Legislature(2001 - 2002)

02/28/2002 01:54 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 28, 2002                                                                                          
                          1:54 PM                                                                                               
TAPE HFC 02 - 33, Side A                                                                                                        
TAPE HFC 02 - 33, Side B                                                                                                        
TAPE HFC 02 - 34, Side A                                                                                                        
CALL TO ORDER                                                                                                                 
Co-Chair Williams called the House Finance Committee meeting                                                                    
to order at 1:54 PM.                                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Eldon Mulder, Co-Chair                                                                                           
Representative Bill Williams, Co-Chair                                                                                          
Representative Con Bunde, Vice-Chair                                                                                            
Representative Eric Croft                                                                                                       
Representative John Davies                                                                                                      
Representative Richard Foster                                                                                                   
Representative John Harris                                                                                                      
Representative Bill Hudson                                                                                                      
Representative Ken Lancaster                                                                                                    
Representative Carl Moses                                                                                                       
Representative Jim Whitaker                                                                                                     
MEMBERS ABSENT                                                                                                                
No absences                                                                                                                     
ALSO PRESENT                                                                                                                  
Representative Norm Rokeberg; Representative Drew Scalzi                                                                        
Anne Carpeneti, Assistant Attorney General, Legal Services                                                                      
Section, Criminal Division, Department of Law; Jerry McCune,                                                                    
United Fishermen of Alaska, Juneau; Mary McDowell,                                                                              
Commissioner, Commercial Fisheries Entry Commission; Jim                                                                        
Nordlund, Director, Division of Public Assistance,                                                                              
Department of Health and Social Services.                                                                                       
PRESENT VIA TELECONFERENCE                                                                                                    
Sandy Hoback, American Institute of Full Employment Oregon.                                                                     
HB 288    "An Act relating to commercial fisheries limited                                                                      
          entry permit buy-back programs."                                                                                      
          HB 288 was heard and HELD in Committee for further                                                                    
HB 330    "An Act  relating to providing  alcoholic beverages                                                                   
          to a person under 21 years of age."                                                                                   
          CSHB 330  (FIN) was REPORTED out of  Committee with                                                                   
          a  "do  pass" recommendation  and  with  previously                                                                   
          published  fiscal notes: LAW  (1), ADM (2)  and DOR                                                                   
HB 402    "An  Act  relating   to  diversion  payments,  wage                                                                   
          subsidies,  cash assistance, and  self- sufficiency                                                                   
          services   provided  under  the   Alaska  temporary                                                                   
          assistance  program;  relating  to the  food  stamp                                                                   
          program;  relating  to  child  support  cases  that                                                                   
          include  persons  who  receive cash  assistance  or                                                                   
          self-sufficiency   services    under   the   Alaska                                                                   
          temporary assistance  program; and providing for an                                                                   
          effective date."                                                                                                      
          CSHB 402 (FIN) was REPORTED out of Committee with                                                                     
          a  "do  pass" recommendation  and  with  previously                                                                   
          published fiscal note: HSS #1.                                                                                        
HOUSE BILL NO. 330                                                                                                            
     "An Act relating to providing alcoholic beverages to a                                                                     
     person under 21 years of age."                                                                                             
REPRESENTATIVE   NORMAN  ROKEBERG,   SPONSOR,  testified   in                                                                   
support of HB 330. He observed  that a major tragedy occurred                                                                   
in  Anchorage  last  summer.  An  Anchorage  police  officer,                                                                   
Justin  Wollan, was  killed in  an  automobile accident.  The                                                                   
officer was killed  when he was hit by a teenager  [under the                                                                   
influence of  alcohol], who perished  along with  other young                                                                   
people  in the  automobile.  The  two individuals  that  were                                                                   
convicted  of furnishing  alcohol to  a minor  could only  be                                                                   
charged with  misdemeanors. The  legislation would  raise the                                                                   
penalty for a person who furnishes  alcohol to a minor from a                                                                   
misdemeanor to a  class C felony, if the action  of the minor                                                                   
results  in serious  injury or  death.  A class  C felony  is                                                                   
punishable by a sentence of up  to five years and up to a $50                                                                   
thousand dollar fine.  A misdemeanor is limited to  up to one                                                                   
year in prison and up to a $5  thousand dollar fine. He noted                                                                   
that in  the Anchorage  incident one  of the individuals  was                                                                   
convicted of two counts of misdemeanor  furnishing alcohol to                                                                   
a  minor   and  sentenced  to   a  maximum  penalty   of  two                                                                   
consecutive  years [in  prison] and  a fine  of $10  thousand                                                                   
dollars. The  legislation would allow  the judge to  pursue a                                                                   
felony  if the  situation  is egregious;  where  there was  a                                                                   
serious injury or death as a result  of the cause of drinking                                                                   
Representative  Croft spoke in  support of the  legislation's                                                                   
intent.  He   questioned  if   "negligently  causes   serious                                                                   
physical  injury"   would  include  "intentionally"   causing                                                                   
serious physical  injury. Representative Rokeberg  noted that                                                                   
the  standard  is  simple  negligence.  Representative  Croft                                                                   
asked if  the legislation  would cover a  case where  a minor                                                                   
who  was  provided  alcohol  assaulted  somebody  or,  as  in                                                                   
Officer Wollam's  case, they  intentionally drove  across the                                                                   
meridian.  Representative Rokeberg  deferred the question  to                                                                   
legal counsel.                                                                                                                  
Representative  Croft  expected the  legislation  to tie  the                                                                   
harmful act to the intoxication.  He asked the legal standard                                                                   
for "under the  influence". He questioned if it  would be the                                                                   
.08 blood alcohol  content (BAC) level or the  alcohol having                                                                   
any affect  on the conduct.  Representative Rokeberg  thought                                                                   
that the  standard was changed  from .10  BAC to .08  BAC. He                                                                   
pointed out that impairment is .04 BAC.                                                                                         
Representative  Croft  concluded  that  impairment  would  be                                                                   
included. Representative Rokeberg  agreed, in that it affects                                                                   
the actions of the youthful miscreant.  He stated that it was                                                                   
his interpretation that "impairment"  would be included under                                                                   
the legislation.                                                                                                                
ANNE CARPENETI,  ASSISTANT ATTORNEY  GENERAL, LEGAL  SERVICES                                                                   
SECTION,  CRIMINAL  DIVISION,   DEPARTMENT  OF  LAW  provided                                                                   
information  regarding the  legislation.  She clarified  that                                                                   
the  Department   interprets  the   law  to  be   "under  the                                                                   
influence"  of an alcoholic  beverage.  She pointed out  that                                                                   
the  state prosecuted  DWI cases  for  "under the  influence"                                                                   
prior  to  blood alcohol  standards  and  breathalyzers.  She                                                                   
observed that  it is a question  of fact; whether or  not the                                                                   
state can prove  beyond reasonable doubt that  the person was                                                                   
under  the  influence  of  alcoholic  beverages.  "Under  the                                                                   
influence" is not defined statutorily.  There are definitions                                                                   
of drunken  person  in Title 4.  "Under the  influence"  is a                                                                   
term that courts apply depending  on the individual defendant                                                                   
and the surrounding circumstances of their behavior.                                                                            
Representative  Croft reiterated  that he  expected to  see a                                                                   
nexus  between  providing  the  alcohol,  specifically  being                                                                   
under the influence,  and the negligence. He  noted that [the                                                                   
legislation pertains]  to persons  who cause physical  injury                                                                   
and are under the influence, without  any link that indicates                                                                   
that the drunken state was a contributing  factor to or was a                                                                   
substantial factor  in the injury. Being negligent  and being                                                                   
under the influence are independent in the bill.                                                                                
Ms.  Carpeneti thought  that the  conditions were  connected.                                                                   
She  thought "while  under  the  influence of  the  alcoholic                                                                   
beverage received in violation  of the section" speaks to the                                                                   
intent of the  legislation. She noted that the  intent was to                                                                   
cover  situations  where  individuals  furnish  alcoholic  to                                                                   
minors and [the  minor] goes out and hurts  people because of                                                                   
their alcoholic  intoxication. She emphasized  the difficulty                                                                   
of defining "under  the influence" because it  depends on the                                                                   
person. Young people  tend to be influenced at  a lower level                                                                   
of alcohol than more experienced drinkers.                                                                                      
Representative Croft  observed that in cases  where a license                                                                   
holder in alcohol provides alcohol  to a minor or someone who                                                                   
is intoxicated,  and they can  be held civilly liable  do not                                                                   
require that  it be  shown that  the particular alcohol  that                                                                   
was sold contributed  to the accident, but they  do require a                                                                   
link to the  actual drunkenness to the incident.  He stressed                                                                   
that there is precedent for linking  the intoxicated state to                                                                   
the negligent act.                                                                                                              
Representative Rokeberg  noted that the previous  versions of                                                                   
the bill connected  both negligence and under  the influence;                                                                   
both  negligence and  under the  influence would  have to  be                                                                   
present. The  current statute  for .08  BAC is driving  while                                                                   
Ms.  Carpeneti explained  that  criminal law  sets a  certain                                                                   
culpable mental state  for the state to prove in  order for a                                                                   
person to  be found guilty of  an offense, Title  11 provides                                                                   
that  any  culpable  state more  serious  than  that  stated,                                                                   
qualifies for that culpable mental  state. She explained that                                                                   
if  the standard  is  criminal  negligence  and a  person  is                                                                   
proved to have acted recklessly  then they could be convicted                                                                   
for criminally  negligent homicide  under the  circumstances.                                                                   
Representative  Rokeberg  added that  the  standard is  civil                                                                   
Representative  Lancaster   questioned  if  drugs   could  be                                                                   
included. Representative  Rokeberg pointed  out that  Title 4                                                                   
deals with alcohol. The inclusion  of "controlled substances"                                                                   
would need to be included under another title.                                                                                  
Representative  Lancaster questioned  if  there is  a way  to                                                                   
present    the   message   without    the   legal    penalty.                                                                   
Representative Rokeberg  noted that other laws  have required                                                                   
the posting of  signs. He did not think that  [posting signs]                                                                   
would be  warranted if the  state does  its job and  gets the                                                                   
word  out. He  expressed the  hope that  people would  become                                                                   
aware  that the  Legislature  has  reacted to  the  Anchorage                                                                   
tragedy. He maintained  that young people and  children often                                                                   
know the laws, such as minor possession, before adults.                                                                         
Representative John  Davies asked for further  interpretation                                                                   
regarding the language contained in the legislation.                                                                            
Ms. Carpeneti  explained that Title  11 speaks to  the person                                                                   
that furnishes alcohol  to a minor, which results  in harm to                                                                   
other persons.                                                                                                                  
Representative Croft read A.S. 11.81.900:                                                                                       
     (1)  a  person  acts  with  "criminal  negligence"  with                                                                   
     respect to a result or to  a circumstance described by a                                                                   
     provision  of law  defining an offense  when the  person                                                                   
     fails to  perceive a substantial and  unjustifiable risk                                                                   
     that  the result  will occur  or  that the  circumstance                                                                   
     exists;  the risk must  be of such  a nature  and degree                                                                   
     that  the failure  to perceive  it  constitutes a  gross                                                                   
     deviation  from the standard  of care that  a reasonable                                                                   
     person would observe in the situation.                                                                                     
Representative  John Davies questioned  if a person  would be                                                                   
criminally negligent  if they  had alcohol in  their cupboard                                                                   
and  knew that  [the minor(s)  who consumed  the alcohol  and                                                                   
subsequently  committed  an  offense  which  causes  harm  to                                                                   
another person]  knew that it  was there. He  also questioned                                                                   
if a  person provides  alcohol  [to a minor]  and the  minors                                                                   
promise  not  to go  anywhere  but  subsequently go  out  and                                                                   
drive,  if   the  person   would  be  criminally   negligent.                                                                   
Representative Rokeberg observed  that there were substantial                                                                   
discussions in  the House Judicial Committee  on the "hosting                                                                   
event" issue.   He explained  that criminal negligence  is on                                                                   
the part of  the person that furnishes. The  person that does                                                                   
the act  would also have to  be negligent and  cause physical                                                                   
harm. Supervision  around the dispensing of  alcohol, such as                                                                   
from a parent  to a child,  is recognized as legal  under the                                                                   
statutes.  There are  circumstances  that  are allowed  under                                                                   
Title 4 for hosting.  He did not think that  the situation in                                                                   
a home where  there was no supervision would  be qualified as                                                                   
a criminally negligent activity.                                                                                                
Ms. Carpeneti  stressed that,  as in  all criminal  cases, it                                                                   
depends on  the facts. If  the alcohol  is in a  cupboard and                                                                   
the person doesn't invite their  children or their friends to                                                                   
use it they  would not be criminally negligent.  If the adult                                                                   
invites the underage  children to consume the  substance then                                                                   
they would  be negligent because  they would know  that there                                                                   
was a  risk that the minors  would drink [the  alcohol]; they                                                                   
would be inviting them to violate the law.                                                                                      
Representative John Davies concluded  that the alcohol has to                                                                   
be  provided  with  criminal  negligence  and  secondly,  the                                                                   
person  has   to  negligently  cause  physical   injury.  Ms.                                                                   
Carpeneti stated  that the legislation  is more of  a penalty                                                                   
provision  because   the  law  already  prohibits   providing                                                                   
alcohol to minors.                                                                                                              
Representative Rokeberg  interjected that the  legislation is                                                                   
just  stepping  up  the  penalty   provision.  Ms.  Carpeneti                                                                   
pointed out that  the second time a person  furnishes alcohol                                                                   
to a  minor they can  be charged and  convicted of a  class C                                                                   
Representative  Croft questioned  if someone  who creates  an                                                                   
intentional act  would be covered. Ms. Carpeneti  stated that                                                                   
the intent was that an intentional  act be covered as long as                                                                   
the child  is acting  under the influence  of alcohol  at the                                                                   
Representative  Croft expressed  concern that  an adult  that                                                                   
allows their 19 or 20 year old  child to have a beer would be                                                                   
the guarantor of their subsequent conduct.                                                                                      
Representative  Rokeberg pointed out  that it is  currently a                                                                   
misdemeanor  [to furnish  alcohol  to a  minor]  even if  the                                                                   
child   does  not   injure  someone.   Representative   Croft                                                                   
concluded  that it  would be  a class  C felony  if a  person                                                                   
negligently  furnishes  a  minor  with  alcohol,  who  causes                                                                   
injury,  even  if  it  is not  related  to  being  under  the                                                                   
Ms. Carpeneti  noted that  it would be  class C felony  if it                                                                   
were  the second  occasion and  no  one was  hurt. The  clear                                                                   
intent  is  that   the  injury  is  related   to  "under  the                                                                   
In  response   to  a   question  by  Representative   Foster,                                                                   
Representative  Rokeberg  reviewed   the  sentencing  of  the                                                                   
individuals  convicted of  furnishing alcohol  to the  minors                                                                   
involved in the Wollam case.                                                                                                    
Representative  Harris referred  to  the fiscal  note by  the                                                                   
Alaska Public  Defenders Agency. The Alaska  Public Defenders                                                                   
Agency expressed  concerns regarding determinations  and what                                                                   
constitutes an  "injury". Representative Rokeberg  noted that                                                                   
the definition  is in  Title 11.  He explained that  "serious                                                                   
physical" was added [to injury].                                                                                                
Vice-Chair Bunde  drew the parallel  of a loaded  firearm and                                                                   
questioned if it would be negligent  to have a loaded firearm                                                                   
in a  home where it  is misused and  someone is  injured. Ms.                                                                   
Carpeneti  did not  know the  civil negligence  ramifications                                                                   
under the  law. On a personal  level, she felt that  it would                                                                   
be egregious  to leave loaded  guns where children  could get                                                                   
them and  felt that  it could  rise to  civil negligence.  It                                                                   
would depend on the facts. Vice-Chair  Bunde asked if alcohol                                                                   
in the home  would potentially have the same  problems as the                                                                   
loaded firearm. Ms. Carpeneti  responded that alcohol has the                                                                   
potential of being  very harmful, "as we have  seen, over and                                                                   
Representative Rokeberg noted  that there is another piece of                                                                   
legislation on  the issue, which  provides a cause  of action                                                                   
in civil  damages that would  come before the  committee. The                                                                   
could not be combined due to the single subject rule.                                                                           
Vice-Chair  Bunde  stated  that  he  did  not  think  it  was                                                                   
negligent to  have a bottle of  wine in an  unlocked cabinet.                                                                   
Ms.  Carpeneti  agreed  and explained  that  the  legislation                                                                   
addresses "furnishing" which is much more serious.                                                                              
Representative   Whitaker   agreed   with  the   intent   but                                                                   
questioned the threshold necessary  to achieve the intent. He                                                                   
summarized that  there must be  a provision of alcohol  by an                                                                   
adult, which is  currently a misdemeanor. Then  there must be                                                                   
a criminally  intent occurrence,  which also has  a provision                                                                   
of negligence  associated  with the minor.  He questioned  if                                                                   
both  were necessary  to make  the penalty  more severe.  Ms.                                                                   
Carpeneti  explained  that  the   legislation  addresses  the                                                                   
penalty section. The legislation  provides a standard for the                                                                   
negligent furnishing  of alcohol to a minor  to be classified                                                                   
as a class C  felony on the second occurrence  within a five-                                                                   
year period. The  legislation also provides a  class C felony                                                                   
if the alcohol was given to a  minor with criminal negligence                                                                   
and the  minor commits  an act  with civil negligence  (after                                                                   
they received  and consumed  the alcohol),  which results  in                                                                   
serious physical injury or death to another person.                                                                             
Representative  Whitaker concluded  that criminal  negligence                                                                   
must be  attached to the provision  of alcohol to  the minor.                                                                   
Ms. Carpeneti explained  that for the offense to  move to the                                                                   
next penalty  that there would  have to be a  past occurrence                                                                   
of furnishing to  a minor; or the minor would  have to commit                                                                   
an  act, which  causes serious  physical  injury [or  death],                                                                   
with some degree of negligence.                                                                                                 
Representative  Whitaker questioned if  the act of  illegally                                                                   
receiving  and consuming the  alcohol could  be deemed  to be                                                                   
negligent on the  part of the minor, automatically  rising to                                                                   
the second  standard. Ms.  Carpeneti did  not think  that the                                                                   
mere act  of drinking the  alcohol would raise  the standard.                                                                   
The minor  would have to  drink the alcohol  and then  act in                                                                   
some way  that was not free  from guilt. Alcohol  consumption                                                                   
alone would  not be considered  civil negligence on  the part                                                                   
of the receiver. The child is  breaking the law by consuming,                                                                   
but it  is a violation,  not a crime.  The law does  not make                                                                   
the association.                                                                                                                
Representative Hudson  questioned if the current  law defines                                                                   
"provider".  He questioned if  a parent who  had a  bottle of                                                                   
scotch in the  cupboard, which was consumed  by minors, would                                                                   
be guilty  of a felony.  Representative Rokeberg  pointed out                                                                   
that  a  person  may not  furnish  or  deliver  an  alcoholic                                                                   
beverage  to a  person under  the  age of  21. It  must be  a                                                                   
willful act  on the  part of the  deliverer. Merely  having a                                                                   
bottle of wine in the cupboard would not be negligent.                                                                          
Vice-Chair  Bunde  acknowledged  the  egregious  behavior  of                                                                   
providing  alcohol to  13 - 14  year olds.  He observed  that                                                                   
there are indeterminate  fiscal notes from the  Department of                                                                   
Corrections  and  the  Alaska  Public  Defenders  Agency.  He                                                                   
questioned   the  fiscal   impact.  Representative   Rokeberg                                                                   
emphasized  the   difficulty  of  making   projections  about                                                                   
discrete  criminal  activity  and  did  not  think  that  the                                                                   
statute would be  frequently enforced. He noted  that the law                                                                   
would  be put  on the  books  as a  deterrent.  He could  not                                                                   
determine the specific cost. There  would already be a charge                                                                   
under  current  law.  The  statute  change  would  result  in                                                                   
additional hard time.                                                                                                           
Vice-Chair Bunde questioned how  many people had been charged                                                                   
with  furbishing alcohol  to a  minor  in the  last 5  years,                                                                   
whether   or   not   a   serious   accident   was   involved.                                                                   
Representative  Rokeberg observed  that the  fiscal note  was                                                                   
based on  the original  draft, which  spoke to "injury".  The                                                                   
current version speaks to "serious  [physical] injury". Vice-                                                                   
Chair Bunde reiterated  that they should be able  to tell how                                                                   
many cases occurred in the past five years.                                                                                     
Co-Chair Mulder summarized that  there is a certain amount of                                                                   
anxiety  about the  family  member  who is  caught  in a  bad                                                                   
situation, which  was not intentional,  but could  somehow be                                                                   
construed as  negligent. He emphasized  that it  is difficult                                                                   
to establish the negligence standard  in court. Ms. Carpeneti                                                                   
explained  that the  culpable  state of  criminal  negligence                                                                   
must be  proved beyond  a reasonable  doubt. Co-Chair  Mulder                                                                   
felt that  the provision would  only occur in  extreme cases.                                                                   
Ms. Carpeneti agreed. She thought  that the Department of Law                                                                   
would  have looked  at statistics  for  second offenses.  She                                                                   
reiterated that it would be utilized  for extreme cases, "not                                                                   
for your  everyday furnishing, which  is not the  most common                                                                   
offense  anyway."  Co-Chair  Mulder   stated  that  he  would                                                                   
support the legislation  with the assurance that  it would be                                                                   
used for extreme cases.                                                                                                         
Representative   John  Davies   questioned   if  the   simple                                                                   
provision  of alcohol to  a minor  is by definition  criminal                                                                   
negligence.  Ms. Carpeneti  noted  that criminal  negligence,                                                                   
which is a higher standard, would  have to be proved in order                                                                   
to convict someone of a class C felony.                                                                                         
Representative Davies asked if:  "I were in my house, [and] I                                                                   
provided alcohol  to a friend  of my son's or  daughter's, is                                                                   
that provision  of alcohol to a minor  criminally negligent?"                                                                   
Ms.  Carpeneti   responded  that   it  would  be   criminally                                                                   
negligent, if  he knew that they were  minors. Representative                                                                   
Davies concluded  that the simple  provision of alcohol  to a                                                                   
minor is by definition criminal negligence.                                                                                     
Representative  Rokeberg observed  that under AS  04.106.051,                                                                   
the  mere act  of  the misdemeanor  would  not be  negligent.                                                                   
Representative    Davies   disagreed   with    Representative                                                                   
Rokeberg's interpretation  of the statute. He  concluded that                                                                   
he would  be criminally  negligent if he  provided a  beer to                                                                   
the  underage friend  of his  son's.  Ms. Carpeneti  affirmed                                                                   
that  it  would  be  criminally  negligent  if  he  knowingly                                                                   
provided the alcohol to minors.                                                                                                 
Representative  Davies MOVED  to ADOPT  Amendment 1:  Page 1,                                                                   
line 12 delete, "while" and insert "as a result of being".                                                                      
Representative  Rokeberg stated that  he would not  object to                                                                   
the  amendment   if  there  were   no  objections   from  the                                                                   
Department of Law.                                                                                                              
Representative  Davies  clarified  that  the  intent  of  the                                                                   
amendment  is  to  make  it clear  that  there  is  a  causal                                                                   
element. He  stated that there  could be circumstances  where                                                                   
the fact of the alcohol could  be a non-issue in the cause of                                                                   
the injury.                                                                                                                     
TAPE HFC 02 - 33, Side B                                                                                                      
Ms. Carpeneti  expressed concern  that if the  minor received                                                                   
alcohol  from  multiple sources  it  would be  impossible  to                                                                   
prove that it was the result of one particular place.                                                                           
Representative Davies  stressed that the furnisher  might not                                                                   
be criminally  negligent if there were multiple  sources that                                                                   
they  were  not aware  of.  She  acknowledged the  intent  to                                                                   
specify  causation,  but  argued  that the  intent  could  be                                                                   
established  without  having  to proving  that  a  particular                                                                   
alcohol was the one that caused the injury to a person.                                                                         
Representative John Davies WITHDREW his amendment.                                                                              
Representative  John  Davies  MOVED  to  ADOPT  Amendment  2:                                                                   
insert  "acting" after  "while"  on line  12,  page 1.  There                                                                   
being NO OBJECTION, it was so ordered.                                                                                          
Co-Chair Mulder observed that  the fiscal notes were zero and                                                                   
MOVED  to report CSHB  330 (FIN)  out of  Committee with  the                                                                   
accompanying fiscal  notes. There being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
CSHB  330 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass"  recommendation and  with  previously published  fiscal                                                                   
notes: LAW (1), ADM (2) and DOR (3).                                                                                            
HOUSE BILL NO. 288                                                                                                            
     "An Act relating to commercial fisheries limited entry                                                                     
     permit buy-back programs."                                                                                                 
REPRESENTATIVE DREW SCALZI, SPONSOR,  spoke in support of the                                                                   
legislation.  He observed that  the legislation would  change                                                                   
state statutes  governing the  buy back provision,  currently                                                                   
allowed under the limited entry  permit system. He noted that                                                                   
the  bill  removes  the  requirement  that  a  state  buyback                                                                   
program be  implemented after  determination from  an optimum                                                                   
number  study that  the optimum  number of  permits is  lower                                                                   
than  the  number  of  permits   currently  in  fishery.  The                                                                   
legislation  eliminates   the  requirement  that   a  buyback                                                                   
program, buy  out vessels and  gear as well as  permits. This                                                                   
is  the  biggest   detriment  to  a  buy  back   program.  He                                                                   
maintained   that    the   provision   has    prevented   the                                                                   
implementation  of a program since  its inclusion  in statute                                                                   
28  years ago.  [Buying  back  vessels and  gear]  is a  very                                                                   
cumbersome and costly process.                                                                                                  
Representative Scalzi explained that the legislation also                                                                       
eliminates  the mandate for  a "dedicated  fund", which  is a                                                                   
constitutional problem  that exists in the  funding mechanism                                                                   
under current law. The provision  provides that an assessment                                                                   
on  fishermen go  directly into  a  buyback fund.  Currently,                                                                   
assessments go  to the general  fund and the  legislature has                                                                   
the discretion  to appropriate the funds. The  Commission has                                                                   
no taxing  authority.  The provision [for  a dedicated  fund]                                                                   
would be eliminated because it is constitutionally illegal.                                                                     
Representative Scalzi observed that the legislation makes                                                                       
only transferable permits eligible  for buyback. (Current law                                                                   
has  provision  for buying  out  nontransferable  permits  if                                                                   
sufficient  funds  are available  in  the buyback  fund.)  He                                                                   
acknowledged  those with  a nontransferable  permit would  be                                                                   
unhappy  with the  provision,  but emphasized  that it  would                                                                   
help to extenuate a cheaper buy back program.                                                                                   
Representative Scalzi summarized the remaining changes                                                                          
incorporated  in  the  proposed   committee  substitute.  The                                                                   
committee substitute  would eliminate the requirement  to buy                                                                   
the permits  back within  a 10-year period.  The holder  of a                                                                   
permit  may  voluntarily  relinquish  their  permit  (whether                                                                   
under a  fleet consolidation  or for  any other reason).  The                                                                   
committee  substitute  also  adds a  definition  of  "optimum                                                                   
number"  to set  an  optimum number  range,  rather than  one                                                                   
number. The Commission  doesn't know the optimum  number that                                                                   
would  constitute   a  buy  back.  The  only   way  that  the                                                                   
Commission can  do it now is to  throw out a number,  buy the                                                                   
permits to  that number and then  go to a judicial  test; the                                                                   
courts would  decide the actual  optimum number.  He observed                                                                   
that  there is  a  disincentive since  the  court could  rule                                                                   
permits must be  put back into the system if the  buy back is                                                                   
too low.                                                                                                                        
Representative Scalzi reiterated that under the current                                                                         
law, the  permit, vessel,  and gear would  have to  be bought                                                                   
out,   which  would   be   cumbersome   and  expensive.   The                                                                   
legislation would help streamline the process.                                                                                  
Vice-Chair  Bunde  questioned  which  limited  entry  permits                                                                   
would be non-transferable.                                                                                                      
Representative   Scalzi  explained   that  there  were   non-                                                                   
transferable interim permits.                                                                                                   
Vice-Chair Bunde  questioned if permits that  are bought back                                                                   
would  still be  transferable and  could be  reissued if  the                                                                   
fisheries  regained  strength  or would  they  always  remain                                                                   
property of  the state. Representative Scalzi  explained that                                                                   
the permits would  be retired unless the court  required them                                                                   
to be issued.                                                                                                                   
In   response   to   a   question    by   Vice-Chair   Bunde,                                                                   
Representative Scalzi noted that  there is a zero fiscal note                                                                   
because the provision  already exists. Until a  buy back plan                                                                   
is  implemented there  is  no cost.  The  state controls  the                                                                   
resource  and permits,  but those  remaining  in the  fishery                                                                   
would pay  for the  Fund. The  provision was removed  because                                                                   
the dedicated fund portion was  illegal. However, a collected                                                                   
program  receipts  such  as  operates  under  Alaska  Seafood                                                                   
Marketing Institute  would be possible and the  sponsor would                                                                   
not  object.  A buy  back  plan  would  be tailored  to  each                                                                   
individual  area. He  observed that  other legislation  would                                                                   
allow  a consolidation  and stressed  that the  intent is  to                                                                   
stimulate buy backs.                                                                                                            
Vice-Chair Bunde  questioned if the legislation  would make a                                                                   
buy back more likely and asked  when a buy back program would                                                                   
begin. Representative  Scalzi noted  that there have  been no                                                                   
buy backs since 1974, due to the difficulty.                                                                                    
Co-Chair Mulder  noted that: "The commission  may establish a                                                                   
buy-back program,  a buy-back plan,  and a buy-back  fund for                                                                   
that  fishery.  If  the  commission  establishes  a  buy-back                                                                   
program  for a  fishery,  the  commission shall  request  the                                                                   
legislature to  appropriate money…" He asked  why "shall" was                                                                   
used instead of  "may". He clarified that it  would be funded                                                                   
through an assessment of the membership.                                                                                        
Representative  Hudson observed that  it would be  similar to                                                                   
the   funding    of   the   Northern/Southeast    Aquaculture                                                                   
Associations.  Co-Chair  Mulder pointed  out  that there  are                                                                   
alternative  means  to  asking  the legislature  for  a  "big                                                                   
check."  He  suggested  that the  language  be  clarified  to                                                                   
indicate that a general fund expenditure  is not expected; it                                                                   
would be an other funds expenditure.                                                                                            
Representative John  Davies questioned if the  intent was for                                                                   
the Fund  to be  capitalized with  an appropriation  from the                                                                   
legislature. Co-Chair Mulder noted  that he would not support                                                                   
capitalization by the legislation.                                                                                              
MARY  MCDOWELL,  COMMISSIONER,   COMMERCIAL  FISHERIES  ENTRY                                                                   
COMMISSION, DEPARTMENT  OF FISH  AND GAME explained  that the                                                                   
intent was to get around the designated  fund source problem,                                                                   
with the understanding that an  assessment of fishermen would                                                                   
be the most  likely source of funds. Any money  collected has                                                                   
to come  into the  general fund  and be  appropriated by  the                                                                   
legislature. The current language  does not provide authority                                                                   
for an  assessment on fishermen.  She observed  that language                                                                   
would need  to be added.  There is a  question as  to whether                                                                   
the  Commercial   Fisheries  Entry   Commission  has   taxing                                                                   
authority. Language  would need to be drafted  to allow funds                                                                   
collected  off fish  sales to  go through  the Department  of                                                                   
Revenue. She  clarified that state  funds for a buy  back are                                                                   
not anticipated.  The legislature would be the  source of the                                                                   
pass  through funds.  There may  be some  federal funds.  The                                                                   
legislation removes the provision  to automatically kick into                                                                   
a  state run  buy back  program  if an  optimum number  study                                                                   
determined that  there are too  many permits in  the fishery.                                                                   
Under  current law,  if a study  were done,  the state  would                                                                   
automatically kick into a buy  back program [if the number of                                                                   
permits   exceeded   the  optimum   number.   Fishermen   are                                                                   
interested  in   pursuing  other  options  such   as  federal                                                                   
funding. The  legislation would  provide the flexibility  for                                                                   
the Commission to do an optimum  number study. She noted that                                                                   
there is  a risk [without an  optimum number study]  that the                                                                   
court would declare  that the fisheries is too  exclusive and                                                                   
permits would  have to be put  back in [after a buy  out] and                                                                   
all of  the effort and expense  of buying permits  would have                                                                   
gone to  waste. Fishermen  would like  help in determining  a                                                                   
defensible  range, so  that they  would  have some  assurance                                                                   
that that  they won't  be forced  to put  bought out  permits                                                                   
back into the fisheries.                                                                                                        
Representative Lancaster  summarized the need  to clarify the                                                                   
funding source.                                                                                                                 
Representative Scalzi explained  that is the current language                                                                   
identifies the  legislature for the appropriation.  The state                                                                   
controls the fisheries and the permitting process.                                                                              
Representative Hudson agreed that  clarification is needed to                                                                   
establish the funding source;  how it is to be accounted for;                                                                   
and  the responsibility  of all  the  participants. He  noted                                                                   
that aquaculture  associations tax  members a little  so that                                                                   
the funds  continue to grow. He  agreed that section  5 needs                                                                   
more work.  He thought  that the  language inferred  that the                                                                   
legislature  would put  the "seed"  money into  the fund.  He                                                                   
noted that the money would go  out but nothing would come in.                                                                   
Both need to  happen. He observed that the  remaining members                                                                   
might want  to underwrite  an assessment  in order  to refuel                                                                   
the fund.  He agreed  concluded  that more  work needs  to be                                                                   
done regarding an assessment.                                                                                                   
Ms. McDowell recounted discussions  with fishermen. She noted                                                                   
that   if  a   particular  fleet   had   an  optimum   number                                                                   
determination which  showed that it was necessary  to buy out                                                                   
some of  the permits a plan  would be establish,  which would                                                                   
probably included  an assessment.  A statutory request  would                                                                   
then be  brought back  to the  legislature for that  fishery.                                                                   
Buy back  programs would  be specialized  for the  individual                                                                   
fisheries. There  has been an  assumption that  the fishermen                                                                   
would have  to pay for the  program "one way or  anohter." An                                                                   
assessment would  have to be  authorized in another  piece of                                                                   
legislation if it is not included in section 5.                                                                                 
Representative Hudson recommended  the addition of assessment                                                                   
Representative  Scalzi  did not  object  to  the addition  of                                                                   
assessment authorization.  He acknowledged  that it  has been                                                                   
difficult to  get fishermen to  consider a buy  back program.                                                                   
There is no one that feels that  the state of Alaska is going                                                                   
to pub money  into a buy back program without  an assessment.                                                                   
The language was removed because  it was illegal. He observed                                                                   
that  there  are  concerns regarding  a  mandatory  buy  back                                                                   
Representative John Davies did  not think that the Commission                                                                   
could establish  a fund. There  needs to be a  receiving fund                                                                   
and  an  expending  fund  created   by  the  legislature.  He                                                                   
stressed that  the intent needs to  be clarified if  it is to                                                                   
be a sub fund in the general fund.                                                                                              
Ms.  McDowell   noted  that  discussions  with   the  sponsor                                                                   
occurred  regarding an  assessment  of fishermen,  which  the                                                                   
legislature would  appropriated for  the intended  use. There                                                                   
was legal concern about the Commission's  taxing authority to                                                                   
implement  an assessment.  An  amendment would  be needed  to                                                                   
allow the Department of Revenue to collect the funds.                                                                           
HB  288  was   heard  and  HELD  in  Committee   for  further                                                                   
HOUSE BILL NO. 402                                                                                                            
     An Act  relating to diversion payments,  wage subsidies,                                                                   
     cash   assistance,   and  self-   sufficiency   services                                                                   
     provided under the Alaska  temporary assistance program;                                                                   
     relating to  the food stamp  program; relating  to child                                                                   
     support  cases that  include  persons  who receive  cash                                                                   
     assistance  or   self-sufficiency  services   under  the                                                                   
     Alaska temporary  assistance program; and  providing for                                                                   
     an effective date.                                                                                                         
REPRESENTATIVE  FRED DYSON  spoke in  support of  HB 402.  He                                                                   
explained that  the legislation  would take Alaska  Temporary                                                                   
Assistance to Needy Families (TANF)  funds and food stamps to                                                                   
subsidize employment.  Instead of  receiving a welfare  check                                                                   
clients would  get a job.  This would allow small  businesses                                                                   
to employ  persons that  they might  not otherwise  have been                                                                   
able to justify.  He noted that  in the state of Oregon  65 -                                                                   
85 percent  of their  clients retained  their jobs  after the                                                                   
subsidy  period.   He  noted  that  Sandy   Hoback,  American                                                                   
Institute  of Full  Employment  Oregon, helped  to draft  the                                                                   
legislation based on the experiences  of the state of Oregon.                                                                   
This bill authorizes full family  sanctions, which allows the                                                                   
Department  to sanction  (withdraw benefits)  until a  job is                                                                   
found.  The  bill repeals  the  limit  of the  percentage  of                                                                   
people  on  welfare that  can  extend  the benefits  past  60                                                                   
months.  There   is  currently   a  20  percent   limit.  The                                                                   
department  supports  the  lifting  of the  20  percent  cap.                                                                   
There  are some  people that  will not  be able  to make  the                                                                   
transition  due   to  disabilities   or  other  problems.   A                                                                   
percentage  of hard-core  welfare  people will  need to  have                                                                   
continued   assistance.   He   acknowledged   concerns   that                                                                   
elimination of  the 20 percent  cap could be  taken advantage                                                                   
of and  that there  should be some  limits. He observed  that                                                                   
the legislature  could require a report regarding  the number                                                                   
of waivers or exceptions.                                                                                                       
Representative  Dyson  provided   members  with  a  committee                                                                   
substitute  for consideration.  He acknowledged that  concern                                                                   
remains  regarding  the  20% limit.  The  proposed  committee                                                                   
substitute  raises the  limit  to 30  percent for  discussion                                                                   
Representative   Hudson   MOVED   to  ADOPT   the   committee                                                                   
substitute 22-LS1431\F, Lauterbach,  2/27/02.  There being NO                                                                   
OBJECTION, it was adopted.                                                                                                      
JIM  NORDLUND,  DIRECTOR,  DIVISION   OF  PUBLIC  ASSISTANCE,                                                                   
DEPARTMENT  OF   HEALTH  AND  SOCIAL  SERVICES,   voiced  his                                                                   
appreciation  for creation  of the  bill. He  noted that  the                                                                   
department  supports  all five  provisions  of  the bill.  He                                                                   
noted  that the  department  has  some trepidation  with  the                                                                   
family sanction  provision. This provision would  require the                                                                   
department  to  fully  sanction  a family  off  benefits  for                                                                   
failure to  cooperate with the  program. He pointed  out that                                                                   
very few  families are not  cooperative with the  Department.                                                                   
He  noted that  the department  would  support the  provision                                                                   
with adequate  protection  to make sure  that the  department                                                                   
does not make  a mistake in cutting off a  family's benefits.                                                                   
He stressed the need to for a  determination to fully explain                                                                   
the sanction to the family.                                                                                                     
Mr. Nordlund  discussed the 20%  provision. He noted  that of                                                                   
the temporary  caseload, 20% of  the current caseload  can be                                                                   
exempt from the  5 year limit. He observed  that the caseload                                                                   
has come down  by 40 - 50  percent across the nation.  The 20                                                                   
percent applies to  the current size of the  caseload not the                                                                   
caseload that  existed when  the law was  passed in  1996. As                                                                   
the caseload has  been reduced 20% becomes a  lower number of                                                                   
families. Those  that are most  able to get off  the caseload                                                                   
have moved  off, but  those with  the greatest disability  or                                                                   
inability to work stay on the caseload.                                                                                         
TAPE HFC 02 - 34, Side A                                                                                                        
Mr. Nordlund  maintained that  there will be families  forced                                                                   
off  the caseload  that  have  disabilities,  are caring  for                                                                   
disabled children, victims of  domestic violence or have some                                                                   
other form  of hardship that  prevents them from  working and                                                                   
supporting  their families. The  Department proposes  getting                                                                   
rid of the arbitrary number and  look at the circumstances of                                                                   
the family.  If the  family meets  a set  of strict  criteria                                                                   
than they would receive an extension.                                                                                           
Mr. Nordlund observed  that the terminology would  be changed                                                                   
from  exemption to  extension. Situations  would be  reviewed                                                                   
and decided  based on  the circumstances  of the family.  The                                                                   
proposed  committee substitute  would  change the  cap to  30                                                                   
percent, which the department  would prefer over current law.                                                                   
The  department  would  prefer  not  to  have  any  arbitrary                                                                   
number, but rely on criteria established in regulation.                                                                         
In  response  to  a question  by  Representative  Croft,  Mr.                                                                   
Nordlund explained  that the maximum under federal  law is 20                                                                   
percent. State  law provided  for 10  percent or the  federal                                                                   
percentage,  whichever is  greater. Federal  law is  greater.                                                                   
passed before  the federal law  passed. State law  was passed                                                                   
before federal law.                                                                                                             
Mr. Nordlund  noted that  the original  caseload was  12,483.                                                                   
The department anticipates a caseload of 5,598 in FY03.                                                                         
Representative  John Davies  suggested that  if the  caseload                                                                   
was reduced  to less than 50  percent, that the  limit should                                                                   
go from 20 - 40 percent.                                                                                                        
In  response to  a  question  by Representative  Davies,  Mr.                                                                   
Nordlund noted  that the limitation  was repealed  in section                                                                   
54 of the original version of the bill.                                                                                         
Representative  John  Davies  asked  if there  is  a  federal                                                                   
limit,   which   would   limit  the   state.   Mr.   Nordlund                                                                   
acknowledged that  the federal limit is still  20 percent. He                                                                   
explained that many  states do not have a time  limit. States                                                                   
that  want  to  provide  benefits to  families  over  the  20                                                                   
percent  limit use  their state  funds. Alaska  law does  not                                                                   
allow the  use of state funds.  He thought that a  30 percent                                                                   
limitation would  be better, but emphasized that  it is still                                                                   
an arbitrary number,  which creates a disincentive  to reduce                                                                   
the  caseload. He  pointed out  that  it is  a federal  block                                                                   
grant with a required minimum  effort of state general funds.                                                                   
The  program  has  a set  amount  of  funding  regardless  of                                                                   
Representative Lancaster questioned  if clients are returning                                                                   
to the  program. Mr.  Nordlund noted that  after 2  years, 30                                                                   
percent of their clients had returned  to the caseload. There                                                                   
is a 60-month lifetime limit.                                                                                                   
Representative Dyson stressed  that he did not want people to                                                                   
get waivers  because there  are no jobs  where they  live. He                                                                   
maintained that people should  move to where the jobs are. He                                                                   
suggested  that  there  is  a  stable  group  of  chronically                                                                   
unemployed.  He  thought that  those  coming  into the  state                                                                   
would  be  more  employable.   He  did  not  think  that  the                                                                   
percentage of  new people  coming on to  rolls would  be less                                                                   
than 30  - 40  percent. He  pointed out  that as the  numbers                                                                   
shrink, the  percentage of chronically unemployed  increases.                                                                   
The department  will  be against  the 20 percent  limit  in a                                                                   
couple of years  if it is not removed. He maintained  that an                                                                   
increase in  the limit would  provide additional time  to see                                                                   
what  is  happening  and make  adjustments  based  on  better                                                                   
factors.  He   emphasized  the   importance  of   moving  the                                                                   
Representative  Hudson  asked if  there  is  anything in  the                                                                   
existing  law that  establishes the  standards. Mr.  Nordlund                                                                   
explained  that there  are criteria  for  exemptions in  law.                                                                   
Exemptions include  persons with  disabilities, caring  for a                                                                   
disabled child, victims of domestic  violence, and people who                                                                   
face hardship.  The hardship category needs  more definition.                                                                   
The  department is  in the  process of  defining hardship  in                                                                   
Representative  Harris  asked  for  a  clarification  on  the                                                                   
limitation. Representative Dyson  stated that he did not have                                                                   
a strong feeling  on inclusion of a limitation.  He expressed                                                                   
confidence  with the department.  He would  support the  bill                                                                   
with or without the limit.                                                                                                      
SANDY HOBACK,  INDEPENDENT CONSULTANT, AMERICAN  INSTITUTE OF                                                                   
FULL  EMPLOYMENT  OREGON testified  via  teleconference.  She                                                                   
noted  that  she   helped  to  draft  the   legislation.  The                                                                   
legislation     incorporates     the     five     legislative                                                                   
recommendations that were made  to improve the program. Their                                                                   
report recommended  the use of  narrowly crafted  criteria as                                                                   
opposed  to an  arbitrary cap.  She emphasized  the need  for                                                                   
legislative  reporting  regarding  extensions  and  cautioned                                                                   
that a  cap not  be a disincentive  for caseload  reductions.                                                                   
She agreed  that the  there would  not be  the same  level of                                                                   
need for new  clients in regards to the five-year  limit. She                                                                   
thought  that   a  30  percent   cap  would  be   reasonable,                                                                   
especially for the next couple of years.                                                                                        
Ms. Hoback  explained that Oregon  reduced their  caseload by                                                                   
65 percent. She  estimated that when the caseload  is reduced                                                                   
to about  35 percent that a  third of the remaining  caseload                                                                   
would remain for a significant amount of time.                                                                                  
Representative John Davies questioned  why the new population                                                                   
would not have the same percentage  of the population staying                                                                   
on the caseload.                                                                                                                
Ms. Hoback  noted that  a portion  of the chronic  unemployed                                                                   
have  been on  welfare for  a long  period of  time and  were                                                                   
unable to  be re-meditated. New  clients have a  higher level                                                                   
of  employability.  She  pointed  out  that  the  chronically                                                                   
unemployed have  been attached  to assistance for  years. She                                                                   
did not  think that  the same  level of  difficulty would  be                                                                   
brought into  the system. She  acknowledged that  there would                                                                   
be some multi  generation welfare recipients.  She emphasized                                                                   
that if the Department  is doing a good job  that there would                                                                   
be fewer children  coming into the system as  adults. She did                                                                   
not think that  there would be the same flow rate  as the old                                                                   
system, which did no more than provide a welfare check.                                                                         
Representative Whitaker  asked why the legislation  needed to                                                                   
pass in the current year. Representative  Dyson stressed that                                                                   
there is a paradigm  shift toward providing a  job instead of                                                                   
a check.  He stated that  the sooner that the  Administration                                                                   
is empowered; the  sooner benefits would be  reaped. He noted                                                                   
that the  20 percent  limit would  present  a problem in  the                                                                   
future and emphasized the need to get the program going.                                                                        
Vice-Chair  Bunde spoke  in  support of  a  30 percent  limit                                                                   
accompanied by reports.                                                                                                         
Mr.  Nordlund  responded that  first  timer's  will meet  the                                                                   
limit in  July. There  will be  families without benefits  in                                                                   
July because they do not meet  the criteria for an extension.                                                                   
Representative  Dyson  observed that  the  measures had  been                                                                   
Representative  John  Davies  MOVED  to  ADOPT  Amendment  1:                                                                   
delete  "30"   and  insert  "33"  percent.  There   being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
Representative Davies  MOVED to report CSHB 402  (FIN) out of                                                                   
Committee with the accompanying fiscal note.                                                                                    
CSHB  402 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass"  recommendation and  with  previously published  fiscal                                                                   
note: HSS #1.                                                                                                                   
The meeting was adjourned at 4:09 PM                                                                                            

Document Name Date/Time Subjects