPTED as the working document.                                                                                            
                                                                                                                                
10:21:14 AM                                                                                                                   
                                                                                                                                
JESSE KIEHL,  Staff to  Senator Kim  Elton, advised  that Senator                                                               
Elton's  office  had worked  with  the  Division of  Banking  and                                                               
Securities in the Department of  Commerce, Community and Economic                                                               
Development to make technical and  stylist revisions to the bill.                                                               
This   would  include   such  things   as  removing   extraneous,                                                               
duplicative provisions and provisions  not required under current                                                               
law  as  well   as  conforming  language  in  the   bill  to  the                                                               
Legislative drafting manual.                                                                                                    
                                                                                                                                
Mr. Kiehl affirmed  that no substantive policy  changes were made                                                               
in the Version "T" committee substitute.                                                                                        
                                                                                                                                
[NOTE: Amendment #1 was not offered.]                                                                                           
                                                                                                                                
Amendment #2:  This amendment makes  the following  additions and                                                               
deletions to the bill.                                                                                                          
                                                                                                                                
The  phrase  "and  licensee under  AS06.60;  in  this  paragraph,                                                               
'licensee under AS 06.60' has  the meaning given to 'licensee' in                                                               
AS 06.60.990"  in Section 1,  AS 06.01.050(3)  on page 1  line 13                                                               
through page 2 line 2 is  deleted and replaced with the following                                                               
language.                                                                                                                       
                                                                                                                                
           "a licensee under AS 06.60, a small mortgage lender                                                                  
     under  AS 06.60,  and an  originator under  AS 06.60  who is                                                               
     employed by  or works under  exclusive contract for  a small                                                               
     mortgage lender; in this paragraph,                                                                                        
               (A) "licensee under AS 06.60" has the meaning                                                                    
     given to "licensee" in AS 06.60.990;                                                                                       
               (B) "originator under AS 06.60" has the meaning                                                                  
     given to "originator" in AS 06.60.990;                                                                                     
               (C) "small mortgage lender under AS 06.60" has                                                                   
     the  meaning   given  to  "small  mortgage   lender"  in  AS                                                               
     06.60.990;"                                                                                                                
                                                                                                                                
Language  on  page  2  line  10  of  subsection  (b)  of  Section                                                               
06.60.010. License  required. in Article 1.  Licensing., added to                                                               
Section 2 by the addition of  a new chapter, Chapter 60. Mortgage                                                               
Lending Regulation Act., is revised to read as follows.                                                                         
                                                                                                                                
          (b) Except as provided by AS 06.60.017, a person may                                                                  
     not  operate  as an  originator  in  this state  unless  the                                                               
     person is a natural person who is                                                                                          
                                                                                                                                
A  new section  is  also added  to  Article 1  of  Section 2,  as                                                               
amended by the  addition a Chapter 60, following line  30 on page                                                               
3, as follows.                                                                                                                  
                                                                                                                                
          "Sec.   06.60.017.    Small   mortgage    lenders   and                                                               
     originators.   (a)   Notwithstanding   AS   06.60.010,   the                                                             
     department may register                                                                                                    
               (1)  a  person  to  operate as  a  small  mortgage                                                               
     lender;                                                                                                                    
               (2) a  natural person to operate  as an originator                                                               
     for a  small mortgage  lender if the  person is  an employee                                                               
     of,  or  working under  exclusive  contract  for, the  small                                                               
     mortgage lender.                                                                                                           
          (b) To qualify for registration as a small mortgage                                                                   
     lender, a person shall                                                                                                     
               (1) submit  an application  on a  form established                                                               
     by the department;                                                                                                         
               (2) pay a fee of $150;                                                                                           
               (3) certify  that all money used  in the operation                                                               
     of the person's business as  a small mortgage lender belongs                                                               
     to the person  and is not borrowed or  received from another                                                               
     person; and                                                                                                                
               (4)  be approved  by the  department under  (d) of                                                               
     this section.                                                                                                              
          (c) To qualify for registration as an originator under                                                                
     this section, a person shall                                                                                               
               (1) submit  an application  on a  form established                                                               
     by the department;                                                                                                         
               (2) pay a fee of $75;                                                                                            
               (3)  be approved  by the  department under  (d) of                                                               
     this section.                                                                                                              
          (d) Before approving an application of a person under                                                                 
     this section, the department shall determine that                                                                          
               (1) if the person  is applying for registration as                                                               
     a  small  mortgage  lender,  the  financial  responsibility,                                                               
     experience, character,  and general  fitness of  the person,                                                               
     and of  the person's  directors, officers,  members, owners,                                                               
     and other principals, and the  organization and operation of                                                               
     the applicant  indicate that the  business will  be operated                                                               
     efficiently and  fairly, in the  public interest,  and under                                                               
     the law; and                                                                                                               
               (2) the person has not                                                                                           
                    (A) been enjoined by a court of competent                                                                   
          jurisdiction from engaging in an aspect of the                                                                        
          business of providing financial services to the                                                                       
          public; and                                                                                                           
                    (B) within the previous seven years,                                                                        
                         (i) been prohibited by a federal or                                                                    
               state   regulatory   agency  from   engaging   in,                                                               
               participating  in,   or  controlling   a  finance-                                                               
               related    activity   that    involves   providing                                                               
               financial services to the public;                                                                                
                         (ii)   been   convicted,   including   a                                                               
               conviction based  on a  guilty plea  or a  plea of                                                               
               nolo  contendere, of  a  felony  or a  misdemeanor                                                               
               involving     fraud,     misrepresentation,     or                                                               
               dishonesty;                                                                                                      
                         (iii) committed an act, made an                                                                        
               omission,   or   engaged   in  a   practice   that                                                               
               constitutes a breach of a fiduciary duty;                                                                        
                         (iv) made a false material statement on                                                                
               an application submitted under this chapter; or                                                                  
                         (v) violated a provision of this                                                                       
               chapter, a regulation  adopted under this chapter,                                                               
               or an order of the department under this chapter.                                                                
          (e) A registration issued under this chapter remains                                                                  
     in effect for two years after the registration is issued.                                                                  
          (f) A small mortgage lender may renew a registration                                                                  
     by submitting to the department 30 days before the                                                                         
     expiration of the registration                                                                                             
               (1) a  renewal application in the  form and manner                                                               
     established by the department;                                                                                             
               (2) a biennial registration fee of $150; and                                                                     
               (3)  a  report  identifying  any  changes  in  the                                                               
     information provided under (b) of this section.                                                                            
          (g)  An originator may renew a registration as an                                                                     
     originator by submitting to the department 30 days before                                                                  
     the expiration of the licensee's registration                                                                              
               (1)  a renewal application  in the form and manner                                                               
     established by the department;                                                                                             
               (2)  a biennial registration fee of $75; and                                                                     
               (3)    a report  identifying  any  changes in  the                                                               
     information provided under (c) of this section.                                                                            
          (h)  An application under this section is considered                                                                  
     granted  unless,   within  30  days  after   the  department                                                               
     determines  it  has  received a  complete  application,  the                                                               
     department notifies  the applicant  that the  department has                                                               
     denied   the   application   because  of   the   applicant's                                                               
     noncompliance with this section.                                                                                           
          (i) The department may adopt regulations to implement                                                                 
     this section                                                                                                               
          (j) In this section,                                                                                                  
               (1) "registration"  means registration  under this                                                               
     section;                                                                                                                   
               (2) "small mortgage lender" means a person who is                                                                
     registered under this section.                                                                                             
                                                                                                                                
Changes made  to Article 4. Discipline  and Investigation., added                                                               
to Section 2 by the addition of Chapter 60, are as follows.                                                                     
                                                                                                                                
The language "or  a registration under AS  06.60.017" is inserted                                                               
following  "license"  in  subsection (a)  of  Section  06.60.200.                                                               
Disciplinary  action., page  16 line  22 and  "or small  mortgage                                                               
lender" is inserted following "licensee" on page 16, line 23.                                                                   
                                                                                                                                
The  phrase  "or small  mortgage  lender"  is inserted  following                                                               
"licensee"  in Section  06.60.200 subsection  (a)(2) on  page 17,                                                               
line 4 and in subsection (a)(2)(C) on page 17, line 8.                                                                          
                                                                                                                                
The language "or  a registration under AS  06.60.017" is inserted                                                               
following "license" in Section  06.60.200 subsection (a)(2)(E) of                                                               
on page 17 line 10.                                                                                                             
                                                                                                                                
Furthermore, the  words "or the registration  under AS 06.60.017"                                                               
are  added following  "license" in  Section 06.60.200  subsection                                                               
(a)(2)(F),  page  17  line  13.  Also  on  lines  14  and  15  of                                                               
subsection  (F),  the  phrase  "is  not  fit  to  engage  in  the                                                               
activities for which  that licensee was licensed"  is deleted and                                                               
replaced with "or  small mortgage lender is not fit  to engage in                                                               
the  activities for  which  the licensee  was  licenses or  small                                                               
mortgage lender was registered".                                                                                                
                                                                                                                                
In  addition,   the  phrase  "or  the   small  mortgage  lender's                                                               
business" is  inserted following "business" in  Section 06.60.200                                                               
subsection (a)(2)(G) on page 17, lines 18 and 19.                                                                               
                                                                                                                                
The phrase "or  the registration under AS  06.60.017" is inserted                                                               
following "license" in Section  06.60.200, subsection (a)(3) page                                                               
17, line 22.                                                                                                                    
                                                                                                                                
The language ", or the  registration of a small mortgage lender,"                                                               
is inserted following  "licensee" on page 17, line  24 of Section                                                               
06.60.200, subsection  (b). Also in subsection  (b), the language                                                               
".  A person  whose license"  is  deleted and  replaced with  "or                                                               
registered  under  AS  06.60.017.   A  person  whose  license  or                                                               
registration under AS 06.60.017" on page 17, line 27.                                                                           
                                                                                                                                
Furthermore,  the   words  "or  another  registration   under  AS                                                               
06.60.017" are inserted following  "license" in subsection (b) on                                                               
page 17, line 28.                                                                                                               
                                                                                                                                
The  words "or  a registration  of a  small mortgage  lender" are                                                               
inserted  following "license"  in Section  06.60.230. Divestment.                                                               
of Article 4, page 18 line 11.                                                                                                  
                                                                                                                                
Also  in Section  06.60.230, the  phrase "or  the small  mortgage                                                               
lender" is inserted following "licensee"  on page 18, line 12 and                                                               
the  words  "or small  mortgage  lender"  are inserted  following                                                               
"licensee" on page 18, line 13.                                                                                                 
                                                                                                                                
The  words "of  revoked license"  are deleted  from the  title of                                                               
Section 06.60.240.  Reinstatement of revoked license"  on page 18                                                               
line 15  of Article 4.  The revised heading would  therefore read                                                               
Section 06.60.240. Reinstatement.                                                                                               
                                                                                                                                
Also in  Section 06.60.240, the  words "if the licensee"  on page                                                               
18, line 16  are deleted and the words "or  registration under AS                                                               
06.60.017  if   the  licensee  or  small   mortgage  lender"  are                                                               
inserted.                                                                                                                       
                                                                                                                                
On  page  18 line  18  of  that same  section  the  words ",  the                                                               
licensee" are  deleted and replaced  with "or  registration under                                                               
AS 06.60.017, the licensee or small mortgage lender".                                                                           
                                                                                                                                
The words  "or a  small mortgage  lender" are  inserted following                                                               
"chapter" in  subsection (a) of Section  06.60.250. Investigation                                                               
and  examination. of  Article  4,  page 18,  line  22. That  same                                                               
language   is  inserted   in  that   same  subsection   following                                                               
"licensee" on page 18, line 27.                                                                                                 
                                                                                                                                
Furthermore,  the   words  "or   small  mortgage"   are  inserted                                                               
following "licensee" in Section  06.60.250., subsection (b)(1) on                                                               
page 18, line 31 and in subsection (b)(2) on page 19, line 1.                                                                   
                                                                                                                                
A new  paragraph is added following  language on page 17,  line 3                                                               
of Article 4 as follows.                                                                                                        
                                                                                                                                
               "(2) the small mortgage lender has violated a                                                                    
     provision of this chapter applicable to the small mortgage                                                                 
     lender;"                                                                                                                   
                                                                                                                                
Changes to  Article 5. Business  Duties and  Restrictions., added                                                               
to Section 2 by the addition of Chapter 60, are as follow.                                                                      
                                                                                                                                
The phrase  ", including  a small  mortgage lender,"  is inserted                                                               
following  "person" on  page  20, line  9  in Section  06.60.320.                                                               
False, misleading, or deceptive advertising prohibited.                                                                         
                                                                                                                                
Also  added to  Section 06.60.320  is the  phrase ",  including a                                                               
small mortgage lender," following "person" on page 20, line 13.                                                                 
                                                                                                                                
Added to  Section 06.60.340. Prohibited activities.  of Article 5                                                               
on  page  20,  line  26  following the  word  "chapter,"  is  the                                                               
language "a person who is a small mortgage lender,".                                                                            
                                                                                                                                
In  addition,  the  word "registration,"  is  inserted  following                                                               
"license," on page  22, line 10, of  Section 06.60.340 subsection                                                               
(10).                                                                                                                           
                                                                                                                                
The  phrase  "or small  mortgage  lender"  is inserted  following                                                               
"licensee,"  on page  24, line  1  in subsection  (a) of  Section                                                               
06.60.370. Criminal liability of licensee.                                                                                      
                                                                                                                                
Also,  in  subsection (b)  of  Section  06.60.370, the  words  ",                                                               
including  a  small  mortgage  lender,"  are  inserted  following                                                               
"person" on page 24, line 5.                                                                                                    
                                                                                                                                
Furthermore, in  subsection (c) of  Section 06.60.370,  the words                                                               
",  person  who  is  a   small  mortgage  lender,"  are  inserted                                                               
following "licensee" on page 24, line 7.                                                                                        
                                                                                                                                
In subsection  (d) of  Section 06.60.370, the  words "or  a small                                                               
mortgage lender"  are inserted following  "licensee" on  page 24,                                                               
line 11.                                                                                                                        
                                                                                                                                
Finally, in subsection  (e) of Section 06.60.370, the  words " or                                                               
without  being  registered  under  AS  06.60.017,"  are  inserted                                                               
following "license" on page 24, line 14.                                                                                        
                                                                                                                                
Changes made  to Article 6.  Enforcement., added to Section  2 by                                                               
the addition of Chapter 60, are as follows.                                                                                     
                                                                                                                                
The words  ", including  a small  mortgage lender,"  are inserted                                                               
following  "person"  in  Section   06.60.400.  Cease  and  desist                                                               
orders. on page 24, line 21.                                                                                                    
                                                                                                                                
In subsection  (a) of Section 06.60.410.  Censure, suspension, or                                                               
bar.  of Article  6, the  phrase "suspend  the registration  of a                                                               
small mortgage lender  for a period not to exceed  12 months," is                                                               
inserted following  "months," on page  24, line 25.  In addition,                                                               
the words  "or a  small mortgage  lender" are  inserted following                                                               
"licensee" on page 24, line 26.                                                                                                 
                                                                                                                                
The  words  ",  to  the  small  mortgage  lender,"  are  inserted                                                               
following "licensee"  in subsection  (a)(3) of  Section 06.60.410                                                               
on page 24, line 30                                                                                                             
                                                                                                                                
In  subsection   (b)  of  Section   06.60.410,  the   phrase  "or                                                               
registration as  a small mortgage  lender" is  inserted following                                                               
"license" on page 25, line 3.                                                                                                   
                                                                                                                                
Furthermore, in  subsection (c) of  Section 06.60.410,  the words                                                               
"or a  small mortgage lender"  are added following  "licensee" on                                                               
page 25, line  6. Also in subsection (c), the  words "licensee is                                                               
conducting  the licensee's  business"  are  deleted and  replaced                                                               
with  "licensee  or  small  mortgage  lender  is  conducting  the                                                               
licensee's or small mortgage lender's  business", on page 25 line                                                               
7.                                                                                                                              
                                                                                                                                
Finally in subsection (c) the  words "or a small mortgage lender"                                                               
are inserted following "licensee" on page 25, line 9.                                                                           
                                                                                                                                
Language in  subsection (a) of  Section 06.60.420.  Civil penalty                                                               
for  violations. of  Article  6  is also  changed.  The words  ",                                                               
including a  small mortgage lender," is  added following "person"                                                               
on page 25, line 10.                                                                                                            
                                                                                                                                
Language  in  subsection  (a) of  Section  06.60.430.  Additional                                                               
enforcement  provisions, actions,  and  rights. of  Article 6  is                                                               
also  changed.  The  words  "or  a  small  mortgage  lender"  are                                                               
inserted following "licensee" on page 25, line 17.                                                                              
                                                                                                                                
Also  in subsection  (c) of  Section  06.60.430, the  words ",  a                                                               
small  mortgage lender,"  are  inserted  following "licensee"  on                                                               
page  25, line  21. In  addition, "or  small mortgage  lender" is                                                               
inserted following "licensee" on page 25, line 22.                                                                              
                                                                                                                                
A new section is inserted into  Article 6 following line 30, page                                                               
25 as follows.                                                                                                                  
                                                                                                                                
          "Sec. 06.60.440. Definition. In AS 06.60.400 -                                                                      
     06.60.440, "small mortgage lender" includes a natural                                                                      
     person who is an employee of, or working under exclusive                                                                   
     contract for, a small mortgage lender."                                                                                    
                                                                                                                                
Changes made  to Article 10. Miscellaneous  Provisions., added to                                                               
Section 2 by the addition of Chapter 60 are as follows.                                                                         
                                                                                                                                
The phrase  ", including  a small  mortgage lender,"  is inserted                                                               
following the first occurrence of  "person" in Section 06.60.890.                                                               
Application to Internet activities. on page 32, line 23.                                                                        
                                                                                                                                
In addition,  the words ",  including a small mortgage  lender to                                                               
the extent this chapter applies  to a small mortgage lender," are                                                               
added   following   "person"   in  Section   06.60.905.   Untrue,                                                               
misleading, or false statements. on page 33 line 3.                                                                             
                                                                                                                                
Finally, the last change made by  the amendment is to Article 11.                                                               
General Provisions.,  added to  Section 2 by  Chapter 60,  is the                                                               
insertion of  the phrase  "(26) "small  mortgage lender"  means a                                                               
person  registered  under   AS  06.60.017"  following  "purposes"                                                               
following line 7 on page 37.                                                                                                    
                                                                                                                                
Senator Huggins moved Amendment #2.                                                                                             
                                                                                                                                
Co-Chair Stedman objected for discussion.                                                                                       
                                                                                                                                
10:22:39 AM                                                                                                                   
                                                                                                                                
MARK  DAVIS,   Director,  Division   of  Banking   &  Securities,                                                               
Department  of  Commerce,   Community  and  Economic  Development                                                               
explained  that this  amendment would,  in essence,  establish an                                                               
exemption  for persons  who make  six  or less  mortgage loans  a                                                               
year. "This is essentially a private banking exemption."                                                                        
                                                                                                                                
Mr.  Davis clarified  however,  that the  person  would still  be                                                               
subject to  the examination and enforcement  provisions specified                                                               
in the bill. This is  important because activities in the private                                                               
banking category are currently unregulated.                                                                                     
                                                                                                                                
Mr. Davis considered  the exemption provided by  the amendment to                                                               
be "a workable  solution" in regards to  these individuals. While                                                               
this  limited exemption  would allow  these  persons to  continue                                                               
their  commercial and  residential lending  activities, it  would                                                               
now require them  to meet both federal and  State regulations, be                                                               
subject  to  examinations,  and  to  be  held  liable  for  civil                                                               
penalties if they  violate the Act. This  would prevent predatory                                                               
lending activities from occurring.                                                                                              
                                                                                                                                
10:24:17 AM                                                                                                                   
                                                                                                                                
Senator Thomas asked the definition of "person" in this case.                                                                   
                                                                                                                                
Mr. Davis  clarified that the  reference to "person"  would apply                                                               
to "either a legal entity or a natural person".                                                                                 
                                                                                                                                
Senator  Thomas understood  therefore that  this exemption  could                                                               
apply to an entity other than a person.                                                                                         
                                                                                                                                
Mr. Davis  affirmed. For  instance, it could  apply to  a limited                                                               
liability  company provided  certain terms  were met.  The entity                                                               
being  exempted must  be putting  its  "own money  at risk",  not                                                               
money that  had been borrowed.  This is a very  important element                                                               
in the amendment.                                                                                                               
                                                                                                                                
10:25:06 AM                                                                                                                   
                                                                                                                                
Senator   Thomas   understood   that  the   maximum   number   of                                                               
transactions that could occur would be six.                                                                                     
                                                                                                                                
Mr. Davis  responded that  the requirement of  "six or  less" was                                                               
deemed appropriate.                                                                                                             
                                                                                                                                
Co-Chair Stedman asked  whether the Department was  in support of                                                               
the amendment.                                                                                                                  
                                                                                                                                
Mr. Davis responded in the affirmative.                                                                                         
                                                                                                                                
10:25:25 AM                                                                                                                   
                                                                                                                                
Senator  Olson  asked  whether   anyone  from  the  industry  was                                                               
available to  address the  amendment as  the nine  page amendment                                                               
appeared to be a complicated one.                                                                                               
                                                                                                                                
10:26:04 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman  asked whether  anyone from the  industry wished                                                               
to testify to the amendment.                                                                                                    
                                                                                                                                
No one came forward.                                                                                                            
                                                                                                                                
Senator Olson considered  that to indicate there  was no industry                                                               
concern to the amendment.                                                                                                       
                                                                                                                                
Co-Chair Stedman removed his objection.                                                                                         
                                                                                                                                
Without further objection, Amendment #2 was ADOPTED.                                                                            
                                                                                                                                
10:27:27 AM                                                                                                                   
                                                                                                                                
Amendment #3: The  amendment deletes the entirety  of language in                                                               
subsection  (8)(B) of  Section 06.60.340.  Prohibited activities.                                                               
under Article  5. Business Duties  and Restrictions, on  page 21,                                                               
line 30 through page  22, line 1, added to Section  2 of the bill                                                               
by  Chapter 60.  Mortgage  Lending Regulation  Act. The  language                                                               
being deleted reads as follows.                                                                                                 
                                                                                                                                
                    (B) the person funds the loan at the rate,                                                                  
     terms, and costs  state in the good  faith estimate provided                                                               
     to the borrower at the  time the prequalification letter was                                                               
     issued or the loan commitment was made;                                                                                    
                                                                                                                                
The  amendment also  allows for  technical changes  in subsection                                                               
(8) resulting from the removal of subsection (B).                                                                               
                                                                                                                                
Senator Elton moved Amendment #3.                                                                                               
                                                                                                                                
Co-Chair Stedman objected for discussion.                                                                                       
                                                                                                                                
AT EASE: 10:27:51 AM / 10:29:09 AM                                                                                          
                                                                                                                                
Mr.  Davis explained  that this  amendment would  remove language                                                               
that allowed  a person to provide  a "cure" for a  falsehood they                                                               
made  in   a  commitment  letter.  The   Division  supported  the                                                               
amendment.                                                                                                                      
                                                                                                                                
Co-Chair Stedman removed his objection.                                                                                         
                                                                                                                                
There being no further objection, Amendment #3 was ADOPTED.                                                                     
                                                                                                                                
10:29:54 AM                                                                                                                   
                                                                                                                                
CHRIS  SKINNER,  Owner,  Kelstar   Alaska  Mortgage  Company  and                                                               
President, Alaska Association of  Mortgage Brokers, testified via                                                               
teleconference from  Mat-Su and  informed the Committee  that she                                                               
had provided written  testimony [copy not on file]  in support of                                                               
the bill provided it did  not contain any language recommended by                                                               
the American Financial Services Association (AFSA).                                                                             
                                                                                                                                
10:31:01 AM                                                                                                                   
                                                                                                                                
Senator Thomas  asked what was  referred to under  Alaska Statute                                                               
(AS)  06.20,  as  referenced  in the  definition  of  a  "covered                                                               
person" on page 24 line 16 of the bill.                                                                                         
                                                                                                                                
Mr.  Davis stated  that AS  06.20 referred  to the  State's Small                                                               
Loan Act.                                                                                                                       
                                                                                                                                
Senator Thomas acknowledged.                                                                                                    
                                                                                                                                
10:32:05 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman  moved  to   report  Senate  Finance  committee                                                               
substitute for  HB 162, Version  25-LS0070\T from  Committee with                                                               
individual recommendations and  accompanying fiscal notes. [NOTE:                                                               
The  motion did  not include  a reference  to the  two amendments                                                               
adopted  by  the  Committee;  however,  that  was  the  Committee                                                               
intent.]                                                                                                                        
                                                                                                                                
There being  no objection, SCS  CS HB 162(FIN) was  REPORTED from                                                               
Committee with three  previous fiscal notes: zero  fiscal note #1                                                               
from the  Department of  Law, indeterminate  fiscal note  #2 from                                                               
the  Department of  Administration, and  $377,500 fiscal  note #3                                                               
from  the   Department  of   Commerce,  Community   and  Economic                                                               
Development.                                                                                                                    
                                                                                                                                
AT EASE 10:32:37 AM / 10:34:40 AM                                                                                           
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 90(JUD)                                                                                
     "An Act relating to the  purchase of alcoholic beverages and                                                               
     to access to licensed  premises; relating to civil liability                                                               
     for certain  persons accessing licensed  premises; requiring                                                               
     driver's licenses  and identification cards to  be marked if                                                               
     a person  is restricted  from consuming  alcoholic beverages                                                               
     as a  result of  a conviction or  condition of  probation or                                                               
     parole and relating to fees  for the marked license or card;                                                               
     relating to the information  contained on driver's licenses;                                                               
     requiring  the   surrender  and  cancellation   of  driver's                                                               
     licenses    and   identification    cards   under    certain                                                               
     circumstances; relating to the  reporting of certain crimes;                                                               
     relating to  prostitution; relating to the  DNA registration                                                               
     system; relating to  credit toward service of  a sentence of                                                               
     imprisonment; relating to violation  of probation and parole                                                               
     conditions by  sex offenders; relating to  bail; relating to                                                               
     distribution  of certain  materials to  minors; relating  to                                                               
     time   limitations  for   prosecution  of   certain  crimes;                                                               
     relating  to  sex  offender registration;  relating  to  the                                                               
     maximum  time  for  probation;  relating  to  certain  post-                                                               
     conviction relief  applications; relating to good  time; and                                                               
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Stedman  expressed that  this  bill  proposes a  fairly                                                               
substantial policy change.                                                                                                      
                                                                                                                                
10:35:21 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE RALPH SAMUELS, co-sponsor  of the bill, considered                                                               
the majority of the changes proposed  in the bill as small policy                                                               
changes.  Most   were  proposed  by  the   Governor  Sarah  Palin                                                               
Administration  to  address  loopholes in  the  State's  criminal                                                               
justice  system. The  Department of  Law would  provide more  in-                                                               
depth  information on  the more  substantive changes  included in                                                               
the bill                                                                                                                        
                                                                                                                                
10:36:33 AM                                                                                                                   
                                                                                                                                
Representative Samuels  reviewed the key components  of the bill.                                                               
It would allow a sex  offender who violated certain conditions of                                                               
their  probation  or  parole  to   be  charged  with  a  class  A                                                               
misdemeanor. This provision was  requested by the law enforcement                                                               
community.                                                                                                                      
                                                                                                                                
Representative  Samuels stated  that the  bill would  also expand                                                               
the penalty  for sending indecent  material to  minors. Currently                                                               
this is only a crime if  the material being sent portrays minors.                                                               
This  bill would  expand that  to  include pornographic  material                                                               
depicting adults.                                                                                                               
                                                                                                                                
Representative Samuels stated that the  bill would also allow for                                                               
the forfeiture of  property such as computers that  might be used                                                               
to electronically distribute indecent material to minors.                                                                       
                                                                                                                                
Representative  Samuels  advised that  the  bill  would also  add                                                               
murder, attempted  murder, and kidnapping  to the list  of crimes                                                               
exempted from the State's statute of limitations.                                                                               
                                                                                                                                
10:37:34 AM                                                                                                                   
                                                                                                                                
Representative Samuels  stated that expanding the  list of crimes                                                               
exempted  from  the  statute  of  limitations  would  assist  the                                                               
State's  cold case  investigative unit's  activities. This  unit,                                                               
which  has received  increased funding  from  the Legislative  in                                                               
recent  years, has  had  success in  solving  several old  murder                                                               
cases including the  "infamous case" about the murder  of a woman                                                               
named Bonnie Craig.                                                                                                             
                                                                                                                                
Representative Samuels stated that  other changes include further                                                               
defining  what  would  be  considered  "new  information"  as  it                                                               
relates to  bail hearings  and disallowing  electronic monitoring                                                               
time in a private residence from  qualifying as a credit toward a                                                               
person's sentencing time.                                                                                                       
                                                                                                                                
10:38:56 AM                                                                                                                   
                                                                                                                                
Representative  Samuels  continued his  review  of  the bill.  It                                                               
would  increase the  maximum time  a  person convicted  of a  sex                                                               
offense  could be  on probation  to  25 years.  This would  allow                                                               
conformity  with sex  offender legislation  adopted the  previous                                                               
year.                                                                                                                           
                                                                                                                                
Representative  Samuels  also pointed  out  that  the bill  would                                                               
change   current  law   to  require   individuals  convicted   of                                                               
distributing  indecent  materials  to  minors  electronically  to                                                               
register as a sex offender.                                                                                                     
                                                                                                                                
10:39:35 AM                                                                                                                   
                                                                                                                                
Representative Samuels  stated that a  new provision of  the bill                                                               
also  addressed  post-conviction  relief.   This  refers  to  the                                                               
situation where a person would "go  to court yet again to try and                                                               
get"  their conviction  mitigated after  they had  been convicted                                                               
and the appeals they filed failed.                                                                                              
                                                                                                                                
Representative  Samuels explained  that  this provision  resulted                                                               
from a victims' rights movement  that started after a 1985 murder                                                               
in Anchorage  that was "perpetrated by  a 15 year old  girl and a                                                               
19 year  old man". The  daughter of a  woman who was  involved in                                                               
that case, and  who has since died, is still  "being dragged into                                                               
court 22  years later" due  to continuing  post-conviction relief                                                               
proceedings. This  legislation would  further efforts  to tighten                                                               
up post-conviction relief hearings.                                                                                             
                                                                                                                                
10:40:31 AM                                                                                                                   
                                                                                                                                
Representative Samuels  stated that the bill  also specifies that                                                               
a person could not receive  "good time" sentencing deductions for                                                               
time spent in  a treatment program. This would  apply to programs                                                               
outside  of  the Department  of  Corrections  programs which  are                                                               
conducted in house.                                                                                                             
                                                                                                                                
10:40:56 AM                                                                                                                   
                                                                                                                                
Representative  Samuels advised  that  the changes  he would  now                                                               
address might  be more appropriately addressed  by the Department                                                               
of Law or by Senator Dyson's  staff as they had assisted in their                                                               
development.                                                                                                                    
                                                                                                                                
Representative Samuels  continued. Changes were made  to statutes                                                               
through  which  individuals  accused  of  victimizing  women  and                                                               
children by forcing them into  prostitution, are prosecuted. This                                                               
provision, which had  been proposed in a separate  bill, had been                                                               
"rolled in"  to this bill  by the Senate Judiciary  Committee. He                                                               
and the  bill's co-sponsor, Representative Bill  Stoltze, support                                                               
that provision's addition.                                                                                                      
                                                                                                                                
Representative   Samuels  advised   that  the   Senate  Judiciary                                                               
Committee also  added language to  the bill that would  allow for                                                               
deoxyribonucleic  acid (DNA)  genetic testing  collection at  the                                                               
time of  arrest. The DNA  language in  this bill mirrors  that of                                                               
legislation  enacted a  few  years prior  which  has allowed  the                                                               
State's cold  case prosecutors  to use DNA  evidence to  arrest a                                                               
man in  the case of  Bonnie Craig,  an 18-year old  University of                                                               
Alaska Anchorage student who was murdered.                                                                                      
                                                                                                                                
Representative  Samuels informed  the  Committee  that this  bill                                                               
"would allow DNA to be collected  like a fingerprint" at the time                                                               
of arrest. This  could be further addressed by  the Department of                                                               
Law.                                                                                                                            
                                                                                                                                
Representative  Samuels qualified  that the  DNA sample  would be                                                               
destroyed if there was no conviction.                                                                                           
                                                                                                                                
10:42:37 AM                                                                                                                   
                                                                                                                                
Representative Samuels continued.  The Senate Judiciary Committee                                                               
also added  a provision to the  bill, referred to as  Kiva's Law,                                                               
which  would require  a person  who witnesses  a crime  against a                                                               
child to report it.                                                                                                             
                                                                                                                                
10:43:01 AM                                                                                                                   
                                                                                                                                
Representative  Samuels informed  the Committee  that the  Senate                                                               
Judiciary Committee  also rolled in language  from HB 14-RESTRICT                                                               
ACCESS TO ALCOHOL which had  recently passed the House, into this                                                               
bill. This language  would require the driver's  license or other                                                               
legal identification  of a  person who was  ordered by  the court                                                               
not  to  purchase alcohol  to  be  marked with  some  identifying                                                               
color. This would  alert an establishment not to  sell alcohol to                                                               
that individual.  This language  would not hold  an establishment                                                               
liable  and would  in fact,  allow the  establishment to  bring a                                                               
$1,000 civil penalty case against such a person.                                                                                
                                                                                                                                
Representative Samuels  concluded his  review. The  Department of                                                               
Law  would review  the more  legal  and technical  nature of  the                                                               
bill. Other than the DNA testing,  the majority of the bill could                                                               
be considered an effort to clean up the laws.                                                                                   
                                                                                                                                
10:44:24 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE BILL STOLTZ, co-sponsor  of the bill, communicated                                                               
that  the  primary  goal  of  this bill  was  to  close  existing                                                               
loopholes in sex  offender laws and further  victim's rights. The                                                               
bill  was  expanded to  assist  with  such  things as  cold  case                                                               
investigations. He  and Representative Samuels consider  the bill                                                               
"a pretty good omnibus measure".                                                                                                
                                                                                                                                
10:45:23 AM                                                                                                                   
                                                                                                                                
RICK SVOBODNY,  Deputy Attorney General, Legal  Services Section-                                                               
Juneau,  Criminal  Division,  Department  of  Law,  informed  the                                                               
Committee  that  the  Department  supported  the  bill  with  one                                                               
exception.  That being  Sections  5  through 9,  page  4 line  27                                                               
through  page  7,  line  13  which  pertain  to  the  Kiva's  Law                                                               
provisions.  This   language  would  "criminalize"   an  innocent                                                               
bystander were  they to witness a  crime against a child  and not                                                               
report it.                                                                                                                      
                                                                                                                                
Mr. Svobodny stated that incorporating  this requirement into the                                                               
bill "is  not necessarily  a bad change"  since people  should be                                                               
"socially  responsible"  particularly  in regards  to  situations                                                               
incurring  serious harm  to children.  However, there  is concern                                                               
that  this provision  would create  "difficult problems"  for the                                                               
prosecutor who  tries the murderer  or a  rapist in that  case in                                                               
court. This  is because a  witness not reporting the  crime would                                                               
themselves be  charged with a  crime and would thereby  "have the                                                               
Fifth Amendment privilege not to testify".                                                                                      
                                                                                                                                
Mr. Svobodny  clarified however that  this could  be accommodated                                                               
because the  Legislature has provided  the Attorney  General "the                                                               
authority to grant immunity to a witness".                                                                                      
                                                                                                                                
Mr. Svobodny  informed the  Committee that he  had once  been the                                                               
person designated  by the  Attorney General  to make  the witness                                                               
immunity decisions.  In his 30  years as a prosecutor,  that "was                                                               
the hardest thing to do".                                                                                                       
                                                                                                                                
10:48:04 AM                                                                                                                   
                                                                                                                                
Mr. Svobodny explained that the  problem was not "that the person                                                               
witnessed a  crime but  didn't call";  it is  because determining                                                               
whether  to grant  immunity  to a  witness  with Fifth  Amendment                                                               
privileges is  "a guess".  The system  established in  this State                                                               
allows  the witness  to tell  the court,  in secret,  information                                                               
specific  to their  involvement in  the case.  The judge  in turn                                                               
tells  the  Department  of Law  designee  whether  the  witness's                                                               
action was  "a serious  felony, a felony,  a misdemeanor,  or the                                                               
person doesn't have the privilege".                                                                                             
                                                                                                                                
Mr.  Svobodny  stated  that making  the  immunity  determination,                                                               
particularly in  the middle of  a murder trial, is  difficult. It                                                               
also delays  trials and the  issue often  arises when a  trial is                                                               
occurring.  He recounted  some of  the  scenarios he  experienced                                                               
when having to make a witness immunity decision.                                                                                
                                                                                                                                
Mr.  Svobodny restated  the position  that  requiring someone  to                                                               
report a crime against a child  is a good social policy. It would                                                               
however,  incur  problems  for  prosecutors,  for  victims  whose                                                               
trials might  be delayed as  a result  of the process,  and would                                                               
increase  expenses to  the public  defenders office  due to  such                                                               
things as conflict of interest matters.                                                                                         
                                                                                                                                
Mr. Svobodny  suggested that  "an easy  solution" to  the problem                                                               
could be  to change the  penalty from being  a Class C  felony to                                                               
being a violation.  This would maintain the  social obligation of                                                               
reporting  the   crime  but  would  not   incur  Fifth  Amendment                                                               
privileges. This is the recommendation of the Department of Law.                                                                
                                                                                                                                
10:50:26 AM                                                                                                                   
                                                                                                                                
Mr.  Svobodny concluded  by stating  that the  Department of  Law                                                               
supports the  bill with  the exception  of the  witness reporting                                                               
provision.                                                                                                                      
                                                                                                                                
Co-Chair Stedman asked  whether Mr. Svobodny wanted  to review in                                                               
more detail any other section of the bill.                                                                                      
                                                                                                                                
Mr. Svobodny  reiterated that  the Department  was in  support of                                                               
other  sections in  the  bill.  He was  more  familiar with  some                                                               
sections  than others,  specifically  those  proposed by  Senator                                                               
Dyson and the two bill sponsors.                                                                                                
                                                                                                                                
10:50:59 AM                                                                                                                   
                                                                                                                                
Mr. Svobodny noted,  for instance, that he was  not very familiar                                                               
with  the  provision  prohibiting  a  person  on  probation  from                                                               
purchasing alcohol.  Nonetheless, he would attempt  to answer any                                                               
questions the Committee might have.                                                                                             
                                                                                                                                
10:51:17 AM                                                                                                                   
                                                                                                                                
Senator  Elton  directed  attention  to language  in  Section  24                                                               
subsection (d)  page 13 lines 1  and 2 which would  not allow the                                                               
time an individual  spent being electronically monitored  or in a                                                               
private  residence  to  count  toward  their  sentencing.  During                                                               
Committee  discussion on  a  separate  bill regarding  electronic                                                               
monitoring, testimony  had touted electronic monitoring  "in lieu                                                               
of incarceration". It was also "less expensive".                                                                                
                                                                                                                                
10:52:09 AM                                                                                                                   
                                                                                                                                
Mr. Svobodny surmised  that the bill being  referenced related to                                                               
the electronic monitoring of gangs.                                                                                             
                                                                                                                                
Mr. Svobodny  informed the Committee  that the  State's appellate                                                               
courts have  determined that  people who  are in  the "functional                                                               
equivalent of  jail" as  a result  of a  court order  "should get                                                               
credit for  that time served".  The provision in this  bill would                                                               
establish  a procedure  through  which the  courts  could make  a                                                               
determination as  to whether the circumstances  of the electronic                                                               
monitored  or restricted  to home  individual to  whom this  bill                                                               
applied  met established  "functionally equivalent"  criteria; if                                                               
not, the time would not be credited.                                                                                            
                                                                                                                                
10:53:35 AM                                                                                                                   
                                                                                                                                
Mr. Svobodny shared  that one such alcohol  treatment program was                                                               
held in the Sergeant Preston  Hotel bar outside of Anchorage. The                                                               
argument was  that a person  attending that program was  stuck in                                                               
the hotel  for the  three days the  program was  being conducted.                                                               
Some  judges  allowed  that  time  to  be  credited  against  the                                                               
sentence and  some did not. The  language in this bill  would not                                                               
allow "good  time credit" for  attending that program.  Good time                                                               
credit  is a  jail  "administrative  tool" in  that  if a  person                                                               
behaves in  jail they would receive  one day off for  every three                                                               
days  served.  "You aren't  in  jail  if  you're  at home  or  on                                                               
electronic monitoring.                                                                                                          
                                                                                                                                
10:54:33 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman asked Mr. Svobodny  to address the drunk-driving                                                               
provisions in the bill.                                                                                                         
                                                                                                                                
Mr. Svobodny asked whether the  provisions in question were those                                                               
in Sections 1 through 3 of the bill.                                                                                            
                                                                                                                                
Co-Chair Stedman affirmed.                                                                                                      
                                                                                                                                
10:54:47 AM                                                                                                                   
                                                                                                                                
Mr. Svobodny  expressed that these sections  were not necessarily                                                               
drunk driving provisions. They would,  however, restrict a person                                                               
on probation or parole from  drinking alcohol by prohibiting them                                                               
from  being in  a bar  and purchasing  alcohol. A  mark on  their                                                               
identification would  identify them  as a person  prohibited from                                                               
drinking alcohol.                                                                                                               
                                                                                                                                
10:55:32 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman asked  for further  information  about the  DNA                                                               
provisions.                                                                                                                     
                                                                                                                                
10:55:38 AM                                                                                                                   
                                                                                                                                
Mr. Svobodny  noted that  the State  presently collects  DNA from                                                               
individuals convicted  of felony  offenses or  a crime  against a                                                               
person.  That  action  would  not be  altered  by  the  provision                                                               
proposed  in this  bill. This  bill would  however, align  Alaska                                                               
with other  states that "have  changed when they go  through that                                                               
collection process,"  in that the  DNA collection would  be taken                                                               
at the  time of arrest  just as fingerprinting  and photographing                                                               
the individual are currently done.                                                                                              
                                                                                                                                
Mr. Svobodny  noted that the  DNA collection is a  simple process                                                               
in which fluid is collected by  swabbing the inside of a person's                                                               
mouth with  a Q-tip. The sample  is then sent to  the State crime                                                               
laboratory where it  is processed and stored in  the national law                                                               
enforcement Combined DNA  Index System (CODIS). If  the person is                                                               
acquitted  or the  case  dismissed, their  DNA  profile would  be                                                               
removed from  the database. He  noted that  this is not  the case                                                               
with fingerprints: they are retained in the database.                                                                           
                                                                                                                                
Mr.  Svobodny  further noted  that  the  national DNA  collection                                                               
standard is specific  to only 13 of the millions  of DNA markings                                                               
that could  be analyzed.  Those 13 loci  have been  determined to                                                               
have "no known information other  than identifiers". For example,                                                               
they could not  provide information as to  whether the individual                                                               
"was at greater  risk of having breast cancer"  than another. The                                                               
national  standard was  designed  so that  only identifying  loci                                                               
could be captured for forensic purposes.                                                                                        
                                                                                                                                
Mr. Svobodny  informed the Committee  that Alaska law makes  it a                                                               
crime for someone to use DNA  collected in this manner, for other                                                               
than  forensic purposes.  The limited  loci  collected, makes  it                                                               
difficult to use for any other purpose anyway.                                                                                  
                                                                                                                                
10:58:44 AM                                                                                                                   
                                                                                                                                
Mr. Svobodny  informed the  Committee that the  bill would  add a                                                               
new provision  to State law  in that it  would require DNA  to be                                                               
processed and  updated into  CODIS within  90 days.  Because this                                                               
will be a  challenge to the State crime lab  to accommodate, this                                                               
provision would not go into  effect until 2009. The difficulty is                                                               
that in order to do DNA  processing, the processor must undergo a                                                               
six month training period and then  a six month supervised in the                                                               
field  training period.  The Department  of Public  Safety fiscal                                                               
note  addressing  this  issue anticipates  that  four  additional                                                               
staffers would  be required  to address  the added  workload this                                                               
provision would produce.                                                                                                        
                                                                                                                                
Mr.  Svobodny specified  that the  Bonnie Craig  murder case  was                                                               
resolved due to DNA information  maintained in the CODIS national                                                               
database. DNA taken  at the crime scene was  processed and stored                                                               
in  CODIS. A  hit was  made in  CODIS when  another state,  which                                                               
collects DNA from  individuals when they are  arrested, loaded an                                                               
arrested person's DNA to CODIS.                                                                                                 
                                                                                                                                
Mr.  Svobodny stated  that, as  is standard  practice, the  State                                                               
then ran new DNA samples to verify the information.                                                                             
                                                                                                                                
11:00:58 AM                                                                                                                   
                                                                                                                                
Senator  Thomas   supported  the  concept  of   the  "good  time"                                                               
administrative tool  as well as  the electronic  monitoring tool,                                                               
particularly in  regards to  individuals with  a history  of gang                                                               
associations. Therefore,  he was  concerned that  the opportunity                                                               
for  early release  would  be affected  by  this legislation.  He                                                               
inquired whether  this restriction  might have resulted  from the                                                               
concern that individuals released early  might have a tendency to                                                               
re-associate with gang-members.                                                                                                 
                                                                                                                                
11:01:52 AM                                                                                                                   
                                                                                                                                
Mr. Svobodny  considered the  provisions in  this bill  to differ                                                               
from  the  concept  of  good  time  associated  with  individuals                                                               
convicted  of  gang-related  crimes. Those  individuals  complete                                                               
their jail  term and then  are electronically monitored  while on                                                               
probation. The process  established in this bill  would assist in                                                               
determining  whether,  for example,  time  a  person spent  being                                                               
electronically monitored should count  toward their sentence. The                                                               
provisions in this  bill would not have any affect  on gang crime                                                               
sentencing.                                                                                                                     
                                                                                                                                
Senator  Thomas   stated  that  the  further   questions  he  had                                                               
regarding  the DNA  provisions  in the  bill  could be  addressed                                                               
outside of this hearing.                                                                                                        
                                                                                                                                
Co-Chair Stedman ordered the bill HELD in Committee.                                                                            
                                                                                                                                
[NOTE: This bill  was readdressed later in the  hearing. See Time                                                               
Stamp 1:53:34 PM.]                                                                                                            
                                                                                                                                
11:03:35 AM                                                                                                                   
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 166(FIN)                                                                                             
     "An  Act  relating  to  contributions  from  permanent  fund                                                               
     dividends to  community foundations, to  certain educational                                                               
     organizations,    and    to   certain    other    charitable                                                               
     organizations; and providing for an effective date."                                                                       
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Stedman stated that the  intent today was to discuss the                                                               
bill, consider a  new committee substitute, and hold  the bill in                                                               
Committee for further consideration.                                                                                            
                                                                                                                                
11:04:13 AM                                                                                                                   
                                                                                                                                
AT EASE 11:05:12 AM \ 11:05:14 AM                                                                                           
                                                                                                                                
Co-Chair  Hoffman moved  to adopt  committee substitute,  Version                                                               
25-LS0678\L, Cook, dated May 9, 2007, as the working document.                                                                  
                                                                                                                                
Without  objection,  the  Version "L"  committee  substitute  was                                                               
ADOPTED as the working document.                                                                                                
                                                                                                                                
11:05:50 AM                                                                                                                   
                                                                                                                                
DAVID GREISEN, Staff to Co-Chair  Stedman, informed the Committee                                                               
that  the changes  incorporated  into the  Version "L"  committee                                                               
substitute  were   intended  to  reduce  costs   and  assist  the                                                               
Department of  Revenue in administering  the program  proposed in                                                               
this legislation.                                                                                                               
                                                                                                                                
Mr. Greisen advised that the  change in Section 2, subsection (f)                                                               
on  page 4  lines  8 through  13 would  allow  the Department  of                                                               
Revenue to  charge a $50  fee to each non-profit  entity applying                                                               
for inclusion on the authorized  list of charities a person could                                                               
elect to donate a portion  of their Permanent Fund Dividend (PFD)                                                               
to.  The  expectation  is  that   700  of  the  2,000  applicants                                                               
anticipated  to  apply  for  inclusion  on  this  list  would  be                                                               
approved. The application fee would  assist in covering the costs                                                               
associated with the selection process.                                                                                          
                                                                                                                                
11:07:02 AM                                                                                                                   
                                                                                                                                
Mr.  Greisen identified  the next  change as  being in  Section 2                                                               
subsection (j)  page 4  lines 27 through  30. This  section would                                                               
continue  the previous  committee  substitute's requirement  that                                                               
the   Department  provide   an  annual   report  depicting   each                                                               
organization and  the donations  they garnered the  previous year                                                               
as a  result of this  legislation; however, the  requirement that                                                               
the report  be provided  to the Legislature  was eliminated  as a                                                               
cost-saving measure. The Department  would now simply be required                                                               
to notify the Legislature that the report was available.                                                                        
                                                                                                                                
Mr. Greisen  stated that  the application  requirements specified                                                               
in Section 2, subsection (d)(4) and  (d)(8) on page 3 line 14 and                                                               
line  24, respectively,  were revised  to accommodate  non-profit                                                               
organizations'   internal    accounting   and    federal   filing                                                               
restrictions.                                                                                                                   
                                                                                                                                
Mr. Greisen  noted that  in order to  made the  administration of                                                               
the  program run  efficiently, language  in Section  2 subsection                                                               
(a)(1)  on page  2 line  14 was  altered to  clarify that  people                                                               
could  not change  the  non-profit entities  they  had chosen  to                                                               
donate to once they had submitted their PFD application.                                                                        
                                                                                                                                
11:08:53 AM                                                                                                                   
                                                                                                                                
Mr. Greisen  next addressed the two  changes made in the  bill at                                                               
the request of  the Department of Revenue. The  first, in Section                                                               
1 subsection  (b) page  1 line  8, was the  removal of  the words                                                               
"and furnish" after  the word "prescribe". This  would reduce the                                                               
cost of mailing out hard  copy PFD application forms to residents                                                               
of the  State. He noted  that the  "vast majority of  people" now                                                               
file  their PFD  application online.  The revised  language would                                                               
read as follows.                                                                                                                
                                                                                                                                
          "(b) The department shall prescribe an application                                                                    
     form for claiming a permanent fund dividend. …                                                                             
                                                                                                                                
Mr. Greisen  stated that  the Department  would continue  to mail                                                               
out  PFD  application  forms  "to rural  areas  that  don't  have                                                               
internet penetration".  Thus, people living in  those areas would                                                               
not experience any negative affects.                                                                                            
                                                                                                                                
Mr. Greisen stated that not conducting  a bulk mailing of the PFD                                                               
application forms  would save the  State a significant  amount of                                                               
money.                                                                                                                          
                                                                                                                                
AT EASE 11:10:27 AM / 11:11:31 AM                                                                                           
                                                                                                                                
Mr.  Greisen  noted  that  the second  change  requested  by  the                                                               
Department  is depicted  in Section  3 subsection  (a)(2) page  5                                                               
lines 16  through 21. This  language "would allow  the Department                                                               
to set  up an electronic  system for civilian process  servers to                                                               
garnish PFDs."  An electronic  system would  significantly reduce                                                               
the amount  of paperwork  involved in  this process  as currently                                                               
all garnishing processing is conducted on paper and mailed.                                                                     
                                                                                                                                
Mr.  Greisen   informed  the  Committee  that   the  two  changes                                                               
requested   by   the   Department   are   anticipated   to   save                                                               
approximately $100,000 each year.                                                                                               
                                                                                                                                
11:12:09 AM                                                                                                                   
                                                                                                                                
KACI  HOTCH,  Staff to  Representative  Bill  Thomas, the  bill's                                                               
sponsor,  affirmed   that  this  bill  would   allow  individuals                                                               
receiving a  PFD to contribute a  portion of their PFD  to a non-                                                               
profit organization. The  goal of this effort is  to increase the                                                               
amount  of  charitable  donations  made by  Alaskans  each  year,                                                               
particularly  as the  level of  charitable contributions  made by                                                               
Alaskans  who earn  more  than  $100,000 a  year  is amongst  the                                                               
lowest in the nation.                                                                                                           
                                                                                                                                
Ms. Hotch specified  that this legislation would  allow the State                                                               
to   compile   a   list    of   approved   non-profit   501(c)(3)                                                               
organizations. That list would be  provided to PFD applicants who                                                               
could,  at the  time they  submit their  application, specify  an                                                               
amount, if any,  they would like to contribute to  one or more of                                                               
the organizations.                                                                                                              
                                                                                                                                
Ms. Hotch pointed out that in  order to be approved for the list,                                                               
the organization must meet criteria specified in the bill.                                                                      
                                                                                                                                
Ms. Hotch  specified that while  the bill contained a  three year                                                               
termination date, but could be  re-authorized by the Legislature.                                                               
There would be no fiscal impact  to the State resulting from this                                                               
legislation as the Rasmussen Foundation  has agreed to administer                                                               
the program and absorb any associated expenses.                                                                                 
                                                                                                                                
11:13:40 AM                                                                                                                   
                                                                                                                                
Senator  Elton   asked  for  further  discussion   regarding  the                                                               
proposed   change  to   how  PFD   application  forms   would  be                                                               
distributed.                                                                                                                    
                                                                                                                                
Co-Chair Stedman  advised that that  question would  be addressed                                                               
by a representative from the Department.                                                                                        
                                                                                                                                
Mr. Greisen agreed that the  Department could best respond to the                                                               
question.                                                                                                                       
                                                                                                                                
11:14:31 AM                                                                                                                   
                                                                                                                                
In  response  to a  question  from  Senator Thomas,  Mr.  Greisen                                                               
reiterated  that  the  expectation  is  that  700  of  the  2,000                                                               
organizations  expected to  apply for  inclusion on  the list  of                                                               
non-profit entities would be approved.                                                                                          
                                                                                                                                
11:15:00 AM                                                                                                                   
                                                                                                                                
Senator  Olson  suggested  that the  approach  proposed  in  this                                                               
legislation might also  be considered as an  avenue through which                                                               
the State, "as a larger body",  might be able to provide Alaskans                                                               
an opportunity to purchase health insurance.                                                                                    
                                                                                                                                
Ms.  Hotch acknowledged  having talked  to Senator  Olson's staff                                                               
about this suggestion. She had  not had an opportunity to explore                                                               
the suggestion  and was unsure  how adding such language  to this                                                               
bill  might impact  it. The  sponsor would  however support  "the                                                               
concept" where it proposed in a separate bill at a later time.                                                                  
                                                                                                                                
11:15:38 AM                                                                                                                   
                                                                                                                                
JERRY  BURNETT, Director,  Administrative  Services Division  and                                                               
Legislative  Liaison, Department  of  Revenue, addressed  Senator                                                               
Elton's question by expressed that  the Department of Revenue and                                                               
the Department of  Law have been actively  discussing whether the                                                               
State is  required by  law to  send a  PFD application  packet to                                                               
every household in the State  as is current practice. In addition                                                               
to its expense, it is a wasted  effort as more than 70 percent of                                                               
Alaskans apply for  their PFD online and thereby, do  not use the                                                               
mailed out paperwork.                                                                                                           
                                                                                                                                
Mr. Burnett specified that the  proposed change would allow paper                                                               
application packets to be "selectively"  mailed out to anyone who                                                               
requests them  and to  those who  have applied  for their  PFD on                                                               
paper in  the past. The  intent is to  stop bulk mailing  the PFD                                                               
packets as has been past practice.                                                                                              
                                                                                                                                
11:17:22 AM                                                                                                                   
                                                                                                                                
Senator  Elton  asked  how new  applicants  would  be  contacted,                                                               
particularly   since   it   could  be   extrapolated   from   the                                                               
Department's  statistics   that  one-third  of   the  prospective                                                               
applicants would  apply by mail.  Legislators would  be inundated                                                               
by  questions if  access for  new applicants  was not  adequately                                                               
addressed. While  filing electronically  was a viable  option, he                                                               
was "uncomfortable  taking away  the mandate that  the Department                                                               
provide an application."                                                                                                        
                                                                                                                                
11:18:19 AM                                                                                                                   
                                                                                                                                
Mr.  Burnett   acknowledged  the  concern  and   noted  that,  as                                                               
Legislative  Liaison for  the Department,  any calls  Legislators                                                               
receive ultimately get routed to him.                                                                                           
                                                                                                                                
Mr. Burnett compared the proposed  application changes to current                                                               
operations of the federal Internal  Revenue Service (IRS) in that                                                               
as people  transition from filing  their tax returns on  paper to                                                               
filing  online, the  IRS stops  mailing  those individuals  paper                                                               
filing material.                                                                                                                
                                                                                                                                
Mr.  Burnett thought  it  unlikely that  newcomers  to the  State                                                               
would be unaware of the PFD  program. The prospect of receiving a                                                               
$1,600 PFD  check would  prompt a newcomer  to contact  the State                                                               
about the PFD application process.                                                                                              
                                                                                                                                
11:19:33 AM                                                                                                                   
                                                                                                                                
Senator  Elton  asked  whether language  in  the  current  appeal                                                               
process  could  be  revised  to  accommodate  an  individual  who                                                               
claimed to  have been  waiting for a  paper application  and thus                                                               
had not applied.                                                                                                                
                                                                                                                                
Mr. Burnett stated  that the Department would be  willing to work                                                               
with Senator Elton  to address this concern.  The Department does                                                               
not desire  to "disenfranchise  anyone or  make it  difficult for                                                               
people". The goal  is to discontinue mailing  out PFD application                                                               
packets because they are not being used.                                                                                        
                                                                                                                                
11:20:38 AM                                                                                                                   
                                                                                                                                
Senator  Huggins  voiced concern  that  the  Department might  be                                                               
inundated by  requests from non-profits  entities to  be included                                                               
on the list of approved organizations.                                                                                          
                                                                                                                                
11:21:04 AM                                                                                                                   
                                                                                                                                
Mr. Burnett  acknowledged that "the Department  is very concerned                                                               
about the  initial effects of  this bill  on the workload  of the                                                               
Department" in regards  to the donation element.  To address that                                                               
concern, an "external organization" such  as the United Way would                                                               
be  hired to  manage the  donation  aspect of  the program.  They                                                               
would be responsible for sorting  the applications. The funds for                                                               
that entity would be provided by the Rasmussen Foundation.                                                                      
                                                                                                                                
11:22:00 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman ordered bill HELD in Committee.                                                                                
                                                                                                                                
RECESS TO CALL OF THE CHAIR 11:22:13 AM / 1:53:34 PM                                                                        
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 90(JUD)                                                                                
     "An Act relating to the  purchase of alcoholic beverages and                                                               
     to access to licensed  premises; relating to civil liability                                                               
     for certain  persons accessing licensed  premises; requiring                                                               
     driver's licenses  and identification cards to  be marked if                                                               
     a person  is restricted  from consuming  alcoholic beverages                                                               
     as a  result of  a conviction or  condition of  probation or                                                               
     parole and relating to fees  for the marked license or card;                                                               
     relating to the information  contained on driver's licenses;                                                               
     requiring  the   surrender  and  cancellation   of  driver's                                                               
     licenses    and   identification    cards   under    certain                                                               
     circumstances; relating to the  reporting of certain crimes;                                                               
     relating to  prostitution; relating to the  DNA registration                                                               
     system; relating to  credit toward service of  a sentence of                                                               
     imprisonment; relating to violation  of probation and parole                                                               
     conditions by  sex offenders; relating to  bail; relating to                                                               
     distribution  of certain  materials to  minors; relating  to                                                               
     time   limitations  for   prosecution  of   certain  crimes;                                                               
     relating  to  sex  offender registration;  relating  to  the                                                               
     maximum time for probation; relating to certain post-                                                                      
     conviction relief applications; relating to good time; and                                                                 
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
The bill was again before the Committee.                                                                                        
                                                                                                                                
Co-Chair Stedman  announced that  a new committee  substitute has                                                               
been developed for consideration.                                                                                               
                                                                                                                                
1:53:54 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman   moved  to  adopt  Senate   Finance  committee                                                               
substitute, Version 25-LS0331\N, Luckhaupt,  May 12, 2007, as the                                                               
working document.                                                                                                               
                                                                                                                                
Senator Dyson objected.                                                                                                         
                                                                                                                                
1:54:23 PM                                                                                                                    
                                                                                                                                
Senator  Dyson  pointed  out  that   the  Version  "N"  committee                                                               
substitute  eliminated  [unspecified]  language  which  had  been                                                               
supported by two members of  the Senate Bipartisan Working Group.                                                               
He considered  that language  to be a  valuable component  of the                                                               
bill.                                                                                                                           
                                                                                                                                
1:54:34 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  clarified that Sections  5 through 9 of  SCS CS                                                               
HB  90(JUD)  had  been  struck from  the  Version  "N"  committee                                                               
substitute.                                                                                                                     
                                                                                                                                
1:54:56 PM                                                                                                                    
                                                                                                                                
RICK SVOBODNY,  Deputy Attorney General, Legal  Services Section-                                                               
Juneau,  Criminal  Division,  Department   of  Law,  advised  the                                                               
Committee  that  the  deletion  of this  language  "aids  in  the                                                               
prosecution of criminal cases." Language  in Sections 5 through 9                                                               
would have hindered the Department's  ability to prosecute cases.                                                               
While requiring people who witness  a crime to report it, "sounds                                                               
good" and  is essentially a  "good social goal", the  granting of                                                               
immunity  to individuals  charged for  non-reporting would  place                                                               
"the  prosecution  at  a disadvantage  because  the  defense  can                                                               
always challenge a witness."                                                                                                    
                                                                                                                                
Mr. Svobodny  explained that  a person testifying  in a  case who                                                               
has  been  granted immunity  means  that  that person  has  "done                                                               
something bad"  and is  "getting away with  it". For  instance, a                                                               
drug  dealer  testifying  in  a  murder  case  might  be  granted                                                               
immunity because  the murder  was a worse  crime that  their drug                                                               
dealing.  Retaining   this  language  in  the   bill  would  also                                                               
"criminalize the average citizen."                                                                                              
                                                                                                                                
Mr. Svobodny  provided numerous arguments against  retaining this                                                               
language in the  bill, including such things as  delays in trials                                                               
and  allowing someone  to go  free  who otherwise  would be  held                                                               
accountable for their deviant behavior.                                                                                         
                                                                                                                                
1:58:48 PM                                                                                                                    
                                                                                                                                
Senator  Dyson considered  legislators'  actions in  establishing                                                               
laws to  reflect the values  and conduct that communities  in the                                                               
State support. The  deletion of Sections 5 through  9 is contrary                                                               
to   the  behavior   western  civilization   has  supported   for                                                               
centuries. That  being that  when someone  sees someone  in harms                                                               
way they "have either a responsibility to help or report".                                                                      
                                                                                                                                
Senator Dyson  contended that the  adoption of Version  "N" would                                                               
be   detrimental   to   that   responsibility.   This   language,                                                               
particularly  the  legal   ramifications,  "was  widely  debated"                                                               
during hearings on  this bill in the  Senate Judiciary Committee.                                                               
Their decision was to retain the language in the bill.                                                                          
                                                                                                                                
Senator Dyson had particular respect  for the Chair of the Senate                                                               
Judiciary  Committee [Senator  Hollis French]  and his  extensive                                                               
criminal  law  background.  Since he  "passionately  believes  in                                                               
this",  Senator Dyson  "would accede  to  his wisdom,  knowledge,                                                               
values, and I want it to stay in."                                                                                              
                                                                                                                                
2:00:56 PM                                                                                                                    
                                                                                                                                
Mr. Svobodny did not "disagree  with the philosophy". However, it                                                               
could be  argued that  if it  was considered to  be such  "a good                                                               
policy", perhaps  it should  be expanded to  all crimes.  Thus, a                                                               
legislator witnessing  something bad  on the Chamber  Floor would                                                               
have  to  report it  immediately  to  federal authorities  and  a                                                               
mother who sees her 18 year old  hit his 16 year old brother must                                                               
report it to the authorities.                                                                                                   
                                                                                                                                
2:01:45 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  interjected  to  note  that  another  bill  in                                                               
Committee,  SB  5-FAILURE TO  REPORT  CRIMES,  would address  the                                                               
issue being deleted  from this bill. That bill would  be a better                                                               
vehicle to address this issue than this bill.                                                                                   
                                                                                                                                
2:02:40 PM                                                                                                                    
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Elton, Senator  Huggins, Senator Olson, Senator                                                               
Thomas, Co-Chair Hoffman and Co-Chair Stedman                                                                                   
                                                                                                                                
OPPOSED: Senator Dyson                                                                                                          
                                                                                                                                
The motion PASSED (6-1)                                                                                                         
                                                                                                                                
Committee  substitute  Version "N"  was  ADOPTED  as the  working                                                               
document.                                                                                                                       
                                                                                                                                
2:03:20 PM                                                                                                                    
                                                                                                                                
Senator Thomas directed attention to  language in Section 5, page                                                               
4 line 27  through page 5 line 8. He  interpreted the language to                                                               
indicate that  a person  who was  at least 18  years of  age, who                                                               
transmitted a  picture of  a female  breast to  a minor  could be                                                               
charged with  a sexual offense.  Furthermore, if that  person was                                                               
convicted  they  would  be  required  to  register  as  a  sexual                                                               
predator for 15 years.                                                                                                          
                                                                                                                                
2:04:43 PM                                                                                                                    
                                                                                                                                
Mr. Svobodny  affirmed that was  correct. If it was  the person's                                                               
first offense, they  would be required to register  for 15 years.                                                               
They  would  be  required  to  register for  life  for  a  repeat                                                               
offense.                                                                                                                        
                                                                                                                                
2:04:57 PM                                                                                                                    
                                                                                                                                
Senator Thomas  understood that this  situation would  be limited                                                               
to the transmittal of stated material via the internet.                                                                         
                                                                                                                                
Mr.  Svobodny  confirmed  that  Section 5  was  specific  to  the                                                               
electronic transfer of such material.  The determination was that                                                               
a person  stalking or  "grooming" a  child would  likely transmit                                                               
adult material as opposed to child pornography.                                                                                 
                                                                                                                                
Mr.  Svobodny  had  conferred   with  Anne  Carpeneti,  Assistant                                                               
Attorney General  in his Division,  about this. She  informed him                                                               
that the issue of transmitting  adult pornography to a child over                                                               
the internet had not specifically been addressed before.                                                                        
                                                                                                                                
2:06:05 PM                                                                                                                    
                                                                                                                                
Mr. Svobodny understood  that prosecuting a young  adult for this                                                               
action  might be  of  concern.  To that  point,  he reminded  the                                                               
Committee that the Legislature  had separately enacted provisions                                                               
relating to  "young offenders" and  the sexual abuse of  a minor.                                                               
Those provisions  specified that the  perpetrator be at  least 18                                                               
years or older  and be at least four years  older than the person                                                               
they offended  against. Such language could  be incorporated into                                                               
this bill if deemed necessary.                                                                                                  
                                                                                                                                
2:06:58 PM                                                                                                                    
                                                                                                                                
Senator   Thomas  considered   the  majority   of  the   offenses                                                               
identified  in  Section  5  substantial  enough  to  warrant  the                                                               
penalty. The  lone area  of concern however  was the  question of                                                               
whether  "the  offense" of  transmitting  an  image of  a  female                                                               
breast over the internet "fit the crime".                                                                                       
                                                                                                                                
2:07:22 PM                                                                                                                    
                                                                                                                                
Mr. Svobodny understood the concern.                                                                                            
                                                                                                                                
2:07:41 PM                                                                                                                    
                                                                                                                                
Senator Dyson  contended that historically, judges  and juries in                                                               
our  country  "have  been   reasonably  understanding  about  the                                                               
extenuating circumstances  and I'm  not worried about  the overly                                                               
harsh penalties being levied against  people that are trafficking                                                               
this  kind  of material  on  the  internet."  To that  point,  he                                                               
emphasized  that  the  entirety  of  Section  5  dealt  with  the                                                               
distribution  of  the  identified  material "to  minors,  not  to                                                               
adults."                                                                                                                        
                                                                                                                                
Senator Dyson assumed  that a person would not  be prosecuted for                                                               
material that  "inadvertently got  to a minor".  The act  must be                                                               
intentional in order for someone to be prosecuted.                                                                              
                                                                                                                                
2:09:20 PM                                                                                                                    
                                                                                                                                
Senator  Olson asked  whether people  in  the medical  profession                                                               
would be exempt from the language in the bill.                                                                                  
                                                                                                                                
2:09:44 PM                                                                                                                    
                                                                                                                                
Mr.  Svobodny  affirmed that  medical  contact  would be  exempt.                                                               
"Sexual   contact,   including  sexual   penetration,   "excludes                                                               
recognized medical treatment".                                                                                                  
                                                                                                                                
2:10:10 PM                                                                                                                    
                                                                                                                                
Mr.  Svobodny   furthered  clarified  that  Section   5  contains                                                               
language that  currently exists under Alaska's  Child Pornography                                                               
and Child Exploitation Statutes.                                                                                                
                                                                                                                                
2:10:31 PM                                                                                                                    
                                                                                                                                
Senator Olson pointed out that some  of the language in Section 5                                                               
was new language as it was indicated as such.                                                                                   
                                                                                                                                
2:10:42 PM                                                                                                                    
                                                                                                                                
Mr. Svobodny clarified his remarks.  While the language currently                                                               
exists  under the  aforementioned Statutes,  it was  new language                                                               
for the Statute addressed in this bill.                                                                                         
                                                                                                                                
2:11:09 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman asked  the Department of Public  Safety to speak                                                               
to their fiscal note.                                                                                                           
                                                                                                                                
DAVID   SCHADE,  Director,   Division   of  Statewide   Services,                                                               
Department of  Public Safety,  testified via  teleconference from                                                               
an  offnet location.  The DNA  collection provision  specified in                                                               
this  bill  is  new  and  would  increase  the  workload  of  the                                                               
Department. The Department had  previously utilized federal grant                                                               
money to support DNA collections  from convicted offenders. Those                                                               
samples were sent to a federal laboratory.                                                                                      
                                                                                                                                
Mr. Schade stated that the  Department recently became pro-active                                                               
and began processing  samples in-house. This enables  them to get                                                               
results faster and allow "for  earlier intervention into criminal                                                               
careers".                                                                                                                       
                                                                                                                                
2:12:23 PM                                                                                                                    
                                                                                                                                
Mr.  Schade stated  that in  order to  accommodate the  increased                                                               
workload,  the  Department would  be  required  to dedicate  four                                                               
people to  the program as  a tremendous  amount of time  would be                                                               
required  to track  the samples.  For  example, if  there was  no                                                               
conviction, the samples  must be removed from  CODIS. He reviewed                                                               
the responsibilities of each of  the four positions that would be                                                               
required.                                                                                                                       
                                                                                                                                
Mr. Schade  also noted  that new  computer programs  and supplies                                                               
would  be  acquired.   A  70  percent  increase   in  samples  is                                                               
anticipated.                                                                                                                    
                                                                                                                                
2:14:12 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  specified that  the Department had  submitted a                                                               
$540,000 fiscal note.                                                                                                           
                                                                                                                                
Senator Elton asked  what would occur were a "hit"  to occur on a                                                               
DNA sample  that should have  been destroyed due  to a lack  of a                                                               
conviction; specifically whether that  hit would be admissible as                                                               
evidence in the other case.                                                                                                     
                                                                                                                                
Mr.  Svobodny stated  that  the case  would  get litigated.  This                                                               
issue is not addressed in  the bill. Consideration could be given                                                               
to  adding  language  to  the  bill that  would  hold  the  State                                                               
harmless in such an event.                                                                                                      
                                                                                                                                
2:15:58 PM                                                                                                                    
                                                                                                                                
Representative  Samuels voiced  no objection  to the  adoption of                                                               
the Version  "N" committee substitute.  The deletion of  the Kiva                                                               
Law language was done at  the recommendation of the Department of                                                               
Law.                                                                                                                            
                                                                                                                                
2:16:35 PM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  moved to  report committee  substitute, Version                                                               
25-LS0331\N  from Committee  with individual  recommendations and                                                               
accompanying fiscal notes.                                                                                                      
                                                                                                                                
There being  no objection,  SCS CS HB  90(FIN) was  REPORTED from                                                               
Committee with previous  zero fiscal note #2  from the Department                                                               
of  Law Administrative  Services  Division; indeterminate  fiscal                                                               
note #3  from the Department  of Administration Office  of Public                                                               
Advocacy;  indeterminate fiscal  note #4  from the  Department of                                                               
Administration Public Defender  Agency; indeterminate fiscal note                                                               
#7 from  the Department of  Corrections; and new  $540,000 fiscal                                                               
note from the Department of Public Safety, dated May 11, 2007.                                                                  
                                                                                                                                
RECESS TO CALL OF THE CHAIR 2:16:53 PM \ 5:19:19 PM                                                                         
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 178                                                                                                        
     "An  Act  relating  to  school  funding,  the  base  student                                                               
     allocation, district  cost factors, the  local contribution,                                                               
     and the  intensive services adjustment for  state funding of                                                               
     public  education;  providing  for   an  effective  date  by                                                               
     repealing the delayed effective date  of sec. 6, ch. 41, SLA                                                               
     2006; and providing for an effective date."                                                                                
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
AT EASE: 5:19:54 PM / 5:20:04 PM                                                                                              
                                                                                                                                
EDDY  JEANS, Director,  School  Finance  and Facilities  Section,                                                               
Department  of  Education  and Early  Development,  conducted  an                                                               
overview of  the bill.  He also provided  a handout  titled "Two-                                                               
Year  Education Funding  Proposal SB  178" [copy  on file]  which                                                               
provided a written analysis of the bill sections.                                                                               
                                                                                                                                
Mr. Jeans noted that Section 1  of the bill "adds a hold harmless                                                               
provision to the foundation program.  It's there to assist school                                                               
districts  that   have  decline  enrollment."  This   section  is                                                               
addressed in item number four on the aforementioned handout.                                                                    
                                                                                                                                
Mr. Jeans continued  that the hold harmless  provision in Section                                                               
1 would  accommodate school districts that  might be consolidated                                                               
for efficiency  and those whose  funding might change due  to the                                                               
funding formula, specifically  as this bill would  specify that a                                                               
community  with an  enrollment of  more than  100 students  would                                                               
receive  funding equivalent  to  two schools.  A community  whose                                                               
enrollment  is below  100 would  be  funded as  one school.  "The                                                               
adjustment in  that is  pretty substantial"  and Section  1 would                                                               
provide some "transition  money for a three year  period to allow                                                               
districts to adjust for that".                                                                                                  
                                                                                                                                
5:21:44 PM                                                                                                                    
                                                                                                                                
Mr. Jeans directed attention to  language in Section 1 subsection                                                               
(b)(2)  on page  3 beginning  on  line 15.  This provision  would                                                               
change  the local  city  or borough  contribution  to its  school                                                               
district from  a four  mill tax  levy to a  three mill  tax levy.                                                               
This  provision   would  be  further  clarified   in  forthcoming                                                               
remarks.                                                                                                                        
                                                                                                                                
Mr. Jeans then  addressed the intensive needs  funding for school                                                               
districts as specified in Section  2 subsection (a)(2)(A) on page                                                               
4  line 2.  This provision  would  provide "a  two percent  block                                                               
funding approach  for school districts with  a student enrollment                                                               
of 1,000  or more."  This calculation  would involve  "taking the                                                               
districts  average daily  membership"  and multiply  that by  two                                                               
percent in order  to determine how many students  would be funded                                                               
under this component.                                                                                                           
                                                                                                                                
Mr. Jeans communicated that the  funding level for this component                                                               
would continue  as specified  in current  State Statute  at "five                                                               
times the base student allocation".                                                                                             
                                                                                                                                
5:23:06 PM                                                                                                                    
                                                                                                                                
Senator  Elton  contended that  a  technical  amendment would  be                                                               
required in this  regard as the current Statute  does not specify                                                               
a  two  percent funding  mechanism  limitation  on special  needs                                                               
student  funding; it  specifies  that anything  over two  percent                                                               
would  be subject  to an  audit. The  proposed language  would be                                                               
problematic for  some school districts. For  example, the current                                                               
special needs student component in  the Juneau School District is                                                               
2.9 percent.  He would  work with the  Department to  further the                                                               
original intent of this consideration.                                                                                          
                                                                                                                                
5:23:59 PM                                                                                                                    
                                                                                                                                
Mr. Jeans affirmed that Senator Elton's statement was correct.                                                                  
                                                                                                                                
Mr.  Jeans stated  that Section  3 beginning  on page  4, line  7                                                               
through page  6 line 2  depicts districts' cost  differentials as                                                               
recommended  by  the  Institute of  Social  and  Economic  Reform                                                               
(ISER) report.                                                                                                                  
                                                                                                                                
Mr.  Jeans  stated that  the  base  student allocation  would  be                                                               
increased from $5,380 to $5,580 as  specified in Section 4 page 6                                                               
lines 3 through 5 effective with Fiscal Year 2009 (FY 09).                                                                      
                                                                                                                                
Mr.  Jeans  noted  that  the   handout  also  depicts  the  costs                                                               
anticipated for the changes proposed in the bill.                                                                               
                                                                                                                                
Mr. Jeans stated  that Section 5 of the bill  also instructs that                                                               
the local contribution equate to a minimum of three percent.                                                                    
                                                                                                                                
Mr. Jean continued. Section 6  would repeal the current provision                                                               
that  requires the  Department to  only count  50 percent  of the                                                               
increased property values since the  year 1999. This would return                                                               
districts  "to a  level  playing field  of  applying three  mills                                                               
across the  board for all  municipalities in the State  of Alaska                                                               
as their required contribution under the foundation program."                                                                   
                                                                                                                                
5:25:35 PM                                                                                                                    
                                                                                                                                
Senator  Dyson  asked  for  clarification  as  to  which  section                                                               
repealed the 50 percent match.                                                                                                  
                                                                                                                                
Co-Chair  Stedman specified  that  the provision  in question  is                                                               
addressed by Section 6 on page 6 line 14.                                                                                       
                                                                                                                                
5:25:59 PM                                                                                                                    
                                                                                                                                
Mr.  Jeans directed  attention to  the bill's  cost estimates  as                                                               
depicted on  the handout. Going to  three mills in FY  2008 would                                                               
cost  the  State  approximately  $9,900,000.  Going  to  the  two                                                               
percent block  funding for  school districts  with 1,000  or more                                                               
students   would  increase   that   component  by   approximately                                                               
$18,700,000.  The implementation  of 50  percent of  a district's                                                               
cost factor  would amount to approximately  $48,600,000. Based on                                                               
current FY  08 student projections, the  hold harmless provisions                                                               
would  cost  the State  approximately  $400,000.  Thus the  total                                                               
formula increase would be approximately $77,600,000.                                                                            
                                                                                                                                
Mr.  Jeans noted  that  Governor Sarah  Palin's  FY 08  operating                                                               
budget included  a one-time grant  funding of  $34,600,000. Thus,                                                               
once  that amount  is subtracted  from the  projected $77,600,000                                                               
total, the general fund increase  in FY 08 would be approximately                                                               
$43 million.                                                                                                                    
                                                                                                                                
Mr.  Jeans noted  that the  FY  08 funding  contribution for  the                                                               
Teachers Retirement  System (TRS) contribution is  anticipated to                                                               
$77,500,000. That increased funding  combined with the Total Two-                                                               
Year  Education Funding  proposed in  this bill  would amount  to                                                               
approximately $120,500,000.                                                                                                     
                                                                                                                                
5:27:21 PM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  noted that  the Committee and  the Senate  as a                                                               
whole had  eliminated the aforementioned $34,600,000  proposed in                                                               
the Governor's  Operating Budget.  Therefore, that  amount should                                                               
be  added to  the $120,500,000.  Thus,  the total  affect to  the                                                               
Operating Budget adopted by the Senate would be $155 million.                                                                   
                                                                                                                                
Mr. Jeans affirmed.                                                                                                             
                                                                                                                                
5:28:03 PM                                                                                                                    
                                                                                                                                
Mr.  Jeans  noted  that  neither  of these  items  has  yet  been                                                               
addressed by the Operating Budget Conference Committee.                                                                         
                                                                                                                                
Co-Chair Hoffman verified this to be true.                                                                                      
                                                                                                                                
5:28:16 PM                                                                                                                    
                                                                                                                                
Mr.  Jeans  noted that  increasing  the  Base Student  Allocation                                                               
(BSA)  from  the current  $5,380  to  $5,580  would result  in  a                                                               
$23,700,000 increase in the FY 2009 budget.                                                                                     
                                                                                                                                
5:28:38 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman deduced  therefore that the BSA for  FY 08 would                                                               
remain level.                                                                                                                   
                                                                                                                                
Mr. Jeans confirmed  that a BSA of $5,380 would  remain in effect                                                               
for FY 08.                                                                                                                      
                                                                                                                                
5:28:57 PM                                                                                                                    
                                                                                                                                
Senator Dyson  understood that eliminating the  50/50 match would                                                               
increase the Municipality of  Anchorage's property tax obligation                                                               
by approximately $34 million  and the Matanuska-Susitna Borough's                                                               
by approximately $40 million over the next five years.                                                                          
                                                                                                                                
Mr. Jeans  could not speak  to how this legislation  might affect                                                               
an area's local  tax base. "The required local  effort within the                                                               
foundation  program  may  change  in those  amounts  that  you've                                                               
suggested there."                                                                                                               
                                                                                                                                
5:29:53 PM                                                                                                                    
                                                                                                                                
Mr. Jeans  recalled having  shared with  the Committee,  during a                                                               
separate  presentation on  the foundation  funding program,  that                                                               
the existing provision was "creating  a disparity in the required                                                               
local contribution amongst our  municipalities." This will "bring                                                               
uniformity back to that required local effort."                                                                                 
                                                                                                                                
5:30:07 PM                                                                                                                    
                                                                                                                                
Co-Chair   Hoffman   recalled   that  when   that   [unspecified]                                                               
legislation  was   being  considered  by  the   Legislature,  the                                                               
Department had not been supportive of it.                                                                                       
                                                                                                                                
Mr.  Jeans could  not recall  the Department's  position in  that                                                               
regard.                                                                                                                         
                                                                                                                                
Co-Chair Hoffman stated that he would research the matter.                                                                      
                                                                                                                                
There  being no  further questions  from the  Committee, Co-Chair                                                               
Stedman ordered the bill HELD in Committee.                                                                                     
                                                                                                                                
                                                                                                                                
5:31:03 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman reviewed  the  Committee's forthcoming  meeting                                                               
schedule.                                                                                                                       
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Bert Stedman adjourned the meeting at 5:31:15 PM.                                                                    

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