Legislature(2003 - 2004)

05/06/2004 09:00 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                        May 06, 2004                                                                                            
                         9:00 A.M.                                                                                              
                                                                                                                                
TAPE HFC 04 - 108, Side A                                                                                                       
TAPE HFC 04 - 108, Side B                                                                                                       
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 9:00 A.M.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative John Harris, Co-Chair                                                                                            
Representative Bill Williams, Co-Chair                                                                                          
Representative Kevin Meyer, Vice-Chair                                                                                          
Representative Mike Chenault                                                                                                    
Representative Eric Croft                                                                                                       
Representative Hugh Fate                                                                                                        
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Reggie Joule                                                                                                     
Representative Carl Moses                                                                                                       
Representative Bill Stoltze                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Fred  Dyson;   Robert  D.  Storer,  Executive                                                                   
Director,  Alaska Permanent Fund  Corporation, Department  of                                                                   
Revenue;  Grey   Mitchell,  Director,  Labor   Standards  and                                                                   
Safety,  Department  of  Community  &  Economic  Development;                                                                   
Rachel  Lewis,  Unclaimed  Property  Manager,  Department  of                                                                   
Revenue;  Tom  Boutin,  Deputy  Commissioner,  Department  of                                                                   
Revenue; Stacy Kraly, Assistant  Attorney General, Department                                                                   
of  Law;  Myra  Push,  Staff,   Senator  Bettye  Davis;  Greg                                                                   
O'Claray,  Commissioner, Department  of Labor; Jason  Hooley,                                                                   
Staff, Senator Fred Dyson                                                                                                       
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Shelby Larsen,  Division of Health Care  Services, Department                                                                   
of Health & Social Services, Anchorage                                                                                          
                                                                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 466    An Act relating to investments  of Alaska permanent                                                                   
          fund assets; and providing for an effective date.                                                                     
                                                                                                                                
          CS HB 466 (FIN) was reported out of Committee with                                                                    
          a "do  pass" recommendation  and with zero  note #1                                                                   
          by the Department of Revenue.                                                                                         
                                                                                                                                
CS SB 30(JUD) am                                                                                                                
          An  Act   relating  to  information   and  services                                                                   
          available to pregnant  women and other persons; and                                                                   
          ensuring  informed consent  before an abortion  may                                                                   
          be   performed,   except   in  cases   of   medical                                                                   
          emergency.                                                                                                            
                                                                                                                                
          HCS  CS SB  30(FIN) was reported  out of  Committee                                                                   
          with "no  recommendation" and with fiscal  notes #3                                                                   
          and  #4  by  the  Department  of  Health  &  Social                                                                   
          Services.                                                                                                             
                                                                                                                                
CS SB 65(FIN) am                                                                                                                
          An   Act   relating   to  the   qualifications   of                                                                   
          correctional   officers,   parole   officers,   and                                                                   
          probation  officers; authorizing the  Department of                                                                   
          Corrections   to   enter   into   lease-   purchase                                                                   
          agreements with municipalities  for new or expanded                                                                   
          public  correctional  facilities  in the  Fairbanks                                                                   
          North Star Borough,  the Matanuska-Susitna Borough,                                                                   
          Bethel,  the  Municipality  of Anchorage,  and  the                                                                   
          City  of Seward;  relating to  the development  and                                                                   
          financing   of  privately   operated   correctional                                                                   
          facility   space  and  services;   authorizing  the                                                                   
          Department  of Corrections to  enter into  a lease-                                                                   
          purchase  agreement with the  City of  Whittier for                                                                   
          the confinement and  care of prisoners in privately                                                                   
          operated correctional  facility space if  the state                                                                   
          cannot provide the same  level of services required                                                                   
          in  state law or  regulation for  the same  or less                                                                   
          cost;   giving  notice   of   and  approving,   and                                                                   
          authorizing   the  entry   into  and  issuance   of                                                                   
          certificates  of  participation for,  the  upgrade,                                                                   
          expansion,  and  replacement  of certain  jails  in                                                                   
          Dillingham   and  Kodiak;  and  providing   for  an                                                                   
          effective date.                                                                                                       
                                                                                                                                
          SB 65 was SCHEDULED but not HEARD.                                                                                    
                                                                                                                                
CS SB 231(FIN)                                                                                                                  
          An   Act  relating   to  unclaimed  property;   and                                                                   
          providing for an effective date.                                                                                      
                                                                                                                                
          CS SB 231 (FIN) was  reported out of Committee with                                                                   
          "no recommendation"  and with fiscal note #2 by the                                                                   
          Department of Revenue.                                                                                                
                                                                                                                                
CS SB 272(FIN)                                                                                                                  
          An  Act relating  to certain  monetary advances  in                                                                   
          which  the deposit or  other negotiation  of checks                                                                   
          to pay the advances  is delayed until a later date;                                                                   
          and providing for an effective date.                                                                                  
                                                                                                                                
          CS SB 272 (FIN) was SCHEDULED but not HEARD.                                                                          
                                                                                                                                
CS SB 278(FIN)                                                                                                                  
          An  Act  relating to  fees  for the  inspection  of                                                                   
          recreational   devices,   including   instructional                                                                   
          devices,   for   certificates    of   fitness   for                                                                   
          electrical  wiring and  plumbing, and for  licenses                                                                   
          for  boiler  operators;  relating to  the  building                                                                   
          safety  account;  and  providing for  an  effective                                                                   
          date.                                                                                                                 
                                                                                                                                
          CS SB 278 (FIN) was  reported out of Committee with                                                                   
          "no recommendation"  and with  zero note #3  by the                                                                   
          Department  of Labor  &  Workforce Development  and                                                                   
          fiscal  note  #4  by  the  Department  of  Labor  &                                                                   
          Workforce Development.                                                                                                
                                                                                                                                
CS SB 288(JUD)                                                                                                                  
          An Act relating to temporary  custody hearings, and                                                                   
          to certain  determinations concerning  placement of                                                                   
          a  child in  child-in-need-of-aid proceedings;  and                                                                   
          providing for an effective date.                                                                                      
                                                                                                                                
          CS SB 288 (JUD) was SCHEDULED but not HEARD.                                                                          
                                                                                                                                
SB 349    An Act requiring licensure of midwifery birth                                                                         
          centers; and providing for an effective date.                                                                         
                                                                                                                                
          SB  349 was reported  out of  Committee with  a "do                                                                   
          pass"  recommendation and  with fiscal  note #1  by                                                                   
          the Department of Health & Social Services.                                                                           
                                                                                                                                
CS SB 357(FIN)                                                                                                                  
          An  Act relating  to the  regulation of  insurance,                                                                   
          insurance  licenses,  qualifications  of  insurance                                                                   
          producers,  surplus  lines,  fraud  investigations,                                                                   
          electronic   transactions,   and  compliance   with                                                                   
          federal law  and national standards;  and providing                                                                   
          for an effective date.                                                                                                
                                                                                                                                
          CS SB 357 (FIN) was SCHEDULED but not HEARD.                                                                          
                                                                                                                                
HOUSE BILL NO. 466                                                                                                            
                                                                                                                                
     An Act relating to investments of Alaska permanent fund                                                                    
     assets; and providing for an effective date.                                                                               
                                                                                                                                
Representative  Foster   MOVED  to  ADOPT  work   draft  #23-                                                                   
LS1699\H, Cook,  Craver, 5/5/04, as  the version of  the bill                                                                   
before  the Committee.    There being  NO  OBJECTION, it  was                                                                   
adopted.                                                                                                                        
                                                                                                                                
ROBERT D. STORER,  EXECUTIVE DIRECTOR, ALASKA  PERMANENT FUND                                                                   
CORPORATION,  DEPARTMENT  OF   REVENUE,  commented  that  the                                                                   
request  would increase  investment  flexibility.   He  noted                                                                   
that  most funds  must  follow  the prudent  investor  expert                                                                   
rule,  however, that  the Permanent  Fund  contains an  extra                                                                   
obligation, a  statutory list outlining what  can be invested                                                                   
in.  Four years ago, the Legislature  gave the Permanent Fund                                                                   
Corporation  the ability  to  invest  up to  5%  in types  of                                                                   
investments not mentioned in the  statutory list, referred to                                                                   
as the "basket clause".  It provides  a 5% limitation.  After                                                                   
studying it  for four  years, regarding  the various  ways to                                                                   
use it, a strategy was implemented  providing a modest amount                                                                   
in  private equities  and a  conservative amount  in a  pilot                                                                   
program  with an  absolute  return.   Presently,  there is  a                                                                   
problem.   If  the strategy  works and  grows, the  Permanent                                                                   
Fund  will  be forced  to  liquidate  assets because  of  the                                                                   
statutory  limitations.   The  proposed legislation  requests                                                                   
two items:                                                                                                                      
                                                                                                                                
   ·    On Line 14 provides "housecleaning items" from the                                                                      
        existing intent of the basket clause; and                                                                               
   ·    On Page 2, Line 3, instead of 5%, increasing it to                                                                      
        10%.                                                                                                                    
                                                                                                                                
Mr. Storer pointed  out that the second change  resulted from                                                                   
an  amendment passed  on  the  Senate side.    The 10%  would                                                                   
provide a  few years  of latitude and  then "down  the road",                                                                   
the  Permanent Fund  could come  back and  ask for  increased                                                                   
flexibility.     He  indicated   that  Version  H   would  be                                                                   
acceptable to the Permanent Fund.                                                                                               
                                                                                                                                
Representative  Joule inquired  if the  15% request  had been                                                                   
based  on projections.    Mr. Storer  advised  that over  the                                                                   
interim,  there would  be no change  in the  projection.   It                                                                   
will take a number  of years to implement the  strategy.  The                                                                   
15% was intended  to essentially give future  administrators,                                                                   
greater flexibility in a dynamic  industry while addressing a                                                                   
changing market  as it occurs.   The State would  continue to                                                                   
target  a  5%  real  rate  of  return.    He  hoped  that  by                                                                   
increasing the  latitude, it would  allow investors  a better                                                                   
chance  of  achieving  the 5%,  while  allowing  latitude  to                                                                   
reduce the volatility of the expected returns.                                                                                  
                                                                                                                                
Vice Chair  Meyer asked  why the Senate  choose 10%  over the                                                                   
requested  15%.  Mr.  Storer understood  that the Senate  was                                                                   
concerned about taking on too  much risk.  The Permanent Fund                                                                   
Corporation  does not  agree that  would  be the  case.   The                                                                   
history of the  Permanent Fund has been very  conservative in                                                                   
applications.    During the  technology bubble, the  Fund did                                                                   
not own any of those types of  stocks.  He added that it took                                                                   
four years  to implement the basket  clause.  The  Fund Board                                                                   
is   cautious  and   deliberative   when  making   investment                                                                   
decisions.                                                                                                                      
                                                                                                                                
Vice  Chair  Meyer  asked  the  current  breakdown  of  asset                                                                   
allocations  in the Fund.   Mr. Storer  noted that  the asset                                                                   
allocation target was:                                                                                                          
                                                                                                                                
   ·    56% equities and of that 18% is in non-dollar                                                                           
        international equities                                                                                                  
   ·    The U.S. bond portfolio is 28%                                                                                          
   ·    A 10% target in real estate                                                                                             
   ·    The non-dollar bond portfolio is at about 4%                                                                            
   ·    A 2% private equity currently being implemented                                                                         
   ·    A 1% target for absolute strategy or hedge fund                                                                         
                                                                                                                                
Vice  Chair Meyer  asked  clarification  if the  hedge  funds                                                                   
included  futures or  commodities.  Mr.  Storer replied  that                                                                   
they do  not include commodities  but have used  futures from                                                                   
time to time.  There must be a modest leverage.                                                                                 
                                                                                                                                
Representative  Fate  asked  the  return for  the  last  five                                                                   
years.   Mr.  Storer pointed  out that  the investment  board                                                                   
recommends a  rolling 10-year  average, which never  has gone                                                                   
below a 5% rate of return average.   One year, there was a 3%                                                                   
real and another  with a 2% real; currently,  the returns are                                                                   
up over  the 5%.   In a  down turned  market, there  were two                                                                   
years with a less than a 5% return.                                                                                             
                                                                                                                                
Representative Fate inquired if  protections would be made if                                                                   
the 10%  number was  given by  the Legislature.   Mr.  Storer                                                                   
explained that would provide the  latitude needed to increase                                                                   
flexibility in an  amount of perhaps one quarter  to one half                                                                   
percent.  He noted  that is a lot of money  when dealing with                                                                   
a $28 billion dollar fund.  The  key in achieving the goal is                                                                   
allowing  current investments  to rise,  taking advantage  of                                                                   
the full market cycle.                                                                                                          
                                                                                                                                
Representative Croft  noted with a 5% internal  target, it is                                                                   
appropriate  to  have  a  10%  ceiling,  so  that  successful                                                                   
investments will not have to be sold.  Mr. Storer agreed.                                                                       
                                                                                                                                
Representative  Croft  inquired   the  target.    Mr.  Storer                                                                   
replied that with a 5% limitation,  the fund is using 3% as a                                                                   
cushion, no matter what.                                                                                                        
                                                                                                                                
Representative Foster MOVED to  report CS HB 466 (FIN) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS HB  466 (FIN)  was reported  out of  Committee with  a "do                                                                   
pass" recommendation and with  zero note #1 by the Department                                                                   
of Revenue.                                                                                                                     
                                                                                                                                
SENATE BILL NO. 349                                                                                                           
                                                                                                                                
     An Act requiring licensure of midwifery birth centers;                                                                     
     and providing for an effective date.                                                                                       
                                                                                                                                
MYRA PUSH, STAFF, SENATOR BETTYE  DAVIS, explained that there                                                                   
are  six birth  centers in  Alaska, five  registered and  one                                                                   
licensed.  The owners of the birth  centers admit the need to                                                                   
have one  licensed standard  for all  birthing centers.   The                                                                   
licensed birth  centers will have  one set of  regulations to                                                                   
follow, comply with annual inspections  and put safeguards in                                                                   
place to  guarantee the  birth center  is a safe  environment                                                                   
for families.                                                                                                                   
                                                                                                                                
She  noted  that  in March  2004,  the  birth  center  owners                                                                   
collaborated,  rewriting   regulations  for   licensed  birth                                                                   
centers,  which  had  not  been  changed  since  1983.    The                                                                   
recommendations  have been  submitted.   Through SB  349, the                                                                   
registered  birth centers  will  be considered  licensed  six                                                                   
months  after   the  effective   date  of  the   new  adopted                                                                   
regulations.   The Midwives Association of Alaska  has agreed                                                                   
there should  be one uniform  standard for birth  centers and                                                                   
recommends passage of the legislation.                                                                                          
                                                                                                                                
Representative  Foster   MOVED  to  report  SB   349  out  of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
SB  349  was reported  out  of  Committee  with a  "do  pass"                                                                   
recommendation and  with fiscal note #1 by  the Department of                                                                   
Health & Social Services.                                                                                                       
                                                                                                                                
CS FOR SENATE BILL NO. 30(JUD) am                                                                                             
                                                                                                                                
     An Act  relating to  information and services  available                                                                   
     to  pregnant  women  and  other  persons;  and  ensuring                                                                   
     informed  consent before an  abortion may be  performed,                                                                   
     except in cases of medical emergency.                                                                                      
                                                                                                                                
STACEY KRALY, ASSISTANT ATTORNEY  GENERAL, DEPARTMENT OF LAW,                                                                   
explained  the   differences  between  the   House  Judiciary                                                                   
version  of the bill  and work  draft #23-LS0193\Y,  Mischel,                                                                   
4/29/04 version.                                                                                                                
                                                                                                                                
She noted that  when the bill arrived in the  House Judiciary                                                                   
Committee,  an  opinion  was   requested  from  the  Attorney                                                                   
General's  office  regarding  the  constitutionality  of  the                                                                   
provisions.  As  a result, recommendations were  made to that                                                                   
Committee and  some amendments  were submitted based  on that                                                                   
review, which were all adopted.                                                                                                 
                                                                                                                                
REPRESENTATIVE  FRED DYSON, SPONSOR,  did not  know if  the Y                                                                   
version  would meet with  the Department  of Law's  approval.                                                                   
He  noted  the  conditions  contained  within  the  committee                                                                   
substitute.  The Department of  Health & Social Services does                                                                   
not  want  the  State Medical  Board  to  have  obstetricians                                                                   
determine  the  information  placed  on  the  website.    The                                                                   
Department believes that they can handle that from within.                                                                      
                                                                                                                                
Ms. Kraly commented that the recommendation  during the House                                                                   
Judiciary proceedings was that  the provisions in the website                                                                   
would  be  information  developed  in  a  medically  accurate                                                                   
manner.    She  stressed  that   it  is  important  that  the                                                                   
information   is  not   politically   motivated  but   rather                                                                   
medically  accurate.     The  State  Medical   Board  is  not                                                                   
interested in performing that  duty.  She reiterated that the                                                                   
information should be medically accurate.                                                                                       
                                                                                                                                
Representative  Stoltze  asked if  the Attorney  General  was                                                                   
interested  in being  involved  in this  matter.   Ms.  Kraly                                                                   
advised  that  the  Attorney General  is  familiar  with  the                                                                   
concern.                                                                                                                        
                                                                                                                                
Senator Dyson addressed  issue #2:  Language  inserted in the                                                                   
House Judiciary  Committee appears to establish  the criteria                                                                   
transmitted  to the woman,  which is  based on a  physician's                                                                   
standard.  In the  Y version, the language is  better fit for                                                                   
the patient  standard and information.   Ms. Kraly  responded                                                                   
that the  Judiciary version creates  two provisions  by which                                                                   
informed consent  may be imparted.  One  provides information                                                                   
through the State maintained web  site.  The second mechanism                                                                   
in the G  version would be to  create a mechanism by  which a                                                                   
physician could  choose not to  use the website  information,                                                                   
but rather impart information,  which the doctor "reasonably"                                                                   
believes is  necessary for  the patient  to make an  informed                                                                   
choice.  That  language is on  Page 6, Lines 24-27,  in the G                                                                   
version.                                                                                                                        
                                                                                                                                
Representative Croft asked if  that reference was made in the                                                                   
Y version.  Ms. Kraly did not  know, as she had just received                                                                   
that  copy.    She  thought  that  the  committee  substitute                                                                   
removed the language.                                                                                                           
                                                                                                                                
Ms. Kraly  noted that  the State  of Alaska  has an  informed                                                                   
consent  provision  under  Title  9, in  which  the  standard                                                                   
creates a  "reasonable patient  standard".  General  case law                                                                   
dealing with  informed consent  issues in  Alaska has  been a                                                                   
reasonable  patient  standard   not  a  reasonable  physician                                                                   
standard.    That  being said,  the  changes  recommended  by                                                                   
Senator Dyson, make sense that  the body of law is consistent                                                                   
in  the sense  of not  having conflicting  provisions in  the                                                                   
law.   She  thought  that the  Y  version section  should  be                                                                   
amended  to make it  more clear  that the  standard is  for a                                                                   
reasonable patient standard.   Constitutionally, it might not                                                                   
be a problem, but that the language should be consistent.                                                                       
                                                                                                                                
Senator  Dyson  voiced concern  when  dealing  with a  doctor                                                                   
doing  the procedure.   There  is a pattern,  where a  caring                                                                   
doctor, could have pressure to  minimize the issues regarding                                                                   
termination.    He thought  that  more  complete  information                                                                   
would allow  women to make  better decisions.   He understood                                                                   
that the Y version would leave  the doctors the alternatives;                                                                   
however,  the intention  of  the legislation  is  to use  the                                                                   
Department's  information, which would  be immune  from legal                                                                   
action.                                                                                                                         
                                                                                                                                
Senator Dyson  added that the  real issue was whether  or not                                                                   
the 24-hour  waiting period  would be  problematic under  the                                                                   
Alaska Constitution.   Ms. Kraly responded that  the issue of                                                                   
the  24-hour waiting  period  with  respect to  the  informed                                                                   
consent provision would be a difficult  question.  The Alaska                                                                   
Constitution provides greater  protections under the right to                                                                   
privacy and  equal protection than the  federal constitution.                                                                   
The Alaska Supreme Court has interpreted  provisions relating                                                                   
to the restrictions  of reproductive rights  and consistently                                                                   
upheld  that  it is  a  fundamental  right  and in  order  to                                                                   
restrict it, there  must be a fundamental  constricting State                                                                   
interest.   It is the opinion  of the Department of  Law that                                                                   
the  24-hour  waiting period  would  be  viewed as  an  undue                                                                   
burden under  the right to  choose.   It makes the  bill less                                                                   
constitutionally sound  than if the provision was  not in it.                                                                   
She reiterated that in the opinion  of the Department of Law,                                                                   
the 24-hour provision would be problematic.                                                                                     
                                                                                                                                
Senator Dyson pointed  out that many states  have fought this                                                                   
battle.  He  understood that the Department of  Law might get                                                                   
challenged.                                                                                                                     
                                                                                                                                
Co-Chair  Williams  asked  the  anticipated cost  of  such  a                                                                   
challenge.  Ms. Kraly agreed that  there would be a challenge                                                                   
and that  the bill would be  more defensible without  the 24-                                                                   
hour  waiting   period.    She  warned  that   litigation  is                                                                   
expensive and time consuming and  that it could cost hundreds                                                                   
of  thousands  of dollars  to  litigate  these issues.    The                                                                   
appeal process  could take  a few years  to get through.   It                                                                   
will be a timely and costly venture if it should pass.                                                                          
                                                                                                                                
Co-Chair  Williams asked  clarification that  if the  24-hour                                                                   
rule  were left  in,  the legislation  would  most likely  be                                                                   
challenged.  Ms. Kraly predicted  that no matter what version                                                                   
passes, it will be challenged  on some level.  If the 24-hour                                                                   
provision  was removed,  there  would be  one  less issue  to                                                                   
litigate.                                                                                                                       
                                                                                                                                
Senator  Dyson  pointed out  that  presently,  in law,  there                                                                   
exists a  "severability concept",  which does not  negate the                                                                   
entire idea.                                                                                                                    
                                                                                                                                
Representative  Croft pointed  out how  verbally careful  the                                                                   
attorney general's  office was  being.   If the bill  passes,                                                                   
the Department of Law will be  defending it and if they truly                                                                   
believe that  it is not constitutional,  it would be  used in                                                                   
that case.   He pointed out  that Ms. Kraly was  very careful                                                                   
not  to mention  things  during  the Committee  meeting  that                                                                   
could be used in defending the  lawsuit later.  He added that                                                                   
the  testimony  sounded  conditional because  of  the  public                                                                   
nature of the situation.                                                                                                        
                                                                                                                                
Senator Dyson  maintained that the  Y version does  not raise                                                                   
constitutional issues except for the 24-hour rule.                                                                              
                                                                                                                                
Vice  Chair  Meyer  MOVED  to   ADOPT  version  #23-LS0193\Y,                                                                   
Mischel, 4/29/04.  There being  NO OBJECTION, it was adopted.                                                                   
                                                                                                                                
Representative  Croft MOVED a  conceptual amendment  removing                                                                   
"at least 24 hours"  on Page 5, Line 16 and  on Page 6, Lines                                                                   
11  & 12.   Vice  Chair  Meyer OBJECTED  for  the purpose  of                                                                   
discussion.  He invited the sponsor's opinion.                                                                                  
                                                                                                                                
Senator Dyson  stated that  the bill is  of great  value even                                                                   
without the 24-hour rule.  He  stated that he would prefer to                                                                   
keep the language  in the bill but would hold  no grudges, as                                                                   
he wanted  to see  the bill  pass from  Committee.   He added                                                                   
that he thought that it could survive a court challenge.                                                                        
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:      Croft, Moses                                                                                                     
OPPOSED:       Stoltze, Chenault, Fate, Foster, Hawker,                                                                         
               Meyer, Williams                                                                                                  
                                                                                                                                
Representative  Joule and  Co-Chair Harris  were not  present                                                                   
for the vote.                                                                                                                   
                                                                                                                                
The MOTION FAILED (2-7).                                                                                                        
                                                                                                                                
Representative Foster MOVED to  report HCS CS SB 30 (FIN) out                                                                   
of Committee  with  individual recommendations  and with  the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
HCS CS  SB 30(FIN)  was reported  out of  Committee with  "no                                                                   
recommendation"  and  with fiscal  notes  #3  and #4  by  the                                                                   
Department of Health & Social Services.                                                                                         
                                                                                                                                
                                                                                                                                
TAPE HFC 04 - 108, Side B                                                                                                     
                                                                                                                                
CS FOR SENATE BILL NO. 278(FIN)                                                                                               
                                                                                                                                
     An  Act   relating  to  fees   for  the   inspection  of                                                                   
     recreational  devices, including instructional  devices,                                                                   
     for certificates  of fitness  for electrical  wiring and                                                                   
     plumbing,  and   for  licenses  for   boiler  operators;                                                                   
     relating to  the building safety account;  and providing                                                                   
     for an effective date.                                                                                                     
                                                                                                                                
GREG O'CLARAY,  COMMISSIONER, DEPARTMENT OF  LABOR, commented                                                                   
that the Department supports the bill.                                                                                          
                                                                                                                                
GREY  MITCHELL,   DIRECOTR,  LABOR   STANDARDS  AND   SAFETY,                                                                   
DEPARTMENT  OF COMMUNITY  & ECONOMIC  DEVELOPMENT,  explained                                                                   
that  SB  278   would  establish  fees  for   inspection  and                                                                   
licensing services,  based on  the concept that  users should                                                                   
bare  the  costs  of  services.   He  offered  to  provide  a                                                                   
sectional analysis.                                                                                                             
                                                                                                                                
Representative  Chenault  questioned  if  the intent  was  to                                                                   
raise  boiler  operator  fees   from  $160  dollars  to  $200                                                                   
dollars.  Mr. Mitchel acknowledged that was correct.                                                                            
                                                                                                                                
Representative   Chenault  pointed   out   that  boilers   in                                                                   
apartment  complexes are  subject to  yearly inspection.   He                                                                   
commented  that there  is a  big difference  between a  small                                                                   
boiler and  a large boiler.   Mr. Mitchel explained  that the                                                                   
bill would not have an affect  on the boiler inspection fees.                                                                   
He pointed  out that  Section 2  indicates that the  operator                                                                   
license would be  used for a person who obtains  a license to                                                                   
work on a boiler.  It is not associated  with the fee charged                                                                   
on the  inspection.  Representative  Chenault clarified  that                                                                   
the bill affects the work license for boiler installers.                                                                        
                                                                                                                                
In  response  to  a query  made  by  Representative  Stoltze,                                                                   
Commissioner O'Clary  stated that the owner  of the mentioned                                                                   
facility,  had  testified in  the  House Labor  and  Commerce                                                                   
Committee and as a result, the  bill was amended to waive the                                                                   
Department's fee  as long as  the out-of-state  inspector had                                                                   
the  required  certifications.     He  added  that  both  the                                                                   
National  Electrical  Contractors  Association and  the  IBW-                                                                   
Local  #50  &  #47,  testified   in  favor  of  the  proposed                                                                   
legislation.                                                                                                                    
                                                                                                                                
Representative  Foster MOVED  to report  CS SB  (FIN) out  of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS  SB 278  (FIN)  was reported  out  of Committee  with  "no                                                                   
recommendation" and  with zero note  #3 by the  Department of                                                                   
Labor  & Workforce  Development  and fiscal  note  #4 by  the                                                                   
Department of Labor & Workforce Development.                                                                                    
                                                                                                                                
CS FOR SENATE BILL NO. 231(FIN)                                                                                               
                                                                                                                                
     An Act relating to unclaimed property; and providing                                                                       
     for an effective date.                                                                                                     
                                                                                                                                
TOM  BOUTIN,  DEPUTY  COMMISSIONER,  DEPARTMENT  OF  REVENUE,                                                                   
stated that  SB 231  would bring Alaska  in concert  with the                                                                   
unclaimed property uniform codes across the nation.                                                                             
                                                                                                                                
RACHEL  LEWIS,  UNCLAIMED  PROPERTY  MANAGER,  DEPARTMENT  OF                                                                   
REVENUE, added that the entire  bill except for four sections                                                                   
had  been   directly   taken  from  the   1995  Uniform   Law                                                                   
Commissioners Act on Unclaimed  Property.  Alaska adopted the                                                                   
1981 Act in 1986.   Alaska is a little outdated  and adoption                                                                   
of SB 231 would  bring Alaska up to date.   She addressed the                                                                   
issues that are different from the 1995 Act.                                                                                    
                                                                                                                                
   ·    Page 3, Section 5, speaks to "demutualization" of                                                                       
        insurance companies.  Demutualization  was a new type                                                                   
        of  property,  not  existing  in  1995  and  was  not                                                                   
        addressed in  that Act.   There  are fourteen  states                                                                   
        that have already adopted that language.                                                                                
   ·    Page 5, Section 10, would be unique language for                                                                        
        Alaska, for  unclaimed  property under  the value  of                                                                   
        $750 dollars, the State  of Alaska does not  want the                                                                   
        hassle  of  the  $2.50  payment.     It  would  be  a                                                                   
        convenence and a  courtesy.  That language  currently                                                                   
        exists in statute and is ambiguous.                                                                                     
   ·    Page 7, Section 13, requires advertising the names                                                                      
        of people with unclaimed  property of $100  dollar or                                                                   
        more.  Last year,  the Department spent  $30 thousand                                                                   
        dollars  to  advertise   3,000  names.     The  State                                                                   
        received  only  340  claims  for   that  work.    The                                                                   
        Department should  evaluate the  best way to  promote                                                                   
        it, encouraging  owners  to  come forward  and  claim                                                                   
        their property.                                                                                                         
   ·    Page 9, Section 17, amends "Gift Certificates" by                                                                       
        adding new language.                                                                                                    
                                                                                                                                
Representative   Stoltze   commented    that   some   utility                                                                   
cooperatives use  their own claims and redistribute  them for                                                                   
scholarships.   He  asked if  that  would be  affected.   Ms.                                                                   
Lewis replied  that utility  coops have  an unique  exemption                                                                   
and  the legislation  would  not touch  that  concern.   They                                                                   
would  be responsible  for  locating  their members  and  the                                                                   
money would continue to be pooled through the coop.                                                                             
                                                                                                                                
Representative Croft  asked if the definition  of mineral and                                                                   
mineral  proceeds had  been  made in  the  legislation.   Ms.                                                                   
Lewis responded that it has not  been defined before and that                                                                   
it would be taken directly from the 1995 Act.                                                                                   
                                                                                                                                
Representative  Fate asked  the procedure  after the  initial                                                                   
notification.  Ms.  Lewis advised that there  are over 80,000                                                                   
names listed for  unclaimed properties ranging  in value from                                                                   
$25  to  $250,000  dollars.     Everyone  is  listed  on  the                                                                   
Internet.  The information is  "out there" but the Department                                                                   
does not  actively attempt  locating them.   The property  is                                                                   
held into perpetuity.                                                                                                           
                                                                                                                                
Representative  Fate  questioned  the number  of  people  not                                                                   
located.   Ms.  Lewis replied  that since  1986, $18  million                                                                   
dollars had been returned to people  living in Alaska.  There                                                                   
is  always a  25%-30% percentage  that cannot  be found,  but                                                                   
with technology, those numbers are decreasing.                                                                                  
                                                                                                                                
Representative  Chenault commented  on  the fiscal  analysis,                                                                   
noting  the increase.   Mr.  Boutin interjected  that it  was                                                                   
intended  to speed  up  the collection  process.   Ms.  Lewis                                                                   
added that the intent was to compress  seven years into five.                                                                   
                                                                                                                                
Representative Foster MOVED to  report CS SB 231 (FIN) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS  SB 231  (FIN)  was reported  out  of Committee  with  "no                                                                   
recommendation" and with fiscal  note #2 by the Department of                                                                   
Revenue.                                                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:11 A.M.                                                                                         
                                                                                                                                

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