Legislature(1999 - 2000)

04/20/2000 09:10 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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HOUSE FINANCE COMMITTEE                                                                                                         
April 20, 2000                                                                                                                  
9:10 A.M.                                                                                                                       
                                                                                                                                
TAPE HFC 00 - 130, Side 1.                                                                                                      
TAPE HFC 00 - 130, Side 2.                                                                                                      
TAPE HFC 00 - 131, Side 1.                                                                                                      
                                                                                                                                
CALL TO ORDER                                                                                                                   
                                                                                                                                
Co-Chair Therriault called the House Finance Committee                                                                          
meeting to order at 9:10 A.M.                                                                                                   
                                                                                                                                
PRESENT                                                                                                                         
                                                                                                                                
Co-Chair Therriault   Representative Foster                                                                                     
Co-Chair Mulder    Representative Grussendorf                                                                                   
Representative Austerman  Representative Moses                                                                                  
Representative Bunde   Representative Phillips                                                                                  
Representative J. Davies  Representative Williams                                                                               
Representative G. Davis                                                                                                         
                                                                                                                                
ALSO PRESENT                                                                                                                    
                                                                                                                                
Mike Tibbles, Staff, Representative Gene Therriault; Jim                                                                        
Pound, Staff, Senator Robin Taylor; Anne Carpeneti,                                                                             
Assistant Attorney General, Criminal Division, Department of                                                                    
Law; Donald Stoltze, Staff, Senator Rick Halford; Senator                                                                       
Dave Donley; Jim Pound, Staff, Senator Robin Taylor; Mary                                                                       
Jackson, Staff, Senator John Torgerson; Dean Guaneli, Chief                                                                     
Assistant Attorney General, Criminal Division, Department of                                                                    
Law; Dwight Perkins, Deputy Commissioner, Department of                                                                         
Labor and Workforce Development; Ron Hall, Deputy Director,                                                                     
Employment Security Division, Department of Labor and                                                                           
Workforce Development; Tom Wylie, Actuary, Unemployment                                                                         
Insurance Trust Fund, Department of Labor and Workforce                                                                         
Development; Wendy Redman, Vice President, Statewide                                                                            
Services, University of Alaska, Fairbanks.                                                                                      
                                                                                                                                
TESTIFIED VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Tim Navarre, Kenai; Jim Samson, Fairbanks; Mark Johnson,                                                                        
Anchorage.                                                                                                                      
                                                                                                                                
SUMMARY                                                                                                                         
                                                                                                                                
SB 4 An Act relating to establishing an office of                                                                               
victims' rights; relating to compensation of                                                                                    
victims of violent crimes; relating to eligibility                                                                              
for a permanent fund dividend for persons                                                                                       
convicted of and incarcerated for certain                                                                                       
offenses; and amending Rule 16, Alaska Rules of                                                                                 
Criminal Procedure, Rule 9, Alaska Delinquency                                                                                  
Rules, and Rule 501, Alaska Rules of Evidence.                                                                                  
                                                                                                                                
 HCS CS SB 4 (FIN) was reported out of Committee                                                                                
with a "no recommendation" and with new fiscal                                                                                  
notes by Department of Corrections, Office of the                                                                               
Governor and Department of Law and new zero fiscal                                                                              
notes by Department of Administration, Department                                                                               
of Public Safety and Legislative Affairs Agency.                                                                                
SB 73 An Act relating to assisted living homes; and                                                                             
providing for an effective date.                                                                                                
                                                                                                                                
  SB 73 was SCHEDULED but not HEARD.                                                                                            
SB 177 An Act relating to insurance trade practices; and                                                                        
providing for an effective date.                                                                                                
                                                                                                                                
  SB 177 was SCHEDULED but not HEARD.                                                                                           
SB 259 An Act relating to criminal impersonation.                                                                               
                                                                                                                                
HCS CS SB 259 (JUD) was reported out of Committee                                                                               
with a "do pass" recommendation and with fiscal                                                                                 
notes by the Senate Finance Committee dated                                                                                     
4/13/00, Department of Administration dated                                                                                     
4/19/00 and the Department of Law dated 4/19/00.                                                                                
                                                                                                                                
SB 286 An Act relating to the duties and powers of the                                                                          
attorney general.                                                                                                               
                                                                                                                                
HCS CS SB 286 (FIN) was reported out of Committee                                                                               
with a "no recommendation" and with a fiscal note                                                                               
by the Department of Law dated 3/23/00.                                                                                         
                                                                                                                                
SB 289 An Act establishing and relating to the Alaska                                                                           
Board of Technical and Vocational Education; and                                                                                
providing for an effective date.                                                                                                
                                                                                                                                
SB 289 was HEARD and HELD in Committee for further                                                                              
consideration.                                                                                                                  
SJR 40 Proposing amendments to the Constitution of the                                                                          
State of Alaska providing that the governor,                                                                                    
United States senators, United States                                                                                           
representative, and electors of the President and                                                                               
Vice-President of the United States be elected by                                                                               
a majority vote.                                                                                                                
                                                                                                                                
  SJR 40 was SCHEDULED but not HEARD.                                                                                           
HOUSE CS FOR CS FOR SENATE BILL NO. 259(JUD)                                                                                    
                                                                                                                                
An Act relating to crimes and offenses relating to                                                                              
aural representations, recordings, access devices,                                                                              
identification documents, impersonation, false reports,                                                                         
and computers; and providing for an effective date.                                                                             
                                                                                                                                
JIM POUND, STAFF, SENATOR ROBIN TAYLOR, noted that some                                                                         
people acting under an assumed name, with false                                                                                 
identification to support the claim, obtain credit cards and                                                                    
checking accounts and then often do not pay the bills.  Such                                                                    
an action leaves the honest Alaskans with the problem of                                                                        
dealing with credit agencies, or the government with little                                                                     
or no recourse.                                                                                                                 
                                                                                                                                
Mr. Pound noted that this creates is more than fraud to deal                                                                    
with.  Today criminals can access information by sitting at                                                                     
the computer or giving information over the telephone.                                                                          
These "new criminals" are not part of current statute.  SB                                                                      
259 would correct that by updating existing law and                                                                             
establishing that Alaska considers stealing someone's                                                                           
identity a crime with serious consequences.                                                                                     
                                                                                                                                
Mr. Pound provided a sectional analysis of the legislation                                                                      
highlighting all changes.                                                                                                       
                                                                                                                                
Co-Chair Therriault noted there would be a change from the                                                                      
term "credit card" to "access device" to include debit cards                                                                    
and other credit pieces.                                                                                                        
                                                                                                                                
Vice Chair Bunde asked if was already illegal to give false                                                                     
information to a police officer.  Mr. Pound did not know.                                                                       
He thought that the legislation would help define the                                                                           
offense.                                                                                                                        
                                                                                                                                
Representative Austerman referenced Section 6, criminal                                                                         
impersonation in the first degree.  He asked if all three                                                                       
items listed would have to be present for a person to be                                                                        
charged.                                                                                                                        
                                                                                                                                
ANNE CARPENETI, ASSISTANT ATTORNEY GENERAL, CRIMINAL                                                                            
DIVISION, DEPARTMENT OF LAW, replied that all three would                                                                       
have to be proven without reasonable doubt in order for that                                                                    
person to be prosecuted.                                                                                                        
                                                                                                                                
Ms. Carpeneti highlighted the main themes of the bill.  The                                                                     
first item would be to bring forward existing statutes,                                                                         
making them current with modern life so that theft of credit                                                                    
would be changed to theft of an access device.  The second                                                                      
change would be to make identity theft in our State a crime,                                                                    
as it is a serious offense that is happening more often.                                                                        
She stressed that it is difficult for these victims to get                                                                      
their lives back together.  Whoever has their identification                                                                    
will always have it.                                                                                                            
                                                                                                                                
Ms. Carpeneti advised that the statute does not cover the                                                                       
stealing of the items, however, selling "the right to" is                                                                       
covered under the bill.  That action would be fraudulent                                                                        
issuance of a credit card or an identification document.  At                                                                    
this time, the statute only covers the stealing of the                                                                          
credit card by fraudulent means.  She noted that phone calls                                                                    
would be covered under the legislation under "access                                                                            
devices".                                                                                                                       
                                                                                                                                
Representative J. Davies referenced Page 4, Line 13.  Ms.                                                                       
Carpeneti explained that section had been added because the                                                                     
identity statute was named criminal impersonation in the                                                                        
first degree.  Consequently, it needed a new name.    The                                                                       
difference in the actual substance of that statute is that                                                                      
it would include intentional fraud and intent to commit a                                                                       
crime to obtain a benefit to which a person is not entitled.                                                                    
Representative J. Davies inquired what second degree                                                                            
represented in terms of a consequence.  Ms. Carpeneti                                                                           
replied that it would be a Class A misdemeanor, which is                                                                        
maximum of one-year jail time and a $5000 dollar fine.                                                                          
                                                                                                                                
Representative J. Davies referenced Page 6, Line 9,                                                                             
"offense".  Ms. Carpeneti replied that section was added at                                                                     
a legislator's request, who voiced concerns regarding a                                                                         
person who obtained a fake driver's license.  That type                                                                         
conduct would be a Class A misdemeanor.  Representative J.                                                                      
Davies asked the other items included in that "sweep".  Ms.                                                                     
Carpeneti replied such an offense would include violations                                                                      
such as traffic offenses or anything that has a consequence                                                                     
of a fine up to $300 dollars.  Also, using false                                                                                
identification would be considered such an offense.  Under                                                                      
Title 4, using false identification would be classified as a                                                                    
misdemeanor.  Representative J. Davies noted his concern                                                                        
that trivial consequences would be swept into that language.                                                                    
                                                                                                                                
Representative J. Davies questioned the discretion that a                                                                       
judge would use to determine the sentence.  Ms. Carpeneti                                                                       
replied that would depend on that person's history.                                                                             
                                                                                                                                
Co-Chair Mulder MOVED to report HCS CS SB 259 (JUD) out of                                                                      
Committee with individual recommendations and with the                                                                          
accompanying fiscal notes.  There being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
HCS CS SB 259 (JUD) was reported out of Committee with a "do                                                                    
pass" recommendation and with fiscal notes by the Senate                                                                        
Finance Committee dated 4/13/00, Department of                                                                                  
Administration dated 4/19/00 and Department of Law dated                                                                        
4/19/00.                                                                                                                        
                                                                                                                                
RECESSED                                                                                                                        
                                                                                                                                
The Committee recessed at 9:35 a.m.                                                                                             
                                                                                                                                
RECONVENED                                                                                                                      
                                                                                                                                
The Committee reconvened at 2:25 p.m.                                                                                           
                                                                                                                                
HOUSE CS FOR CS FOR SENATE BILL NO. 4(JUD)                                                                                      
                                                                                                                                
An Act relating to victims' rights; relating to                                                                                 
establishing an office of victims' rights; relating to                                                                          
compensation of victims of violent crimes; relating to                                                                          
eligibility for a permanent fund dividend for persons                                                                           
convicted of and incarcerated for certain offenses;                                                                             
relating to notice of appropriations concerning                                                                                 
victims' rights; amending Rule 16, Alaska Rules of                                                                              
Criminal Procedure, Rule 9, Alaska Delinquency Rules,                                                                           
and Rule 501, Alaska Rules of Evidence; and providing                                                                           
for an effective date.                                                                                                          
                                                                                                                                
DONALD STOLTZE, STAFF, SENATOR RICK HALFORD, explained the                                                                      
changes done on the proposed legislation since the last                                                                         
meeting.                                                                                                                        
                                                                                                                                
Representative Phillips asked to change language in                                                                             
Amendment #1, Page 1, Line 22, deleting the "Department of                                                                      
Public Safety" and inserting the "Office of the Governor".                                                                      
She advised that this change would need to be made                                                                              
throughout the entire bill. [Copy on File].                                                                                     
                                                                                                                                
Representative Phillips MOVED to ADOPT Amendment #1, 1-                                                                         
LS0029\M.2, Luckhaupt, 4/19/00.  There being NO OBJECTION,                                                                      
the amendment was adopted.                                                                                                      
                                                                                                                                
Representative Phillips MOVED to ADOPT Amendment #2 which                                                                       
would place a 4-year sunset clause on the legislation.  That                                                                    
would result in a new section, number #13.  The sunset date                                                                     
would be June 30, 2004.  There being NO OBJECTION, it was                                                                       
adopted.                                                                                                                        
                                                                                                                                
MIKE TIBBLES, STAFF, REPRESENTATIVE GENE THERRIAULT, was                                                                        
requested to join the Committee to explain previous action                                                                      
taken in the committee substitute on the conforming                                                                             
amendment.  Mr. Tibbles noted that the work draft that was                                                                      
adopted included a provision that required that victims                                                                         
"shall", to the maximum extend practicable, conduct duties                                                                      
contractually.  The intent was to direct them to contract                                                                       
out their services with non-profit organizations.  He noted                                                                     
that Amendment #1 did not include that language.                                                                                
                                                                                                                                
Mr. Tibbles pointed out that references in the original work                                                                    
draft had been made to the offices rather than the                                                                              
individual.  Co-Chair Therriault proposed an amendment which                                                                    
would include that into the proposed bill.  The change would                                                                    
be to Page 5, Amendment #1.  Mr. Tibbles recommended that                                                                       
language be included under Article 2A, duties of the office.                                                                    
He noted that it would be a new subsection and that it could                                                                    
be added into Subsection (a) or be a new Subsection (f).                                                                        
                                                                                                                                
Co-Chair Therriault MOVED conceptual Amendment #3, which                                                                        
would utilize the concept in the "N" version and would add a                                                                    
new section calling for the contracting out provision.                                                                          
There being NO OBJECTION, it was adopted.                                                                                       
                                                                                                                                
Representative J. Davies MOVED to AMEND the proposed                                                                            
legislation, replacing references to the Governor's Office                                                                      
with the Ombudsmen's Office.  Representative Phillips                                                                           
OBJECTED.  She advised that had been considered but noted                                                                       
that the State's Ombudsmen's Office can not serve as an                                                                         
advocacy office.  Representative Phillips pointed out that                                                                      
the proposed function is one of advocacy.  She reiterated                                                                       
that consideration had already been made.                                                                                       
                                                                                                                                
Representative J. Davies pointed out that Office does                                                                           
operate as an advocate of that function and that they should                                                                    
be able to make the determination.  He believed that the                                                                        
role of the two agencies was "thin".  Representative                                                                            
Phillips reiterated that those issues had been examined.  An                                                                    
advocacy organization does not have the authority to use the                                                                    
services of the Ombudsmen's Office.  Representative J.                                                                          
Davies WITHDREW the MOTION to amend.                                                                                            
                                                                                                                                
Representative G. Davis recommended shortening the sunset by                                                                    
two years.  He MOVED to ADOPT Amendment #4, which would                                                                         
sunset the legislation in 2002.  Mr. Stoltze interjected                                                                        
that the funding mechanism does not begin until that year.                                                                      
He believed such a sunset would be premature.                                                                                   
Representative G. Davis WITHDREW his MOTION to amend.                                                                           
                                                                                                                                
Mr. Tibbles spoke to the new fiscal notes contained in                                                                          
member's packets submitted by the Department of Corrections,                                                                    
Department of Law, and zero notes by Department of                                                                              
Administration, Department of Public Safety and Legislative                                                                     
Affairs Agency.  Representative J. Davies asked if anyone                                                                       
had spoken to the Governor's Office regarding the fiscal                                                                        
impact to that Office.  Representative Phillips indicated                                                                       
that she had not.  Representative J. Davies voiced concern                                                                      
that there had not been a fiscal note submitted by the                                                                          
Governor.  Co-Chair Therriault advised that the costs                                                                           
provided by Legislative Council would be moved to the Office                                                                    
of the Governor.                                                                                                                
                                                                                                                                
Representative Foster MOVED to report HCS CS SB 4 (FIN) out                                                                     
of Committee with individual recommendations and with the                                                                       
accompanying fiscal notes.  Vice Chair Bunde OBJECTED for                                                                       
comment on the fiscal notes.  He noted the fiscal size of                                                                       
the notes and questioned if that money was best-spent on                                                                        
victims or better spent somewhere else.  Vice Chair Bunde                                                                       
WITHDREW his OBJECTION.  There being NO further OBJECTION,                                                                      
it was so ordered.                                                                                                              
                                                                                                                                
HCS CS SB 4 (FIN) was reported out of Committee with a "no                                                                      
recommendation" and with new fiscal notes by the Department                                                                     
of Corrections, Department of Law and the Office of the                                                                         
Governor and zero notes by the Department of Administration,                                                                    
Department of Public Safety and Legislative Affairs Agency.                                                                     
CS FOR SENATE BILL NO. 289(FIN) am                                                                                              
                                                                                                                                
An Act relating to technical and vocational education                                                                           
and to employment assistance and training; and                                                                                  
providing for an effective date.                                                                                                
                                                                                                                                
MARY JACKSON, STAFF, SENATOR JOHN TORGERSON, explained that                                                                     
the bill would establish a new Alaska Technical and                                                                             
Vocational Education Program, which would be funded through                                                                     
an employee credit on the Unemployment Insurance Trust Fund.                                                                    
The new credit is one-tenth of one percent and is patterned                                                                     
after the credit currently in place for the Statewide                                                                           
Employment Program (STEP).                                                                                                      
                                                                                                                                
The new program would be administered by the existing Alaska                                                                    
Human Resource Investment Council (AHRIC), which is charged                                                                     
with the responsibility of determining the priorities for                                                                       
grant submittal and distributions on an annual basis.  The                                                                      
revenue from that source is expected to be about $4.3                                                                           
million annually.  Entities eligible to receive grants are                                                                      
those that are authorized by and are physically located in                                                                      
the State of Alaska.                                                                                                            
                                                                                                                                
The first year revenues (about $3.2 million dollars) are                                                                        
directed to specific entities because the AHRIC would not                                                                       
have had the opportunity to formulate regulations to solicit                                                                    
grant applications.   Those funds are directed to the                                                                           
University of Alaska (52% = $1.725 million), Kotzebue                                                                           
Technical Center (16% =$516,000) and Alaska Vocational                                                                          
Technical Center (32% = $1.032 million).                                                                                        
                                                                                                                                
Ms. Jackson continued, the bill would also provide for the                                                                      
AHRIC to act as the lead State planning and coordinating                                                                        
entity for Alaska.  The State would then be in position to                                                                      
receive funds from the federal government for technical and                                                                     
vocational education programs.                                                                                                  
                                                                                                                                
After the first year, grants would be awarded to programs in                                                                    
Alaska run by technical and vocational entities that hold                                                                       
valid authorization to operate.  The AHRIC will award grants                                                                    
to entities that have sufficient accounting systems, secured                                                                    
private sector contribution commitments for matching                                                                            
purposes, and who's grant application purpose is listed                                                                         
first on the list of priorities adopted by the AHRIC.  AHRIC                                                                    
will adopt a priority list each year based on economic,                                                                         
employment, and other relevant data in order to maximize                                                                        
employment opportunities for participants.                                                                                      
                                                                                                                                
Ms. Jackson pointed out that the bill would establish intent                                                                    
language directing the AHRIC to undergo an internal review                                                                      
to improve its efficiency and minimize its membership.  It                                                                      
would require a report to the 22nd Legislature on that review                                                                   
and also on the developed guidelines for implementing the                                                                       
new grant program.                                                                                                              
                                                                                                                                
Ms. Jackson stated that the bill would revise some program                                                                      
elements of the existing STEP by adding clarifying language                                                                     
on grant fund use for relocation assistance, tools and other                                                                    
gear, and support services, including allowances.                                                                               
                                                                                                                                
Representative J. Davies referenced the diagram contained in                                                                    
member's packets indicating .2% - Attachment #1 and asked                                                                       
how that number had been determined.  [Copy on File].                                                                           
                                                                                                                                
Ms. Jackson noted that the account was established on Page                                                                      
3; Page 30 indicates establishment of the employee                                                                              
contribution; Page 4 contains the same verbiage that is in                                                                      
the existing State Training Employment Program (STEP) where                                                                     
the 2/10th was established.                                                                                                     
                                                                                                                                
Vice Chair Bunde referenced the current STEP funding and                                                                        
asked if that referred to the current amount that the                                                                           
employee and employer were having deducted.  Ms. Jackson                                                                        
replied those are the current averages.                                                                                         
                                                                                                                                
(TAPE CHANGE, HFC 00 - 130, Side 2).                                                                                            
                                                                                                                                
Ms. Jackson explained that it would not increase the                                                                            
deductions.                                                                                                                     
                                                                                                                                
Representative Phillips inquired if the sponsor had an                                                                          
amount in mind for the Intent Language in Section #1.  Ms.                                                                      
Jackson stated that they did not.  She noted that the first                                                                     
board was a stand alone, five-person board.  The Legislature                                                                    
appointed it through the Governor and is subject to                                                                             
ratification.  The Senate Finance Committee (SFC) decided to                                                                    
go with the existing group, however, she commented since the                                                                    
membership is so large, there should be common provisions                                                                       
put into effect.                                                                                                                
                                                                                                                                
Ms. Jackson referenced the Alaska Human Resource Investment                                                                     
Council (AHRIC) and noted that grants after the first year                                                                      
would be awarded according to regulations developed by                                                                          
AHRIC.  The revenue from that source is expected to be about                                                                    
$8.6 million dollars annually.                                                                                                  
                                                                                                                                
TIM NAVARRE, (TESTIFIED VIA TELECONFERENCE), KENAI,                                                                             
testified in support of the legislation.  He noted that it                                                                      
would provide a better-trained and educated work force from                                                                     
which to draw upon as an employer.  Potentially, that could                                                                     
reduce the draw on the trust fund for unemployment.  Mr.                                                                        
Navarre suggested that there would be concerns regarding                                                                        
future increases.                                                                                                               
                                                                                                                                
DWIGHT PERKINS, DEPUTY COMMISSIONER, DEPARTMENT OF LABOR AND                                                                    
WORKFORCE DEVELOPMENT, noted the position paper included in                                                                     
members packets as submitted by Commissioner Flanagan. [Copy                                                                    
on File].                                                                                                                       
                                                                                                                                
Mr. Perkins advised that the Department strongly supports                                                                       
the intent of the bill, however, are opposed to the                                                                             
diversion of funds from the Unemployment (UI) Trust fund to                                                                     
achieve that goal.  The Department is not opposed to some                                                                       
sort of tax to support vocational technology education.  It                                                                     
is true that there is currently a diversion of .1% of                                                                           
employed UI contributions in the STEP, which was established                                                                    
in legislation in 1989.  STEP, however, is closely tied to                                                                      
the UI program; eligibility for service is restricted to                                                                        
workers who have contributed to UI by working for a                                                                             
contributing employer; the statutory purpose of the program                                                                     
is to reduce claims against unemployment benefits and reduce                                                                    
unemployment costs.  When not reappropriated to the STEP                                                                        
account, unexpended funds have always been deposited back                                                                       
into the corpus of the UI Trust Fund.                                                                                           
                                                                                                                                
Representative Phillips asked if any of the UI funds were                                                                       
used for relief sent to Bristol Bay a couple years ago.  Mr.                                                                    
Perkins replied that those funds were not sent directly from                                                                    
the Trust Fund.  He pointed out that there are large                                                                            
unemployment pockets having a need and it becomes an                                                                            
infusion of funds into those communities.                                                                                       
                                                                                                                                
Vice Chair Bunde commented that the STEP draw was for those                                                                     
people whom had paid into the UI program and had become                                                                         
unemployed.  He proposed that using that money to train                                                                         
people would help prevent future danger of unemployment.                                                                        
Representative Bunde suggested that it was a type of "user                                                                      
fee".  Mr. Perkins replied that, currently, in order to                                                                         
qualify for STEP funds, only private employers pay into it.                                                                     
Many folks would not be eligible for those funds.                                                                               
                                                                                                                                
In response to Co-Chair Therriault, Mr. Perkins noted that                                                                      
Alaska is one of five states in which the employee                                                                              
participates in the unemployment insurance side of the                                                                          
equation.  In Alaska, it is referred to as a 20/80 plan. The                                                                    
employee pays 20% and the employer pay 80%.  If there were                                                                      
an increase in the weekly benefit amount, the corpus of the                                                                     
fund would need to be made up.  The concern is if the corpus                                                                    
of the fund begins to draw down, and if the employer side of                                                                    
the equation increases, would they be interested in an                                                                          
increased weekly benefit amount.                                                                                                
                                                                                                                                
RON HALL, DEPUTY DIRECTOR, EMPLOYMENT SECURITY DIVISION,                                                                        
DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT, replied to                                                                       
questions asked by Representative G. Davis.  He noted that                                                                      
that the chart represents a reversed axle and would not                                                                         
originate from the trust fund.  The bill would not add an                                                                       
additional deduction into the employee paycheck, but                                                                            
instead, the corpus would drop.  To recover those funds, the                                                                    
tax rate of the employers would have to increase. The                                                                           
employers are responsible to pay for this increase.                                                                             
                                                                                                                                
Co-Chair Mulder asked the amount of money currently in the                                                                      
fund.  Mr. Hall replied that in October 1999, there was $211                                                                    
million dollars.  Co-Chair Mulder asked the percentage of                                                                       
solvency.  Mr. Hall explained that it would take about two                                                                      
years for the formula to set in.  The formula reacts over a                                                                     
three-year cycle and if there is a large economic down pour,                                                                    
the solvency rate could drop fast.  It takes two to three                                                                       
cycles for that to happen.  The solvency rate formula is                                                                        
established by a federal standard.  Right now the State is                                                                      
at .98% of that standard.  He added that we should be at 1%                                                                     
of the standard.                                                                                                                
                                                                                                                                
Co-Chair Mulder believed that was a healthy number.  Mr.                                                                        
Hall explained that if the State dropped to .8%, there would                                                                    
be sanctions imposed.  Co-Chair Mulder asked at what level                                                                      
could a tax be imposed.  Mr. Hall replied that the proposed                                                                     
legislation would impose a tax to the employer.  It would                                                                       
take two years for that to occur.  Co-Chair Mulder asked                                                                        
what could trigger a tax.  Mr. Perkins interjected that a                                                                       
draw down could happen.                                                                                                         
                                                                                                                                
TOM WYLIE, ACTUARY, UNEMPLOYMENT INSURANCE TRUST FUND,                                                                          
DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT, noted that                                                                       
there are two parts of the calculation of the UI tax rates.                                                                     
The first part looks at benefit costs in relation to                                                                            
payroll. That provides a certain percentage which is called                                                                     
the "average benefit cost rate".  That is the percentage                                                                        
rate which is divided between the employer and the employee                                                                     
and provides the 2.14% and .54% number.  After that                                                                             
calculation is done, then the tax rate calculation looks at                                                                     
the amount of money and calculates according to a solvency                                                                      
rate schedule whether the fund appears to be in good or bad                                                                     
shape in comparison to the statewide payroll.                                                                                   
                                                                                                                                
In response to Co-Chair Mulder's question as to when the                                                                        
trust fund becomes solvent, Mr. Wylie noted that is the                                                                         
stage where the trust fund is looked at.  When the amount of                                                                    
money in the UI Trust Fund falls below 3% of taxable total                                                                      
payroll in the State, then a tax is added on to the                                                                             
employers tax rate.  If the Trust fund balance falls below                                                                      
3.3% of total payroll in the State, it is considered more                                                                       
solvent than it needs to be and the employers tax rate is                                                                       
reduced by the solvency adjustment.                                                                                             
                                                                                                                                
Co-Chair Mulder inquired about applying that concept to                                                                         
today.  Mr. Wylie replied that today, the trust fund is at                                                                      
approximately 3.15%, which is a bit higher than it needs to                                                                     
be.  Discussion followed between Mr. Wylie and Co-Chair                                                                         
Mulder regarding the solvency percentage.  Mr. Wylie noted                                                                      
that the calculation states that if the Trust Fund solvency                                                                     
is between 3%-3.3% of payroll, it is okay and we would not                                                                      
need a tax.  He noted that the State is currently at 3.15%.                                                                     
                                                                                                                                
Co-Chair Mulder asked what the 3% would constitute.  Mr.                                                                        
Wylie replied that 3% of total payroll tends to be right                                                                        
around $200 million dollars.  That changes during the course                                                                    
of the year and during the winter months when unemployment                                                                      
rates are higher.  For tax rate purposes, the State looks at                                                                    
the Trust Fund balances at the end of September.  This is a                                                                     
State standard and added that there is no national standard                                                                     
compared to the Alaska standard.  All the states have a                                                                         
different way to set solvency.  The tax rate moves based on                                                                     
the assumption of whether it is a good rate or not.  The                                                                        
federal government has a solvency rate which they call an                                                                       
average high cost multiplier.  That calculation is applied                                                                      
to every state.                                                                                                                 
                                                                                                                                
In response to Co-Chair Mulder, Mr. Wylie noted that the                                                                        
average high cost is 1%.  It is a different type of                                                                             
calculation than the one previously explained.  Co-Chair                                                                        
Mulder asked how would that translate to the State of                                                                           
Alaska's calculation.  Mr. Wylie replied that the federal                                                                       
calculation on our tax rate came out to .98, just under 1%,                                                                     
which is considered the proper average high cost multiplier                                                                     
that the federal government uses.  Co-Chair Mulder asked the                                                                    
flexibility.  Mr. Wylie replied that the federal government                                                                     
is not that complicated.  If a state is at 1% or above, they                                                                    
are okay and if below, they are not. He reiterated that                                                                         
above is good, below is not.                                                                                                    
                                                                                                                                
JIM SAMSON, (TESTIFIED VIA TELECONFERENCE),  FAIRBANKS,                                                                         
spoke in opposition to the legislation.  He noted that he                                                                       
had the responsibility of distributing the Unemployment                                                                         
Trust Fund in 1986-1987, during the lowest point in the                                                                         
account.  He stated that the Trust Fund should not be used                                                                      
to pay for the programs outlined in SB 289.                                                                                     
                                                                                                                                
Mr. Samson noted that he supported adequate funding for the                                                                     
Tech Center and full funding for the University, however,                                                                       
disagreed that the funding should come out of the Trust Fund                                                                    
that was set up to pay benefits to workers during temporary                                                                     
unemployment.  He understood that by taking 2/10 of 1%, and                                                                     
diverting it into another fund would be unfair to every                                                                         
Alaskan employee.  He stressed that the burden would not be                                                                     
fairly distributed by that method of tax.                                                                                       
                                                                                                                                
WENDY REDMAN, VICE PRESIDENT, STATEWIDE SERVICES, UNIVERSITY                                                                    
OF ALASKA, FAIRBANKS, voiced support for the proposed                                                                           
legislation.  She acknowledged that an alternative source of                                                                    
funding would be better.  Ms. Redman noted that since the                                                                       
State general fund should be supportive of all training                                                                         
programs, the State should keep people employed.  Given that                                                                    
the State is not at that place yet, one of the best things                                                                      
that the State could do is to provide training to people to                                                                     
be better able to hold jobs. Given the last decade of flat                                                                      
funding for vocational programs throughout the State, the                                                                       
University is in trouble trying to respond to the current                                                                       
training needs existing in Alaska.                                                                                              
                                                                                                                                
Ms. Redman explained that there has not been a capital                                                                          
appropriation for instructional equipment in almost a                                                                           
decade.  In trying to respond to some of the high tech                                                                          
programs needed throughout the State, there is not enough                                                                       
money to make the up-front investment.                                                                                          
                                                                                                                                
CS SB 259 (JUD) was HELD in Committee for further                                                                               
consideration.                                                                                                                  
HOUSE CS FOR CS FOR SENATE BILL NO. 286(JUD)                                                                                    
                                                                                                                                
An Act relating to the duties and powers of the                                                                                 
attorney general.                                                                                                               
                                                                                                                                
JIM POUND, STAFF, SENATOR ROBIN TAYLOR, explained that SB                                                                       
286 was an attempt to clarify the duties of the Attorney                                                                        
General, place into statute that the Attorney General                                                                           
"shall" defend the Constitution of the State of Alaska, and                                                                     
put into law that the Legislative power to make                                                                                 
appropriations constrains and limits the Attorney General's                                                                     
authority to settle cases.                                                                                                      
                                                                                                                                
He noted that the Senate Judiciary Committee had worked                                                                         
closely with members of the Subcommittee on privatization                                                                       
and considered recommendations.  The Subcommittee found that                                                                    
the Attorney General is not a constitutional officer and                                                                        
that the Legislature, by statute, may define the role and                                                                       
responsibilities of the head of the Department of Law.  He                                                                      
pointed out that it was the intent of the legislation that                                                                      
the Attorney General defend and uphold the Constitution of                                                                      
the State of Alaska, and that any settlement entered into by                                                                    
the Attorney General, which recognizes a present or future                                                                      
duty or obligation on the part of the State, and not                                                                            
contained in statute or for which appropriations have not                                                                       
been provided, must expressly provide that the duty or                                                                          
obligation is subject to appropriation by the Legislature.                                                                      
                                                                                                                                
Co-Chair Therriault pointed out that the sponsor had                                                                            
withdrawn the proposed committee substitute.  [Copy on                                                                          
File].  Mr. Pound noted that the proposed amendment would                                                                       
resolve concerns addressed in the substitute.                                                                                   
                                                                                                                                
Representative Phillips asked if there was anything in the                                                                      
legislation that called for the election of the Attorney                                                                        
General.  Mr. Pound replied there was not.                                                                                      
                                                                                                                                
In response to a question by Representative J. Davies                                                                           
regarding "common law", Mr. Pound pointed out a reference on                                                                    
Page 2, Line 8.  He stated that language was changed in the                                                                     
Senate Judiciary Committee at the request of the Department.                                                                    
Representative J. Davies commented that was not a                                                                               
substantive change.  Mr. Pound suggested that the amendment                                                                     
should resolve the problem.                                                                                                     
                                                                                                                                
Vice Chair Bunde MOVED to ADOPT Amendment #1, 1-LS1512\G.                                                                       
[Copy on File].  Representative Bunde OBJECTED for the                                                                          
purpose of discussion.  Mr. Pound stated that Amendment #1                                                                      
would delete "or that generally . in other states"; and add,                                                                    
"that pertain to the Office of the Attorney General".                                                                           
                                                                                                                                
Representative Grussendorf asked the purpose of the                                                                             
amendment.  Mr. Pound explained that the argument was that                                                                      
the definition of common law refers to the common law of                                                                        
other states. The question rests in whether Alaska should                                                                       
base their law on common law dating back from the 17th                                                                          
century English and applies to other states.                                                                                    
                                                                                                                                
Co-Chair Therriault pointed out that the effect of the                                                                          
amendment is that Alaska's statutes would govern the duties                                                                     
of the Attorney General.  Mr. Pound agreed.  Representative                                                                     
J. Davies argued that much of state law is based on common                                                                      
law. If that is the intent of the amendment, he believed it                                                                     
was misdirected.  Common law exists in this country.  He                                                                        
noted that many court decisions are decided on the basis of                                                                     
what is general practice.                                                                                                       
                                                                                                                                
Co-Chair Therriault observed that it would provide a list of                                                                    
duties. The question is whether the Attorney General would                                                                      
perform his duties based on other states common law or the                                                                      
list provided in the legislation.                                                                                               
                                                                                                                                
Representative J. Davies argued that what occurs in the                                                                         
committee substitute and that is further exasperated through                                                                    
the amendment is a change to existing statute.                                                                                  
Representative J. Davies noted that he preferred the                                                                            
existing statutory language.                                                                                                    
                                                                                                                                
(TAPE CHANGE, HFC 00 - 131, Side 1)                                                                                             
                                                                                                                                
Vice Chair Bunde noted his concern regarding "common law"                                                                       
property.  He asked what the language was before the House                                                                      
Judiciary Committee changed it.  Mr. Pound replied that the                                                                     
Legislature should be the ones that define the description.                                                                     
Representative G. Davis asked if the courts would be able to                                                                    
continue to use common law, and then the Attorney General                                                                       
would not have that authority.                                                                                                  
                                                                                                                                
DEAN GUANELI, CHIEF ASSISTANT ATTORNEY GENERAL, CRIMINAL                                                                        
DIVISION, DEPARTMENT OF LAW, explained that the Attorney                                                                        
General's office worked with the House Judiciary Committee                                                                      
in establishing a committee substitute.  He stated that it                                                                      
adequately strikes a balance between the sponsor's concerns                                                                     
and the needs of the Department.  He noted that it also                                                                         
addresses the concerns regarding common law authority of the                                                                    
Attorney General.  It is true that over a period of many                                                                        
years, the judges in other states have developed common                                                                         
principles about what other attorney generals can do and                                                                        
what authority they have.                                                                                                       
                                                                                                                                
Mr. Guaneli provided Committee members with five examples                                                                       
where in Alaska, the Department has had to go to the Court                                                                      
of Appeals and relies on this provision:                                                                                        
                                                                                                                                
? From time to time, there is a conflict in                                                                                     
prosecuting in a particular criminal case.  The                                                                                 
attorney general appoints special prosecutors or                                                                                
independent counsel.  There is no statute that                                                                                  
allows the attorney general to appoint those                                                                                    
prosecutors.  He noted that recently, the                                                                                       
defendant in a case went to the Court of Appeals                                                                                
and challenged the attorney general's authority to                                                                              
do that.                                                                                                                        
                                                                                                                                
Co-Chair Therriault noted that the federal government allows                                                                    
that.  He asked if there were other places nationally that                                                                      
allowed it.  Mr. Guaneli replied that the Court of Appeals                                                                      
found that authority usually pertains to the Office of the                                                                      
Attorney General.  He added, it does not flow through                                                                           
statutes in other states but instead, is where the courts                                                                       
have found that this is power that the attorney generals                                                                        
have and that is necessary to carry out their public duties.                                                                    
                                                                                                                                
? He noted that the second item was when an Attorney                                                                            
General's office brought an action on behalf of a                                                                               
number of consumers who had bought land under a                                                                                 
"shady" land deal.  The Attorney General brought                                                                                
that to the Consumer Protection Law and for some                                                                                
reason the court held that the Consumer Protection                                                                              
Laws did not apply.  The Attorney Generals office                                                                               
switched theories noting a uniform land sales act                                                                               
in Alaska.  The Supreme Court found that under the                                                                              
attorney generals common law authority, they had                                                                                
the power to use a common law fraud action against                                                                              
the land developer.                                                                                                             
? Noted that there are many crimes each year, where                                                                             
people allege that crimes have been committed in                                                                                
violation of State law.  The Attorney General has                                                                               
the discretion not to prosecute.  The authority                                                                                 
not prosecute comes from the described provision.                                                                               
                                                                                                                                
Vice Chair Bunde commented that the law was working under                                                                       
the original verbiage and then it was changed in the House                                                                      
Judiciary Committee.  Mr. Guaneli clarified that                                                                                
Representative Green had a concern with that language. The                                                                      
general common law in this country is if the Attorney                                                                           
Generals states the authority, then it is something that can                                                                    
be done.  Representative Green thought that it would be                                                                         
appropriate to change the language so that it would not look                                                                    
like we were doing something not in law.                                                                                        
                                                                                                                                
? Mr. Guaneli noted that in cases where the State is                                                                            
not a party, the State is asked to file as a                                                                                    
"friend of the court" and the State would have                                                                                  
nothing to do with the litigation.                                                                                              
? The last scenario carries a fiscal impact.  The                                                                               
strict reading of current law represents the State                                                                              
in which the State is a party.  There are a number                                                                              
of lawsuits that the Attorney General defends, in                                                                               
which the State is not named, but an employee is.                                                                               
In the federal civil rights actions, they have to                                                                               
file against an individual; they can not file                                                                                   
against the State.  There is currently, nothing in                                                                              
statute that would allow the Attorney General to                                                                                
represent an employee of the State.  The                                                                                        
Department believes that is within their general                                                                                
authority to represent State employees and is                                                                                   
included in many union contracts.  The danger is                                                                                
that if the Attorney General is not allowed to                                                                                  
represent State employees, and then those                                                                                       
employees are sued, they would have to get private                                                                              
counsel.  That could give the litigants some basis                                                                              
for suing the State later.                                                                                                      
                                                                                                                                
Mr. Guaneli pointed out that there is a statute that                                                                            
stipulates that common law governs in the State of Alaska,                                                                      
except where it has been specifically over-ridden in                                                                            
statute.  The danger of removing the common law powers of                                                                       
the Attorney General is that all circumstances will be                                                                          
"caught" where the Attorney General will need to rely on                                                                        
some common law authority.  He emphasized that the                                                                              
Department of Law becomes involved in every-kind of case                                                                        
imaginable and the purposed language would force giving up                                                                      
important rights and authority of the Attorney General.                                                                         
                                                                                                                                
Mr. Guaneli added that the Attorney General is not a                                                                            
constitutional officer, therefore, the Legislature does have                                                                    
authority to set the powers of the Attorney General.  The                                                                       
Governor is a constitutional officer.  He noted that there                                                                      
is a provision in the Constitution, Article 3, Section 16,                                                                      
which imposes upon the Governor, the obligation to initiate                                                                     
legal action to uphold the constitutional laws of the State                                                                     
of Alaska to protect its' people.  The governors do not do                                                                      
that on their own, but instead, do it through the attorney                                                                      
general.  To take away the powers of the Attorney General                                                                       
that are necessary to uphold the governor's legal authority                                                                     
may be beyond the power of the Legislature.  He clarified                                                                       
that if the legislation passes, it will result in more                                                                          
litigation.                                                                                                                     
                                                                                                                                
Mr. Guaneli reiterated that the Department is satisfied with                                                                    
the House Judiciary Committee version of the legislation.                                                                       
                                                                                                                                
Representative J. Davies asked if generally, the courts had                                                                     
read the existing statutory language consistently with the                                                                      
House Judiciary amendment.  Mr. Guaneli replied that was the                                                                    
way that the Courts had interrupted it.  Representative J.                                                                      
Davies noted that a court might ask why the Legislature                                                                         
changed the language.  He commented that the existing                                                                           
language was clear.                                                                                                             
                                                                                                                                
Mr. Guaneli interjected that the wording he had suggested to                                                                    
the House Judiciary Committee was that "the powers that                                                                         
usually pertain to the Office of the State Attorney                                                                             
General".  That language is the key for what is generally                                                                       
necessary for an office of the State Attorney General to                                                                        
carry out their public protection duties.                                                                                       
                                                                                                                                
Representative Phillips emphasized that the current system                                                                      
is not broken.                                                                                                                  
                                                                                                                                
Co-Chair Therriault noted that Amendment #1 was the MOTION                                                                      
before Committee members.                                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Grussendorf, Phillips, Williams, Bunde, J.                                                                            
Davies, G. Davis, Foster, Therriault                                                                                            
OPPOSED:  -0-                                                                                                                   
                                                                                                                                
Representative Moses, Representative Austerman and Co-Chair                                                                     
Mulder were not present for the vote.                                                                                           
                                                                                                                                
The MOTION FAILED (0-8).                                                                                                        
                                                                                                                                
Vice Chair Bunde MOVED to ADOPT a conceptual amendment on                                                                       
Page 2, Lines 8-10, returning the bill to the original                                                                          
language.    Representative G. Davis OBJECTED.  He noted                                                                        
that it had passed the House Judiciary Committee and that                                                                       
legal counsel had recommended the change.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Phillips, Williams, Austerman, Bunde, J.                                                                              
Davies, Grussendorf                                                                                                             
OPPOSED:  Foster, G. Davis, Therriault                                                                                          
                                                                                                                                
Representative Moses and Co-Chair Mulder were not present                                                                       
for the vote.                                                                                                                   
                                                                                                                                
The MOTION FAILED (6-3).                                                                                                        
                                                                                                                                
Representative Foster MOVED to report HCS CS SB 286 (FIN)                                                                       
out of Committee with individual recommendations and with                                                                       
the accompanying fiscal note.  There being NO OBJECTION, it                                                                     
was so ordered.                                                                                                                 
                                                                                                                                
HCS CS SB 286 (FIN) was reported out of Committee with a "no                                                                    
recommendation" and with a fiscal note by the Department of                                                                     
Law dated 3/23/00.                                                                                                              
                                                                                                                                
MARK JOHNSON, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE,                                                                        
commented that the fundamental principle that the language                                                                      
be eliminated from existing law stems from the notion that                                                                      
the powers of the Attorney General's office stem from the                                                                       
constitutional statutes of Alaska.  He stated, what is                                                                          
currently in law is an open-ended invitation for the                                                                            
Attorney General to initiate litigation for a whole array of                                                                    
subjects.                                                                                                                       
                                                                                                                                
Mr. Johnson argued that if left as it stands, it would only                                                                     
be a matter of time before the Department of Law had an                                                                         
issue that they feel strongly about but that the Legislature                                                                    
did not support.  He stated that he did not support deletion                                                                    
of the language adopted by the Committee.                                                                                       
ADJOURNMENT                                                                                                                     
                                                                                                                                
The meeting adjourned at 4:10 P.M.                                                                                              
H.F.C. 18 4/20/00 a.m.                                                                                                          

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