Legislature(2003 - 2004)

03/08/2004 01:52 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                       March 08, 2004                                                                                           
                         1:52 P.M.                                                                                              
                                                                                                                                
TAPE HFC 04 - 51, Side A                                                                                                        
TAPE HFC 04 - 51, Side B                                                                                                        
TAPE HFC 04 - 52, Side A                                                                                                        
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Vice-Chair Meyer  called the House Finance  Committee meeting                                                                   
to order at 1:52 P.M.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative John Harris, Co-Chair                                                                                            
Representative Bill Williams, Co-Chair                                                                                          
Representative Kevin Meyer, Vice-Chair                                                                                          
Representative Mike Chenault                                                                                                    
Representative Eric Croft                                                                                                       
Representative Hugh Fate                                                                                                        
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Reggie Joule                                                                                                     
Representative Carl Moses                                                                                                       
Representative Bill Stoltze                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
John  Main, Staff  to  Representative  Pete Kott;  Lt.  Allen                                                                   
Story,  Division  of  Alaska State  Troopers,  Department  of                                                                   
Public  Safety;  Melanie  Millhorn,   Director,  Division  of                                                                   
Retirement  and Benefits, Department  of Administration;  Bob                                                                   
Loeffler,  Director,  Division  of Mining,  Land  and  Water,                                                                   
Department  of   Natural  Resources;  Landa   Baily,  Special                                                                   
Assistant  and Legislative  Liaison,  Department of  Revenue;                                                                   
Anne Carpeneti,  Assistant Attorney  General, Legal  Services                                                                   
Section,   Criminal  Division,   Department  of  Law;   Clyde                                                                   
Gilespie, Alaska Miners Association;  Peter Ecklund, Staff to                                                                   
Representative Williams                                                                                                         
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
John  Mallonee, Acting  Director,  Child Support  Enforcement                                                                   
Division, Department  of Revenue; Diane Wendlandt,  Assistant                                                                   
Attorney General, Department of Law                                                                                             
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 514    An Act  relating to child support  modification and                                                                   
          enforcement,  to the establishment of  paternity by                                                                   
          the  child support enforcement  agency, and  to the                                                                   
          crimes  of  criminal   nonsupport  and  aiding  the                                                                   
          nonpayment  of child  support; amending Rule  90.3,                                                                   
          Alaska Rules of Civil  Procedure; and providing for                                                                   
          an effective date.                                                                                                    
                                                                                                                                
          HB 514 was heard and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
HB 486    An   Act  relating   to  reclamation  bonding   and                                                                   
          financial assurance  for certain mines; relating to                                                                   
          financial   assurance   limits  for   lode   mines;                                                                   
          establishing  the mine reclamation trust  fund; and                                                                   
          providing for an effective date.                                                                                      
                                                                                                                                
          CSHB 486(FIN) was REPORTED out of Committee with a                                                                    
          "do  pass" recommendation  and with two  previously                                                                   
          published fiscal notes.                                                                                               
                                                                                                                                
HB 123    An  Act   relating  to  the  allocation   of  money                                                                   
          appropriated   to   the   Alaska   Human   Resource                                                                   
          Investment Council;  and providing for an effective                                                                   
          date.                                                                                                                 
                                                                                                                                
          CSHB 123(FIN) was REPORTED out of Committee with                                                                      
          individual recommendations and a zero fiscal note.                                                                    
                                                                                                                                
HOUSE BILL NO. 486                                                                                                            
                                                                                                                                
     An  Act relating  to reclamation  bonding and  financial                                                                   
     assurance  for  certain  mines;  relating  to  financial                                                                   
     assurance limits  for lode mines; establishing  the mine                                                                   
     reclamation trust  fund; and providing for  an effective                                                                   
     date.                                                                                                                      
                                                                                                                                
BOB LOEFFLER,  DIRECTOR, DIVISION OF MINING,  LAND AND WATER,                                                                   
DEPARTMENT  OF NATURAL  RESOURCES  (DNR), briefly  summarized                                                                   
mining reclamation  problems and  the three changes  proposed                                                                   
in HB 486.   He explained that a mine damages  land to remove                                                                   
ore and then must  restore the land to stable  condition.  To                                                                   
ensure that  the land is reclaimed,  the DNR requires  a bond                                                                   
in an amount  sufficient that if the company  defaults on the                                                                   
requirement to reclaim  the land, the DNR can  seize the bond                                                                   
and  conduct the  reclamation itself.   The  current law  was                                                                   
enacted  in 1991  when Alaska  had mainly  placer mining  but                                                                   
Alaska has developed  a large mine industry  since that time.                                                                   
The system has  worked well for many years  for placer mining                                                                   
and exploration but it doesn't accommodate the large mines.                                                                     
                                                                                                                                
Mr.  Loeffler  stated  that this  bill  would  modernize  the                                                                   
reclamation  law.  The  first change is  only for  large lode                                                                   
mines and  it doesn't  affect the  placer industry.   Current                                                                   
law  sets a  $750  per acre  reclamation  bond  limit by  the                                                                   
department.  Large  mines such as Greens Creek,  with about a                                                                   
$24 million bond,  don't reclaim for that amount.   This bill                                                                   
removes that limit for lode mines  and requires a bond in the                                                                   
amount of expected reasonable costs.                                                                                            
                                                                                                                                
Mr. Loeffler  explained  that the second  change expands  the                                                                   
financial instruments  that companies can use  to satisfy the                                                                   
larger  bond  requirement to  include  corporate  guarantees,                                                                   
certificates  of  deposit,  surety   bonds,  and  letters  of                                                                   
credit.                                                                                                                         
                                                                                                                                
Mr. Loeffler stated that the third  change establishes a Mine                                                                   
Reclamation   Trust  Fund  as   another  voluntary   way  for                                                                   
companies to satisfy the bond  requirement.  The Fund has the                                                                   
advantage  to the  state of  establishing a  bond for  either                                                                   
perpetual or  long-term reclamation needs. He  commented that                                                                   
Red Dog  Mine is expected to  need water quality  work during                                                                   
its entire  productive life.   The  department can  only bond                                                                   
for  those  situations  by having  a  fund  that  accumulates                                                                   
interest  as a mini-endowment  that the  mining company  pays                                                                   
into.  Companies have  the advantage  of not  being taxed  on                                                                   
interest and earnings.                                                                                                          
                                                                                                                                
Representative  Fate asked  if there  has been discussion  of                                                                   
the decreasing  5%  annual fee  as the pool  increases.   Mr.                                                                   
Loeffler explained  that the Reclamation  Mine Bond  Pool for                                                                   
placer  mining  requires  $37.50  per  year per  acre.    The                                                                   
department believes that it is  an appropriate amount and has                                                                   
not   considered decreasing it.  Currently the bond  pool has                                                                   
about $300 thousand in unrestricted corpus.                                                                                     
                                                                                                                                
In  response  to  a  question  by  Representative  Fate,  Mr.                                                                   
Loeffler explained that there  is an individual trust account                                                                   
for each lode  mine instead of  a pooled shared risk.    Each                                                                   
mine's account plus interest would be used for that mine.                                                                       
                                                                                                                                
Representative  Fate asked  if  the bill  excludes  companies                                                                   
with  low-grade   deposits  using   the  chemical   bleaching                                                                   
process.   Mr. Loeffler replied  that the historic  policy of                                                                   
the  department has  been not  to  allow chemical  processing                                                                   
because that level  of bonding could break the  bond pool. He                                                                   
advised that placer  mines don't use chemicals  because it is                                                                   
free  gold.   Representative Fate  commented  that there  has                                                                   
been  discussion of  using chemical  reduction. Mr.  Loeffler                                                                   
reiterated that  chemical processing is excluded  because the                                                                   
value  of the  reclamation  bond would  be  greater than  the                                                                   
placer mine bond pool and would put the pool at risk.                                                                           
                                                                                                                                
CLYDE GILESPIE, ALASKA MINERS  ASSOCIATION (AMA), stated that                                                                   
the  AMA supports  HB  486.   The current  statute  requiring                                                                   
financial  assurance for  mining  was sponsored  by the  late                                                                   
Senator Betty Fahrenkamp in 1990.  The statute focused on the                                                                   
small  placer  mines and  some  changes  to the  statute  are                                                                   
needed to effectively address  the financial assurance needed                                                                   
for large  lode mines.  Mr. Gilespie  said  that the AMA  has                                                                   
discussed  these changes  for  several years  and has  worked                                                                   
with   the   DNR  and   the   Department   of   Environmental                                                                   
Conservation  for  more  than   six  months  to  develop  the                                                                   
language.  He urged passage of the bill.                                                                                        
                                                                                                                                
REPRESENTATIVE CROFT MOVED TO ADOPT AMENDMENT 1.                                                                                
                                                                                                                                
     Amendment 1 reads:                                                                                                         
                                                                                                                                
     Page 3, line 7, after "guarantee":                                                                                         
          Insert:  "that meet the financial tests set in                                                                        
          regulation by the commissioner"                                                                                       
     Page 3, line 10:                                                                                                           
          Delete: "sinking fund"                                                                                                
     Page 3, line 10, after "financial assurance"                                                                               
          Insert:  "that meet the financial test or other                                                                       
          conditions set in regulation by the commissioner"                                                                     
                                                                                                                                
     Renumber accordingly.                                                                                                      
                                                                                                                                
Vice-Chair Meyer OBJECTED for purposes of discussion.                                                                           
                                                                                                                                
Representative  Croft explained  that he  had discussed  with                                                                   
Mr. Loeffler a sufficient financial  guarantee and methods to                                                                   
set  parameters for  the department.   The  approach was  too                                                                   
limiting  on  the  department's  discretion and  led  to  the                                                                   
approach  in  the  amendment  that  whatever  mechanisms  the                                                                   
department wants would be put  into regulation. The amendment                                                                   
ensures  that  the  financial   test  of  adequate  corporate                                                                   
guaranty will be in regulation.                                                                                                 
                                                                                                                                
Mr. Loeffler  explained that corporate guarantees  are useful                                                                   
when  a  corporation   has  assets,  and  can   sometimes  be                                                                   
problematic for  reclamation.  Putting a financial  test into                                                                   
regulation would  ensure that a  corporation is viable.   The                                                                   
DNR  runs  a  separate  program  for  coal  reclamation,  and                                                                   
Usibelli  Corporation  has  a   financial  guaranty  under  a                                                                   
separate  statute.  He said  that  issuing regulations  is  a                                                                   
useful procedure that helps the public.                                                                                         
                                                                                                                                
Vice-Chair  Meyer WITHDREW  his OBJECTION.   Amendment  1 was                                                                   
adopted.                                                                                                                        
                                                                                                                                
Representative Stoltze expressed  concern about complaints by                                                                   
agriculture   in  his  district   that  the  larger   federal                                                                   
reclamation projects don't use Alaskan seed.                                                                                    
                                                                                                                                
Vice-Chair Meyer  asked for explanation  of the  small fiscal                                                                   
note.                                                                                                                           
                                                                                                                                
Mr. Loeffler  stated that  there is a  zero fiscal  note from                                                                   
DNR.   The  Department  of  Revenue  fiscal note  reflects  a                                                                   
charge for  managing the reclamation  trust fund at  6 mills,                                                                   
and $15  thousand to set up  the computer program  during the                                                                   
first year.   Apart  from the $15  thousand, the  money would                                                                   
come from the trust fund itself.                                                                                                
                                                                                                                                
Representative  Foster MOVED  CSHB 486(FIN).  There being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHB 486(FIN) was REPORTED out  of Committee with a "do pass"                                                                   
recommendation  and  with  two  previously  published  fiscal                                                                   
notes.                                                                                                                          
                                                                                                                                
A brief At-ease was taken.                                                                                                      
                                                                                                                                
HOUSE BILL NO. 514                                                                                                            
                                                                                                                                
     An  Act  relating  to  child  support  modification  and                                                                   
     enforcement,  to the establishment  of paternity  by the                                                                   
     child support  enforcement agency, and to  the crimes of                                                                   
     criminal nonsupport  and aiding the nonpayment  of child                                                                   
     support;  amending  Rule  90.3, Alaska  Rules  of  Civil                                                                   
     Procedure; and providing for an effective date.                                                                            
                                                                                                                                
JOHN MAIN, STAFF  TO REPRESENTATIVE PETE KOTT,  explained the                                                                   
changes  in the Judiciary  Committee  Substitute for  HB 514.                                                                   
[The first part  of Mr. Main's testimony did  not record.] He                                                                   
said  that   Section  4  raises   aiding  and   abetting  the                                                                   
nonpayment of child support to the felony level.                                                                                
                                                                                                                                
In  response to  a question  by  Representative Stoltze,  Mr.                                                                   
Main  explained that  he  was formerly  the  Director of  the                                                                   
Child  Support Division  and that  he now  works for  Speaker                                                                   
Kott.                                                                                                                           
                                                                                                                                
Mr. Main  continued discussing  the Judiciary  version  of HB
514.   He  remarked  that a  study  conducted  by Dr.  Elaine                                                                   
Sorenson noted  that of the  $90 billion owed  throughout the                                                                   
nation in  child support,  70% of  the individuals  make less                                                                   
than $10  thousand a year.  In Alaska, individuals  owe about                                                                   
$250-300 million.   The bill sponsor  would like to  give the                                                                   
agency the authority to adjust  these arrearages, so that the                                                                   
parent  can start making  payments and  the custodial  parent                                                                   
can count  on child  support coming  in monthly.   The  child                                                                   
support  agency  would gain  in  its performance  measure  of                                                                   
collections,  the custodial  parent would  gain with  monthly                                                                   
payments, and the child would gain another reliable parent.                                                                     
                                                                                                                                
Mr. Main  explained that under  current state law  the agency                                                                   
is not allowed to establish paternity  for victims of rape or                                                                   
incest,  and  consequently,  the agency  cannot  establish  a                                                                   
child support order.  The bill  asks that the agency be given                                                                   
that authority whenever a woman requests it.                                                                                    
                                                                                                                                
Mr.  Main  noted  that  the  bill  addresses  a  modification                                                                   
imposed by  the federal government  to comply with  the state                                                                   
plan  this legislative  session,  or lose  $14-75 million  in                                                                   
federal funds.                                                                                                                  
                                                                                                                                
Representative  Croft  asked   if  there  is  a  federal  law                                                                   
prohibiting  the retroactive  modification  of child  support                                                                   
orders, and in what manner the  state's ability to compromise                                                                   
the orders would  affect the federal rule.   Mr. Main replied                                                                   
that is correct, a state cannot  retroactively modify a child                                                                   
support  order or  arrearage,  but a  state  can forgive  the                                                                   
debt.  A  state does not have  to pay the federal  portion of                                                                   
the debt if the state does not collect it.                                                                                      
                                                                                                                                
Representative Croft  asked the practical  difference between                                                                   
child support  payments that are  too high being cut  in half                                                                   
versus a  cumulative debt being  halved.  Mr.  Main clarified                                                                   
that  the  agency would  create  a  new  order to  forgive  a                                                                   
hardship debt, as in a default  order establishing what could                                                                   
have  been paid  many  years before.    The  agency does  not                                                                   
modify  a  current  order.   Representative  Croft  asked  if                                                                   
federal  law   prevents  modifying  on-going   child  support                                                                   
orders.  Mr. Main replied that he did not believe so.                                                                           
                                                                                                                                
LANDA  BAILY,  SPECIAL  ASSISTANT  AND  LEGISLATIVE  LIAISON,                                                                   
DEPARTMENT OF REVENUE, stated  that HB 514 is a collaborative                                                                   
effort between  the Department  of Revenue (DOR)  and Speaker                                                                   
Kott  and his  staff.    She noted  that  two of  the  bill's                                                                   
provisions cause the department concern.                                                                                        
                                                                                                                                
Ms.  Baily  stated  that  Section   12(f)  in  the  Judiciary                                                                   
Committee Substitute  relates to arming the  investigators in                                                                   
the  Child Support  Enforcement Division  (CSED). She  shared                                                                   
that the department takes seriously  the security of its CSED                                                                   
employees  and  their  clients,   and  the  security  of  the                                                                   
information.  Past incidents  have led  to security  measures                                                                   
including  bulletproof  glass and  cardkey  entry systems  in                                                                   
Anchorage, and emergency response  procedures.  Other offices                                                                   
around  the state  also have  response procedures,  including                                                                   
instructing employees to dial 911.                                                                                              
                                                                                                                                
Ms. Baily  continued explaining  that CSED investigators  are                                                                   
commissioned as special officers  by the Department of Public                                                                   
Safety to gather  documentary evidence for the  conviction of                                                                   
the current misdemeanor crime  of non-support, or to help the                                                                   
Department  of  Law  obtain court  judgments  to  secure  the                                                                   
payment  of  child support.    It  is a  multi-agency  effort                                                                   
involving the departments of Revenue,  Law, Public Safety and                                                                   
the court system.                                                                                                               
                                                                                                                                
Ms. Baily  stated that the  Department of Revenue  works hard                                                                   
to  ensure  that  Alaskan  children  receive  their  entitled                                                                   
support.   It is a  process of  working with the  documentary                                                                   
evidence,   not   one   of   face-to-face   encounters   with                                                                   
individuals  who may become  hostile or  threatening.   Other                                                                   
states  arm their  investigators  and ask  them to  supervise                                                                   
felony investigations  and to  make arrests because  they are                                                                   
dealing with hostile people on  a frequent basis.  The intent                                                                   
of  Representative  Kott  is  that  the  investigators  carry                                                                   
firearms for self-protection rather than to make arrests.                                                                       
                                                                                                                                
Ms. Baily  noted the provision on  page 3, line 20  that adds                                                                   
the words  "and unreasonably"  harmful.  She stated  that the                                                                   
intent of  the bill is to  help the department  to prosecute,                                                                   
while this may have the opposite effect.                                                                                        
                                                                                                                                
Ms. Baily  referred to  the bill  sections pertaining  to the                                                                   
compromising of state-owed arrearages,  stating that there is                                                                   
a  lot of  money owed  to the  state  and to  children.   The                                                                   
department has  worked closely with  CSED on a  pilot program                                                                   
that would help people with a  poor payment history to become                                                                   
responsible  and  make  payments  to  the state  and  to  the                                                                   
custodial parent.   The pilot  program needs extensive  legal                                                                   
analysis to  meet constitutional  safeguards, and  she stated                                                                   
that the current wording may have  equal protection problems.                                                                   
                                                                                                                                
Co-Chair Williams  stated that  he planned  to hear  both the                                                                   
Judiciary Committee  Substitute and  the Work Draft  versions                                                                   
of HB 514,                                                                                                                      
                                                                                                                                
Representative Stoltze questioned  the merits of recreational                                                                   
licensing on  page 2,  lines 14-16. Ms.  Baily was  unable to                                                                   
respond.                                                                                                                        
                                                                                                                                
Co-Chair Harris  noted on page  1, Sec. 3(d) through  page 2,                                                                   
(1) the  aggregate amount of  accrued monetary  child support                                                                   
arrearage totaling  $10 thousand. He maintained that  it is a                                                                   
lot of money  to be in arrears  before there is  an attempted                                                                   
felony prosecution,  and he said,  two years without  support                                                                   
from  the spouse  is  a very  long  time.   He  asked if  the                                                                   
sponsor  considered making  it  one year,  or  less than  $10                                                                   
thousand.                                                                                                                       
                                                                                                                                
Ms. Baily explained  that two years is  Representative Kott's                                                                   
suggested  timeframe.   Ms. Baily  acknowledged that  parents                                                                   
have attested it's very difficult  when they're not receiving                                                                   
child support.                                                                                                                  
                                                                                                                                
Mr. Main stated  that two years and $10 thousand  mirrors the                                                                   
federal child  support criminal  statute.  The  statute began                                                                   
in 1992 with $5 thousand and one  year of non-payments, which                                                                   
was found  insufficient.  Co-Chair  Harris asked  what wasn't                                                                   
sufficient.  Mr. Main replied  that the misdemeanors were not                                                                   
being  investigated.  When  the  CSED tried  to  get  federal                                                                   
attorney  to  prosecute  numerous cases,  they  were  denied.                                                                   
From 2002  to the  present, the  federal government  reviewed                                                                   
4600  federal cases  and prosecuted  450 nationwide  felonies                                                                   
across   state  lines.   Through   restitution  the   federal                                                                   
government  recovered $18  million. The  State of Alaska  has                                                                   
submitted  several  federal  felony  cases  for  review  that                                                                   
haven't yet been prosecuted.                                                                                                    
                                                                                                                                
Co-Chair  Harris  asked  if  a  person  would  face  criminal                                                                   
charges if  they made one  payment during twenty-four  months                                                                   
and owed less than $10 thousand.  Mr. Main explained that the                                                                   
issue is  inadequate investigative  resources to look  at all                                                                   
the  cases.   Currently there  are about  14,000 cases  owing                                                                   
more than  $10,000 or two years  in arrears, but  he stressed                                                                   
that  it  doesn't  mean  that  everyone  who  owes  over  $10                                                                   
thousand should be charged with a felony or misdemeanor.                                                                        
                                                                                                                                
TAPE HFC 04 - 51, Side B                                                                                                      
                                                                                                                              
Mr. Main noted that there are  a number of reasons why people                                                                   
cannot afford to pay and may be two years in arrears.                                                                           
                                                                                                                                
Co-Chair Harris  asked if the  CSED could foreclose  on homes                                                                   
or automobiles.   Mr.  Main affirmed that  the CSED  has that                                                                   
authority but  has chosen not  to exercise it.   The division                                                                   
has put  liens on  houses and various  properties.   The CSED                                                                   
tried  to  become  a  co-lien  holder  on  vehicles  but  the                                                                   
Division  of Motor  Vehicles (DMV)  advised  against it.  The                                                                   
State  of Washington  has a  successful  program requiring  a                                                                   
buyer to go  through the DMV to  get title whenever  a car is                                                                   
sold.  To  his knowledge,  the  CSED  has not  foreclosed  on                                                                   
homes, but  it has  gone after airplanes.  Due to  a manpower                                                                   
shortage, the  CSED has not approached seizing  property from                                                                   
homes.                                                                                                                          
                                                                                                                                
Co-Chair  Harris  asked if  there  is  a penalty  against  an                                                                   
employer  who pays  "under the  table" to avoid  a record  of                                                                   
salary  so  the   CSED  or  the  courts  cannot   attach  the                                                                   
employee's  wages.   Mr. Main  affirmed that  there are  both                                                                   
civil and criminal  penalties.  The civil penalty  applies if                                                                   
the employer  received a holding  order or garnishment  order                                                                   
and failed to  withhold.  In those cases, the  employer could                                                                   
be fined  the full arrears. In  court, the employer  could be                                                                   
fined  the   entire  $10  thousand   rather  than   what  the                                                                   
individual  would have  been charged.   The criminal  penalty                                                                   
involves  aiding   and  abetting  the  nonpayment   of  child                                                                   
support, currently a misdemeanor.   In response to a question                                                                   
by Co-Chair  Harris, Mr. Main  stated that charges  have been                                                                   
filed.                                                                                                                          
                                                                                                                                
Representative Croft clarified  that not paying child support                                                                   
at all  is currently criminal  nonsupport and  a misdemeanor,                                                                   
but when it reaches the two-year  limit, it becomes a felony.                                                                   
                                                                                                                                
Representative  Croft  asked  if a  violator  of  misdemeanor                                                                   
nonsupport  could lose  hunting  and fishing  licenses.   Mr.                                                                   
Main affirmed that a violator  could lose up to six months of                                                                   
use  of hunting  and fishing  licenses. Representative  Croft                                                                   
asked  if this  provision is  a requirement  of federal  law.                                                                   
Mr.  Main  responded that  it  is  a compromise  because  the                                                                   
federal   government   mandated    that   the   state   seize                                                                   
recreational licenses  if a person  owes back  child support.                                                                   
The Judiciary  Committee amendment  extended the loss  of the                                                                   
hunting or  fishing license until  the arrears were  paid, if                                                                   
the person is convicted of a felony.                                                                                            
                                                                                                                                
Representative  Joule  asked how  many  of the  14,000  cases                                                                   
become felons. Mr. Main replied,  between 3-6 cases per year.                                                                   
                                                                                                                                
Representative  Joule  questioned  the  rationale  of  people                                                                   
losing hunting  licenses in rural  areas where there  may not                                                                   
be jobs, and where obtaining game  is good for the family but                                                                   
doesn't translate  into a child  support payment.  He pointed                                                                   
out that if people lost their  hunting license, they would be                                                                   
gathering  food illegally.   Mr. Main  pointed to Version  U,                                                                   
page 4, section 8, line 18 "the  court may suspend, restrict,                                                                   
or revoke,"  and explained  that  it does not  mean that  the                                                                   
court  is required  to do  so. The  court would  look at  the                                                                   
individual's  circumstances  and   whether  the  license  was                                                                   
needed for subsistence to feed the family.                                                                                      
                                                                                                                                
Representative Croft  stated that the law  previously revoked                                                                   
a hunting or  fishing license for six months  for nonsupport,                                                                   
and asked if it would now be revoked  for the duration of the                                                                   
nonsupport.  Mr.  Main affirmed that the  Judiciary Committee                                                                   
had adopted that amendment.                                                                                                     
                                                                                                                                
Representative  Chenault asked  the meaning  on page  4, line                                                                   
21, "natural person."  Mr. Main was unable to respond.                                                                          
                                                                                                                                
Co-Chair Harris asked if a person  would be subject to losing                                                                   
a recreational  license forever  if that person  is currently                                                                   
making payments but  also has a great backlog  of payments to                                                                   
make up.  Mr. Main  replied that  the court  would make  that                                                                   
decision,  with a recommendation  by the  Department  of Law.                                                                   
The  language reads,  "the court  may  suspend, restrict,  or                                                                   
revoke."  Co-Chair Harris asked  why the word "shall" was not                                                                   
used.                                                                                                                           
                                                                                                                                
Ms.  Baily pointed  out that  it  is a  penalty for  criminal                                                                   
nonsupport  so  the  license would  not  revoked  unless  the                                                                   
person was  actually convicted of  either a misdemeanor  or a                                                                   
felony.  It  would   not  apply  to  ongoing   child  support                                                                   
arrearages unless the person was convicted.                                                                                     
                                                                                                                                
                                                                                                                                
In  response to  a question  by  Representative Stoltze,  Mr.                                                                   
Main explained that  a conviction would be prosecuted  in the                                                                   
courts.                                                                                                                         
                                                                                                                                
In response to a question by Representative  Foster, Mr. Main                                                                   
indicated there are four CSED investigators.                                                                                    
                                                                                                                                
CO-CHAIR Harris  referred to language  on page 5, line  5 and                                                                   
asked  if  the   CSED  automatically  would   take  the  full                                                                   
Permanent  Fund  dividend  (PFD)  if an  individual  were  in                                                                   
arrears.                                                                                                                        
                                                                                                                                
JOHN  MALLONEE, ACTING  DIRECTOR,  CHILD SUPPORT  ENFORCEMENT                                                                   
DIVISION,  DEPARTMENT  OF  REVENUE   explained  that  if  the                                                                   
individual has more  than $50 in arrears, the  division would                                                                   
attach any portion  up to and including the  entire amount of                                                                   
the PFD.  If the arrears totals  more than the amount  of the                                                                   
dividend,  the entire  PFD would  be  taken. Co-Chair  Harris                                                                   
asked if the dividend would be  split among multiple children                                                                   
with  different  parents.   Mr.  Mallonee affirmed  that  the                                                                   
dividend would be split among  them based on a portion of the                                                                   
arrears.                                                                                                                        
                                                                                                                                
Representative Joule  asked whether an individual  in arrears                                                                   
who is currently raising another  family could use any of the                                                                   
PFD balance for the new family.   Mr. Mallonee explained that                                                                   
the dividend  comes in  primarily against  the child  support                                                                   
arrears  but  any  balance would  go  toward  on-going  child                                                                   
support.                                                                                                                        
                                                                                                                                
MELANIE  MILLHORN,  DIRECTOR,   DIVISION  OF  RETIREMENT  AND                                                                   
BENEFITS,  DEPARTMENT  OF  ADMINISTRATION,  stated  that  the                                                                   
division was asked to look at  the legal analysis dated March                                                                   
2 (copy  on file), and to  respond to a provision  in Section                                                                   
12 of  the Judiciary Committee  Substitute. Section  12 would                                                                   
provide  peace officer/firefighter  retirement service  after                                                                   
20 years for the four CSED positions.    The Mercer Actuarial                                                                   
preliminary  figures  show  an   increase  of  2.84%  in  the                                                                   
employer contribution  rate by the Department  of Revenue for                                                                   
personal  services. A  fiscal  note will  follow. The  annual                                                                   
cost to the department totals $6,208.                                                                                           
                                                                                                                                
Representative  Hawker  questioned  whether the  language  is                                                                   
sufficient  to  the  intent  of  granting  investigators  the                                                                   
powers  but  not the  designation  of  peace officers.    Ms.                                                                   
Millhorn  commented  that the  legal  analysis  looks at  the                                                                   
statutory  provision and  the regulation  for peace  officers                                                                   
and  firefighters,  and she  admitted  uncertainty  regarding                                                                   
whether   the    regulation   could   withstand    challenge.                                                                   
Representative  Hawker   argued  against  giving   title  and                                                                   
authority without commensurate benefits.                                                                                        
                                                                                                                                
ANNE CARPENETI,  ASSISTANT ATTORNEY  GENERAL, LEGAL  SERVICES                                                                   
SECTION,  CRIMINAL DIVISION,  DEPARTMENT OF  LAW, spoke  to a                                                                   
minor part  of the  Judiciary Committee  Substitute  that was                                                                   
removed  from the  new work draft.   She  explained that  the                                                                   
addition of two  words, "and unreasonably," in  the Judiciary                                                                   
Version U,  on page 3, line  20 would have made  it difficult                                                                   
for attorneys  to prosecute  people for criminal  nonsupport.                                                                   
Ms. Carpeneti was unsure if the  sponsor realized that aiding                                                                   
the obligor with nonpayment of  child support would interfere                                                                   
with prosecuting for nonpayment  of child support.  Currently                                                                   
the   division  has   to  prove   that  there   is  a   valid                                                                   
administrative order  that the person knows  about, and prove                                                                   
that  the   person  intentionally  withheld   information  or                                                                   
knowingly helped  to hide assets.  She explained  that adding                                                                   
the  "and unreasonably"  standard  would  be problematic  and                                                                   
she doubted that it was the sponsor's intent.                                                                                   
                                                                                                                                
Co-Chair   Harris   pointed   out  that   the   words,   "and                                                                   
unreasonably" were removed from the new work draft.                                                                             
                                                                                                                                
Representative Croft questioned  the language on page 3, Sec.                                                                   
5(A) of  both versions  that would make  it a misdemeanor  to                                                                   
withhold   information  about   an  obligor.  Ms.   Carpeneti                                                                   
explained that  the division doesn't prosecute  many of these                                                                   
cases, and it applies to employers and second spouses.                                                                          
                                                                                                                                
Representative  Croft   suggested  adding  the   words,  "and                                                                   
unreasonably," under  Sec. 5(A), arguing that  there could be                                                                   
reasonable  situations of  a person not  wanting to  disclose                                                                   
employment or  residence information.  Ms.  Carpeneti replied                                                                   
that  she would  be more  comfortable if  that language  only                                                                   
modified  paragraph(A),  but  it would  add  an  unreasonable                                                                   
requirement and  an additional hardship to existing  law. She                                                                   
would prefer that it not be included at all.                                                                                    
                                                                                                                                
Representative Croft asked if  there is a general misdemeanor                                                                   
penalty if a  person does not disclose information  to a CSED                                                                   
investigator.  Ms. Carpeneti replied, not to her knowledge.                                                                     
                                                                                                                                
Representative  Croft questioned  the federal requirement  to                                                                   
only revoke  the recreational license  for a major  crime and                                                                   
not  a  misdemeanor.    Ms. Carpeneti  was  unable  to  fully                                                                   
respond,  but  commented that  it  is discretionary  and  not                                                                   
mandatory.                                                                                                                      
                                                                                                                                
DIANE   WENDLANDT,   CHIEF   ASSISTANT    ATTORNEY   GENERAL,                                                                   
DEPARTMENT OF  LAW, VIA TELECONFERENCE, ANCHORAGE,  explained                                                                   
the  federal  requirement  is   simply  that  the  state  has                                                                   
procedures  allowing  for  the   suspension  of  recreational                                                                   
licenses.  The federal  government doesn't  specify how  that                                                                   
may  be done,  although  for  all  other licenses  there  are                                                                   
general   programs   through   the  licensing   agencies.   A                                                                   
compromise  was  reached,  with the  department  agreeing  to                                                                   
suspend  recreational   licenses  only  in  cases   of  civil                                                                   
contempt or criminal nonsupport,  which would comply with the                                                                   
federal requirement.                                                                                                            
                                                                                                                                
Representative  Croft asked  if the state  would violate  the                                                                   
federal  requirement by  suspending  the license  only for  a                                                                   
felony and  not a misdemeanor.   Ms. Wendlandt  answered that                                                                   
it  is  difficult   to  know  beforehand  what   the  federal                                                                   
government will allow.                                                                                                          
                                                                                                                                
Representative    Foster   questioned    having   the    CSED                                                                   
plainclothes  officers  carrying   guns  in  the  twenty-nine                                                                   
villages  of his  district.  He recounted  an  instance of  a                                                                   
national park service employee  in Hawaii who was killed with                                                                   
his own gun, and expressed concern  that this provision would                                                                   
be asking for trouble in Western Alaska.                                                                                        
                                                                                                                                
Mr.  Main replied  that  the provision  is  intended for  the                                                                   
protection  of   the  CSED   investigators  who   don't  wear                                                                   
uniforms. In rural  areas, the investigators would  ask to be                                                                   
accompanied  by  state  troopers  or  Village  Public  Safety                                                                   
Officers (VPSOs).   To his knowledge, the  investigators have                                                                   
gone  to areas  by road  or aircraft  but not  to the  remote                                                                   
villages.                                                                                                                       
                                                                                                                                
Representative  Foster  questioned the  fiscal  note for  the                                                                   
training of four  CSED investigators.  He commented  that the                                                                   
VPSOs  in Hooper  Bay are  unarmed and  face greater  dangers                                                                   
than the child support investigators.                                                                                           
                                                                                                                                
LT.  ALLEN   STORY,  DIVISION   OF  ALASKA  STATE   TROOPERS,                                                                   
DEPARTMENT  OF  PUBLIC SAFETY,  VIA  TELECONFERENCE,  replied                                                                   
that there is not  a fiscal note yet.  He  commented that the                                                                   
definitions of "peace officer"  and "police officer" are used                                                                   
throughout statute  to empower different people  in differing                                                                   
circumstances.    He  stated that  Representative  Foster  is                                                                   
correct that  police officers would  have to be  certified by                                                                   
the  Alaska  Police   Standards  Council.     The  costs  for                                                                   
attending   the  Public   Safety   Academy   are  $7100   per                                                                   
participant, and  another $2700 for an array  of firearms and                                                                   
use of force equipment.                                                                                                         
                                                                                                                                
Representative Foster  asked if this is the  same argument as                                                                   
the ABC Board wanting to arm their  agents. Mr. Story replied                                                                   
that it  is not the intent  of the current  administration to                                                                   
arm the ABC agents.                                                                                                             
                                                                                                                                
Mr. Main stated  that the Child Support  Enforcement Division                                                                   
wrote  up  a  fiscal  note  regarding  the  training  of  the                                                                   
investigators, not the Department of Public Safety.                                                                             
                                                                                                                                
Ms. Baily  clarified that the  new numbers for  training will                                                                   
be incorporated  into a new  fiscal note that  the department                                                                   
will provide soon.                                                                                                              
                                                                                                                                
Representative  Chenault  reiterated   his  question  of  the                                                                   
meaning  of the  language "natural  person"  that appears  on                                                                   
page 4, lines 21 and 28 of Judiciary Version U.                                                                                 
                                                                                                                                
Ms.  Carpeneti  replied  that  it means  a  human  being  and                                                                   
clarified that there are entities  including corporations and                                                                   
partnerships.    Representative    Chenault   doubted    that                                                                   
corporations  would be  issued  a recreational  license.  Ms.                                                                   
Carpeneti stated  that this is existing law,  and a defendant                                                                   
could be  a corporation  aiding and  abetting failure  to pay                                                                   
child  support.  Representative  Chenault  argued  that  this                                                                   
deals with revoking recreational licenses.                                                                                      
                                                                                                                                
PETER ECKLUND, STAFF TO REPRESENTATIVE WILLIAMS, explained                                                                      
the changes in the Work Draft 23-S1639\V by first pointing                                                                      
out the language deleted from Judiciary Version U.  The                                                                         
words "and unreasonably" were deleted from page 3, line 20.                                                                     
All of Sec. 12 (f)(1) and (2) has been deleted from page 5,                                                                     
line 16, which had designated the investigators as peace                                                                        
officers and allowed them to carry firearms. The work draft                                                                     
also deletes Sec. 12(g) through  (i) which was the arrearages                                                                   
section allowing the department to negotiate forgiveness of                                                                     
child support arrearages.                                                                                                       
                                                                                                                                
Mr. Ecklund explained that the work draft adds a Pilot                                                                          
Program for Child Support Arrearages  on page 7, line 10.  He                                                                   
noted that if the committee accepts the work draft and the                                                                      
pilot program language, the date that the pilot program                                                                         
would report to the legislature and the Governor should be                                                                      
changed. He suggested changing  page 7, line 15, from October                                                                   
1, 2005 to February 1, 2005.                                                                                                    
                                                                                                                                
Co-Chair  Williams  asked  if  the  department  supports  the                                                                   
changes.   Ms. Baily replied  that the Department  of Revenue                                                                   
supports the  changes in  the proposed committee  substitute,                                                                   
especially   the   removal   of   language   giving   firearm                                                                   
authorization  to CSED  investigators, and  the inclusion  of                                                                   
the  pilot  program  and  provision to  report  back  to  the                                                                   
legislature.                                                                                                                    
                                                                                                                                
In response  to a  question by  Representative Chenault,  Ms.                                                                   
Baily  replied  that  the  fiscal note  would  change.    She                                                                   
offered that some of the changes  in the committee substitute                                                                   
might help allay  concerns expressed by the  Division of Risk                                                                   
Management and the Tort and Workers'  Compensation Section in                                                                   
the Department of  Law.   She expected a revised  fiscal note                                                                   
soon.                                                                                                                           
                                                                                                                                
Representative Hawker asked the  sponsor's perspective on the                                                                   
changes.                                                                                                                        
                                                                                                                              
TAPE HFC 04 - 52, Side A                                                                                                      
                                                                                                                                
In  response to  a  question  by Representative  Foster,  Ms.                                                                   
Baily described the pilot program  formulated by the CSED and                                                                   
the Department  of Revenue.   The  program would help  people                                                                   
who  are  not  presently  paying   child  support  to  secure                                                                   
training  for  employment  and  reduce  the  need  for  state                                                                   
assistance.  It  would also address arrearages  in payment to                                                                   
custodial parent.  She stated  that Ms. Wendlandt  has worked                                                                   
with  the  department  and outlined  concerns  regarding  the                                                                   
pilot  program  in the  Department  of Law  memorandum  dated                                                                   
March  5,  2004  (copy  on  file.)   The  program  must  meet                                                                   
constitutional safeguards.                                                                                                      
                                                                                                                                
In  response  to  a question  by  Co-Chair  Harris,  Co-Chair                                                                   
Williams  stated that  he would  wait to hear  from the  bill                                                                   
sponsor before  adopting the  proposed committee  substitute.                                                                   
Mr.  Main pointed  out  that the  sponsor  has  not seen  the                                                                   
committee substitute.                                                                                                           
                                                                                                                                
Co-Chair Harris requested a revised  fiscal note based on the                                                                   
new version.                                                                                                                    
                                                                                                                                
Representative  Stoltze  asked for  guidance  in whether  the                                                                   
committee  would  adopt the  work  draft  Version V,  or  the                                                                   
Judiciary Committee Substitute.   Co-Chair Williams clarified                                                                   
that he was asked by the administration  to draft a committee                                                                   
substitute,  but it  is up  to  the committee  which bill  it                                                                   
supports.                                                                                                                       
                                                                                                                                
HB  514  was   heard  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
The committee took a brief At Ease.                                                                                             
                                                                                                                                
HOUSE BILL NO. 123                                                                                                            
     An Act relating to the allocation of money appropriated                                                                    
     to the Alaska Human Resource Investment Council; and                                                                       
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
Representative Foster MOVED to report CS HB 123(FIN) out of                                                                     
Committee with a zero fiscal note and individual                                                                                
recommendations. There being NO OBJECTION, it was so                                                                            
ordered.                                                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 3:39 P.M.                                                                                          
                                                                                                                              
                                                                                                                              
                                                                                                                                
                                                                                                                                

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