Legislature(1999 - 2000)

04/15/2000 09:20 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 15, 2000                                                                                           
                         9:20 A.M.                                                                                              
                                                                                                                                
TAPE HFC 00 - 121, Side 1                                                                                                       
TAPE HFC 00 - 121, Side 2                                                                                                       
TAPE HFC 00 - 122, Side 1                                                                                                       
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Therriault  called   the  House  Finance  Committee                                                                   
meeting to order at 9:20 a.m.                                                                                                   
                                                                                                                                
PRESENT                                                                                                                       
                                                                                                                                
Co-Chair Mulder                                                                                                                 
Co-Chair Therriault            Representative Foster                                                                            
Vice Chair Bunde               Representative Grussendorf                                                                       
Representative Austerman       Representative Moses                                                                             
Representative J. Davies       Representative Phillips                                                                          
Representative G. Davis        Representative Williams                                                                          
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  John Coghill;  Jeannie Smith, Staff,  Senator                                                                   
MacKie;  Guy  Bell,  Director,  Division  of  Retirement  and                                                                   
Benefits,  Department of  Administration;  Dave Gray,  Staff,                                                                   
Senator  MacKie;  George  Capacci,  General  Manager,  Alaska                                                                   
Marine  Highway  System,  Department  of  Transportation  and                                                                   
Public  Facilities;  Patti  Swenson,   Staff,  Representative                                                                   
Bunde;  Wendy  Redman, Vice  President,  Statewide  Programs,                                                                   
University of  Alaska; Jeannie Smith, Staff,  Senator MacKie;                                                                   
David   Logan,  Dentist,   Juneau;   Larry  Persily,   Deputy                                                                   
Commissioner, Department of Revenue.                                                                                            
                                                                                                                                
TESTIFIED VIA TELECONFERENCE                                                                                                  
                                                                                                                                
Denny Kay Weathers, Anchorage.                                                                                                  
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 121    "An  Act  relating  to  patients'  rights  under  a                                                                   
          health  care insurance  plan or contract  providing                                                                   
          coverage for  dental care, and  prohibiting certain                                                                   
          practices  by  health  care  insurers  relating  to                                                                   
          dental care."                                                                                                         
                                                                                                                                
          CSHB 121 (L&C) was REPORTED out of Committee with                                                                     
          "no recommendation"  and a zero fiscal  note by the                                                                   
          Department  of Community  and Economic  Development                                                                   
          and  a  zero  fiscal  note  by  the  Department  of                                                                   
          Administration, both published on 4/14/00.                                                                            
                                                                                                                                
HB 281    "An Act providing for the issuance of general                                                                         
          obligation bonds in  the amount of $665,000,000 for                                                                   
          the  purposes   of  paying  the  cost   of  design,                                                                   
          construction,  and renovation of  public elementary                                                                   
          and   secondary   schools,  renovation   of   state                                                                   
          buildings,  capital improvements at  the University                                                                   
          of  Alaska,  and  capital   improvements  to  state                                                                   
          harbors; and providing for an effective date."                                                                        
                                                                                                                                
          HB 281 was heard and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
HB 311    "An Act eliminating a requirement that a social                                                                       
          security number  be provided by an  applicant for a                                                                   
         hunting or sport fishing license or tag."                                                                              
                                                                                                                                
          CSHB 311 (JUD) was REPORTED out of Committee with                                                                     
          "no  recommendation" and  a fiscal  impact note  by                                                                   
          the Department of Revenue, published 4/10/00.                                                                         
                                                                                                                                
CSSB 85(RLS)                                                                                                                    
          "An Act relating to  credited service in the public                                                                   
          employees'   retirement    system   for   temporary                                                                   
          employment;  and creating a public  service benefit                                                                   
          in the public employees' retirement system."                                                                          
                                                                                                                                
          CSSB 85(RLS)  was REPORTED out of Committee  with a                                                                   
          "do pass"  recommendation and with a  Department of                                                                   
          Administration, published 2/15/00.                                                                                    
                                                                                                                                
SB 288    "An    Act    authorizing   the    Department    of                                                                   
          Transportation and Public  Facilities to enter into                                                                   
          an agreement with the  Inter-Island Ferry Authority                                                                   
          regarding   the  operation   of   the  Clarke   Bay                                                                   
          Terminal, Prince of Wales Island."                                                                                    
                                                                                                                                
          SB 288 was REPORTED out of Committee with a "do                                                                       
          pass" recommendation  and with a fiscal impact note                                                                   
          by  the  Department  of Transportation  and  Public                                                                   
          Facilities, published 3/24/00.                                                                                        
                                                                                                                                
CSSB 192 (FIN)                                                                                                                  
          "An Act making and amending  capital appropriations                                                                   
          and  reappropriations and  capitalizing funds;  and                                                                   
          providing for an effective date."                                                                                     
                                                                                                                                
          CSSB 192 (FIN) was postponed.                                                                                         
CS FOR SENATE BILL NO. 85(RLS)                                                                                                
                                                                                                                                
     "An  Act  relating to  credited  service  in the  public                                                                   
     employees' retirement  system for temporary  employment;                                                                   
     and  creating a  public service  benefit  in the  public                                                                   
     employees' retirement system."                                                                                             
                                                                                                                                
JEANNIE SMITH, STAFF, SENATOR  MACKIE testified in support of                                                                   
SB  85. She  noted  that the  legislation  was introduced  on                                                                   
behalf  of constituents  in  Kodiak.  She stressed  that  the                                                                   
legislation  would   be  an  effective  management   tool  to                                                                   
minimize the impact of current  and future budget reductions.                                                                   
The  bill would  allow  employees  to meet  their  retirement                                                                   
eligibility  threshold sooner  than they  would otherwise  be                                                                   
able.  Employees prone  to use  this  benefit for  retirement                                                                   
credit  are employees  with higher  service totals.  Employer                                                                   
costs  decrease when  these  employees  are replaced  through                                                                   
reduced costs  to the Supplemental  Benefit System  (SBS) and                                                                   
the retirement system. The replacement  of Tier I and Tier II                                                                   
category employees  with new Tier  III employees  would lower                                                                   
benefit costs. The fiscal note  reflects a $4 thousand dollar                                                                   
designated  fund source  of the  Public Employees  Retirement                                                                   
Trust Fund. The  legislation would be a simple  economic tool                                                                   
that  may  be  used to  minimize  the  impact  of  downsizing                                                                   
Alaska's state government.                                                                                                      
                                                                                                                                
Ms.  Smith noted  that  the legislation  was  changed in  the                                                                   
Senate  Rules   Committee  to  include  certain   legislative                                                                   
employees. She  noted that the  full actuarial time  would be                                                                   
counted.                                                                                                                        
                                                                                                                                
Co-Chair Therriault  questioned if  two years service  in the                                                                   
Public Employee's  Retirement System (PERS) is  needed to get                                                                   
the  credit in  the Teacher's  Retirement  System (TRS).  Ms.                                                                   
Smith explained that the legislation  would address employees                                                                   
in the  Department of  Education and  Early Development  that                                                                   
switched from PERS to TRS. The  intent is for the employee to                                                                   
pay the  full actuarial cost  of their temporary  time, state                                                                   
benefits and interest. The net  impact to the state of Alaska                                                                   
is zero.                                                                                                                        
                                                                                                                                
Vice Chair  Bunde asked how  departments have reacted  to the                                                                   
legislation.  Ms.  Smith  responded  that  other  states  are                                                                   
allowing  flexibility  between  departments to  minimize  the                                                                   
impacts  of  downsizing.  She  noted that  the  agencies  are                                                                   
supportive.                                                                                                                     
                                                                                                                                
Representative  J. Davies questioned  if the credit  from the                                                                   
first service  would be  transferred to  the second  service.                                                                   
Ms.  Smith clarified  that the  legislation  would allow  the                                                                   
service to be transferred.                                                                                                      
                                                                                                                                
In response to  a question by Co-Chair Therriault,  Ms. Smith                                                                   
clarified  that  temporary  time  could  be  added  to  their                                                                   
threshold,  but that  it is  impossible  to use  the time  to                                                                   
change their Tier I or Tier II status.                                                                                          
                                                                                                                                
GUY  BELL, DIRECTOR,  DIVISION  OF RETIREMENT  AND  BENEFITS,                                                                   
DEPARTMENT  OF  ADMINISTRATION  provided information  on  the                                                                   
legislation  and  provided  a  brief  summary  of  the  three                                                                   
sections. Section  1 would allow  employees to  use temporary                                                                   
time for 20/30 and out. Currently,  employees have to have 20                                                                   
or  30  years  of  membership   service  depending  on  their                                                                   
employment. They can purchase  their temporary time toward an                                                                   
actuarially  adjusted higher  benefit, but  not to add  years                                                                   
toward  their   retirement.  The   legislation  would   allow                                                                   
temporary time  toward their retirement. An employee  with 29                                                                   
and a half  years of service  and 6 months of  temporary time                                                                   
could pay for the temporary time in order to retire.                                                                            
                                                                                                                                
Mr.  Bell  noted  that the  second  provision  would  address                                                                   
legislative  employees prior  to 1979.  These employees  were                                                                   
classified  as temporary  and  their time  did  not count  in                                                                   
PERS. Their status was changed  in 1979 and they were allowed                                                                   
to  claim  the  service until  1980.  The  legislation  would                                                                   
reopen the window and allow employees  to purchase their time                                                                   
toward  the  conditional legislative  retirement  benefit  of                                                                   
five legislative  sessions. This  provision would apply  to a                                                                   
small number of people at no state cost.                                                                                        
                                                                                                                                
Mr. Bell discussed the third provision  of SB 85. Individuals                                                                   
with a minimum of two years paid  up service in PERS would be                                                                   
allowed to combine their service  with TRS to reach the five-                                                                   
year  vesting  requirement  for  a  retirement  benefit.  The                                                                   
Department of  Administration would assure that  the employee                                                                   
and  employer  contribution  meets   the  actuarial  for  the                                                                   
benefit requirement.  An actuarial adjustment could  be made.                                                                   
The provision would only apply to a small number of people.                                                                     
                                                                                                                                
Mr. Bell  noted that there would  be a small fiscal  cost [$4                                                                   
thousand dollars].                                                                                                              
                                                                                                                                
Vice  Chair Bunde  reiterated  that only  a  small number  of                                                                   
people would  be affected.  Mr. Bell gave  the example  of an                                                                   
individual that  worked in  the Department of  Transportation                                                                   
and Public Facilities and then  transferred to the Department                                                                   
of Education  and Early Development.  Some of his  service is                                                                   
in TRS and some  is in PERS. The total is more  than 5 years,                                                                   
but he is not vested in either system.                                                                                          
                                                                                                                                
Mr.  Bell  observed  that the  agencies  have  not  expressed                                                                   
concern  with  the legislation  and  that  the bill  is  very                                                                   
limited in scope.                                                                                                               
                                                                                                                                
Representative Foster  MOVED to report  CSSB 85 (RLS)  out of                                                                   
Committee with  the accompanying fiscal note.  There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSSB 85(RLS) was  REPORTED out of Committee with  a "do pass"                                                                   
recommendation  and  with  a  Department  of  Administration,                                                                   
published 2/15/00.                                                                                                              
CS FOR SENATE BILL 288                                                                                                        
                                                                                                                                
     "An  Act authorizing  the  Department of  Transportation                                                                   
     and Public  Facilities to  enter into an  agreement with                                                                   
     the   Inter-Island   Ferry   Authority   regarding   the                                                                   
     operation  of the Clarke  Bay Terminal, Prince  of Wales                                                                   
     Island."                                                                                                                   
                                                                                                                                
DAVE GRAY, STAFF,  SENATOR MACKIE testified in  support of SB
288. He  explained that the  legislation would  authorize the                                                                   
Inter-Island  Ferry  Authority  to assume  operation  of  the                                                                   
Hollis terminal. The Inter-Island  Ferry Authority is made up                                                                   
of  five municipalities  and six  unincorporated  communities                                                                   
that are primarily  on Prince of Wales Island.  The Authority                                                                   
has been working  for the past five years to  provide service                                                                   
between Prince of Wales Island  and Ketchikan and Petersburg.                                                                   
The Authority  is ready  to go  to bid  on their first  ship,                                                                   
which  would  be  ready by  June.  Legislative  authority  is                                                                   
required before the Authority  can take over operation of the                                                                   
Hollis  terminal. The  Authority  will do  the ticketing  and                                                                   
docking on the Hollis side. The  Authority will own the ships                                                                   
they operate. There will eventually  be a new terminal on the                                                                   
northern end of  the island. The state will  retain operation                                                                   
of the Ketchikan and Petersburg facilities.                                                                                     
                                                                                                                                
Co-Chair Therriault  questioned how  many employees  would be                                                                   
affected by the legislation.                                                                                                    
                                                                                                                                
Vice Chair Bunde  clarified that the state of  Alaska will no                                                                   
longer provide  service from Hollis.  Mr. Gray  observed that                                                                   
additional state service could occur on occasion.                                                                               
                                                                                                                                
GEORGE  CAPACCI,  GENERAL  MANAGER,   ALASKA  MARINE  HIGHWAY                                                                   
SYSTEM, DEPARTMENT  OF TRANSPORTATION  AND PUBLIC  FACILITIES                                                                   
provided  information  on  SB  288.  He  clarified  that  the                                                                   
Authority  will be responsible  for maintenance  and  care of                                                                   
the  facility. There  are  three state  employees  associated                                                                   
with the  Hollis terminal. Two  would be eliminated  with the                                                                   
transfer of  responsibilities to the Authority.  One employee                                                                   
would remain  to maintain  the Craig  reservation office  and                                                                   
handle through traffic reservations throughout the system.                                                                      
                                                                                                                                
Co-Chair  Therriault  noted  that   there  would  be  a  $141                                                                   
thousand dollars  savings to  the state  that would  begin in                                                                   
the year 2002.                                                                                                                  
                                                                                                                                
Representative  Foster   MOVED  to  report  SB   288  out  of                                                                   
Committee with  the accompanying fiscal note.  There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
SB  288  was REPORTED  out  of  Committee  with a  "do  pass"                                                                   
recommendation  and   with  a  fiscal  impact   note  by  the                                                                   
Department   of   Transportation   and   Public   Facilities,                                                                   
published 3/24/00.                                                                                                              
HOUSE BILL NO. 121                                                                                                            
                                                                                                                                
     "An  Act relating  to patients'  rights  under a  health                                                                   
     care insurance  plan or contract providing  coverage for                                                                   
     dental  care,  and  prohibiting   certain  practices  by                                                                   
     health care insurers relating to dental care."                                                                             
                                                                                                                                
Representative  Con Bunde,  Sponsor  spoke in  support of  HB
121.  He  noted  that the  legislation  no  longer  prohibits                                                                   
insurers  from reimbursing  a covered  person at a  different                                                                   
rate because of  the person's choice of dentist.  He observed                                                                   
that the legislation was introduced  to aid dentists to serve                                                                   
their  patients effectively.  He  maintained  that the  House                                                                   
Labor  and Commerce  Committee  version is  supported by  the                                                                   
parties  impacted   by  the   legislation.  The   legislation                                                                   
supports  consumers by  allowing  them the  right to  receive                                                                   
full  information   regarding  their  care   options  without                                                                   
fearing adverse  actions from  insurance companies.  The bill                                                                   
also  allows patients  to take  civil  action against  health                                                                   
care insurers to  enforce their rights and requires  a dental                                                                   
treatment plan  review or utilization review  to be conducted                                                                   
by a dentist.                                                                                                                   
                                                                                                                                
PATTI   SWENSON,   STAFF,   REPRESENTATIVE   BUNDE   provided                                                                   
information   on  the   legislation.  She   noted  that   the                                                                   
legislation  was  amended in  the  House Labor  and  Commerce                                                                   
Committee on page 2, line 8 -  13 to allow individuals to use                                                                   
a  dentist   outside   of  the   dental  preferred   provider                                                                   
organization.  The  language   was  added  to  satisfy  union                                                                   
opposition to the bill.                                                                                                         
                                                                                                                                
In response  to a  question by  Representative Phillips,  Ms.                                                                   
Swenson  stated that  the  legislation  would apply  anywhere                                                                   
there is a dental preferred provider organization.                                                                              
                                                                                                                                
Representative   J.  Davies   asked   for  more   information                                                                   
regarding arbitration.                                                                                                          
                                                                                                                                
Ms. Swenson explained that insurance  companies have a formal                                                                   
system  of arbitration.  The  arbitration is  to  be a  final                                                                   
agreement. If  the parties  do not agree  a civil  action can                                                                   
take place. Representative Bunde  added that the arbitrator's                                                                   
decision is  the end of  the process.  Patients can go  on to                                                                   
sue.                                                                                                                            
                                                                                                                                
Representative  J. Davies expressed  concern that there  be a                                                                   
time limit to  the arbitration. He asked if  arbitrators must                                                                   
act in a specified time period.   Ms. Swenson did not know if                                                                   
a time  limit exists,  but stressed  that it  would cost  the                                                                   
insurance company to continue the arbitration.                                                                                  
                                                                                                                                
DAVID  LOGAN,  DENTIST,  JUNEAU   spoke  in  support  of  the                                                                   
legislation as an advocate for  patients. He pointed out that                                                                   
dentists  do  not  receive  an   economic  benefit  from  the                                                                   
legislation. Each  company has a different  arbitration plan.                                                                   
Most plans do  not have a time specification.  He pointed out                                                                   
that   patients  would   have  rights   with  the   Insurance                                                                   
Commission to expedite the process.                                                                                             
                                                                                                                                
Representative Foster  MOVED to report CSHB 121  (L&C) out of                                                                   
Committee with  the accompanying fiscal note.  There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHB  121  (L&C)  was REPORTED  out  of  Committee  with  "no                                                                   
recommendation" and  a zero fiscal note by  the Department of                                                                   
Community and Economic Development  and a zero fiscal note by                                                                   
the Department of Administration,  both published on 4/14/00.                                                                   
HOUSE BILL NO. 311                                                                                                            
                                                                                                                                
     "An Act eliminating a requirement that a social                                                                            
     security number be provided by an applicant for a                                                                          
     hunting or sport fishing license or tag."                                                                                  
                                                                                                                                
REPRESENTATIVE JOHN  COGHILL, SPONSOR testified  in support o                                                                   
HB  311. The  legislation  would  repeal the  requirement  to                                                                   
provide a social security number  on hunting or sport fishing                                                                   
licenses or  tags. He observed  that there is a  larger issue                                                                   
regarding   the   use   of  social   security   numbers   for                                                                   
identification.  He observed  that federal  law requires  the                                                                   
use  of social  security numbers  for a  number of  documents                                                                   
including recreational  licenses. He  suggested that  the use                                                                   
of  social  security  numbers  on hunting  or  sport  fishing                                                                   
licenses or  tags is less secure  than on other  records such                                                                   
as marriage licenses. The federal  code does not specifically                                                                   
identify that licenses being addressed.                                                                                         
                                                                                                                                
Representative  Coghill  referred to  a memorandum  by  Terry                                                                   
Lauterbach  dated March  23, 1999.  Ms. Lauterbach  concluded                                                                   
that  the  legislation  could jeopardize  federal  funds  for                                                                   
child   enforcement.  He   noted  that   other  states   have                                                                   
challenged the  federal requirement without  consequences. He                                                                   
observed  that  "recreational license  "  is  not defined  in                                                                   
federal  code.  He suggested  that  the  federal  requirement                                                                   
could be  challenged on the  basis of security.  Recreational                                                                   
licenses are sold  in a number of businesses in  the state of                                                                   
Alaska. He observed that the effective  date would be January                                                                   
1, 2001.  He maintained  that  it would be  easier to  obtain                                                                   
social  security numbers  from hunting  and fishing  licenses                                                                   
than from a marriage or driver's license.                                                                                       
                                                                                                                                
Co-Chair Therriault  observed that  cases of stolen  identity                                                                   
have occurred through the use  of social security numbers. It                                                                   
can be  difficult and  expensive to  straighten out  cases of                                                                   
stolen identity.                                                                                                                
                                                                                                                                
Representative  J.  Davies  observed   that  social  security                                                                   
numbers  were  added on  hunting  and fishing  licenses  when                                                                   
state welfare  reform legislation was updated  to comply with                                                                   
federal  code.  He expressed  concern  that  overturning  the                                                                   
federal requirement would create difficulty.                                                                                    
                                                                                                                                
Co-Chair Therriault  observed that the original  legislation,                                                                   
which was passed, to come into  compliance had a sunset date.                                                                   
                                                                                                                                
(TAPE CHANGE, HFC 00 - 121, SIDE 2)                                                                                           
                                                                                                                                
Co-Chair Therriault noted that  states that have not included                                                                   
hunting and fishing licenses did not lose funds.                                                                                
                                                                                                                                
Representative Coghill  spoke in support of  the legislation.                                                                   
He noted  that the  whole issue  has to  be revisited  in the                                                                   
next year  under the  current statute.  He maintained  that a                                                                   
challenge   to  the   federal  requirement   is  worthy   and                                                                   
necessary.                                                                                                                      
                                                                                                                                
Vice Chair Bunde stated that he  knows someone who had his or                                                                   
her  identity  stolen  through  his or  her  social  security                                                                   
number. He observed  that the person's credit  was negatively                                                                   
impacted for  five years. While  he acknowledged  the problem                                                                   
he expressed concern  that the legislation is  "like plugging                                                                   
a hole  in a dike."  He suggested that  it is easy  to obtain                                                                   
social security numbers  in a variety a ways.  He stated that                                                                   
he would  support the proposal  if it wouldn't result  in the                                                                   
loss of federal funds. He added  that social security numbers                                                                   
on hunting  and fishing licenses  has assisted  child support                                                                   
enforcement.                                                                                                                    
                                                                                                                                
Representative  Austerman  observed that  there  is a  bigger                                                                   
long-term  issue.  He  referred  to  the  memorandum  by  Ms.                                                                   
Lauterbach   and  noted   that  funds   could  be   affected.                                                                   
Representative  Coghill  acknowledged  that  the  legislation                                                                   
would not  resolve the  greater problem  [of identity  theft]                                                                   
but  emphasized  that the  dialog  needs  to be  started.  He                                                                   
maintained that the challenge  is worthy and pointed out that                                                                   
there is a security issue.                                                                                                      
                                                                                                                                
Representative Coghill maintained  that the legislation would                                                                   
be a vote of confidence in the  people of Alaska. He stressed                                                                   
that the  federal government would  assume that the  state of                                                                   
Alaska is  willing to incorporate  the information  without a                                                                   
challenge.                                                                                                                      
                                                                                                                                
Representative Phillips  questioned the impact  to the state.                                                                   
She observed that the Department  of Fish and Game would have                                                                   
costs  associated  with  changing forms.  She  stressed  that                                                                   
there  is no way  to assure  safety  in this day  and age  of                                                                   
technology.                                                                                                                     
                                                                                                                                
Representative Coghill  observed that the effective  date was                                                                   
chosen  to  allow  the  department to  print  forms  for  the                                                                   
following year without additional cost.                                                                                         
                                                                                                                                
In  response  to  a  question  by  Representative  Austerman,                                                                   
Representative  Coghill  pointed out  that  inclusion of  the                                                                   
social security number is mandatory.                                                                                            
                                                                                                                                
Representative J. Davies acknowledged  that identity theft is                                                                   
a problem, but  did not think the legislation was  the way to                                                                   
solve  the problem.  He observed  that  there are  businesses                                                                   
that  will research  a person's  social  security number  and                                                                   
other  financial information  for $35  dollars. He  expressed                                                                   
concern that TANF  and other federal funds could  be lost. He                                                                   
observed  that   other  states  have  begun   challenges  and                                                                   
recommended that  the state of  Alaska wait to see  where the                                                                   
challenges go  or at least get  an opinion from  the Attorney                                                                   
General.                                                                                                                        
                                                                                                                                
DENNY KAY  WEATHERS, ANCHORAGE  testified via  teleconference                                                                   
in  support of  the legislation.  She observed  that her  son                                                                   
lost a  piece of identification  that was  found and  used to                                                                   
run up  phone charges.  She does not  have a social  security                                                                   
number and  is not  employed. She pointed  out that  a social                                                                   
security  number  is  only required  for  employment  by  the                                                                   
federal  government, however  the  state  of Alaska  requires                                                                   
social  security  numbers  (SSN)   for  hunting  and  fishing                                                                   
licenses. She  stressed that  non-residents are not  required                                                                   
to have a  social security number. She provided  members with                                                                   
CRS  Report  for  Congress, November  21,  1991,  The  Social                                                                 
Security   Number:   Chronology   of   Federal   Developments                                                                 
Affecting Its  Use (copy on  file). She reviewed  the report.                                                                 
The federal Tax  Reform Act of 1976 authorizes  states to use                                                                   
Social  security  numbers  in   administration  of  any  tax,                                                                   
general public assistance, driver's  license or motor vehicle                                                                   
registration law and to require  individuals affected by such                                                                   
laws  to furnish  their  SSNs  to  the states.  In  addition,                                                                   
states  are permitted  to  use  Social security  numbers  for                                                                   
requests for  information from any agency  operating pursuant                                                                   
to the  Aid to Families  with Dependent Children  program and                                                                   
the  Child Support  and Establishment  of Paternity  program.                                                                   
The  Commercial Motor  Vehicle Safety  Act of  1986 gave  the                                                                   
secretary of Transportation authority  to require that states                                                                   
to include a SSN on commercial vehicle licenses.                                                                                
                                                                                                                                
Ms. Weathers  stressed that SSN  information was  intended to                                                                   
be  confidential. She  observed  that SSNs  are required  for                                                                   
commercial  fishing permits.  Fishing tenders  come from  all                                                                   
over. Commercial  fishermen  are required  to give their  SSN                                                                   
and name to fish tenders.                                                                                                       
                                                                                                                                
Ms.  Weathers  continued  support  for  a  challenge  to  the                                                                   
federal requirement  to include social security  numbers. She                                                                   
observed  that  other  states  are  challenging  the  federal                                                                   
mandate  for  inclusion  of  Social   security  numbers.  She                                                                   
observed that  there are challenges  in the states  of Idaho,                                                                   
New Mexico, Michigan,  Montana and North Carolina.  She added                                                                   
that  some individuals  do  not  give their  Social  security                                                                   
numbers on religious  basis. She concluded that  section 3 of                                                                   
the  Statehood  Act states  that  anything repugnant  to  the                                                                   
United  States   Constitution  or   the  principals   of  the                                                                   
Declaration of Independence would  be unlawful. She concluded                                                                   
that allowing  the federal  government  to legislate  for the                                                                   
state is against these principals.  She maintained that there                                                                   
are no federal  laws requiring social security  numbers, only                                                                   
federal mandates.                                                                                                               
                                                                                                                                
Ms.  Weathers quoted  Article I,  Section 2  state of  Alaska                                                                   
Constitution:  "All  political   power  is  inherent  in  the                                                                   
people.  All  government  originates   with  the  people,  is                                                                   
founded upon  their will only,  and is instituted  solely for                                                                   
the  good  of   the  people  as  a  whole."   She  urged  the                                                                   
legislature  to  uphold the  people's  right  to not  have  a                                                                   
social security number.                                                                                                         
                                                                                                                                
LARRY  PERSILY, DEPUTY  COMMISSIONER,  DEPARTMENT OF  REVENUE                                                                   
testified  in opposition  to  HB 311.  He  observed that  the                                                                   
Child  Support Enforcement  Division statutes  sunset in  the                                                                   
next year. He stressed that there  is legislation in Congress                                                                   
to overturn requirements  for SSN on hunting  and fishing and                                                                   
recreational licenses.  He suggested that a  resolution could                                                                   
be passed  requesting Congress  to overturn the  requirement.                                                                   
He  acknowledged  that  there   are  some  individual  states                                                                   
fighting the  requirement. Indications  are that  the federal                                                                   
government will  penalize states that do not  enforce federal                                                                   
requirements and that they will  loss their federal funds for                                                                   
child  support  and TANF.  He  pointed  out that  there  were                                                                   
options to avoid vendors from  seeing SSNs. Applicants can go                                                                   
to a Fish and  Game office or apply by mail.  If someone does                                                                   
not have a SSN  they can fill out an affidavit  and attach it                                                                   
to  their application.  He observed  that  the Child  Support                                                                   
Enforcement Division  cannot suspend a recreational  license.                                                                   
Only those convicted of criminal  non-support or contempt can                                                                   
loose their license.  Personal uses and subsistence  uses are                                                                   
unaffected.                                                                                                                     
                                                                                                                                
Co-Chair  Therriault noted  that the  zero fiscal note  shows                                                                   
the potential loss of revenue.                                                                                                  
                                                                                                                                
Co-Chair Mulder MOVED  to report CSHB (JUD)  out of Committee                                                                   
with the accompanying fiscal note.  There being NO OBJECTION,                                                                   
it was so ordered.                                                                                                              
                                                                                                                                
CSHB  311  (JUD)  was REPORTED  out  of  Committee  with  "no                                                                   
recommendation"  and a fiscal  impact note by  the Department                                                                   
of Revenue, published 4/10/00.                                                                                                  
HOUSE BILL NO. 281                                                                                                            
                                                                                                                                
     "An   Act  providing   for  the   issuance  of   general                                                                   
     obligation bonds  in the amount of $665,000,000  for the                                                                   
     purposes  of paying  the cost  of design,  construction,                                                                   
     and  renovation  of  public   elementary  and  secondary                                                                   
     schools,   renovation   of  state   buildings,   capital                                                                   
     improvements  at the University  of Alaska,  and capital                                                                   
     improvements  to  state harbors;  and  providing for  an                                                                   
     effective date."                                                                                                           
                                                                                                                                
Co-Chair Mulder  explained that  HB 281 contains  the school-                                                                   
construction package.  Members were provided with  a proposed                                                                   
committee substitute,  work draft  1-LS1201\V, 4/15/00  and a                                                                   
spreadsheet listing  schools that  would be included  (copies                                                                   
on  file). Schools,  the  university  and ports  and  harbors                                                                   
would receive  funding. The total  cost of the  package would                                                                   
be  $269,595.8  million  dollars and  tobacco  bond  revenues                                                                   
would  fund the  legislation. He  observed that:  "It is  the                                                                   
intent of the legislature  that the sale of a  portion of the                                                                   
revenue derived from tobacco settlement  litigation described                                                                   
under sec. 3(a)  of this Act result in funding  of $1,400,000                                                                   
annually  for   smoking  education  and   cessation  programs                                                                   
administered by the state."                                                                                                     
                                                                                                                                
In response  to a question  by Co-Chair Therriault,  Co-Chair                                                                   
Mulder clarified  that the student housing identified  in the                                                                   
legislation  would  be  at the  Alaska  Vocational  Technical                                                                   
Center  in Seward.  There  is  a piece  of  property that  is                                                                   
across  the street  that would  be used  to build  additional                                                                   
housing.                                                                                                                        
                                                                                                                                
Co-Chair Therriault asked for  more information regarding the                                                                   
University of Alaska, Mat-Su Ortner building replacement.                                                                       
                                                                                                                                
WENDY REDMAN, VICE PRESIDENT,  STATEWIDE PROGRAMS, UNIVERSITY                                                                   
OF  ALASKA   explained  that   the  Mat-Su  Ortner   building                                                                   
replacement has  been on the  University of Alaska's  capital                                                                   
list for many years. She observed  that the facility would be                                                                   
for  the  maintenance  shop.   They  are  currently  using  a                                                                   
classroom.  It is  high  on the  Board  of Regent's  priority                                                                   
list.                                                                                                                           
                                                                                                                                
Ms.  Redman noted  that  the  definition under  the  projects                                                                   
should be broader  than "deferred maintenance".  She observed                                                                   
that  "deferred  maintenance/renewal  and  replacement/  code                                                                   
compliance"  has been used  in the  past. She suggested  that                                                                   
the legislation  be amended on page  5, lines 16, 21,  and 24                                                                   
to include the broader definition.                                                                                              
                                                                                                                                
Vice Chair Bunde noted that "construction  and renovation" is                                                                   
used on  line 12. Ms.  Redman noted that  the terms  were not                                                                   
used in the budgeting process.                                                                                                  
                                                                                                                                
Vice Chair Bunde  referred to page 2, section  1. He observed                                                                   
that  funding  would  not  be   reduced  below  $1.4  million                                                                   
dollars.  He  questioned  if  the  language  should  be  more                                                                   
flexible  to allow  additional  money to  be appropriated  if                                                                   
there is  a surplus.  Co-Chair Therriault  stressed  that the                                                                   
legislature  could appropriate  additional  money and  agreed                                                                   
that the language could be clarified.                                                                                           
                                                                                                                                
Representative  Phillips recommended  that  "GO" be  replaced                                                                   
with "revenue" bonds.                                                                                                           
                                                                                                                                
Representative  Williams  asked how  many  projects could  be                                                                   
completed   with   the   tobacco   securitization.   Co-Chair                                                                   
Therriault responded  that $269 million dollars  is the total                                                                   
amount. Co-Chair Mulder explained  that a higher amount could                                                                   
increase  the cost  of the  bonds from  6.5 to  7 percent  or                                                                   
higher. Representative  Williams  recommended that  the state                                                                   
use as  much as possible.  Co-Chair Mulder stressed  that the                                                                   
settlement  would  continue  in   perpetuity,  if  the  bonds                                                                   
proceeds are realized  in the level that is  anticipated that                                                                   
they  would be  retired  in 20  years and  the  MSA could  be                                                                   
leveraged  again.  If there  are  problems in  realizing  the                                                                   
income stream as established in  the MSA then risk is born by                                                                   
the  holders  of  the  bonds.  There is  a  potential  to  be                                                                   
extended to 40 years.                                                                                                           
                                                                                                                                
Co-Chair Therriault reviewed questions  that arose during the                                                                   
meeting.                                                                                                                        
                                                                                                                                
(TAPE CHANGE, HFC 00 - 122, SIDE 1)                                                                                           
                                                                                                                                
Co-Chair  Mulder requested  that the legislation  be  held to                                                                   
further review the suggestions.                                                                                                 
                                                                                                                                
HB  281  was   heard  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was recessed at 10:55 a.m.                                                                                          

Document Name Date/Time Subjects