Legislature(2003 - 2004)

05/10/2004 11:20 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                        May 10, 2004                                                                                            
                         11:20 A.M.                                                                                             
                                                                                                                                
TAPE HFC 04 - 113, Side A                                                                                                       
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 11:20 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                                                                                                                  
                                                                                                                                
Anselm  Staack,   Chief  Financial  Officer,   Department  of                                                                   
Administration;  Pete   Kelly,  Director,   State  Relations,                                                                   
University  of Alaska; Melanie  Millhorn, Director,  Division                                                                   
of  Retirement and  Benefits,  Department of  Administration;                                                                   
Daniel   Patrick   Otierney,  Assistant   Attorney   General,                                                                   
Regulatory  Affairs,  Department  of  Law;  Richard  Schmitz,                                                                   
Staff,  Senator   John  Cowdery;   Cindy  Cashen,   Executive                                                                   
Director,  Mother's  Against   Drunk  Driving  (MADD);  Jason                                                                   
Hooley,  Staff,   Senator  Fred   Dyson;  Anthony   Lombardo,                                                                   
Director,  Division  of  Public   Assistance,  Department  of                                                                   
Health & Social Services                                                                                                        
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Linda  Wilson,   Deputy  Director,  Alaska   Public  Defender                                                                   
Agency, Department of Administration,  Anchorage; Jay Marley,                                                                   
Public Assistance  Fraud Control Unit Manager,  Department of                                                                   
Labor & Workforce Development, Anchorage                                                                                        
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CS SB 224(STA)                                                                                                                  
          An  Act relating  to  a minor  operating a  vehicle                                                                   
          after  consuming alcohol,  to a  minor refusing  to                                                                   
          submit  to chemical  tests, and  to driving  during                                                                   
          the  24 hours after  being cited  for one  of those                                                                   
          offenses; and providing for an effective date.                                                                        
                                                                                                                                
          CS SB 224 (STA) was  reported out of Committee with                                                                   
          "no recommendation"  and with  zero note #5  by the                                                                   
          Department of Public  Safety, indeterminate note #6                                                                   
          by  the Alaska Court  System, zero  note #7  by the                                                                   
          Department  of Health & Social Services,  zero note                                                                   
          #8   by    the   Department   of    Administration,                                                                   
          indeterminate   note  #9   by  the  Department   of                                                                   
          Administration and a  new note by the House Finance                                                                   
          Committee for the Department of Administration.                                                                       
                                                                                                                                
CS SB 232(FIN)                                                                                                                  
          An  Act relating  to federal  tax requirements  for                                                                   
          and  other provisions  of the teachers'  retirement                                                                   
          system,  the public  employees' retirement  system,                                                                   
          and  the   judicial  retirement   system;  removing                                                                   
          village  public  safety  officers from  the  public                                                                   
          employees'   retirement  system;  eliminating   the                                                                   
          public  employees'  retirement  system  conditional                                                                   
          duty  to  refund  contributions   under  $1,000  to                                                                   
          inactive  employees;  limiting service  credit  for                                                                   
          village  public  safety   officer  service  in  the                                                                   
          public employees' retirement  system to five years;                                                                   
          and providing for an effective date.                                                                                  
                                                                                                                                
          CS SB 232 (FIN) was  reported out of Committee with                                                                   
          "no recommendation"  and with  zero note #2  by the                                                                   
          Department of Administration.                                                                                         
                                                                                                                                
CS SB 368(FIN) am                                                                                                               
          An Act relating to taxes  on cigarettes and tobacco                                                                   
          products,   to  tax   stamps   on  cigarettes,   to                                                                   
          forfeiture  of cigarettes and  of property  used in                                                                   
          the   manufacture,  transportation,   or  sale   of                                                                   
          unstamped   cigarettes,   and   to   licenses   and                                                                   
          licensees   under  the   Cigarette  Tax   Act;  and                                                                   
          providing for an effective date.                                                                                      
                                                                                                                                
          CS SB 368(FIN) am was SCHEDULED by not HEARD.                                                                         
                                                                                                                                
CS SB 376(HES) am                                                                                                               
          An Act  relating to public assistance  and subpoena                                                                   
          powers;   and  relating   to  the  permanent   fund                                                                   
          dividend and subpoena powers.                                                                                         
                                                                                                                                
          CS  SB 376  (HES)am was reported  out of  Committee                                                                   
          with "no recommendation"  and with fiscal note #1 &                                                                   
          #2 by  the Department  of Health & Social  Services                                                                   
          and zero note #3 by the Department of Revenue.                                                                        
                                                                                                                                
SB 392    An Act relating to the expenses of investigation,                                                                     
          hearing, or  public advocacy before  the Regulatory                                                                   
          Commission   of  Alaska,  to  calculation   of  the                                                                   
          regulatory  cost charge  for  public utilities  and                                                                   
          pipeline  carriers  to  include the  Department  of                                                                   
          Law's  costs of  its public  advocacy function,  to                                                                   
          inspection  of  certain books  and  records by  the                                                                   
          attorney general  when participating as  a party in                                                                   
          a  matter  before  the   Regulatory  Commission  of                                                                   
          Alaska; and providing for an effective date.                                                                          
                                                                                                                                
          SB 392 was reported out of Committee with "no                                                                         
          recommendation"  and  with fiscal  note  #3 by  the                                                                   
          Department of Law.                                                                                                    
                                                                                                                                
CS SB 393(FIN)                                                                                                                  
          An Act  relating to  default on tuition,  fees, and                                                                   
          other  charges of the  University of Alaska  and to                                                                   
          claims  on permanent  fund  dividends for  tuition,                                                                   
          fees,  and  other  charges  of  the  University  of                                                                   
          Alaska that are in default.                                                                                           
                                                                                                                                
          CS SB  393(FIN) was reported out of  Committee with                                                                   
          a "do pass" recommendation  and with fiscal note #1                                                                   
          by the  University of Alaska and fiscal  note #2 by                                                                   
          the Department of Revenue.                                                                                            
                                                                                                                                
CS SB 395(FIN) am                                                                                                               
          An Act authorizing the  Alaska Railroad Corporation                                                                   
          to  extend its  rail line to  Fort Greely,  Alaska,                                                                   
          and  relating to  that  extension; authorizing  the                                                                   
          corporation  to issue bonds to finance  the cost of                                                                   
          the   extension   and  necessary   facilities   and                                                                   
          equipment;  relating   to  the  Railroad  Planning,                                                                   
          Platting, and  Land Use Regulation Task  Force; and                                                                   
          providing for an effective date.                                                                                      
                                                                                                                                
          CS  SB 395  (FIN)am was reported  out of  Committee                                                                   
          with "individual  recommendations" and  with fiscal                                                                   
          note #2  by the Department of Community  & Economic                                                                   
          Development.                                                                                                          
                                                                                                                                
CS FOR SENATE BILL NO. 395(FIN) am                                                                                            
                                                                                                                                
     An Act  authorizing the  Alaska Railroad Corporation  to                                                                   
     extend  its  rail  line  to  Fort  Greely,  Alaska,  and                                                                   
     relating to that extension;  authorizing the corporation                                                                   
     to issue bonds to finance  the cost of the extension and                                                                   
     necessary  facilities  and  equipment; relating  to  the                                                                   
     Railroad  Planning, Platting,  and  Land Use  Regulation                                                                   
     Task Force; and providing for an effective date.                                                                           
                                                                                                                                
Co-Chair  Harris MOVED  to RESCIND previous  action taken  on                                                                   
failure to  move the bill out  of Committee.  There  being NO                                                                   
OBJECTION, the action was rescinded.                                                                                            
                                                                                                                                
Co-Chair  Harris MOVED  to  report CS  SB  395(FIN)am out  of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS  SB  395  (FIN)am  was  reported  out  of  Committee  with                                                                   
"individual recommendations"  and with fiscal note  #2 by the                                                                   
Department of Community & Economic Development.                                                                                 
                                                                                                                                
CS FOR SENATE BILL NO. 232(FIN)                                                                                                 
                                                                                                                                
     An  Act relating  to federal  tax  requirements for  and                                                                   
     other  provisions of  the  teachers' retirement  system,                                                                   
     the  public   employees'  retirement  system,   and  the                                                                   
     judicial  retirement  system;  removing  village  public                                                                   
     safety  officers from the  public employees'  retirement                                                                   
     system;  eliminating  the public  employees'  retirement                                                                   
     system  conditional duty  to refund contributions  under                                                                   
     $1,000  to inactive employees;  limiting service  credit                                                                   
     for village public safety  officer service in the public                                                                   
     employees'   retirement  system   to  five  years;   and                                                                   
     providing for an effective date.                                                                                           
                                                                                                                                
MELANIE  MILLHORN,  DIRECTOR,   DIVISION  OF  RETIREMENT  AND                                                                   
BENEFITS,  DEPARTMENT  OF ADMINISTRATION,  advised  that  the                                                                   
proposed   legislation  was  extremely   important   for  the                                                                   
Division  and  would insure  tax  compliance  for the  Public                                                                   
Employees  Retirement  Account  (PERS),  Teachers  Retirement                                                                   
System  (TERS)  and the  Judicial  Retirement  System  (JRS).                                                                   
Presently, there  is an agreement  with the Internal  Revenue                                                                   
Service stating that  the State intends to move  forward with                                                                   
the legislation.                                                                                                                
                                                                                                                                
ANSELM  STAACK,   CHIEF  FINANCIAL  OFFICER,   DEPARTMENT  OF                                                                   
ADMINISTRATION,   offered   to   answer  questions   of   the                                                                   
Committee.                                                                                                                      
                                                                                                                                
Representative Foster MOVED to  report CS SB 232 (FIN) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS SB  232 (FIN)  was reported  out of  Committee with  a "no                                                                   
recommendation" and  with zero note  #2 by the  Department of                                                                   
Administration.                                                                                                                 
                                                                                                                                
SENATE BILL NO. 392                                                                                                             
                                                                                                                                
     An  Act  relating  to  the  expenses  of  investigation,                                                                   
     hearing,  or  public  advocacy   before  the  Regulatory                                                                   
     Commission of  Alaska, to calculation of  the regulatory                                                                   
     cost charge  for public utilities and  pipeline carriers                                                                   
     to include  the Department of Law's costs  of its public                                                                   
     advocacy  function, to inspection  of certain  books and                                                                   
     records by the attorney general  when participating as a                                                                   
     party in  a matter before  the Regulatory  Commission of                                                                   
     Alaska; and providing for an effective date.                                                                               
                                                                                                                                
DANIEL   PATRICK   OTIERNEY,  ASSISTANT   ATTORNEY   GENERAL,                                                                   
REGULATORY  AFFAIRS,  DEPARTMENT  OF LAW,  stated  that  last                                                                   
year's   Executive    Order   (EO)   111    transferred   the                                                                   
responsibility  for  advocacy  on  behalf of  the  public  in                                                                   
utility matters  before the  Regulatory Commission  of Alaska                                                                   
(RCA) from the  RCA to the attorney general,  and established                                                                   
the public  advocacy function  within the Department  of Law.                                                                   
As a result, the RCA personnel,  historically responsible for                                                                   
public advocacy,  now acts under the authority  and direction                                                                   
of the Department.  The bill completes  the prior transfer of                                                                   
authority by providing for execution aspects.                                                                                   
                                                                                                                                
SB 392  clarifies that regulatory  cost charge  receipts (not                                                                   
general fund) would continue to  pay for the general costs of                                                                   
public advocacy  now administered by the Department,  just as                                                                   
the  receipts historically  paid  for public  advocacy  costs                                                                   
when the function was performed by RCA personnel.                                                                               
                                                                                                                                
The bill also adjusts the regulatory  cost charge ceiling and                                                                   
creates two,  distinct percentages  of total regulatory  cost                                                                   
charge  receipts   to  separately   fund  the  RCA   and  the                                                                   
Department public advocacy function  in order to provide each                                                                   
entity with budgetary independence from the other.                                                                              
                                                                                                                                
Mr.  Otierney   advised  that   SB  392  would   provide  the                                                                   
Department qualified  access to  utility or pipeline  carrier                                                                   
records  similar to  that afforded  the  RCA's former  public                                                                   
advocacy staff  to maintain  efficient and economical  access                                                                   
to   information   where   the  RCA   has   determined   that                                                                   
comprehensive review.   Also,  the bill clarifies  that State                                                                   
agencies are  exempt from paying  the allocated costs  of RCA                                                                   
proceedings  to which  the State  agency is  a party  because                                                                   
there is no net fiscal benefit to the State.                                                                                    
                                                                                                                                
Representative Stoltze  thought that the request  should have                                                                   
been included  in the  Department of  Law's operating  budget                                                                   
request.    Mr.  Otierney  disagreed  that  the  request  was                                                                   
misplaced.                                                                                                                      
                                                                                                                                
Co-Chair Harris asked if Mr. Otierney's  job was "on the line                                                                   
if the bill did  not pass".  Mr. Otierney stated  it was not.                                                                   
The  funding source  for  public  advocacy had  already  been                                                                   
transferred  and currently  is  from regulatory  cost  charge                                                                   
receipts.  In  that scenario, the Department  of Law's public                                                                   
advocacy function is in RDU within  the RCA budget and funded                                                                   
from regulatory cost charge receipts.   The bill provides the                                                                   
appropriate  independence of  the budget  for that  function.                                                                   
He added, there would be no change  in the source of funding.                                                                   
                                                                                                                                
Co-Chair  Harris   inquired  why  the  issue   had  not  been                                                                   
submitted in  the Department of  Law's budget.   Mr. Otierney                                                                   
understood  that it  was not  a  function funded  out of  the                                                                   
general fund but rather a regulatory cost-charge.                                                                               
                                                                                                                                
Co-Chair Harris referenced Mr.  Otierney's statement that the                                                                   
request  was "off-budget",  pointing  out that  there are  no                                                                   
"off-budget" requests.   All funds are receipts  for services                                                                   
and are  taken into  consideration.   Mr. Otierney  indicated                                                                   
that  he did  not  take issue  to  that and  that  he is  the                                                                   
"substantive  guy" with the  responsibility to implement  the                                                                   
advocacy function.                                                                                                              
                                                                                                                                
Co-Chair Harris noted that he supports the bill.                                                                                
                                                                                                                                
Representative  Foster   MOVED  to  report  SB   392  out  of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
SB   392   was   reported   out   of   Committee   with   "no                                                                   
recommendation" and with fiscal  note #3 by the Department of                                                                   
Law.                                                                                                                            
                                                                                                                                
CS FOR SENATE BILL NO. 393(FIN)                                                                                               
                                                                                                                                
     An Act relating  to default on tuition,  fees, and other                                                                   
     charges  of the University  of Alaska  and to  claims on                                                                   
     permanent  fund dividends for  tuition, fees,  and other                                                                   
     charges  of  the  University   of  Alaska  that  are  in                                                                   
     default.                                                                                                                   
                                                                                                                                
PETE KELLY, DIRECTOR, STATE RELATIONS,  UNIVERSITY OF ALASKA,                                                                   
stated that  SB 393 would add  the University to the  list of                                                                   
exemptions for  Permanent Fund  dividends when there  is debt                                                                   
owed to the  State.  Currently, criteria exist  in statute by                                                                   
which it can  be collected.  The bill clarifies  the purposes                                                                   
of collecting bad debt from tuition  and department fees.  In                                                                   
policy,  there  are  protections  built  in notice.    It  is                                                                   
anticipated that  the legislation  will allow the  University                                                                   
to collect  approximately  $400 thousand  dollars this  year.                                                                   
To implement the legislation,  the first year costs amount to                                                                   
approximately  $100 thousand dollars,  with $40 thousand  per                                                                   
year used to collect the fees after that.                                                                                       
                                                                                                                                
Representative  Stoltze  inquired  if the  only  other  State                                                                   
agency  that   has  the  authority  was  the   Child  Support                                                                   
Enforcement Agency  (CSEA).  Mr.  Kelly pointed  out language                                                                   
on Page 2, Line 22, indicating how broad that statute is.                                                                       
                                                                                                                                
Representative  Croft asked  why  it could  not be  collected                                                                   
under Section (5), Page 2, Lines  18-20.  He thought that the                                                                   
difference between Sections #5  & #6 was that they would have                                                                   
to go through the  expense of small claims action  to get the                                                                   
judgment  rather  than the  administrative  appeals  process.                                                                   
Mr. Kelly  agreed that  was correct  and that the  procedures                                                                   
are already in statute.                                                                                                         
                                                                                                                                
Co-Chair  Harris asked  if the  University's Student  Council                                                                   
had issued an opinion.   Mr. Kelly responded that  it had not                                                                   
yet been proposed to them.  Co-Chair  Harris recommended that                                                                   
discussion occur.                                                                                                               
                                                                                                                                
Representative Foster MOVED to  report CS SB 393 (FIN) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS SB  393 (FIN)  was reported  out of  Committee with  a "do                                                                   
pass"  recommendation   and  with  fiscal  note   #1  by  the                                                                   
University of Alaska and fiscal  note #2 by the Department of                                                                   
Revenue.                                                                                                                        
                                                                                                                                
CS FOR SENATE BILL NO. 224(STA)                                                                                               
                                                                                                                                
     An Act  relating to  a minor  operating a vehicle  after                                                                   
     consuming  alcohol, to  a  minor refusing  to submit  to                                                                   
     chemical  tests,  and to  driving  during  the 24  hours                                                                   
     after  being  cited  for  one  of  those  offenses;  and                                                                   
     providing for an effective date.                                                                                           
                                                                                                                                
RICHARD SCHMITZ, STAFF, SENATOR  JOHN COWDERY, explained that                                                                   
SB  224 would  change Alaska's  law to  require that  stiffer                                                                   
penalties apply to people under  the legal drinking age after                                                                   
consuming  any  amount of  alcohol.    Under current  law,  a                                                                   
person under  21 years old, who  drives with a  Blood Alcohol                                                                   
Content (BAC) of  below .08, would receive a  charge of minor                                                                   
consuming and/or  minor operating a vehicle  after consuming,                                                                   
both of which are infractions.                                                                                                  
                                                                                                                                
SB  224 applies  mandatory fines  and  community service  for                                                                   
minors to  drive after  consuming any amount  of alcohol.   A                                                                   
first-time  offender faces  a $500 fine,  which increases  to                                                                   
$1000  for  a   second  offense  and  $1500   for  additional                                                                   
offenses.      Community   service    requirements   increase                                                                   
similarly.                                                                                                                      
                                                                                                                                
Mr. Schmitz continued, drivers  between the ages of 15 and 20                                                                   
years  old make  up  approximately 7%  of  the total  driving                                                                   
population.     That  7%  constitutes  14%  of   the  alcohol                                                                   
related  fatalities.    Zero  tolerance  laws can  act  as  a                                                                   
deterrent and dramatically help change the behavior.                                                                            
                                                                                                                                
CINDY  CASHEN,  EXECUTIVE DIRECTOR,  MOTHER'S  AGAINST  DRUNK                                                                   
DRIVING (MADD),  JUNEAU, explained that currently,  teenagers                                                                   
are being charged  with minor consuming charges.   The public                                                                   
defenders office  has indicated  that passage would  increase                                                                   
their workload.   She  thought that in  reality, most  of the                                                                   
minor consuming  charges already have  the right to  a public                                                                   
defender, which  would not significantly change.   Presently,                                                                   
time,  the fee  for  such a  charge  is usually  around  $250                                                                   
dollars, which to the offender is a joke.                                                                                       
                                                                                                                                
Ms.  Cashen commented  that the  BAC level  usually create  a                                                                   
raise with each  charge and then the person  becomes familiar                                                                   
with  the system,  becoming  a high-risk  driver.   The  bill                                                                   
would detour them with the first  charge at $500 dollars, the                                                                   
second  charge  at  $1000  dollars and  the  third  at  $1500                                                                   
dollars.   That would  be an amount,  which would  affect the                                                                   
legal guardians,  providing an  opportunity for them  to talk                                                                   
about  the  situation.   Also,  the  community  work  service                                                                   
program  aspect is  very  important, as  it  would force  the                                                                   
teenager to work  in a program that deals with  the education                                                                   
of treatment and  intervention of alcohol abuse.   Ms. Cashen                                                                   
thought that  it would be effective  and urged that  the bill                                                                   
pass.                                                                                                                           
                                                                                                                                
Representative  Stoltze asked  if the  proposed change  would                                                                   
alter eligibility  for first time youth offenders  being able                                                                   
to get  into the Youth Corp  program.  Ms.  Cashen understood                                                                   
that 14-16  year olds  would no longer  be eligible  for that                                                                   
program.                                                                                                                        
                                                                                                                                
Representative Stoltze  asked if the increase  in the penalty                                                                   
would create  any barrier to that  program.  Mr.  Schmitz did                                                                   
not know,  however, understood that different  municipalities                                                                   
addressed that  concern differently.  Representative  Stoltze                                                                   
asked that  a more definitive  answer be provided  before the                                                                   
House Floor session discussion.   Mr. Schmitz understood that                                                                   
the legislation  would  make the student  ineligible  for the                                                                   
Youth Corp program.                                                                                                             
                                                                                                                                
Representative Chenault  asked if the legislation  would only                                                                   
apply to a .02  BAC.  Mr. Schmitz stated that  it would apply                                                                   
if  the person  had  driven  within  a 24-hour  period  after                                                                   
drinking or  consuming alcohol and  that the BAC  level would                                                                   
not be the  only factor considered.   There would need  to be                                                                   
proof that the student had been consuming alcohol.                                                                              
                                                                                                                                
Vice Chair Meyer  pointed out the indeterminate  fiscal notes                                                                   
and  asked if  the  teenager would  be  eligible  for a  jury                                                                   
trial.    Ms. Cashen acknowledged that was  correct, pointing                                                                   
out that  most of  them are additionally  charged with  minor                                                                   
consuming,  which allows that  person to  qualify for  a jury                                                                   
trial.                                                                                                                          
                                                                                                                                
Vice  Chair Meyer  noted that  he  appreciated the  community                                                                   
service aspect of the legislation.                                                                                              
                                                                                                                                
Representative  Fate questioned  if  the  provision would  be                                                                   
waived  if drinking  were  done  at home  with  family.   Mr.                                                                   
Schmitz replied  that was  not included in  statute.   If the                                                                   
person were caught drinking illegally,  they would be guilty.                                                                   
Ms. Cashen  interjected that it  is legal to give  your child                                                                   
alcohol.                                                                                                                        
                                                                                                                                
Representative  Fate  reiterated  his question,  asking  what                                                                   
would happen if there was an accident.   Ms. Cashen responded                                                                   
that they  would be  charged because  they  were a minor  and                                                                   
operating a motor vehicle while under consumption.                                                                              
                                                                                                                                
Representative Croft asked if  the "minor" as proposed in the                                                                   
legislation,  would  be under  21  years  old.   Mr.  Schmitz                                                                   
explained  that had  been discussed  in  the House  Judiciary                                                                   
Committee and  was a  "term of art"  and applies  to drinking                                                                   
and driving statutes.   In response to  Representative Croft,                                                                   
Ms.  Cashen added  that the  legislation  would increase  the                                                                   
penalties and  fines and would  add mandatory  community work                                                                   
service.                                                                                                                        
                                                                                                                                
Representative   Joule  asked   if   the  community   service                                                                   
prevention  including   treatment  and  education   would  be                                                                   
mandatory.  Ms.  Cashen responded that the  community service                                                                   
would  be done  through  the  schools, hopefully  offering  a                                                                   
variety of opportunities.                                                                                                       
                                                                                                                                
Co-Chair Harris  asked about the  fiscal notes.   Mr. Schmitz                                                                   
pointed out  the public  defender's note  that MADD  does not                                                                   
agree  with.     The  original   bill  proposed  a   Class  B                                                                   
misdemeanor, which subsequently  was removed and however, the                                                                   
fiscal note did not change removing that language.                                                                              
                                                                                                                                
Co-Chair  Harris   MOVED  to   zero  out  fiscal   note  #10.                                                                   
Representative Stoltze pointed  out for the record that it is                                                                   
the opinion  of MADD that action  would be appropriate.   Ms.                                                                   
Cashen acknowledged  that entire court system  could use more                                                                   
staff,  however,  SB  224  would   not  increase  the  Public                                                                   
Defender's  workload to  require  another  person.   Co-Chair                                                                   
Harris stated  that the  reality is,  the public defender  is                                                                   
required by the court to represent  those people and that the                                                                   
agency  could  come  back  to  the  Legislature  through  the                                                                   
supplemental  budget request.   He maintained  that  he would                                                                   
rather face  the supplemental later  than to fund it  at this                                                                   
time.                                                                                                                           
                                                                                                                                
LINDA   WILSON,  (TESTIFIED   VIA   TELECONFERENCE),   DEPUTY                                                                   
DIRECTOR,  ALASKA  PUBLIC  DEFENDER   AGENCY,  DEPARTMENT  OF                                                                   
ADMINISTRATION,  ANCHORAGE,  commented  on the  fiscal  note.                                                                   
Currently, when a  person is charged with a  movack, they get                                                                   
their license  revoked.   Requiring mandatory community  work                                                                   
service  and increased  graduated  fines,  will require  more                                                                   
prosecution in  court.  For  a first minor consuming  charge,                                                                   
there would be no license action  as there would be no tie in                                                                   
consuming  with   the  driving.    In  the   past,  when  the                                                                   
legislature changed  the statute concerning  minor consuming,                                                                   
calling it  an infraction, the  minor was not to  be entitled                                                                   
to a  court appointed  council.  In  2001, when that  statute                                                                   
changed, there were  58 cases charged with a  public defender                                                                   
for minor consuming.   That number has mushroomed  in 2003 to                                                                   
892.   There  are  three  statutes  now that  have  graduated                                                                   
sanctions and mandatory community work service.                                                                                 
                                                                                                                                
Enactment  of the  legislation would  provide entitlement  to                                                                   
court appointed council  and a jury trial and  will require a                                                                   
fair  amount  of  public  defenders.    Changing  it  from  a                                                                   
misdemeanor to an infraction does  not negate the entitlement                                                                   
to a court appointed attorney  or a jury trial because of the                                                                   
mandatory community  work service that  is part of  the bill.                                                                   
She  stressed that  they will  need at  least one  additional                                                                   
attorney to handle the request  and she urged that the fiscal                                                                   
note not be zeroed out.                                                                                                         
                                                                                                                                
Co-Chair  Williams   OBJECTED  to   zeroing  out   the  note.                                                                   
Representative Croft  added his objection to  zeroing out the                                                                   
note, stressing that  it would not be an  appropriate action.                                                                   
He  noted the  usual large  supplemental  requests from  that                                                                   
agency, which  does not provide  an accurate picture  of that                                                                   
agency's on-going  needs.  Fiscal notes are  provided to give                                                                   
the  State an  understanding of  the  costs for  implementing                                                                   
legislation.                                                                                                                    
                                                                                                                                
Co-Chair Williams  WITHDREW his  OBJECTION to the  amendment.                                                                   
There being NO further OBJECTION, the note was zeroed out.                                                                      
                                                                                                                                
Representative Foster MOVED to  report CS SB 224 (STA) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS  SB 224  (STA)  was reported  out  of Committee  with  "no                                                                   
recommendation" and  with zero note  #5 by the  Department of                                                                   
Public  Safety, indeterminate  note  #6 by  the Alaska  Court                                                                   
System, zero  note #7  by the Department  of Health  & Social                                                                   
Services, zero  note #8 by the Department  of Administration,                                                                   
indeterminate  note #9  by the  Department of  Administration                                                                   
and  a  new note  by  the  House Finance  Committee  for  the                                                                   
Department of Administration.                                                                                                   
                                                                                                                                
CS FOR SENATE BILL NO. 376(HES) am                                                                                            
                                                                                                                                
     An Act relating to public assistance and subpoena                                                                          
     powers; and relating to the permanent fund dividend and                                                                    
     subpoena powers.                                                                                                           
                                                                                                                                
JASON HOOLEY,  STAFF, SENATOR FRED  DYSON, noted that  SB 376                                                                   
would allow the commissioners  for the Department of Health &                                                                   
Social  Services  and  the Department  of  Revenue  to  issue                                                                   
subpoenas  to  compel the  production  of records  needed  to                                                                   
investigate  cases of  suspected  fraud.   The Department  of                                                                   
Labor  & Workforce  Development  currently has  that type  of                                                                   
subpoena power, as do many agencies in other states.                                                                            
                                                                                                                                
The Division of Public Assistant  Fraud Control Unit reported                                                                   
that records such  as rental agreements, utility  billings or                                                                   
health care information are often  used to verify information                                                                   
provided  by  public  assistance  applicants  or  recipients.                                                                   
Simple  requests for  these items  often go  unheeded due  to                                                                   
concerns about  exposure to litigation.  Currently,  the cost                                                                   
of going  to court to get  subpoenas for that type  of record                                                                   
makes  investigating  "smaller"   fraud  cases  prohibitively                                                                   
expensive.  By allowing these  departments to issue their own                                                                   
subpoenas, the costs  of going to court would  be eliminated,                                                                   
and the  department could  cost-effectively investigate  more                                                                   
cases  of suspected  fraud.   The result  will be  additional                                                                   
recovery  of  welfare  overpayments.   The  one-person  staff                                                                   
working to combat Permanent Fund  Dividend fraud has begun an                                                                   
aggressive  fraud  program, aimed  to  assure  that fraud  is                                                                   
identified, prosecuted,  and deterred to the  greatest extent                                                                   
possible.                                                                                                                       
                                                                                                                                
Representative Foster  MOVED to report CS SB  376 (HES)am out                                                                   
of Committee  with  individual recommendations  and with  the                                                                   
accompanying fiscal notes.                                                                                                      
                                                                                                                                
Representative  Chenault  OBJECTED to  make  a  comment.   He                                                                   
voiced concern with who would  be in charge with the subpoena                                                                   
ballot.  He stated that it is  important that the Legislature                                                                   
indicate who  they would want  to see it be.   Representative                                                                   
Chenault WITHDREW his OBJECTION.                                                                                                
                                                                                                                                
JAY   MARLEY,   (TESTIFIED   VIA    TELECONFERENCE),   PUBLIC                                                                   
ASSISTANCE FRAUD CONTROL UNIT  MANAGER, DEPARTMENT OF LABOR &                                                                   
WORKFORCE  DEVELOPMENT,  ANCHORAGE,  stated that  within  the                                                                   
Department  of Labor  & Workforce  Development, the  subpoena                                                                   
power went down  to the investigator level.   With the number                                                                   
of subpoenas currently being investigated  by the Department,                                                                   
it would  be extremely  burdensome  to have  to wait for  the                                                                   
commissioner, deputy  commissioner or the deputy  director of                                                                   
any division's signature.                                                                                                       
                                                                                                                                
Representative Stoltze  could not believe that it  would be a                                                                   
"burden" to get the signature of the commissioner.                                                                              
                                                                                                                                
ANTHONY LOMBARDO,  DIRECTOR, DIVISION  OF PUBLIC  ASSISTANCE,                                                                   
DEPARTMENT OF HEALTH & SOCIAL  SERVICES, noted that there had                                                                   
been discussion in the Senate  regarding potential abuse.  As                                                                   
a result, there was language proposed  by Senator French that                                                                   
it  be limited  to the  commissioner's  or director's  level.                                                                   
Essentially, the  decisions need to  be made on  an executive                                                                   
level where  there is  some accountability  in the  issuance.                                                                   
Department of Health  & Social Services agreed  that would be                                                                   
an appropriate limitation.                                                                                                      
                                                                                                                                
There  being NO  further  OBJECTION, CS  SB  376 (HES)am  was                                                                   
reported out of  Committee with "no recommendation"  and with                                                                   
fiscal note  #1 &  #2 by  the Department  of Health  & Social                                                                   
Services and zero note #3 by the Department of Revenue.                                                                         
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 12:08 P.M.                                                                                         

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