Legislature(1999 - 2000)

03/16/1999 08:05 AM House CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
        HOUSE COMMUNITY AND REGIONAL AFFAIRS                                                                                    
                 STANDING COMMITTEE                                                                                             
                   March 16, 1999                                                                                               
                     8:05 a.m.                                                                                                  
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                                 
                                                                                                                                
Representative Andrew Halcro, Co-Chairman                                                                                       
Representative John Harris, Co-Chairman                                                                                         
Representative Carl Morgan                                                                                                      
Representative Lisa Murkowski                                                                                                   
Representative Fred Dyson                                                                                                       
Representative Reggie Joule                                                                                                     
Representative Albert Kookesh                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                  
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
*HOUSE BILL NO. 103                                                                                                             
"An Act relating to civil actions by municipalities and certain                                                                 
public corporations and prohibiting certain civil actions by them                                                               
against firearms or ammunition manufacturers and dealers."                                                                      
                                                                                                                                
     - MOVED CSHB 103(CRA) OUT OF COMMITTEE                                                                                     
                                                                                                                                
*HOUSE BILL NO. 98                                                                                                              
"An Act relating to contracts for the provision of state public                                                                 
assistance to certain recipients in the state; providing for                                                                    
regional public assistance plans and programs in the state;                                                                     
relating to grants for Alaska tribal family assistance programs;                                                                
and providing for an effective date."                                                                                           
                                                                                                                                
     - MOVED CSHB 98(CRA) OUT OF COMMITTEE                                                                                      
                                                                                                                                
(* First public hearing)                                                                                                        
                                                                                                                                
PREVIOUS ACTION                                                                                                                 
                                                                                                                                
BILL: HB 103                                                                                                                    
SHORT TITLE: LIABILITY RELATING TO FIREARMS                                                                                     
SPONSOR(S): REPRESENTATIVES(S) DYSON, Austerman                                                                                 
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 2/19/99       260     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 2/19/99       260     (H)  CRA, JUDICIARY                                                                                      
 2/24/99       308     (H)  COSPONSOR(S):  AUSTERMAN                                                                            
 3/09/99               (H)  CRA AT  8:00 AM CAPITOL 124                                                                         
 3/16/99               (H)  CRA AT  8:00 AM CAPITOL 124                                                                         
                                                                                                                                
BILL: HB  98                                                                                                                    
SHORT TITLE: PUB.ASSISTANCE:PROGRAMS/GRANTS/CONTRACTS                                                                           
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 2/19/99       253     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 2/19/99       253     (H)  CRA, HES, FIN                                                                                       
 2/19/99       254     (H)  ZERO FISCAL NOTE (DHSS)                                                                             
 2/19/99       254     (H)  GOVERNOR'S TRANSMITTAL LETTER                                                                       
 3/09/99               (H)  CRA AT  8:00 AM CAPITOL 124                                                                         
 3/16/99               (H)  CRA AT  8:00 AM CAPITOL 124                                                                         
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
VICTOR GUNN, Legislative Administrative Assistant                                                                               
     for Senator Pete Kelly                                                                                                     
Alaska State Legislature                                                                                                        
Capitol Building, Room 510                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-2327                                                                                                      
POSITION STATEMENT:  Supported HB 103.                                                                                          
                                                                                                                                
DAVID KELLEYHOUSE                                                                                                               
Alaska Outdoor Council                                                                                                          
PO Box 81452                                                                                                                    
Fairbanks, Alaska                                                                                                               
Telephone:  (907) 455-7882                                                                                                      
POSITION STATEMENT:  Supported HB 103.                                                                                          
                                                                                                                                
MIKE COONS, Paramedice                                                                                                          
Member, National Rifle Association                                                                                              
PO Box 4225                                                                                                                     
Palmer, Alaska 99645                                                                                                            
Telephone:  (907) 745-6779                                                                                                      
POSITION STATEMENT:  Encouraged passage of HB 103 and SB 77.                                                                    
                                                                                                                                
JIM NORDLUND, Director                                                                                                          
Division of Public Assistance                                                                                                   
Department of Health & Social Services                                                                                          
PO Box 110640                                                                                                                   
Juneau, Alaska 99811-0640                                                                                                       
Telephone:  (907) 465-5154                                                                                                      
POSITION STATEMENT:  Discussed HB 98.                                                                                           
                                                                                                                                
TERRY HOEFFERLE, Chief of Operations                                                                                            
Bristol Bay Native Association                                                                                                  
PO Box 310                                                                                                                      
Dillingham, Alaska 99576                                                                                                        
Telephone:  (907) 842-5257                                                                                                      
POSITION STATEMENT:  Discussed Bristol Bay Native Association and                                                               
                    Native nonprofits in general.                                                                               
                                                                                                                                
DON SHIRCEL, Director                                                                                                           
Family Services                                                                                                                 
Tanana Chiefs Council                                                                                                           
122 First Avenue                                                                                                                
Fairbanks, Alaska 99701                                                                                                         
Telephone:  (907) 452-8251                                                                                                      
POSITION STATEMENT:  Discussed the Tanana Chiefs Council program.                                                               
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 99-15, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HARRIS called the House Community and Regional Affairs                                                              
Standing Committee meeting to order at 8:05 a.m.  Members present                                                               
at the call to order were Representatives Halcro, Harris, Morgan,                                                               
Murkowski, Dyson and Kookesh.  Representative Joule arrived at 8:07                                                             
a.m.                                                                                                                            
                                                                                                                                
HB 103-LIABILITY RELATING TO FIREARMS                                                                                           
                                                                                                                                
Number 0047                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HARRIS announced the first order of business before the                                                             
committee would be HOUSE BILL NO. 103, "An Act relating to civil                                                                
actions by municipalities and certain public corporations and                                                                   
prohibiting certain civil actions by them against firearms or                                                                   
ammunition manufacturers and dealers."                                                                                          
                                                                                                                                
REPRESENTATIVE DYSON, Sponsor of HB 103, informed the committee                                                                 
that HB 103 is a companion to SB 77, sponsored by Senator Pete                                                                  
Kelly.  Representative Dyson pointed out that Victor Gunn, staff to                                                             
Senator Pete Kelly, was present.                                                                                                
                                                                                                                                
REPRESENTATIVE DYSON believed there to be two issues at hand.                                                                   
There appears to be a concerted effort from those who have an                                                                   
inherent distaste for firearms to punish the industry, thereby                                                                  
limiting the accessibility of firearms through liability suits.                                                                 
Such liability suits attempt to financially punish the                                                                          
manufacturers and distributors of firearms for the misuse of                                                                    
firearms.  This bill, HB 103, would prohibit Alaskan political                                                                  
subdivisions from prosecuting suits for the misuse of legally                                                                   
manufactured and distributed firearms.  The bill does not prohibit                                                              
manufacturers from being sued for manufacturing defects and such of                                                             
the weapons themselves.                                                                                                         
                                                                                                                                
Number 0272                                                                                                                     
                                                                                                                                
REPRESENTATIVE DYSON identified the other issue at hand as                                                                      
liability itself.  The misuse of any manufactured implement is the                                                              
responsibility of the person misusing the implement not the                                                                     
manufacturer.  He discussed the time his wife was on a jury in                                                                  
which the manufacturer/distributor of a snow machine was being sued                                                             
by an individual hurt when a belt broke.  The snow machine owner                                                                
testified in court that he had not maintained the snow machine for                                                              
four years, had taken the belt guard and cowling off, and was                                                                   
racing the snow machine.  Initially, Representative Dyson's wife                                                                
was the only juror who did not want to rule in favor of the injured                                                             
individual.  Three or so days later, the jury did not award the                                                                 
injured individual anything because this was not the manufacturer's                                                             
fault but rather the individual's misuse of the product.                                                                        
                                                                                                                                
REPRESENTATIVE DYSON believed that everyone should be held                                                                      
accountable for their actions.  Manufacturers should be held                                                                    
accountable for the production of inferior or unsafe items, but                                                                 
should not be held accountable for the misuse of items.                                                                         
Representative Dyson noted that firearms, as far as he knew, were                                                               
the only manufactured item that enjoys some constitutional                                                                      
protection.  Therefore, more care should be taken in the treatment                                                              
of firearms.  He informed the committee that SB 77 had been amended                                                             
and those amendments should be before the committee.  The Senate                                                                
amendments expand the bill to include the State of Alaska as a                                                                  
party that could not bring forth such suits.                                                                                    
                                                                                                                                
Number 0542                                                                                                                     
                                                                                                                                
VICTOR GUNN, Legislative Administrative Assistant for Senator Pete                                                              
Kelly, Alaska State Legislature, supported HB 103.  As                                                                          
Representative Dyson said, cities are taking firearm manufacturers                                                              
to court to hold them responsible for the violence in the city.                                                                 
Mr. Gunn stated that cities claim that firearm manufacturers have                                                               
conspired to flood the market knowing the guns will reach those                                                                 
cities with strict gun laws via the black market.  Furthermore, the                                                             
manufacturers are allegedly manufacturing more powerful firearms in                                                             
order to increase sales.  Both HB 103 and                                                                                       
SB 77 are in response to lawsuits brought forth by municipalities                                                               
against gun manufacturers in order that the municipality can recoup                                                             
its damages from the illegal use of products.  Mr. Gunn said, "They                                                             
were emboldened by recent tobacco settlements where municipalities                                                              
are now thinking they can attempt to supplement their general funds                                                             
by lawsuits directed at the deep pocket of gun manufacturers.  A                                                                
product that they consider politically uncorrect."  Unlike tobacco                                                              
companies, firearm manufacturers do not deny that they manufacture                                                              
a deadly product.  Mr. Gunn indicated that people illegally using                                                               
firearms are not being held responsible.                                                                                        
                                                                                                                                
MR. GUNN said that a group of lawyers, successful in the tobacco                                                                
suits, have persuaded the mayors of several large cities to go                                                                  
after the firearm industry.  The aim is to bankrupt the firearm                                                                 
companies by suing for medical costs and monetary damages of                                                                    
gun-related crime.  Such lawsuits circumvent the constitutional                                                                 
limits as well as democratic debate.  Mr. Gunn stated, "The gun                                                                 
control movement thinks it can win without passing laws or winning                                                              
elections.  By using litigation to raise prices and drive                                                                       
manufacturers out of business, the gun controllers can reduce the                                                               
access to firearms without confronting the Second Amendment."  He                                                               
indicated the clear intent is to utilize the courts to accomplish                                                               
what the anti-gun lobbyists have not been able to accomplish in the                                                             
federal and state legislatures.  "This clear abuse of tort                                                                      
liability system seeks to use potentially bankrupting lawsuits to                                                               
force makers of a legal, but politically incorrect product, to quit                                                             
manufacturing."                                                                                                                 
                                                                                                                                
Number 0812                                                                                                                     
                                                                                                                                
MR. GUNN clarified that the intent of the legislation is not to                                                                 
prevent bringing an action for product liability for a defective                                                                
product.  Firearm manufacturing is a legal enterprise that produces                                                             
quality products that are lawfully and safely used by thousands of                                                              
Alaskans for various activities.  Mr. Gunn said that Bill Reuger,                                                               
Jr. had commented that it is easier to blame the firearm                                                                        
manufacturer than have people take responsibility for their                                                                     
actions.  The Reuger company motto has been, "Arms maker for                                                                    
responsible citizens."  Mr. Gunn informed the committee that the                                                                
American Firearms Council conducted a nationwide survey of                                                                      
registered voters which found that 92 percent of registered voters                                                              
polled did not believe cities or states should sue firearm                                                                      
manufacturers as a means to stop violence.  The survey also found                                                               
that 67 percent of the voters polled believe that enforcing current                                                             
laws against the use of a firearm is more effective in addressing                                                               
criminal violence than limiting the number of firearms an                                                                       
individual can purchase.  He noted that the Public Opinion Strategy                                                             
of Alexandria, Virginia conducted the survey in October 1998 which                                                              
polled 800 registered voters nationwide with a margin of error of                                                               
plus or minus three percent.                                                                                                    
                                                                                                                                
MR. GUNN mentioned that blaming gun manufacturers for                                                                           
firearm-related crime is somewhat of a novel theory.  This would be                                                             
similar to attaching blame to an automobile manufacturer when an                                                                
individual drives an automobile while intoxicated and kills                                                                     
someone.  He asked, "What's next?"  One professor's report                                                                      
documented that firearms were used safely over 2 million times to                                                               
defend lives nationwide.  Further, one-tenth of one percent of                                                                  
firearms are used in any given year to commit armed crime.  The                                                                 
criminal use of firearms should be addressed by state and federal                                                               
legislatures, not the manufacturers of a legal product.                                                                         
                                                                                                                                
Number 1059                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI referred to the CSSB 77(JUD) when she                                                                  
inquired as to, "...why they have removed it from the section                                                                   
relating to municipalities, public corporations to its own                                                                      
subsection."                                                                                                                    
                                                                                                                                
MR. GUNN explained that the Senate committee felt it important to                                                               
include individuals and the state in SB 77, which the CS                                                                        
accomplishes.                                                                                                                   
                                                                                                                                
REPRESENTATIVE MURKOWSKI agreed with Mr. Gunn's earlier statements.                                                             
She commented that with regard to Mr. Gunn's question about what                                                                
would be next, Representative Murkowski hoped that the legislature                                                              
will not have to address this by statute; hopefully this will not                                                               
be the first of many statutes in an effort to end what some feel                                                                
are frivolous lawsuits.                                                                                                         
                                                                                                                                
MR. GUNN commented that from the information he has garnered there                                                              
is no "smoking gun" in this legislation.  Unlike the tobacco                                                                    
industry, which was viewed as deceiving the public there was a                                                                  
"smoking gun."  No one has proven that the firearm industry has                                                                 
flooded the market with firearms knowing the firearms will move                                                                 
into cities with stricter firearm control laws.  Mr. Gunn explained                                                             
that the firearm industry sells firearms to legal dealers who in                                                                
turn sell firearms to individuals.  What an individual does with                                                                
the firearm after purchasing it is unknown.  He reiterated his                                                                  
statements regarding the claims cities have made against the                                                                    
firearm industry.  Any firearm is a potentially fatal item in the                                                               
hands of an irresponsible individual.  Mr. Gunn emphasized that                                                                 
everyone should remember that millions of individuals have survived                                                             
and prevented attacks and assaults on their person due to the                                                                   
presence of a firearm.  The firearm industry should be protected.                                                               
                                                                                                                                
CO-CHAIRMAN HARRIS referred to Section 2(b) which would cover                                                                   
liability issues regarding the manufacture of unsafe or damaged                                                                 
firearms.                                                                                                                       
                                                                                                                                
MR. GUNN informed the committee of his law enforcement background.                                                              
He reiterated that the legislation does not intend to prevent                                                                   
damages being sought for the manufacture of products not up to par.                                                             
                                                                                                                                
Number 1422                                                                                                                     
                                                                                                                                
DAVID KELLEYHOUSE, Alaska Outdoor Council (AOC), informed the                                                                   
committee that AOC is the state affiliate of the National Rifle                                                                 
Association (NRA).  Mr. Kelleyhouse supported HB 103.  He                                                                       
reiterated Mr. Gunn's comments regarding the correlation between                                                                
the tobacco industry lawsuits and the flurry of lawsuits brought                                                                
against the firearms industry.  He indicated that any industry with                                                             
deep pockets that is considered "politically incorrect" at the                                                                  
moment would be in jeopardy.                                                                                                    
                                                                                                                                
MR. KELLEYHOUSE said that AOC feels the current litigation to be a                                                              
direct threat to Second Amendment rights.  If substantial                                                                       
judgements are levied against firearm manufacturers, the                                                                        
manufacturer will become bankrupt or the price of weapons will                                                                  
increase by a considerable amount, placing weapons out of reach to                                                              
the average American citizen.                                                                                                   
                                                                                                                                
MR. KELLEYHOUSE informed the committee that he served as the                                                                    
Director of the Division of Wildlife Conservation under the                                                                     
previous administration.  He noted that Alaska receives $7 to $10                                                               
million a year in federal matching funds for wildlife conservation                                                              
as a result of the Federal Aid and Wildlife Restoration Act of                                                                  
1937, the Pitman-Robertson Funds.  Those funds come from the 11                                                                 
percent excise tax on firearm manufacturers which is distributed to                                                             
all state wildlife agencies.  This funding has been the backbone of                                                             
conservation funding throughout the U.S. since 1937.  Mr.                                                                       
Kelleyhouse pointed out that if firearm manufacturers go bankrupt                                                               
or if there is an extreme increase in the price of firearms, the                                                                
funding for state conservation and wildlife programs would be                                                                   
strangled.  Mr. Kelleyhouse stated, "No manufacturer should be held                                                             
responsible for the irresponsible or illegal use of its products.                                                               
There's scarcely a product in society today that could not be                                                                   
injurious if misused, it's a matter of taking personal                                                                          
responsibility for one's own actions.  So, litigation against the                                                               
manufacturers of goods should not be viewed as a shortcut for local                                                             
governments to swell their coffers and shift blame for social                                                                   
problems.  Used legally, in the shooting sports, firearms are among                                                             
the safest of all products.  Consider that statistically, hunting                                                               
and target shooting are more safe than football, bowling, or even                                                               
badminton.  It's seven injuries per 100,000 participants."                                                                      
                                                                                                                                
MR. KELLEYHOUSE noted that he was involved in law enforcement for                                                               
20 years and a game biologist.  He informed the committee that one                                                              
of the demands he has heard is for the firearm industry to make a                                                               
firearm specific to one individual owner.  Mr. Kelleyhouse pointed                                                              
out that in two instances that he had to use a firearm to save the                                                              
life of another, he had to use another person's firearm.                                                                        
Therefore, to make firearms useful to only one individual does not                                                              
make sense.  Mr. Kelleyhouse said that the AOC and the NRA urge the                                                             
committee to adopt HB 103.                                                                                                      
                                                                                                                                
Number 1738                                                                                                                     
                                                                                                                                
MIKE COONS, Paramedic, NRA member, testified via teleconference                                                                 
from Palmer.  He asked if the SB 77 amendment, prohibiting the                                                                  
state or state agents to bring such a suit, will be included in                                                                 
HB 103.                                                                                                                         
                                                                                                                                
CO-CHAIRMAN HARRIS said not at this time.                                                                                       
                                                                                                                                
MR. COONS noted that he had sent Co-Chairman Halcro and Harris                                                                  
e-mails regarding this issue.  Mr. Coons stated that HB 103 seems                                                               
to only address cities and boroughs.  The language does not                                                                     
prohibit  states or agents of the state from filing frivolous                                                                   
lawsuits against firearm manufacturers.  He did not have a problem                                                              
with true product liability suits or breech of contract.  Mr. Coons                                                             
felt that using only the Georgia law as a blueprint would be                                                                    
ignoring the corrections other states have made in similar                                                                      
legislation.  Texas and Florida are stopping such suits from the                                                                
Governor's mansion on down.  As long as it is possible to have an                                                               
anti-gun governor and an appointed state attorney general, the                                                                  
prohibitive language for states and state agents must be included.                                                              
Mr. Coons cited fairness as another issue.  He said, "The political                                                             
subdivisions have every right to yell 'foul' that...they are being                                                              
told what not to do, but the state isn't willing to put the same                                                                
restrictions on itself."  Mr. Coons urged the committee to amend HB
103 to include language pertaining to the state as well as agents                                                               
of the state.                                                                                                                   
                                                                                                                                
Number 1901                                                                                                                     
                                                                                                                                
MR. COONS said that in an e-mail to the committee and                                                                           
Representative Dyson, Mr. Coons encouraged an amendment fashioned                                                               
after language in Florida's legislation.  Mr. Coons informed the                                                                
committee that Representative Dyson had expressed concern that the                                                              
amendment could prohibit HB 103 from passing out of the House of                                                                
Representatives.  Mr. Coons noted that Senator Pete Kelly indicated                                                             
that he was considering an amendment which would make violations of                                                             
this law a civil action against the violator.  Mr. Coons reiterated                                                             
his preference for language similar to that in Florida's law in                                                                 
order to make any state agent have second thoughts about                                                                        
challenging this law.  Mr. Coons said that he would agree to a                                                                  
compromise with the civil action, if the consequences for violation                                                             
of this law were punitive enough to strongly discourage such                                                                    
action.  He informed the committee that the Mayor of Atlanta,                                                                   
Georgia was going forward with a suit against a firearm                                                                         
manufacturer.  Although Georgia has a law prohibiting such, there                                                               
are no meaningful ramifications.                                                                                                
                                                                                                                                
MR. COONS stated that Internet polls by CNN and ABC respectively                                                                
report that respondents against such suits range between 75 to 90                                                               
percent.  He noted that the last time he checked, the CNN poll had                                                              
received almost 100,000 respondents and the ABC poll had received                                                               
about 50,000 respondents.  Mr. Coons emphasized that all industries                                                             
are open to such suits.  He informed the committee of a report                                                                  
aired on the Rush Limbaugh show about a report which concluded                                                                  
smoking during pregnancy results in the baby becoming a criminal                                                                
which he felt illustrated the craziness of such litigation.  In                                                                 
closing, Mr. Coons encouraged the passage of HB 103 and SB 77.                                                                  
                                                                                                                                
REPRESENTATIVE DYSON thanked Mr. Coons for his interest as well as                                                              
the information he has supplied on this issue.  Representative                                                                  
Dyson announced his intention to continue to work with Senator Pete                                                             
Kelly and have these two bills become similar, if not exactly the                                                               
same.  Representative Dyson indicated that amendments will be made                                                              
in both bodies as the bills move through the committee process.                                                                 
                                                                                                                                
MR. COONS appreciated all the work on this issue.  He mentioned                                                                 
that Senator Pete Kelly was on NRA Live last week.                                                                              
                                                                                                                                
Number 2085                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HALCRO asked if Representative Dyson would approve of                                                               
adopting CSSB 77(JUD), Version LS0463\I, Ford, 3/15/99, and                                                                     
reporting that out of committee as the CS from the House Community                                                              
& Regional Affairs committee.  Co-Chairman Halcro believed that the                                                             
Senate Judiciary CS does a better job of covering everyone,                                                                     
including state agencies and municipalities.  Co-Chairman Halcro                                                                
pointed out that the CSSB 77(JUD) includes everything in HB 103,                                                                
but the language is a bit broader.                                                                                              
                                                                                                                                
REPRESENTATIVE DYSON said he would be pleased with the                                                                          
substitution.                                                                                                                   
                                                                                                                                
The committee took an at-ease from 8:36 a.m. to 8:37 a.m.                                                                       
                                                                                                                                
Number 2212                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HALCRO moved that the wording from the CSSB 77(JUD) be                                                              
considered as the content of the amended HB 103.  There being no                                                                
objection, it was so ordered.                                                                                                   
                                                                                                                                
CO-CHAIRMAN HALCRO moved to report CSHB 103, Version LS0463\I,                                                                  
Ford, 3/15/99, out of committee with individual recommendations and                                                             
the accompanying zero fiscal note.   There being no objection, it                                                               
was so ordered.                                                                                                                 
                                                                                                                                
The committee took an at-ease from 8:40 a.m. to 8:42 a.m.                                                                       
                                                                                                                                
HB  98-PUB.ASSISTANCE:PROGRAMS/GRANTS/CONTRACTS                                                                                 
                                                                                                                                
Number 2278                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HARRIS announced the next order of business before the                                                              
committee as HOUSE BILL NO. 98, "An Act relating to contracts for                                                               
the provision of state public assistance to certain recipients in                                                               
the state; providing for regional public assistance plans and                                                                   
programs in the state; relating to grants for Alaska tribal family                                                              
assistance programs; and providing for an effective date."                                                                      
                                                                                                                                
JIM NORDLUND, Director, Division of Public Assistance, Department                                                               
of Health & Social Services, said that he was present to testify on                                                             
behalf of the governor's bill, HB 98.  This bill would allow Alaska                                                             
Native organizations to run their own welfare programs in their own                                                             
areas as well as providing an additional measure of local control                                                               
over welfare programs.  Mr. Nordlund explained that HB 98 developed                                                             
from the Federal Welfare Reform Law signed by President Clinton in                                                              
August of 1996.  The federal law allows tribal and Native                                                                       
organizations in Alaska the ability to run their own Temporary                                                                  
Assistance for Needy Families (TANF) program.  The TANF federal                                                                 
block grant runs the Alaska Temporary Assistance Program (ATAP)                                                                 
which is the replacement for the Aid to Families with Dependent                                                                 
Children (AFDC).  Currently, Alaska receives about $65 million for                                                              
the TANF block grant.  The federal law specifies that block grant                                                               
must be matched by, "the maintenance of effort", by 80 percent of                                                               
the funding the state spent on the AFDC program in 1994.                                                                        
                                                                                                                                
MR. NORDLUND explained that HB 98 would allow state funding to be                                                               
utilized by a Native-run program in Alaska.  The federal law says                                                               
that the 12 regional nonprofits organizations in Alaska and the                                                                 
Metlakatla Indian Community are eligible to receive part of                                                                     
Alaska's block grant directly from the federal government to run                                                                
their own programs.  The amount of money would be determined by the                                                             
department and would be based on the number of recipients that                                                                  
state money used to serve those clients in the fiscal year (FY)                                                                 
1994.  Mr. Nordlund stated that the reason for HB 98 is to allow a                                                              
state match to the federal block grant.  The AFDC program, the                                                                  
primary cash assistance program for poor families in Alaska, has                                                                
traditionally been a 50-50 match program.  The passage of the new                                                               
federal law created the TANF block grant which required states to                                                               
provide a match, but the match was not required for Native-run                                                                  
programs.  Therefore, HB 98 would allow state funding to follow the                                                             
federal money for a Native-run program.  Native-run organizations                                                               
would become eligible for this funding in much the same way as the                                                              
state is eligible for the federal money.  He explained that a plan                                                              
must be provided to the U.S. Secretary of Health and Human                                                                      
Services; with the approval of that plan the Native-run                                                                         
organization would receive its federal share.  Mr. Nordlund pointed                                                             
out that the federal law includes a provision which states that a                                                               
Native-run program in Alaska needs to be comparable to the state's                                                              
program.                                                                                                                        
                                                                                                                                
Number 2508                                                                                                                     
                                                                                                                                
MR. NORDLUND informed the committee that currently, Alaska has a                                                                
grant that goes to the Tanana Chief's Conference (TCC).  The grant                                                              
received by the TCC is similar to HB 98 in that it provides state                                                               
funding for cash assistance programs.  In order to receive that                                                                 
state funding, the TCC had to amend its original program to become                                                              
essentially identical to the state program.  If HB 98 passed, the                                                               
TCC would be able to amend its plan to a program that TCC would                                                                 
feel is a better welfare program for their area.  For example, TCC                                                              
wanted to implement a 5 percent benefit reduction and use those                                                                 
proceeds to fund enhanced alcohol and drug treatment programs for                                                               
those screened to have such problems.  Mr. Nordlund felt that HB 98                                                             
does provide an additional measure for local control, allow                                                                     
programs to be more culturally attune and better meet the needs of                                                              
persons in the specific locals.                                                                                                 
                                                                                                                                
MR. NORDLUND said that HB 98 would allow a Native-run program to                                                                
serve a non-Native in that area with departmental approval.  For                                                                
example, in a small village populated with 20 Native families and                                                               
one non-Native family it makes more sense for the Native-run                                                                    
program to serve the one non-Native family as opposed to the state                                                              
serving that family.  With regard to whether HB 98 will cost any                                                                
money, Mr. Nordlund said no.  Currently, the state serves Native                                                                
families in these areas.  This bill would allow the diversion of                                                                
state funds to the Native organization in order to serve those same                                                             
families.  Therefore, there is not a fiscal note for HB 98.  He                                                                 
noted that HB 98 has the possibility, although probably not in the                                                              
short-term, to save the state money.  Mr. Nordlund believed that a                                                              
locally-run welfare program is probably a better welfare program                                                                
and has a better possibility of helping reduce welfare case loads,                                                              
thereby saving money.                                                                                                           
                                                                                                                                
Number 2667                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HALCRO asked if the intent of HB 98 is to provide more                                                              
flexibility.                                                                                                                    
                                                                                                                                
MR. NORDLUND replied yes.                                                                                                       
                                                                                                                                
CO-CHAIRMAN HALCRO noted that Mr. Nordlund had provided a list of                                                               
14 organizations.  He asked if those organizations have already                                                                 
been approved to participate in this program or have those                                                                      
organizations merely expressed a desire to participate.                                                                         
                                                                                                                                
MR. NORDLUND clarified that there are 12 regional nonprofits and                                                                
the Metlakatla Indian Community.  No organization has been approved                                                             
yet.  He reiterated that approval is incumbent upon a plan that the                                                             
organization submits to the federal government.  The TCC plan has                                                               
been approved but had to be amended to become ATAP compatible in                                                                
order to receive state funding.  In further response to Co-Chairman                                                             
Halcro, Mr. Nordlund agreed that in those areas without an                                                                      
organization expressing interest in administering a welfare                                                                     
program, the state would serve that population.  Mr. Nordlund noted                                                             
that not all of the authorized organizations will pursue this.                                                                  
                                                                                                                                
Number 2753                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI noted that Mr. Nordlund used permissive                                                                
language when saying that a non-Native "may" participate in one of                                                              
these programs.  Representative Murkowski referred to Mr.                                                                       
Nordlund's example regarding a Native community with one non-Native                                                             
family.  She asked if it would be an option to exclude the                                                                      
non-Native family or would a Native nonprofit program have to                                                                   
include anyone eligible in that village regardless.                                                                             
                                                                                                                                
MR. NORDLUND explained that if the Native organization and the                                                                  
state agreed that the non-Native family would be served in that                                                                 
village by the Native organization, that would be the case.  The                                                                
recipient would not have the option to decide between service from                                                              
the state or the Native organization.                                                                                           
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked if for example, the Kodiak Native                                                                
Association could operate its program at the same time the state                                                                
operates its program.                                                                                                           
                                                                                                                                
MR. NORDLUND agreed that would be possible.  He would encourage a                                                               
plan under which the state would serve non-Natives in Kodiak, while                                                             
the rural villages on Kodiak Island would be served by the                                                                      
Native-run program.  This would all be dependent upon the service                                                               
delivery structure that would be created in association with the                                                                
Native organization.  However, Mr. Nordlund pointed out that it                                                                 
would also be possible that the determination would be that the                                                                 
Native organization would serve the non-Natives in that area.  Mr.                                                              
Nordlund stated it is too soon to make such projections.                                                                        
                                                                                                                                
Number 2875                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI expressed concern that if two different                                                                
entities operate similar programs, there would be some                                                                          
administrative overlap.  Is there a way to eliminate such overlap?                                                              
                                                                                                                                
MR. NORDLUND clarified that to eliminate the administrative overlap                                                             
and make use of the administration better is the intent of HB 98.                                                               
In larger communities such as Fairbanks, large administrative                                                                   
structures exist.  In smaller communities, having an additional                                                                 
administrative body tends to be less efficient.                                                                                 
                                                                                                                                
REPRESENTATIVE KOOKESH commented that these Native organizations to                                                             
which Mr. Nordlund is speaking have been alive for many years and                                                               
have strong administrative staff and presence in their regions.                                                                 
These Native organizations would survive even without this                                                                      
legislation, but HB 98 could make life in Rural Alaska easier.                                                                  
This legislation makes sense for these regions as well as for the                                                               
state as a whole.  Representative Kookesh said if the Native                                                                    
organization does not do this work, the state will need a larger                                                                
presence in these areas.                                                                                                        
                                                                                                                                
TAPE 99-15, SIDE B                                                                                                              
                                                                                                                                
Number 2991                                                                                                                     
                                                                                                                                
MR. NORDLUND pointed out that there is a limit to the state's                                                                   
presence, especially in the smaller areas of Alaska.  Native                                                                    
organizations have already established a presence in villages.                                                                  
Furthermore, Native organizations have a better ability than the                                                                
state to work with rural clients to do a better job helping those                                                               
clients move away from public assistance.  In response to                                                                       
Representative Murkowski, Mr. Nordlund stated that the TCC program                                                              
is very young.  The TCC officially took over the program in                                                                     
October.  After  a three month transition period, the TCC began                                                                 
paying benefits.  Mr. Nordlund believed it is still very early to                                                               
comment on the success of the program.  Many hurtles remain to be                                                               
overcome.  Mr. Nordlund believed that in the long run the TCC                                                                   
program will be more successful than the state's program in that                                                                
area.                                                                                                                           
                                                                                                                                
REPRESENTATIVE DYSON noted that he was most familiar with Bristol                                                               
Bay Native Cooperation and the Cook Inlet Tribal Council.  Those                                                                
organizations have done excellent work and are an immense asset.                                                                
                                                                                                                                
REPRESENTATIVE MORGAN asked if the TCC program has made judgement                                                               
calls based on the color of someone's skin in order to determine                                                                
for which program that individual would be eligible.                                                                            
                                                                                                                                
MR. NORDLUND informed the committee that protocols are being                                                                    
established to determine such referrals.  Mr. Nordlund pointed out                                                              
that the Division of Public Assistance will continue to  issue                                                                  
benefits and make eligibility determinations for the Medicaid                                                                   
program and food stamps for Adult Public Assistance for Natives and                                                             
non-Natives.  Only for ATAP would Native clients be referred to                                                                 
TCC.                                                                                                                            
                                                                                                                                
Number 2800                                                                                                                     
                                                                                                                                
REPRESENTATIVE MORGAN asked if the state would respect TCC's                                                                    
application or would a client have to go through the entire process                                                             
again for the state.  He indicated the possibility of duplication                                                               
and inconvenience for the client.                                                                                               
                                                                                                                                
MR. NORDLUND said that there may be some inconvenience for the                                                                  
client.  He expressed the importance of establishing a relationship                                                             
between the client and TCC employee who will work with that client                                                              
in the future.  Mr. Nordlund acknowledged that in some cases the                                                                
client would have to go across town to receive a service.                                                                       
                                                                                                                                
REPRESENTATIVE JOULE noted that there is access to the Alaska                                                                   
Career Information System (ACIS) during the transition from welfare                                                             
to work.  Would that technology be available to the Native                                                                      
organizations?  Representative Joule emphasized that ACIS is an                                                                 
excellent resource.                                                                                                             
                                                                                                                                
MR. NORDLUND said that clients are entitled to those services at                                                                
the usual locations (one-stops, the job service).  Ideally, Native                                                              
organizations running these programs would offer such in house                                                                  
through a computerized connection.  However if the Native                                                                       
organization has not reached that development stage, a client could                                                             
receive that information from an access point.                                                                                  
                                                                                                                                
REPRESENTATIVE JOULE asked if a Native organization were on-line                                                                
would ACIS follow.                                                                                                              
                                                                                                                                
MR. NORDLUND clarified that would be dependent upon the                                                                         
capabilities of the Native organization.  However if the service is                                                             
not available through the Native organization, the service would be                                                             
available through the other state offices.                                                                                      
                                                                                                                                
Number 2609                                                                                                                     
                                                                                                                                
REPRESENTATIVE DYSON encouraged, as Representative Morgan spoke to                                                              
earlier, co-locating these services and having one intake form.                                                                 
Representative Dyson indicated he would ultimately desire every                                                                 
family or person have one person/counselor/case manager who would                                                               
access all available services whether federal, state, local or                                                                  
tribal.  Representative Dyson understood from prior comments that                                                               
this legislation would somewhat separate services, but the benefits                                                             
would outweigh that concern.                                                                                                    
                                                                                                                                
MR. NORDLUND pointed out that the department is endeavoring to                                                                  
establish a case management system.  He mentioned the opening of                                                                
the one-stop center in Muldoon.  Mr. Nordlund encouraged Native                                                                 
organizations to try to locate in existing one-stops which would                                                                
not only save time for the client, but also achieve efficiencies in                                                             
other functions.  Mr. Nordlund said that the department is trying                                                               
to move in that direction, but it is fairly complicated.                                                                        
                                                                                                                                
REPRESENTATIVE DYSON mentioned that he had watched the Department                                                               
of Community & Regional Affairs do creative things in order to find                                                             
local organizations through which to work.  Could the statute be                                                                
changed to make this easier?  Representative Dyson longed for the                                                               
day in which a single individual can act on behalf of the local,                                                                
state and federal governments, et cetera.  Therefore, co-locating                                                               
and separate administrative requirements would not be necessary.                                                                
                                                                                                                                
REPRESENTATIVE MORGAN commented that HB 98 sounds like the                                                                      
beginnings of the privatization of state services which he                                                                      
indicated perhaps, he would like.                                                                                               
                                                                                                                                
MR. NORDLUND agreed this could be viewed as privatization.  Mr.                                                                 
Nordlund stated, "There is a bit of concern here in that regard, in                                                             
that--there is a provision in our state contract with the Public                                                                
Employee Unions that any time we look to privatize unless we can                                                                
show that its saving money, that a feasibility study needs to be                                                                
done in order to show that money actually can be saved to this                                                                  
effort."  Mr. Nordlund believed that would have to be done before                                                               
this legislation could be fully utilized.                                                                                       
                                                                                                                                
Number 2273                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI returned to the Kodiak scenario.  She                                                                  
noted the understanding that a Native nonprofit organization has                                                                
the latitude to modify the program to accommodate local needs.                                                                  
Suppose there is a Native organization running the program and the                                                              
state is running assistance for those located in Kodiak.  "Is it                                                                
possible that one program is going to be perceived as more                                                                      
favorable than the other and the only basis for the distinction is                                                              
the fact that one family is Native and one family is non-Native?                                                                
And what kind of problems does that create?"                                                                                    
                                                                                                                                
MR. NORDLUND acknowledged Representative Murkowski's comments as                                                                
one of the concerns with HB 98.  He pointed out that Senator                                                                    
Murkowski had encouraged comparability language in federal law that                                                             
is included in the law as well as standards for comparability.  The                                                             
programs must be comparable enough that the recipient of either                                                                 
program is not discriminated against.  For example, if HB 98 passes                                                             
and TCC does the five percent benefit cut in order to provide other                                                             
services, Mr. Nordlund recognized the possibility of a challenge                                                                
from a TCC recipient claiming they were treated unfairly which                                                                  
could lead to litigation.  Mr. Nordlund hoped the comparability                                                                 
criteria would be adequate to sustain such a challenge.                                                                         
                                                                                                                                
CO-CHAIRMAN HARRIS inquired as to the way the money changed hands.                                                              
                                                                                                                                
MR. NORDLUND explained that currently, the state pays cash to ATAP                                                              
through a debit card.  He did not believe most Native organizations                                                             
would have that capability.  Mr. Nordlund believed that TCC paid                                                                
its clients through their general account.  He suggested there                                                                  
might be folks from TCC on-line who could better speak to this.  In                                                             
further response to Co-Chairman Harris' question about a tracking                                                               
mechanism, Mr. Nordlund said that there is some reporting about                                                                 
which recipients are receiving benefits and the level of benefits                                                               
received.  Presumably, those recipients are eligible to receive                                                                 
those benefits.  He noted that there is an appeal process for                                                                   
clients who feel that they have not received the proper benefit.                                                                
An unhappy client would first appeal to TCC, then to the                                                                        
department, and to the court system.                                                                                            
                                                                                                                                
MR. NORDLUND mentioned that the federal government has criteria for                                                             
the block grant as well.  The federal government has auditing                                                                   
procedures and performance measures for the Native organization.                                                                
Furthermore, the department has normal auditing procedures to which                                                             
the Native organization would be subject.                                                                                       
                                                                                                                                
Number 1921                                                                                                                     
                                                                                                                                
TERRY HOEFFERLE, Chief of Operations, Bristol Bay Native                                                                        
Association (BBNA), testified via teleconference from Anchorage.                                                                
He was impressed with the knowledgeable level of discussion.  The                                                               
federal TANF legislation identified 13 organizations in Alaska as                                                               
eligible to operate local programs of which 12 are regional Native                                                              
nonprofits and the Metlakatla Indian Community.  Some regional                                                                  
organizations have already indicated that they are not interested                                                               
in operating their own family assistance program.  He noted that                                                                
some of the regional organizations are too small to operate such a                                                              
program.                                                                                                                        
                                                                                                                                
MR. HOEFFERLE informed the committee that BBNA was established in                                                               
1966 and most of the other organizations are over 30 years old.                                                                 
These organizations were created to resolve Native land claims in                                                               
Alaska.  Although the regional boundaries of the regional Native                                                                
nonprofits correspond to the regional for profit Native                                                                         
corporations, the two should not be confused.  These 12 regional                                                                
Native nonprofits operate Indian programs which include health and                                                              
social service programs.  These tribal programs bring in over $400                                                              
million per year to the state.  Mr. Hoefferle described these                                                                   
tribal programs as Indian funded dollars which could be viewed as                                                               
authorized by the U.S. Congress as treaty obligations.  Mr.                                                                     
Hoefferle informed the committee that these organizations contract                                                              
with various federal agencies each of which has its own programming                                                             
and reporting requirements that must be followed.  He noted that                                                                
the Native nonprofits also operate state contracts and grants for                                                               
a diverse group of programs such as Village Public Safety and                                                                   
Healthy Families to name a few.                                                                                                 
                                                                                                                                
MR. HOEFFERLE informed the committee that BBNA provides services in                                                             
32 villages in the Bristol Bay region.  The BBNA Board of Directors                                                             
has a member from each village as well as six members at large.                                                                 
This year BBNA has a $16 million budget and 302 employees, of which                                                             
68 are located in the central office in Dillingham and the                                                                      
remaining 234 employees are located in the villages in the region.                                                              
Within the villages, the BBNA employees are employed in various                                                                 
capacities from the Village Public Safety Officer to Tribal                                                                     
Children Service Workers.                                                                                                       
                                                                                                                                
Number 1526                                                                                                                     
                                                                                                                                
MR. HOEFFERLE identified the major focus of BBNA, as well as other                                                              
Native nonprofits in Alaska, as placing Native people in the                                                                    
workforce.  Today BBNA has a workforce development budget of $1.2                                                               
million which is used for employment training, higher education                                                                 
scholarships, child care, and general assistance.  Although these                                                               
are Indian Program funds, these funds can be used to leverage some                                                              
of the ATAP funds.  The aforementioned programs are worked out of                                                               
a one-stop shop workforce development center in Dillingham.  BBNA                                                               
created this one-stop shop using its own administrative dollars.                                                                
The State of Alaska is co-locating some of its similar programs                                                                 
into the office structure.  Mr. Hoefferle pointed out that BBNA has                                                             
an agreement with the Alaska Department of Labor to operate a                                                                   
computer which has access to the department's information system.                                                               
Also the Department of Community & Regional Affairs has co-located                                                              
its peer outreach workforce program in the BBNA offices.                                                                        
                                                                                                                                
MR. HOEFFERLE agreed with Representative Kookesh's comments that                                                                
his interest in HB 98 is not to guarantee the Native nonprofits                                                                 
survival.  The manner in which BBNA operates the aforementioned                                                                 
programs requires an administrative rate, an indirect cost rate,                                                                
which is much lower than that of the University of Alaska, the                                                                  
State of Alaska, or the U.S. government.  Mr. Hoefferle explained                                                               
that assessment was determined from the indirect rate the state and                                                             
federal governments have applied to disaster assistance funds                                                                   
coming in to Bristol Bay.  The interest in administering this                                                                   
program emanates from the BBNA's local presence and resources in                                                                
the region.  Mr. Hoefferle stated that BBNA can do a better job                                                                 
moving "our" people from welfare to work than the state.  The state                                                             
program is operated via a long-distance phone call to Anchorage.                                                                
                                                                                                                                
Number 1212                                                                                                                     
                                                                                                                                
DON SHIRCEL, Director, Family Services, Tanana Chiefs Council,                                                                  
testified via teleconference from Fairbanks.  He informed the                                                                   
committee that since October 1, 1998 the TCC has operated the TANF                                                              
program, which is called the Athabascan Self-Sufficiency Assistance                                                             
Partnership (ASAP), for Native households.  The TCC service area                                                                
encompasses over a third of the entire state.  During the first                                                                 
three months of programming, TCC has transitioned over 500 Native                                                               
household cases which is about one-third of the Division of Public                                                              
Assistance's Northern region case load.  Since mid December, TCC                                                                
has been the sole agency determining eligibility, processing                                                                    
applications, and providing timely benefits to over 450 Native                                                                  
households in over 40 rural communities and in Fairbanks, Alaska's                                                              
second largest city.  Mr. Shircel discussed the intricacies of                                                                  
initiating and setting up structures for this program.                                                                          
                                                                                                                                
MR. SHIRCEL stated that it is still too early to make projections                                                               
to the full impact of the privatization of welfare services under                                                               
the TCC ASAP program.  In six months of operation, the TCC has not                                                              
had any formal complaints and have been able to engage over 35                                                                  
percent of the rural caseload in work activities and created                                                                    
one-stop service centers in 38 remote rural communities.  The state                                                             
has not been able to do either on the same dime, since the                                                                      
initiation of welfare reform programming.  Mr. Shircel emphasized                                                               
that tribes are, through their Native organizations, operating                                                                  
these programs effectively, efficiently, within the constraints of                                                              
the organization's budget and with the full support and                                                                         
participation of over 40 communities.  Mr. Shircel echoed Mr.                                                                   
Nordlund's comments that the TCC would like to do more which would                                                              
be allowed under                                                                                                                
HB 98.  He reiterated the TCC's desire to implement a five percent                                                              
reduction in benefits, mandatory alcohol and substance abuse                                                                    
screening, a voucher system for clients suspected of misuse of                                                                  
welfare benefits, stronger sanctions for nonparticipation in work                                                               
activities, stronger sanctions in domestic violence cases, and                                                                  
incentives for parents to participate in parent-teacher conferences                                                             
and children's health screenings.  Mr. Shircel said that he would                                                               
appreciate the committee's serious consideration of moving HB 98                                                                
out of committee and the legislator's support this session.                                                                     
                                                                                                                                
There being no one else wishing to testify, the public testimony                                                                
was closed.                                                                                                                     
                                                                                                                                
Number 0867                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HALCRO moved CSHB 98 out of committee with individual                                                               
recommendations and the attached zero fiscal note.  There being no                                                              
objection, CSHB 98(CRA) was reported out of committee.                                                                          
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
There being no further business before the committee, the House                                                                 
Community & Regional Affairs Standing Committee meeting was                                                                     
adjourned at 9:36 a.m.                                                                                                          
                                                                                                                                
                                                                                                                                

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