Legislature(1995 - 1996)
03/07/1996 01:34 PM House CRA
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
March 7, 1996
1:34 p.m.
MEMBERS PRESENT
Representative Ivan Ivan, Co-Chair
Representative Alan Austerman, Co-Chair
Representative Jerry Mackie
Representative Kim Elton
Representative Al Vezey
Representative Pete Kott
MEMBERS ABSENT
Representative Irene Nicholia
COMMITTEE CALENDAR
* HOUSE BILL NO. 474
"An Act relating to violations of municipal ordinances and
regulations; and amending the definition of the jurisdiction of the
superior court and the Department of Health and Social Services
over delinquent minors to add a further exclusion from that
jurisdiction for a minor's violation of a municipal ordinance or
regulation that is punishable as an infraction or violation, and
making a related technical amendment to that jurisdictional
definition."
- PASSED OUT OF COMMITTEE
* HOUSE BILL NO. 488
"An Act relating to matching funds requirements for municipal
school construction grants."
- HEARD AND HELD
CS FOR SENATE BILL NO. 54(RLS) am
"An Act relating to exclusive service areas for utilities
certificated to provide electric utility service and to the
definition of `general public' for utilities furnishing electric
service; and relating to employees and terms of members of the
Alaska Public Utilities Commission."
- HEARD AND HELD; ASSIGNED TO SUBCOMMITTEE
(* First public hearing)
PREVIOUS ACTION
BILL: HB 474
SHORT TITLE: VIOLATIONS OF MUNICIPAL ORDINANCES & REGS
SPONSOR(S): REPRESENTATIVE(S) TOOHEY, Kelly
JRN-DATE JRN-DATE ACTION
02/07/96 2648 (H) READ THE FIRST TIME - REFERRAL(S)
02/07/96 2649 (H) CRA, HES, JUDICIARY
02/28/96 2944 (H) COSPONSOR(S): KELLY
02/29/96 (H) CRA AT 1:00 PM CAPITOL 124
02/29/96 (H) MINUTE(CRA)(cancelled meeting)
03/07/96 (H) CRA AT 1:30 PM CAPITOL 124
BILL: HB 488
SHORT TITLE: SCHOOL DISTRICT MATCHING FUND REQUIREMENT
SPONSOR(S): REPRESENTATIVE(S) LONG, Foster
JRN-DATE JRN-DATE ACTION
02/09/96 2693 (H) READ THE FIRST TIME - REFERRAL(S)
02/09/96 2693 (H) CRA, HES, FINANCE
02/19/96 2813 (H) COSPONSOR(S): FOSTER
02/29/96 (H) CRA AT 1:00 PM CAPITOL 124
02/29/96 (H) MINUTE(CRA)(cancelled meeting)
03/07/96 (H) CRA AT 1:30 PM CAPITOL 124
BILL: SB 54
SHORT TITLE: ELECTRIC UTIL SERVICE/ APUC
SPONSOR(S): LABOR & COMMERCE BY REQUEST
JRN-DATE JRN-DATE ACTION
01/26/95 95 (S) READ THE FIRST TIME - REFERRAL(S)
01/26/95 95 (S) STA, L&C, FIN
02/14/95 (S) STA AT 3:30 PM BELTZ ROOM 211
02/14/95 (S) MINUTE(STA)
02/21/95 (S) MINUTE(STA)
03/09/95 (S) STA AT 3:30 PM BELTZ ROOM 211
03/09/95 (S) MINUTE(STA)
03/10/95 576 (S) STA RPT CS 2DP 2NR SAME TITLE
03/10/95 576 (S) FISCAL NOTE W/FY97 IMPACT (DCED)
03/21/95 (S) L&C AT 1:30 PM FAHRENKAMP RM 203
03/21/95 (S) MINUTE(L&C)
03/22/95 743 (S) L&C RPT CS 2DP 3NR NEW TITLE
03/22/95 744 (S) PREVIOUS FN FY97 IMPACT (DCED)
04/06/95 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/11/95 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/11/95 (S) FIN AT 2:30 PM SENATE FINANCE 532
04/12/95 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/12/95 (S) FIN AT 2:30 PM SENATE FINANCE 532
04/13/95 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/13/95 (S) FIN AT 2:30 PM SENATE FINANCE 532
04/13/95 (S) MINUTE(FIN)
04/18/95 1056 (S) FIN RPT CS 2DP 1DNP 3NR NEW TITLE
04/18/95 1057 (S) PREVIOUS FN W/FY97 IMPACT (DCED)
04/19/95 (S) RLS AT 0:00 AM FAHRENKAMP ROOM 203
04/20/95 (S) RLS AT 7:30 PM FAHRENKAMP ROOM 203
04/30/95 (S) RLS AT 5:40 PM FAHRENKAMP RM 203
04/30/95 (S) MINUTE(RLS)
01/22/96 (S) RLS AT 11:25 AM FAHRENKAMP RM 203
01/22/96 (S) MINUTE(RLS)
01/30/96 2251 (S) RLS RPT CS 4DP AND CAL 1NR NEW TITLE
01/30/96 2251 (S) ZERO FISCAL NOTE TO CS (DCED)
01/30/96 2251 (S) RULES TO CALENDAR 1/30/96
01/30/96 2252 (S) READ THE SECOND TIME
01/30/96 2252 (S) RLS CS ADOPTED Y15 N3 E1 A1
01/30/96 2253 (S) ADVANCED TO THIRD READING UNAN CONSENT
01/30/96 2253 (S) READ THE THIRD TIME CSSB 54(RLS)
01/30/96 2253 (S) PASSED Y14 N4 E1 A1
01/30/96 2253 (S) Taylor NOTICE OF RECONSIDERATION
01/31/96 2265 (S) RECON TAKEN UP - IN THIRD READING
01/31/96 2265 (S) RETURN TO SECOND FOR AM 1 UNAN CONSENT
01/31/96 2265 (S) AM NO 1 MOVED BY HALFORD
01/31/96 2266 (S) AM NO 1 ADOPTED Y13 N7
01/31/96 2266 (S) AUTOMATICALLY IN THIRD READING
01/31/96 2266 (S) PASSED ON RECONSIDERATION Y14 N6
01/31/96 2268 (S) TRANSMITTED TO (H)
02/02/96 2595 (H) READ THE FIRST TIME - REFERRAL(S)
02/02/96 2595 (H) C&RA, L&C, STATE AFFAIRS
03/05/96 (H) CRA AT 1:00 PM CAPITOL 124
03/05/96 (H) MINUTE(CRA)(cancelled meeting)
03/07/96 (H) CRA AT 1:30 PM CAPITOL 124
WITNESS REGISTER
CYNTHIA TOOHEY, Representative
Alaska State Legislature
State Capitol Building, Room 104
Juneau, Alaska 99801
Telephone: (907) 465-4919
POSITION STATEMENT: Presented sponsor statement for HB 474.
BOB BAILEY, Member, Board of Directors
Anchorage Chamber of Commerce; and
Co-Chair, Chamber Crime Prevention Committee
P.O. Box 91598
Anchorage, Alaska 99509
Telephone: (907) 279-3511
POSITION STATEMENT: Supported HB 474.
ANNE CARPENETI, Assistant Attorney General
Central Office
Criminal Division
Department of Law
P.O. Box 110300
Juneau, Alaska 99811-0300
Telephone: (907) 465-3428
POSITION STATEMENT: Provided department's position and answered
questions regarding HB 474.
JACK CHENOWETH, Legislative Counsel
Legal Services Division
Alaska State Legislature
Goldstein Building, Room 406
Juneau, Alaska 99801
Telephone: (907) 465-2450
POSITION STATEMENT: As bill drafter for HB 474, answered
questions.
DUANE UDLAND, Deputy Chief
Anchorage Police Department
4501 South Bragaw
Anchorage, Alaska 99507
Telephone: (907) 786-8500
POSITION STATEMENT: Testified on HB 474.
L. DIANE WORLEY, Director
Division of Family and Youth Services
Department of Health and Social Services
P.O. Box 110630
Juneau, Alaska 99811-0630
Telephone: (907) 465-3191
POSITION STATEMENT: Provided department's position and answered
questions regarding HB 474.
DON LONG, Representative
Alaska State Legislature
State Capitol Building, Room 405
Juneau, Alaska 99801
Telephone: (907) 465-4833
POSITION STATEMENT: Provided sponsor statement for HB 488.
MICHAEL MOORE, Total Quality Manager
Northwest Arctic Borough
P.O. Box 1110
Kotzebue, Alaska 99752
Telephone: (907) 442-2500
POSITION STATEMENT: Testified on HB 488.
JOHN ROGERS, Special Assistant to the Superintendent
Northwest Arctic Borough School District
P.O. Box 51
Kotzebue, Alaska 99752
Telephone: (907) 442-3472
POSITION STATEMENT: Supported HB 488.
MICHAEL MORGAN, Special Projects Manager
School Finance
Department of Education
801 West Tenth Street, Suite 200
Juneau, Alaska 99801-1894
Telephone: (907) 465-8665
POSITION STATEMENT: Answered questions regarding department's
fiscal note for HB 488.
BRUCE D. SCOTT, Director
Member and Public Relations
Matanuska Electric Association, Incorporated
P.O. Box 2929
Palmer, Alaska 99645
Telephone: (907) 745-9215
POSITION STATEMENT: Supported SB 54.
SAM COTTEN, Commissioner
Alaska Public Utilities Commission
1016 West Sixth, Suite 400
Anchorage, Alaska 99501
Telephone: (907) 276-6222
POSITION STATEMENT: Opposed SB 54.
ALYCE HANLEY, Commissioner
Alaska Public Utilities Commission
1016 West Sixth, Suite 400
Anchorage, Alaska 99501
Telephone: (907) 276-6222
POSITION STATEMENT: Opposed SB 54.
PAUL MORRISON, Chief
Engineering Section
Alaska Public Utilities Commission
1016 West Sixth, Suite 400
Anchorage, Alaska 99501
Telephone: (907) 276-6222
POSITION STATEMENT: Answered questions on SB 54.
DAVID HUTCHENS, Executive Director
Alaska Rural Electric Cooperative Association
703 West Tudor, Suite 200
Anchorage, Alaska 99503
Telephone: (907) 561-6103; (907) 463-3636
POSITION STATEMENT: Testified on SB 54.
ROBERT MARTIN, JR., General Manager
Tlingit-Haida Rural Electric Association
P.O. Box 210149
Auke Bay, Alaska 99821
Telephone: (907) 789-3196, Extension 35
POSITION STATEMENT: Supported SB 54.
BOB CRAIG
P.O. Box 20422
Juneau, Alaska 99802
Telephone: (907) 586-9091
POSITION STATEMENT: Opposed SB 54.
ACTION NARRATIVE
TAPE 96-17, SIDE A
Number 0001
CO-CHAIR IVAN IVAN called the House Community and Regional Affairs
Committee meeting to order at 1:34 p.m. Members present at the
call to order were Representatives Ivan, Austerman, Mackie, Elton
and Vezey; Representative Kott arrived at 1:35 p.m. Absent was
Representative Nicholia.
HB 474 - VIOLATIONS OF MUNICIPAL ORDINANCES & REGS
Number 0073
CO-CHAIR IVAN noted that committee packets for HB 474 included the
bill; a sectional analysis; zero fiscal notes from the Department
of Community and Regional Affairs, Department of Health and Social
Services and the Department of Public Safety; the sponsor
statement; and letters of support. He invited Representative
Toohey to introduce the bill.
Number 0116
REPRESENTATIVE CYNTHIA TOOHEY, sponsor of HB 474, presented the
bill:
"We all know that the juvenile justice system has some problems.
Too often, young offenders are finding there is no meaningful
consequence for their delinquent behavior. This is particularly
true for those who commit minor offenses, since the justice system
is already overwhelmed with serious offenders. Knowing this,
juvenile offenders have become increasingly dangerous and blatant
regarding their offenses, since they know the overloaded system can
do little to them. House Bill 474 would allow municipalities to
respond to less serious juvenile behavior by expanding its
jurisdiction to include the abilities to subject juvenile offenders
to civil infractions and/or mediation. This will allow the
juvenile justice system to focus on the more serious criminal
activities while assuring that juvenile offenders of less serious
offenses receive more immediate consequences for their actions."
Number 0314
BOB BAILEY, Member, Board of Directors, Anchorage Chamber of
Commerce, and Co-Chair, Chamber Crime Prevention Committee,
testified via teleconference. He indicated the Municipality of
Anchorage had brought before the Crime Prevention Committee a
package of proposed crime-related legislation. Due to lack of
jurisdiction, Anchorage had been "nearly helpless" in addressing
problems relating to juveniles. "We've heard such horror stories
as juveniles shoplifting in Dimond Center because they knew they'd
get a ride back downtown by the police but the state couldn't
prosecute," he said. While HB 474 would not solve juvenile
problems, Mr. Bailey believed it would allow local municipalities
to use their resources as a first line of defense against
offenders. "It's been shown over and over again that many
juveniles commit crimes simply because they know they won't be
prosecuted due to the overcrowding of the state system," Mr. Bailey
said. "And they get away with it once and they offend again."
While fines did not necessarily deter serious criminals, his
committee believed that fines might keep first-time juvenile
offenders from becoming repeat offenders. On December15, the
Anchorage Chamber of Commerce Board of Directors passed a
resolution supporting the entire package of crime-related
legislation. Today, they were asking for passage of HB474, which
they saw as an important first step in fighting juvenile crime.
Number 0474
REPRESENTATIVE AL VEZEY asked if there was a relationship between
HB 474 and shoplifting.
MR. BAILEY replied he was not sure there was a direct relationship.
"It's my understanding that minor shoplifting offenses could be
addressed under this bill as a citation," he said.
REPRESENTATIVE VEZEY asked for clarification about "citation."
MR. BAILEY clarified it was a violation. He explained his
understanding that a ticket would be issued for shoplifting.
REPRESENTATIVE VEZEY again asked for clarification, saying he
thought shoplifting was a misdemeanor under Alaska statute.
MR. BAILEY asserted his understanding that the municipality could
pass a local ordinance to address shoplifting, as well.
Number 0591
ANNE CARPENETI, Assistant Attorney General, Central Office,
Criminal Division, Department of Law, said, "concealment of
merchandise in our Alaska statutes varies according to the value of
the merchandise that's concealed." She indicated it went from a B
misdemeanor to a C felony.
REPRESENTATIVE VEZEY asked what that had to do with HB 474, which
appeared to address violations and infractions.
Number 0653
JACK CHENOWETH, Legislative Counsel, Legal Services Division,
Alaska State Legislature, offered that he was the bill drafting
attorney. He explained:
"In the current law, municipalities are permitted to identify
conduct and criminal laws through ordinances. When they enact
ordinances that carry a criminal penalty, [indisc.] under the law
as it currently reads, unless there is an exception in state law,
the way that the penalty is enforced is through DFYS. The minor is
handled through the delinquency process. What Anchorage has asked
is that the exceptions to treatment through the delinquency process
be expanded, so that if a municipality chooses to write ordinances
and treat more activities - more conduct by minors - in a criminal
sense, that these kids could be prosecuted in the district court.
And that's what Section 3 of this bill does.
"At the current time, the only exception for municipal ordinances
that takes them out from under delinquency treatment and allows a
direct prosecution, is the exception for traffic ordinances or
regulations. That's page 2, lines 26 and 27 of the bill. The
provisions of this subsection apply when a minor is accused of
violating a traffic ordinance or regulation by a municipality.
What Anchorage has asked for is an expansion of that authority.
And what we've given them is paragraph 6, so that the exception is
broadened, so that any ordinance or regulation of a municipality
that's punishable as an infraction or violation can be taken to the
district court and tried and prosecuted and sentence can be entered
there."
Number 0772
MR. CHENOWETH continued: "The wrinkle on this is that the kinds of
conduct that this is being expanded to cover includes things that
can only be punished as infractions or violations, only minor
offenses, only minor conduct, as it's called in the court rules, so
that there is no threat of a minor having to put in any kind of
jail sentence. There is no threat of incarceration, there is no
threat of any penalty whatsoever, except for payment of a fine, and
under the general authority, of payment of restitution if there's
property damage done. Limiting it to a minor offense means that
provisions of law that would require trial before a jury or
appointment of public counsel would not be applicable. In other
words, if the only penalty - the only potential penalty - is the
payment of a fine, treatment of this as a violation would mean that
there would be no requirement that a municipality choosing to
enforce its ordinances this way would be required to go before a
jury to prosecute this minor or no requirement that there be a
court-appointed counsel. So, essentially, what Anchorage is asking
is that the opportunity be expanded beyond traffic offenses and
other sorts of conduct that minors might engage in be criminalized
and enforced in this manner."
Number 0869
MR. CHENOWETH continued: "Now, having said that, let me also say
that Anchorage has a wrinkle on this that differs from, as I
understood it, from most, if not all, of the municipalities. About
a year and a half ago, Anchorage expanded its civil enforcement
ordinance, so that rather than prosecute before the district court,
or rather than take these cases, if they gain the benefit of this
change in law, what they proposed to do would be to expand the use
of their civil enforcement mechanism that's in place and handle it
that way. But for most municipalities - Fairbanks, where you're
from, Juneau, and other places where the norm would be to adopt
ordinances that speak to criminal conduct - what we're asking, or
what the bill is asking, what the sponsor is asking, is that the
opportunities be given to municipalities to enforce their
ordinances directly in the district court, rather than requiring
that these be handled as delinquency proceedings initiated by
DFYS."
Number 0926
REPRESENTATIVE VEZEY said he had thought the bill was trying to
give municipalities more authority to deal with violations. "But
then, the example was given of shoplifting," he said, "and you
elaborated that we have statutes that criminalize shoplifting, like
the misdemeanor, and we would be giving municipalities the right to
supersede that statute and make it a violation, prosecute people
for a violation of what under state law would be a misdemeanor or
perhaps a felony. Nobody in the municipality of Anchorage would
voluntarily be prosecuted for a felony when they could choose to be
prosecuted for a violation."
Number 0970
MR. CHENOWETH replied it was not a question of choice. It was a
question of how a municipality chose to enforce or penalize
criminal conduct. He referred to shoplifting as an example and
indicated that nothing said a municipality could not come along and
make substantially similar conduct a violation with a fine for a
penalty. "And the choice then, really, would be up to law
enforcement officials and the prosecutors of the city or borough,
whichever it would happen to be, as to how to prosecute. If they
chose not to prosecute at the municipal level, it could go before
the district attorney's office and be prosecuted by the state, I
assume, or vice versa. The district attorney might turn it down
and the municipality might decide that it would choose to
prosecute. But nothing prevents the municipalities from enacting
an ordinance now that says that shoplifting is conduct that is
punishable as a violation."
Number 1039
REPRESENTATIVE VEZEY indicated he could envision a double-jeopardy
possibility.
MR. CHENOWETH said that would be true only if they were prosecuted
by both the state and the municipality.
REPRESENTATIVE VEZEY replied, "But if the state chose to prosecute
as a felony violation and the person's saying, `no, no, I committed
this in the municipality where it's only a violation, not a felony,
I would prefer to be prosecuted for a violation.'"
MR. CHENOWETH emphasized it was not the alleged offender's decision
but the prosecutor's decision.
Number 1076
REPRESENTATIVE JERRY MACKIE said that Representative Vezey was on
point with some concerns he also had. He noted that many larger
communities prosecuted DWI violations, for example, under municipal
ordinances, using city attorneys to prosecute the cases. "But
you'll find serious felonies and murder and other types of things
are always charged under state statute," he said, "because then
it's the responsibility of the district attorney and the state to
pay for those. Representative Mackie cited examples of offenses
that might be bailable for fines that could be mailed in, including
traffic regulations, possession of tobacco, fish and game statutes,
and parks and recreation violations. He referred to the new
language on page 3, lines 3-7, where it said "an ordinance or
regulation that is punishable as an infraction or violation." "My
question is," he said, "other than the ones that are already
stated, what is there out there that is punishable by a violation
that could be adopted by ordinance without getting into the area
that Representative Vezey talked about where all of a sudden,
municipalities are adopting ordinances that are normally criminal
offenses, misdemeanor charges under state statutes, and opting to
go to infraction-type ordinances?" He clarified, "What are some of
the things they're asking to be able to serve violation citations
on?"
Number 1189
MR. CHENOWETH replied he did not have a list of what Anchorage, for
example, might be concerned about. Typical low-level criminal
conduct, he suggested, might be things like littering, dog control,
or curfew violations.
REPRESENTATIVE MACKIE responded that they could do all those things
under ordinance now.
MR. CHENOWETH said, "Yes, but when they come to enforce those ...
there is no exception that says they are to be prosecuted in the
district court. Consequently, they get put through the delinquency
system. That is to say, they are presented to or by DFYS and
handled through DFYS. What Anchorage folks are asking is that the
use of the availability of the district court as a means, just as
we do now, for - just as municipalities do now - to enforce their
traffic ordinances, that that be expanded, so that other kinds of
ordinances, other subject matter, could be prosecuted - minors
could be prosecuted - in the district court in the same way. And
I say that and then I have to hasten to add that Anchorage at this
point does not use that. They are thinking in terms of expanding
the use of a parallel civil enforcement remedy that they adopted
about a year and a half ago. But that doesn't mean that other
municipalities might not also want to have the opportunity to
enforce their own regulations, or their own ordinances [indisc.]
through a district court criminal prosecution."
Number 1294
REPRESENTATIVE TOOHEY noted that Duane Udland was available and
asked Mr. Udland if he could answer that question.
DUANE UDLAND, Deputy Chief, Anchorage Police Department, testified
via teleconference that he was also representing the City of
Anchorage. "Our whole request for this bill lies in the fact and
the belief that minor offenses often go unpunished when you're
dealing with juveniles," he said, expressing the need for early
consequences when a juvenile was first caught by the police. He
suggested that juvenile intake did not have the time or resources
to deal with petty offenses. This legislation would allow
Anchorage to either cite a juvenile in district court or take it
through the civil road, as they were currently doing with curfew
violations. He cited types of violations that the state courts
never saw. "We think we have a problem with juveniles that we
would like to start charging them with some of these ordinances,"
he said. "But right now, unfortunately, we can charge, but the
system at the state level just is not going to deal with it." He
emphasized that Anchorage was asking for enabling legislation.
Number 1428
REPRESENTATIVE MACKIE asked if the focus of the bill related to
jurisdiction more than the ability to put new laws on the books.
"Because I can't imagine any of the infractions that you can't put
on the books right now, already, under current law, by ordinance,"
he said.
MR. UDLAND replied, "You're exactly right. We've got a whole host
of them that we could charge the kids with right now. It's just
that the state has the jurisdiction to prosecute. We're asking for
that jurisdiction to prosecute them, either civilly or taking them
directly into district court."
Number 1450
REPRESENTATIVE MACKIE asked if there was a fiscal note from the
courts. He wanted to know what kind of impact it would have on
state courts, prosecution, court time and the judges. He further
wondered if the fines eventually went to the municipality of
Anchorage, what was in it for the state for the utilization of the
state courts.
MR. UDLAND said he did not know how many kids they were talking
about. He indicated the assembly was interested in the civil
process, where Anchorage would have its own Anchorage hearing
officer. He thought the impact on district court would be minimal.
Number 1542
REPRESENTATIVE VEZEY referred to page 2, lines 14 through 16, and
said it appeared to be double jeopardy. "You're talking about
prosecuting for a violation for somebody that's been convicted of
a crime, which implies that there was a misdemeanor or a felony
involved, they were convicted, then it talks about prosecuting for
violations," he said. "I'm confused by what we're trying to do
there."
Number 1578
MR. CHENOWETH said, "Section 2 is intended to address the question
of a concern on the part of Anchorage that if you allow us to
prosecute, don't put on us the burden of requiring that these
things go before a jury or requiring that we have to pay for court-
appointed counsel. You don't have to take a case to a jury and you
don't have to provide a lawyer at public expense if you are
prosecuting what the court has identified as a minor offense -
that's their term. And we looked at what the court meant by minor
offense." He explained the term arose out of a judicial decision.
"And we were looking for something that would indicate what the
court was thinking of in terms of qualifying as a minor offense.
If we met that, we would be able to exempt the municipalities from
having to carry the burden of trying a minor before a jury or
appointing an attorney. We found the clue to that in something
called District Court Criminal Rule 8. And essentially, paragraphs
2 and 3, lines 7-16 of that page, pick up the characteristics out
of the district court rule and set them down in state law in a way
that, hopefully, keeps the municipality from having to carry the
burden of putting their cases before a jury or of having to appoint
an attorney at public expense."
Number 1658
MR. CHENOWETH continued: "One of the other characteristics of a
minor offense is that the penalty could not give rise to any
disability or legal disadvantage based on conviction of a crime.
Your voting rights couldn't be taken away. You couldn't lose a
license to practice, practice law, practice medicine, operate a
business. No other disability or legal disadvantage attaches to
the conviction apart from payment of a fine. Period. If the
ordinance were drafted in any way that said that for violation of
this ordinance, some other penalty attaches beyond payment of a
fine, then paragraph 3 would say that the enacting municipality
could not take advantage of the minor offense exception, and
therefore, it would be treated as a normal criminal offense and
various other things would come into play, including right to trial
by jury and right to court-appointed counsel if you couldn't afford
it. So, what we're trying to do is meet the court's definition of
minor offense in all of the facets in the district court rule."
Number 1723
REPRESENTATIVE VEZEY said his interpretation in reading it was that
there was a conviction involved. He understood Mr. Chenoweth to be
saying there was no disability or legal disadvantage that would
accrue from a conviction.
MR. CHENOWETH replied that an ordinance that the municipality chose
to enforce this way could not include a provision that penalized
the defendant, upon conviction, beyond payment of a fine.
Number 1764
REPRESENTATIVE VEZEY explained that he understood what Mr.
Chenoweth was saying but questioned whether the bill language said
that. He asked if Mr. Chenoweth was comfortable that the language
said that.
MR. CHENOWETH indicated he had cribbed the language from the
district court rule.
Number 1777
REPRESENTATIVE MACKIE reiterated that he wanted to know if there
was a fiscal note from the court. Furthermore, he wished to know
the position of the Administration or the Department of Law on this
particular bill.
Number 1799
MS. CARPENETI testified on behalf of the Department of Law, saying
the department opposed HB 474. She explained that the
Administration opposed automatic waivers of juveniles to adult
court, especially for minor offenses. Shoplifting was the type of
offense that the Administration thought should be dealt with in the
juvenile system.
Number 1838
MS. CARPENETI explained that the district court in Alaska had no
probation supervision, so that a person would go to court and be
fined without having any follow-up. Nor did the bill provide for
restitution. "And we're not sure exactly what offenses may be
dealt with under this system," she said. "If it's concealment of
merchandise, it might be a violation in Anchorage, then it's a B
misdemeanor or an A misdemeanor or a C felony outside of
Anchorage." Ms. Carpeneti acknowledged there was frustration with
the juvenile system. "And we would recommend that you wait while
the Governor's Commission on Youth and Justice addresses the
problem," she said. "I think the system is creaking under too many
people and too many demands made of it. But we would oppose this
approach to alleviating whatever problems that are seen with the
juvenile system."
Number 1893
REPRESENTATIVE MACKIE said he could appreciate the position of
automatic waivers of juveniles into court. "What we're talking
about is not jail time," he said. "We're talking about minor
offenses, which is under a bailable schedule. With certain
parameters on there, ... wouldn't the Administration look to this
as, perhaps, a mechanism for relief from a juvenile justice system
that is obviously very broke?" He suggested that Anchorage would
not be asking for relief unless it was a serious problem.
Number 1930
MS. CARPENETI thought it would be useful to hear from the Division
of Family and Youth Services (DFYS) and added, "I think that may be
a misconception that these cases are just not dealt with. And it's
the Administration's position that if you don't deal with them at
the beginning, then you might end up with a juvenile who has not
been addressed in terms of how to help that person steer away from
committing offense after offense. And you end up with a juvenile
who's in more trouble, and who's in serious trouble, and you've
lost the chance to help that individual, to steer him or her away
from bad behavior."
Number 1956
REPRESENTATIVE ELTON asked who would determine what a minor
infraction was. He wondered whether the municipality, by
ordinance, would say what were waivable offenses, rather than
having determinations made by DFYS or the state.
Number 1999
MS. CARPENETI believed that the way the bill was drafted, if the
municipality adopted an ordinance with only a fine attached to it,
they could, by that very act, define what is a waivable offense.
For example, if they prohibited concealment of merchandise and made
the only consequence a fine, that would, by definition, make it
waivable under this bill. She added that she believed minor
consuming was already waived to district court.
Number 2034
MR. UDLAND emphasized Anchorage's willingness to take on the
problem. He said, "I'd be testifying in the opposite if we were
talking about waiving the kids into district court where they would
be sentenced to jail, as opposed to being handled by juvenile
intake. But that's not the case." He added, "I think that if
there's concerns about the extent that the municipality would
pursue this, for instance, would be going to serious misdemeanors
and then sort of declassifying them to violations, perhaps you
could put some language into the bill that would somehow ensure
that that wouldn't occur, but I don't know how to do that. But it
would seem to me that this bill really does relieve the state of
Alaska from some burden that I've always heard in the past that
you'd like to get rid of."
Number 2130
L. DIANE WORLEY, Director, Division of Family and Youth Services
(DFYS), Department of Health and Social Services (DHSS), testified
that the department opposed HB 474. "While it has been noted that
there are times we would probably relieve ourselves of some of
these obligations, the reality is we do not feel it is in the best
interest of the youth," she said.
Number 2163
MS. WORLEY pointed out that in the bill, as designed, each
municipality would have the ability to adopt the ordinance of their
choice. The department was concerned that throughout the state,
youth would be treated differently for the same violations. A
second concern was that when a youth went into court, DFYS had no
mechanism for receiving that information. Someone who had been to
district court previously could come into the DFYS system as a
first-time offender. Similarly, there was no notification to
district court when a youth was on probation in the juvenile
system.
Number 2229
MS. WORLEY emphasized that DHSS felt the juvenile justice system
was the best mechanism for handling youth. She discussed
misperceptions and statistics relating to the system. On
misdemeanor referrals for 1995, she said, DHSS adjusted with a
letter 18 percent of the time and with a referral 29 percent of the
time, resulting in payment of restitution, going to youth court or
mediation, or performing community service. The department
adjusted with a conference almost 21 percent of the time, in which
parents were involved and worked out a plan of action with the
youth and probation officer, including ongoing follow-up. In 13
percent of the cases, juveniles were petitioned to court. About 5
percent received ongoing probation for a period of time. Ms.
Worley emphasized that the system was trying to find methods of
rehabilitation. She acknowledged they were not always successful.
However, they felt that if parents were involved and the youth were
engaged in community service, probation, monitoring or other
methods, there was a better opportunity for keeping an eye on the
youth.
Number 2313
MS. WORLEY expressed concern that youths would fail to pay the
fines. "As you all well know," she said, "our youth facilities are
more than full and we have grave concern about how many of these
kids decide not to pay a fine, get a contempt of court charge, and
then we have to take them in for a period of time for an offense
that could be as small as skateboarding in the wrong place of town
because there was a municipal ordinance against skateboarding on
that part of the street."
Number 2345
MS. WORLEY emphasized that they supported municipalities taking a
more active role. "Anchorage is a wonderful example," she said.
"We would really like the opportunity to work with municipalities
and have them help us develop alternatives for placement and
referrals for these youth."
Number 2369
REPRESENTATIVE TOOHEY expressed amazement that DHSS opposed
allowing the municipality to take on this problem. She asked if
the problem was going to be addressed in the Governor's new youth
bill.
MS. WORLEY replied that was certainly part of it. "And I serve on
the prevention working group of the Governor's Conference," she
said. "There's the prevention, there's the youth-at-risk and then
there's dealing with the juvenile code. So we are dealing with all
aspects of that."
Number 2401
REPRESENTATIVE TOOHEY asked, "But will he address this issue that
is a major problem in Anchorage? If he doesn't, then that's what
I'm saying. This bill is a specific problem in our Anchorage area
with the youth. They're running rampant in Anchorage. We need
some way to stop them in the very beginning. Now, whether the
state wants to get involved in a five-dollar shoplifting or in
spray-painting an office building, maybe that's something they want
to do. And if that is, then the fiscal note should be totally
different. As it is now, it is something that Anchorage feels they
can handle."
Number 2430
REPRESENTATIVE MACKIE referred to earlier testimony about attitudes
by juvenile offenders who did not worry about prosecution. He
asked if there were minor offense charges currently under the
state's juvenile justice system being dismissed because of lack of
resources.
TAPE 96-17, SIDE B
Number 0001
REPRESENTATIVE MACKIE asked if DFYS could be notified when there
was a violation. "If it's being adjudicated by a district court
judge anyway, there would be a record of it," he said, "and
certainly, something like that could be passed on." He asked why
Ms. Worley did not see the bill as an asset to the system.
Number 0025
MS. WORLEY responded, "You bring up a number of good points, as
does Representative Toohey. And I think it's important to
understand that it's not that we don't feel the municipality can
handle it." However, DFYS was concerned that payment of a fine,
while often immediate, was not a real deterrent nor would it keep
juveniles on the right track down the road. "There could even be
said that it provides a benefit to those who have higher economic
status," she said. "It's easy to pay a fine if you have a wealth
of money. If you don't, it becomes a greater burden. I guess my
concern continues to be that I believe, through the juvenile
justice system, we can have a stronger, continuing relationship, a
monitoring process, to keep in touch with these youth and to see
where they're going. Certainly a fine for some kids is going to be
a deterrent." She reiterated the fear that many would not pay the
fines and would end up in contempt of court, resulting in their
placement in the youth facilities.
Number 0085
MS. WORLEY agreed the department could probably set up a system to
receive notification from the courts.
REPRESENTATIVE MACKIE asked if it were a policy of DFYS to not
issue fines because of a belief that fines did not serve as a
deterrent. He noted that paying money had been a deterrent to him
as a youth. Representative Mackie then referred back to his
earlier question about youth not being prosecuted or receiving
follow-through in the system and asked if that was the case.
Number 0113
MS. WORLEY stated that according to the statistics for FY 1995,
6percent of misdemeanors were dismissed for various reasons. Lack
of resources precluded them from dealing with every single case as
thoroughly as they wanted to. "But we certainly try to evaluate
each case and make a good determination as to what steps can be
taken and we try to have some type of consequence in every case,"
she said. Althought DFYS did not normally impose fines, they
required a lot of restitution, particularly in cases where there
was property damage or stolen merchandise.
Number 0209
REPRESENTATIVE MACKIE said, "So, there's not an inordinate number
of offenders that are falling through the cracks, then, in your
opinion?"
MS. WORLEY replied, "It's hard to answer that. I think there are
kids who are falling through the cracks, definitely. I don't know
if there is an inordinate number. I think a lot of it is on
perception of what is a consequence. In some people's minds, a
fine is a concrete consequence, whereas community service is not a
concrete consequence."
Number 0237
REPRESENTATIVE TOOHEY said, "If municipalities would get together
and absorb 10 or 15 percent of these minor cases, it certainly
would leave your hands free, and the money free, to prosecute the
more serious offenses." She asked Mr. Udland about the numbers of
cases being dismissed.
Number 0254
MR. UDLAND replied, "I can't give you numbers. I think `dismissed'
is actually the wrong terminology." He said he had heard people
from Juneau intake say they were so busy that if they could write
a letter, that might be all they would do because of lack of time.
"And I don't think that would count as a dismissal," he said. "It
would probably be a disposition, and therefore, I don't think the
dismissals would show up as a true, accurate picture." He noted
that street officers were frustrated because the only consequence
was a letter in the mail. "I've always defended juvenile intake
and the work that they do," he said. "I think they do a wonderful
job. But the problem is, is there aren't enough of them. And
they're getting overwhelmed. I wish I could get every kid into
juvenile intake for every minor event. I think they have the
ability and the desire. They just don't have the resources. I
guess there's a question, can the municipality enter into this one
limited area and help out? I think we can."
Number 0333
CO-CHAIR AUSTERMAN pointed out that with 18 percent letters and 6
percent dismissals, that was 24 percent, almost a quarter of the
cases, which did not have fines or actions against them. With
another 21 percent going to conference with parents, nearly 45 to
50 percent of the caseload was not being petitioned to court, going
to referrals or in the ongoing probation period. "So, using those
numbers, it sounds to me like there is a problem," he said. "And
maybe this would be one way of helping your department solve some
of the problems that you've got out there." He indicated he
supported the bill and wanted to move it from committee.
Number 0369
CO-CHAIR IVAN commented that he was not totally convinced by DFYS.
He saw the bill as a tool and thought it would give the
municipalities the authority to deal at the local level, getting
the authority closer to parents and enforcement in the communities.
Number 0422
REPRESENTATIVE ELTON thought they were taking a philosophy adopted
by the state over a long period of time and "turning it on its
head." He said, "I really do believe that part of the problem with
juvenile misbehavior is that we've got to get them into a system
where they can get some help." He was not sure that taking
juveniles straight into the court system would do that. He
suggested the proposed legislation was, at most, a partial solution
that could possibly be adopted as part of a package. "I don't see
anything in here that guarantees that there's going to be
retribution," he said. "I don't see anything in here that speeds
up the docket in district court. I don't see anything in here that
tells me how much this is going to cost the court system. I don't
think we've even asked the court system how much it's going to
cost." He advised that until there were answers to those kinds of
questions, the bill should not move on.
Number 0539
REPRESENTATIVE TOOHEY responded, "This is for a municipality to
adopt. Juneau obviously doesn't have that problem. It is
obviously a problem for Anchorage. It may be for Fairbanks; I'm
not sure. But the court system said that it would be so minor that
it might incur a $2,000 court problem, $2,000 a year, if that."
She emphasized her belief that it was a solution to 14- and 15-
year-olds starting into a life of crime. "Some of them it's going
to stop," she said. "If we can save 20 percent by scaring them or
by imposing this fine on them, then I think that we're saving
somebody." She pointed out that the municipalities were not
mandated to do this but were willing to take on this problem.
Number 0582
REPRESENTATIVE MACKIE said he did not necessarily disagree with
Representative Elton's comments. "And I certainly think that DFYS
and other agencies try to do the best they can with the
rehabilitation and looking out for the best interest of the kid."
However, he recalled getting a ticket at age 14 for driving without
a license and the effect that going with his mother before a judge
had on him. He suggested that going before a judge could be a
wake-up call. Representative Mackie referred to the numbers
pointed out by Co-Chair Austerman and said that also concerned him.
"There is not a lot of deterrent out there," he added.
Number 0658
REPRESENTATIVE ELTON clarified that although he thought there was
a problem, he was not yet ready to buy into the solution. He
indicated that as a youth, he would have been more frightened by
his parents receiving a letter than by going before the district
court judge. He recalled an incident where he was one of 150 kids
who jaywalked in front of the high school one afternoon. "We
thought that was the biggest, most fun thing we had that whole
week," he said. "We got the afternoon off and we all went to court
and he told us not to do it again." He thought there should not be
too much concern about 21 percent getting a letter because if it
worked right, a lot of those kids would not be back in the system.
"Frankly, I think the best solution is, give DFYS the ability, the
resources they need, to do a good job," he said.
Number 0766
CO-CHAIR AUSTERMAN moved that HB 474 move from committee with
accompanying fiscal notes and individual recommendations. There
being no objection, it was so ordered.
CO-CHAIR IVAN recessed the committee at 2:40 p.m. for a short
break.
HB 488 - SCHOOL DISTRICT MATCHING FUND REQUIREMENT
Number 0796
CO-CHAIR IVAN called the meeting back to order at 2:45 p.m. There
was no longer a quorum. Co-Chair Ivan noted that committee packets
for HB 488 contained the bill; the affected statutes; a zero fiscal
note from the Department of Community and Regional Affairs; a
fiscal note from the Department of Education; a sponsor statement;
data from the Department of Labor; and letters of support.
Number 0828
REPRESENTATIVE DON LONG, sponsor of HB 488, presented the bill. He
said certain school district areas had been neglected because of
inability to come up with the matching fund requirement. He read
from the sponsor statement:
"This legislation is intended to allow municipalities with an
unemployment rate of 10 percent a waiver towards their
participating share. At the present time, municipalities with an
unemployment rate of 10 percent of greater have a much harder time
of paying their local share for school construction. This high
unemployment rate results from a lack of economic development or
jobs in a municipality, which translates into low revenue for the
local municipalities.
"Since the adoption of the school district participation grant
program in 1973, many schools in Alaska have been neglected due to
these municipalities' inability to come up with their participating
share of the grant. I believe this bill would be a step in the
right direction in helping economically depressed municipalities in
their efforts to receive school construction grants."
Number 0910
REPRESENTATIVE LONG explained that although some schools had
applied for waivers, none had been granted since 1993. Many of the
schools had been on a list for many years, yet had never been
funded. He felt the only municipalities that could afford matching
fund programs would have their schools fixed or constructed. There
was no effective means of helping these municipalities come up with
matching funds.
CO-CHAIR IVAN noted that there was again a quorum present, with
Representatives Austerman, Vezey and Elton present in addition to
himself.
Number 0980
REPRESENTATIVE ELTON asked how Representative Long had arrived at
the 10 percent figure. He said Mat-Su, for example, was "on the
cusp of maybe being eligible," which he did not think was
necessarily intended.
Number 1019
REPRESENTATIVE LONG responded that in discussions with people from
his district, they had arrived at an average figure of 10 percent.
He noted that in his own district, those figures had gone up to 14
or 16 percent in some areas.
REPRESENTATIVE ELTON asked why the previous year was being used.
He suggested an average of prior years would ensure that it was
more than a one-year phenomenon and asked if there had been
discussion about that.
Number 1055
REPRESENTATIVE LONG replied, "The discussion was based on that the
department would have the ability to prove that they ... meet that
requirement of the 10 percent." He indicated they had not
considered an average over several years.
CO-CHAIR IVAN noted that he did not plan to move the legislation
out today. "We need more input and questions answered before we
proceed," he said.
Number 1131
REPRESENTATIVE AL VEZEY said, "Representative Long, I'm not aware
that the unemployment rates in different regions of the state have
been extremely cyclical in the last, say, eight years." He noted
that with 10 years, there might be cyclical action. "We have
certain regions of the state which have historically high
unemployment rates," he said. "When we passed the statutes
providing for the matching funding for the bonding propositions and
whatnot, those unemployment conditions were known then. And I
would, on the surface, think that all that was taken into account."
He thought going back in now might distort the whole idea of local
sharing on these cost programs.
Number 1232
REPRESENTATIVE LONG responded that it had become apparent that it
was hard for a school district to obtain a waiver. He envisioned
this legislation as an additional waiver mechanism for school
districts that would not otherwise qualify. He said a municipality
might have funds but be mandated by another department, for
example, the Department of Environmental Conservation, to spend the
money elsewhere, such as in fixing their landfill.
Number 1338
CO-CHAIR AUSTERMAN indicated he had questions for the Department of
Education.
MICHAEL MOORE, Total Quality Manager, Northwest Arctic Borough,
testified via teleconference from Kotzebue that the borough was
having a great deal of difficulty raising the required match for
schools. "What we estimate we need to do for the next 20 years is
set aside $750,000 a year at a minimum to meet the match
requirement," he said. He indicated they faced deficits otherwise
totalling $15 million in the next five years. "So, we don't
believe we're going to be able to do it. Our unemployment rate
over the past three years has averaged approximately 18 percent."
Number 1430
REPRESENTATIVE VEZEY asked Mr. Moore what the relationship was in
the borough between borough revenues, school district revenues and
unemployment.
MR. MOORE responded there was no direct relationship. "The
unemployment figure is an indicator of the state of the economy,"
he said. "Another indicator would be that we have a number of
communities with 30 percent of the people at or below poverty
level. There's many indicators that could have been used. I don't
have any reason to believe that the unemployment indicator is an
incorrect one, but it might need additional factors and that might
be something to consider in the bill."
Number 1494
JOHN ROGERS, Special Assistant to the Superintendent, Northwest
Arctic Borough School District, testified via teleconference from
Kotzebue. He said he had been asked by Superintendent Swenson to
testify in support of HB 488. He explained they were in the final
design stages of a school facility in Selawik, the first project
for which they had received funding that required a local match.
"In this particular case," he said, "that requirement was
$1,436,669. After the money was appropriated by the legislature,
we worked with the Department of Education to identify
approximately $245,000 of prior year expenses which qualified for
local match purposes. This left the district with a $1.2 million
obligation to complete this requirement for Selawik schools."
Number 1569
MR. ROGERS continued, "Over the last two years, the district has
had to utilize all of its cash reserves to meet this obligation.
Just recently, the school board appropriated the final $850,000
which was necessary for us to go ahead and apply with the local
match requirement. At the same time they were appropriating the
$850,000 for construction, they also had to go in and cut
approximately $435,000 out of the operating fund budget. The
action of the board in this final appropriation for the
construction project in Selawik has utilized all of the district's
available cash reserves. If additional construction funds were to
be appropriated by the legislature for our school district, we
cannot meet any more local match requirements."
Number 1643
MR. ROGERS indicated that HB 488 provided a method for a waiver of
the local match requirement in areas of the state having high
unemployment, such as his borough. He reiterated the school
district's support of the bill.
Number 1649
REPRESENTATIVE VEZEY asked Mr. Rogers what the match formula had
been.
MR. ROGERS replied he believed the borough's match was 10 percent,
providing a 90/10 split.
Number 1699
MICHAEL MORGAN, Special Projects Manager, School Finance,
Department of Education, testified that the department acknowledged
that districts faced challenges in meeting the local match
requirement. "And this bill certainly speaks to that," he said.
He indicated he was there to answer questions regarding the fiscal
note.
CO-CHAIR AUSTERMAN stated his understanding that for the fiscal
note, the Department of Education had used the total number of
sites, 29.
MR. MORGAN clarified that was municipalities. "This excludes
REAAs," he said.
CO-CHAIR AUSTERMAN stated, "And you've said 11 of them go over the
10 percent."
MR. MORGAN replied, "That's correct. That was using 1995
unemployment figures."
Number 1773
CO-CHAIR AUSTERMAN referred to the fiscal note for $873,000 and
asked if it was based upon full funding.
MR. MORGAN clarified it was full funding of the department-
recommended projects for FY 1997. "This is based on the six-year
plan that we put forth within the last couple weeks," he said.
CO-CHAIR AUSTERMAN asked if it was full funding for the 11 sites.
Number 1805
MR. MORGAN replied, "No, that's based on full funding for all
projects within that fiscal year." He added, "For the first two
fiscal years in the six-year plan, the department targeted, in its
six-year plan, a target figure of $100 million a year. And part of
the projects which were recommended for funding under that $100-
million-dollar goal were recommended for funding, for example,
perhaps, for planning a design only in FY 97, with full funding for
construction to follow in FY 98. So, the $873,000 speaks to the
full funding as recommended by the department, but that doesn't
necessarily cover the full scope of all the projects in that one
year."
CO-CHAIR AUSTERMAN asked if it covered the 11 sites.
MR. MORGAN replied yes.
CO-CHAIR AUSTERMAN asked if it covered more than the 11 sites.
MR. MORGAN replied, "The $873,000 is just the impact of the 11
municipalities that had over the 10 percent. If you go to
Attachment Number 1, we kind of speak to this by saying -- the
first group of figures is total scope and the $873,000 is just the
impact if those 11 sites didn't have to pay their participating
share for that year."
Number 1890
CO-CHAIR AUSTERMAN suggested that over the number of years that
they had been funding school construction, not everybody on the
list had been funded at once.
MR. MORGAN said, "That's correct."
CO-CHAIR AUSTERMAN pointed out that the department had used a full-
list figure for the fiscal note.
MR. MORGAN replied, "We've used the full-list spread over a six-
year period." He added, "Right now, this six-year period includes
more than the full list. This includes the full list as we
published it this year, plus other projects which have been
currently identified by districts in their six-year plans, which
really takes us out into that -- the end of the six-year horizon."
Number 1950
CO-CHAIR AUSTERMAN replied, "I guess what I need from you guys is
to go back and do an average on what percentage of funding you're
getting actually for school construction over the last number of
years, what you project to get FY 97, and come back with a figure
that shows what you would need, then, for an additional funding for
it."
MR. MORGAN said, "If everything on the list was funded this year
... and the 11 districts got waivers, the cost would be $12
million. That's if all $650 million gets funded in one year, but
... if you total up everything on the current list for
municipalities, excluding REAAs, it comes to $273,983,000. If the
11 districts ... which had over 10 percent unemployment didn't pay
their participating share, it would cost an additional
$12,300,000."
CO-CHAIR AUSTERMAN asked for clarification.
Number 2044
MR. MORGAN referred to Attachment 1, the third page of the fiscal
note, and said, "The very top figure is the $273,983,644. That's
total requested by districts right now, on the current list, that
aren't REAAs. Right below it is, out of that 273 [million], 118
[million] of it belongs to those 11 districts that had over 10
percent unemployment. If you drop down to the second group of
figures, the 57.5 [million], that's how much the participating
share is out of the 273 [million] for all those municipalities.
The figure right under it is how much the participating share would
be for those with over 10 percent unemployment. In other words,
out of the 118 [million], it would be $12,300,000."
CO-CHAIR AUSTERMAN said, "And then, you're saying that the $873,000
is based upon what possibly could be funded."
MR. MORGAN responded, "That was just on our recommended funding.
I mean, if we come back to the Governor's plan of $7,100,000, we'd
have to go back and look at those individual projects and see how
they'd apply. But that was saying, if we recommended funding of
$39,800,000 for districts that were municipalities in FY 97, out of
that $39,800,000, the impact of this bill would be the $873,000 in
[FY] 97."
Number 2179
CO-CHAIR AUSTERMAN asked if a list was available of the 11 sites or
the 33 percent being discussed and then noted it was part of the
committee packet.
Number 2200
REPRESENTATIVE ELTON expressed concern about the language in the
bill that said the exemption will be granted if unemployment
averaged at least 10 percent in the fiscal year immediately before
the fiscal year for which the appropriation bill funding the
municipality is passed by the legislature. He asked, "How many
municipalities have those figures that are that recent, or does the
Department of Community and Regional Affairs have those figures?
Or do they keep them that up-to-date, so that you can just call
somebody and say, `what was the unemployment rate?'"
Number 2259
MR. MORGAN replied, "I'm not sure. I know that in preparing this
fiscal note, we had to go back to '95 figures."
REPRESENTATIVE ELTON asked if that was FY 95.
MR. MORGAN specified it was calendar year 1995, as he understood
it.
REPRESENTATIVE ELTON said, "Because this requires that unemployment
rates be figured in terms of fiscal years, not calendar years."
MR. MORGAN replied, "Right. And I don't know the answer to that."
He noted there were some practical questions that needed to be
worked out.
Number 2290
REPRESENTATIVE ELTON pointed out that unemployment rates were not
based on fiscal years. They were based on calendar years.
MR. MORGAN suggested it would probably lap into two calendar years.
Number 2345
CO-CHAIR IVAN said he would hold HB 488 in committee for further
information. "As far as unemployment figures are concerned, I
believe the Department of Labor can provide that," he added.
SB 54 - ELECTRIC UTIL SERVICE/ APUC
Number 2381
CO-CHAIR IVAN noted that committee packets for SB 54 included
fiscal notes and sponsor statements, as well as letters of support.
TAPE 96-18, SIDE A
Number 0026
BRUCE D. SCOTT, Director, Members and Public Relations, Matanuska
Electric Association, Incorporated (MEA), testified via
teleconference. He read the first portion of a four-page document
dated March 7, 1996, included in the committee packets. He
explained that MEA, incorporated since 1941, was now a member-owned
nonprofit cooperative serving 29,000 members in Southcentral
Alaska, with a service are of 3,360 square miles. He discussed the
pricing structure of MEA and explained that of the four types of
costs to customers, only the wholesale cost of energy went down
when MEA lost a customer. Remaining costs were then spread to
fewer customers. A few large, commercial customers were important
to the cooperative; MEA's largest customer represented almost 3
percent of total sales, whereas the six largest customers
represented 10 percent. Therefore, MEA was concerned about "cherry
picking," where a competitor might pick up these high-consumption
customers, resulting in higher costs to the other consumers.
Therefore, MEA urged passage of SB 54, which he said would allow
utilities to preserve their retail loads and avoid
counterproductive and unfair cherry picking. They suggested the
real opportunity for savings was in coordinated planning and
operation of generation facilities.
Number 0462
SAM COTTEN, Commissioner, Alaska Public Utilities Commission
(APUC), testified via teleconference, indicating the committee had
a copy of APUC's position paper on SB 54. He noted that fellow
commissioner Alyce Hanley and Paul Morrison, chief of APUC's
Engineering Section, were also present on teleconference. Mr.
Cotten said the commission unanimously opposed SB 54, basically
because it eliminated the opportunity for the commission to analyze
potential benefits of competition. It also eliminated the
potential choice of service options by consumers. He acknowledged
concerns about "cherry picking" and said, "we're not aware of any
case where the commission has allowed direct competition. While we
must consider the effect on the current providers, the results
could be better rates, better service, more choices." He added,
"the commission feels that protection is already in place and feel
that this bill would go against what is a national trend, that I
think would apply to Alaska as well, and that's the potential for
benefit from competition."
ALYCE HANLEY, Commissioner, Alaska Public Utilities Commission,
voiced via teleconference that she agreed with Commissioner
Cotten's testimony but had no further comments.
Number 0653
CO-CHAIR AUSTERMAN said, "There's been reference to APUC being able
to control competition to some degree. And is that a correct
statement, that if somebody wants to move into an area, that it
does have to come through APUC and some competition, then, is
controlled by APUC?"
Number 0695
PAUL MORRISON, Chief, Engineering Section, Alaska Public Utilities
Commission, answered via teleconference, saying, "Our current
statutes require a waiver of objection be (indisc.) by a utility
trying to get into another utility service area."
MR. COTTEN added, "Basically, the answer is yes. In order, for
example, for somebody to come into Kodiak and compete with Kodiak
Electric for providing electric service, they'd have to come to the
commission to get permission to do that."
MS. HANLEY said, "And I think at the present time - there perhaps
was one exception - there are no overlapping certificate areas. I
think we basically have just one certificate in each area. I
think, through some mistake some years ago, there got to be a
portion of an area that overlapped, but for the most part, we have
no overlapping. They're all pretty much monopoly services."
Number 0765
DAVID HUTCHENS, Executive Director, Alaska Rural Electric
Cooperative Association, indicated he had been asked to go through
the bill section by section. He explained:
"Section 1 is an intent provision that was put in, in one of the
committees in the other body last spring, to make it clear that
this legislation applies only to service areas for electric
utilities, not any other kind of utility service.
"Section 2 was a provision added in the Finance Committee in the
other body that had been something that the APUC had requested so
that if the budget ever provides for funding for special assistants
to the commissioners, separate from the professional staff of the
commission itself, as a whole, that they could be selected outside
of the regular state employment system.
"Section 3 is also something that the commission had recommended.
This would eliminate the lame-duck appointment problem that you
faced a year ago. And Section 6 goes with that - it's the
transition provision - so that current commissioners would hold
over until early the next year after their term would otherwise
have expired in October.
"Sections 4 and 5 are the heart of the bill, from our perspective,
at least, and we would agree with the commission that the present
practice has been that the service areas be separate for electric
utilities. And, frankly, the reason for the legislation is to make
sure that it stays that way. This was the determination made by
the state legislature in 1970, that up until that time, you did
have overlapping service areas and utilities competing with each
other at retail and it was a mess. And the legislature made the
affirmative decision in 1970 to separate these service areas and
gave the commission detailed instructions in the statute as to how
to separate the service areas. And we had taken it for granted all
these years that that was the natural order that the service areas
would remain separate. But as one spokesman from the commission
just now said, there is a good deal of national discussion about
some kind of retail competition and that usually goes under the
title of retail wheeling. And this, you know, we have people from
the commission in recent years that have been going out to meetings
with their counterparts from across the country and they hear a lot
of discussion about retail wheeling and they come back, `oh, gee,
wouldn't it be nice if we tried retail competition?' Well, we
tried it in this state and it doesn't work very well in the Alaska
setting."
Number 0950
MR. HUTCHENS referred to a statement that he had submitted to the
committee and said he would not discuss that in the interests of
time. He then referred to a printout from the Kodiak Electric
Association that had yellow and pink highlighted lines on it.
"What I'd like to point out with this," he said, "is why it doesn't
work very well in the Alaska setting. You have to have a flexible
marketplace for competition to work. And we don't have that in the
Alaska setting, nor are we likely to." Line 14 of the printout,
highlighted in pink, showed that if Kodiak Electric were to lose
the fish processors from their system, the rates for everybody else
would rise by nearly 15 percent. He referred to line 6,
highlighted in yellow, and said that showed the amount of
investment devoted to each kilowatt hour of sale in the year. "You
see, what would happen," he said, "is that from '95 to '96, with
just losing the fish processors from the system, the amount of
investment per kilowatt hour sold would increase from 50 cents to
68 cents. And that would mean a 36 percent stranded investment,
investment that would not be utilized in 1996 that was utilized in
1995, just from the sheer fact of losing that volume of sales. The
same thing would happen all over the state. The smaller the
system, the greater the impact."
Number 1129
REPRESENTATIVE ELTON said, "Using your sheet here, let's assume
that somebody wanted to do that. What would they have to do now to
provide service in Kodiak under existing law?"
MR. HUTCHENS replied, "What they would have to do now to provide
service, not self-generation, but provide service to somebody else,
they would have to make an application to the APUC for authority to
serve. And up to this point, up until very recently, the
commission had always regarded the service areas as exclusive,
based on the 1970 statute. And the last year or two, there have
been some sounds coming out of the commission that, `well, we don't
really mean those to be exclusive,' that we could provide
overlapping service areas if we chose to do so. And the authority
they cite for that was a 1968 case involving Chugach Electric, but
that was before the 1970 act of the legislature that changed all
the rules. But any rate, to answer your question, they'd have to
apply to the commission; the commission would have to have a
finding that it was in the public interest to permit this; and then
they could take a certificate area away from [an] existing utility
and assign it to the new one."
Number 1211
REPRESENTATIVE ELTON asked if there would be public hearings
throughout that process.
MR. HUTCHENS replied, "That is correct. That's the way we would
understand it. We think it would be unlikely that in a real
thorough test that any of these items could be found in the public
interest. But we've heard some statements from people at the
commission that indicate an intention to proceed in that direction
and it's to forestall court tests on this very point is the reason
for the legislation."
Number 1246
REPRESENTATIVE ELTON thought the use of the fishing industry as an
example was interesting, from his perspective, because of the
trouble that industry was facing. "What would happen if a couple
of the fish processing people got together in Kodiak and said,
`hey, we've got to cut costs; our production costs are too high, we
can't compete with farmed salmon, for example, that's being
produced at x number of cents a pound'? Under the proposed
legislation, would they be prohibited from going together to
generate their own power?"
Number 1278
MR. HUTCHENS replied, "Under the proposed legislation, they would
have the absolute right to provide their own self-generation. But
in terms of some entity being created that would sell to the fish
processors, they would be prohibited from doing that."
REPRESENTATIVE ELTON asked if they could form a co-op to provide
power to themselves.
MR. HUTCHENS said, "My understanding of it would be that if it were
some kind of a separate entity created, this entity would have to
sell power to the fish processors and that would be prohibited."
Number 1322
ROBERT MARTIN, JR., General Manager, Tlingit-Haida Rural Electric
Association (THREA), noted that he had submitted copies of his
testimony, a four-page document. He discussed the national trend
toward competition in the generation and transmission part of the
utility business. He noted that the entire continent was joined in
an interconnected grid of transmission and distribution lines
except for Alaska, where only Hyder was connected to the
continental grid.
MR. MARTIN mentioned large loads being targeted by neighboring
utilities or independent producers. In many rural communities,
there were only one or two large loads, the school and perhaps the
village store. Because of fixed costs for the utility serving
residential consumers, rates would necessarily rise to the
remaining customers if those large loads were lost to a competitor.
The remaining customers would lower consumption, leading to what
was known in the industry as a death spiral.
Number 1480
MR. MARTIN said, "We support passage of this because it would
protect the rural utilities from unfair competition." He mentioned
steps taken in his region to keep costs down. "It is important to
remember," he said, "that the experience with deregulation in other
industries has led to great benefits for the urban areas but has
led to decreased service and higher costs in the rural areas."
Number 1566
BOB CRAIG testified that he was strongly opposed to SB 54. "At
least in the urban environment, I think there is a need for
competition," he said. He thought the fiscal note might be
incorrect. "Competition almost always reduces prices," he said.
"We've seen it time and again. When Mapco came to Juneau, the
price of gasoline dropped 30 cents overnight. With the millions of
dollars that the state spends on their power cost equalization
program, the state has a great vested interest in seeing more
competition come in and the price being reduced." He added, "I
think the bill should be studied more and at least it should be
amended by this committee to exclude large future customers. Any
of the aspects brought up by utilities are for their existing
customers. They have made an investment and perhaps they should
keep those as exclusive. But future customers, I believe, should
be for whoever can produce power at the lowest possible cost, such
as the large mines that are coming in around the Juneau area and
other communities." He thought he could produce power
competitively. "But if I sell it to AEL&P and they resell it,
it'll never happen," he added.
Number 1669
CO-CHAIR AUSTERMAN said, "I've made no bones about my opposition to
this bill. I think that it creates monopolies and I'm against the
fact that we would try to run free enterprise out by creating these
exclusive areas." He noted that he was distributing to committee
members a letter from Chugach Electric Association to
Representative Mark Hanley that showed that Chugach Electric was
also opposed to the bill.
Number 1701
CO-CHAIR IVAN indicated he thought more work needed to be done on
the bill. He assigned SB 54 to a subcommittee chaired by
Representative Vezey.
REPRESENTATIVE KOTT asked who else would be on the subcommittee and
asked Co-Chair Austerman if there were any way to alleviate his
concerns.
CO-CHAIR AUSTERMAN replied, "I've looked at this really hard and I
don't see any. I'm concerned with -- in my area, I've got an 18
cent kilowatt hour that it costs me to live there and I'm on a
hydro project. So I think if I got a hydro project that also, now,
all of a sudden, becomes exclusive at 18 cents a kilowatt hour, I'm
very concerned that it's going to be 24 or 30 cents a kilowatt hour
before we're done there. And if there's no competition, I think
that's where it might direct."
Number 1770
REPRESENTATIVE ELTON expressed that he was somewhat in between. "I
think we're trying to deal with different problems in different
parts of the state with one approach," he said. "And I'm not sure
that necessarily works, because I think the problems in a rural
area where you have very high up-front costs for establishing
infrastructure, and then if you allow cherry picking to occur, I
can see where that could be very, very destructive to the
residential consumers, especially. I'm not so sure that is
something that necessarily occurs in the urban areas." He cited
the example of cable TV in Juneau. "I happen to think that if
there were competition, I wouldn't have to spend $50 a month for
cable TV," he said. "I'm just not sure that we've got an approach
that works for both areas." He suggested that structuring a system
in which APUC could use public input to protect the different types
of areas was the best way. "I'm not sure that this bill does it,"
he emphasized.
Number 1865
CO-CHAIR IVAN noted that he represented a small, rural community.
He referred to APUC, which controlled rates depending on population
and the amount of revenue, and said "I've enjoyed their
protection." He asked Representatives Kott and Elton to sit on the
subcommittee for SB 54.
ADJOURNMENT
There being no further business to conduct, CO-CHAIR IVAN adjourned
the House Community and Regional Affairs Committee meeting at 3:49
p.m.
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