Legislature(1999 - 2000)
04/20/2000 09:10 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.