Legislature(2005 - 2006)HOUSE FINANCE 519

04/11/2005 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 109 SCREENING NEWBORNS FOR HEARING ABILITY TELECONFERENCED
Heard & Held
+ HB 91 INDECENT EXPOSURE TO MINORS TELECONFERENCED
Moved Out of Committee
+ HB 219 STRANGULATION CRIMES TELECONFERENCED
Moved CSHB 219(FIN) Out of Committee
+ HB 71 AK PENINSULA OIL & GAS LEASE SALE; TAXES TELECONFERENCED
Heard & Held
Bills Previously Heard/Scheduled
= HB 123 OCCUPATIONS: FEES & EXTENSION OF BOARDS
Moved CSHB 123(FIN) Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 11, 2005                                                                                           
                         1:41 p.m.                                                                                              
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer called the House  Finance Committee meeting to                                                                   
order at 1:41:29 PM.                                                                                                          
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Bill Stoltze, Vice-Chair                                                                                         
Representative Eric Croft                                                                                                       
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Jim Holm                                                                                                         
Representative Mike Kelly                                                                                                       
Representative Carl Moses                                                                                                       
Representative Bruce Weyhrauch                                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Reggie Joule                                                                                                     
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Rick Urion,  Director, Occupational Licensing,  Department of                                                                   
Community  and Economic  Development;  John Walsh,  Lobbyist,                                                                   
Alaska    Psychological    Association;    William    Corbus,                                                                   
Commissioner,   Department   of  Revenue;   Mitch   Usibelli,                                                                   
Manager,   Usibelli   Energy;  Representative   Jay   Ramras;                                                                   
Representative John Coghill; Representative Ralph Samuels                                                                       
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Linda  Wilson,  Deputy  Director,   Public  Defender  Agency,                                                                   
Department  of  Administration;   Martin  Beals,  Jr.,  M.D.,                                                                   
Pediatrician,  Anchorage;  Debbie  Golden,  March  of  Dimes,                                                                   
Anchorage;   Lisa  Owens,   Audiologist,  Anchorage;   Debbie                                                                   
Joslin, Eagle River; Tara Henry,  Sexual Abuse Nurse Examiner                                                                   
(SANE),  Anchorage,   Tamara  DeLucia,  Office   of  Victim's                                                                   
Rights; Dan Dickinson, Director,  Tax Division, Department of                                                                   
Revenue; Colleen  Chinn-Acca,  Fairbanks; Martin Beals,  Jr.,                                                                   
M.D. Pediatrician, Anchorage.                                                                                                   
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 123    "An  Act relating  to  occupational licensing  fees                                                                   
          and  receipts; extending  the termination  dates of                                                                   
          the  Boards  of Barbers  and  Hairdressers,  Social                                                                   
          Work Examiners, Pharmacy,  Professional Counselors,                                                                   
          Psychologist     and    Psychological     Associate                                                                   
          Examiners,  and Veterinary  Examiners; relating  to                                                                   
          an exemption that allows  one bill to continue more                                                                   
          than one board, commission,  or agency program; and                                                                   
          providing for an effective date."                                                                                     
                                                                                                                                
          CSHB 123  (FIN) was REPORTED out of  Committee with                                                                   
          a  "no  recommendation"   recommendation  and  with                                                                   
          fiscal  impact   note  #1  by  the   Department  of                                                                   
          Commerce, Community and Economic Development.                                                                         
                                                                                                                                
HB 71     "An Act relating to a credit for certain                                                                              
          exploration   expenses    against   oil   and   gas                                                                   
          properties   production  taxes   on  oil   and  gas                                                                   
          produced  from a  lease or  property in the  state;                                                                   
          relating  to the deadline  for certain  exploration                                                                   
          expenditures  used  as credits  against  production                                                                   
          tax  on  oil  and  gas produced  from  a  lease  or                                                                   
          property  in the Alaska  Peninsula competitive  oil                                                                   
          and  gas area wide  lease sale  area after  July 1,                                                                   
          2004; and providing for an effective date."                                                                           
                                                                                                                                
          HB 71  was heard and HELD in Committee  for further                                                                   
          consideration.                                                                                                        
                                                                                                                                
HB 219    "An Act relating to crimes and dangerous                                                                              
          instruments."                                                                                                         
                                                                                                                                
          CSHB 219  (FIN) was REPORTED out of  Committee with                                                                   
          a  "do pass"  recommendation  and  with three  zero                                                                   
          fiscal impact notes:  #1 CRT, #2 LAW, #3 DPS, and a                                                                   
          new ADM zero fiscal note.                                                                                             
                                                                                                                                
HB 91     "An Act relating to indecent exposure."                                                                               
                                                                                                                                
          HB  91 was  REPORTED out  of Committee  with a  "do                                                                   
          pass"  recommendation  and with  three zero  fiscal                                                                   
         impact notes: #1 ADM, #2 LAW, and #3 CRT.                                                                              
                                                                                                                                
HB 109    "An Act relating to establishing a screening,                                                                         
          tracking,  and intervention program related  to the                                                                   
          hearing ability of newborns  and infants; providing                                                                   
          an  exemption to  licensure as  an audiologist  for                                                                   
          certain   persons  performing   hearing   screening                                                                   
          tests; relating  to insurance coverage  for newborn                                                                   
          and infant hearing screening;  and providing for an                                                                   
          effective date."                                                                                                      
                                                                                                                                
          HB 109 was heard and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
1:41:44 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 123                                                                                                            
                                                                                                                                
     "An  Act relating  to  occupational  licensing fees  and                                                                   
     receipts; extending the termination  dates of the Boards                                                                   
     of  Barbers  and Hairdressers,  Social  Work  Examiners,                                                                   
     Pharmacy,  Professional   Counselors,  Psychologist  and                                                                   
     Psychological   Associate   Examiners,  and   Veterinary                                                                   
     Examiners;  relating  to an  exemption  that allows  one                                                                   
     bill  to continue  more than one  board, commission,  or                                                                   
     agency program; and providing for an effective date."                                                                      
                                                                                                                                
RICK URION,  DIRECTOR OCCUPATIONAL  LICENSING, DEPARTMENT  OF                                                                   
COMMUNITY  AND   ECONOMIC  DEVELOPMENT;  offered   to  answer                                                                   
questions regarding HB 123.                                                                                                     
                                                                                                                                
Co-Chair  Meyer  asked for  an  explanation of  the  $486,000                                                                   
fiscal note.  Mr. Urion reported  that the fiscal note covers                                                                   
direct costs by  the boards.  Vice-Chair Stoltze  inquired if                                                                   
that amount  is already  built  into the budget.   Mr.  Urion                                                                   
replied that is correct.                                                                                                        
                                                                                                                                
Co-Chair  Meyer asked  where  the funds  from  the fines  and                                                                   
penalties go.   Mr.  Urion explained that  the fines  went to                                                                   
the profession  until  a few years  ago.   It was  discovered                                                                   
that fines  are not  covered in law,  so new legislation  was                                                                   
needed.   He related that the  fines do not  generate revenue                                                                   
because it costs  money to collect them.  The  bill addresses                                                                   
an  issue of  fairness  when it  allows  fines and  penalties                                                                   
collected  by various  occupations  to be  included with  fee                                                                   
collections for  the purpose  of determining whether  revenue                                                                   
collected approximately equals  the total costs of regulation                                                                   
for an occupation or board.                                                                                                     
                                                                                                                                
1:46:28 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault  asked  how  much the  Department  of  Law                                                                   
actually spends on  collecting the fines.  Mr.  Urion replied                                                                   
that he could look up the records.    He added that there are                                                                   
five personnel  alone that  deal with occupational  licensing                                                                   
issues.                                                                                                                         
                                                                                                                                
Representative  Weyhrauch   asked  if  licensing   fines  are                                                                   
determined on a case-by-case method.   Mr. Urion replied that                                                                   
various  boards  have various  methods  of figuring  out  the                                                                   
fines.   Representative Weyhrauch  suggested that  some cases                                                                   
might  be technical  violations,  others  fraud, which  would                                                                   
require  different fine  amounts.   Mr.  Urion  said that  is                                                                   
correct.                                                                                                                        
                                                                                                                                
1:49:11 PM                                                                                                                    
                                                                                                                                
Representative  Hawker asked if  there is unequal  allocation                                                                   
of fine  costs between occupations.   Mr. Urion  replied that                                                                   
would be  handled at individual  board levels.  Costs  from a                                                                   
profession  will  be  borne  by   its  own  profession.    He                                                                   
emphasized that every profession favors this bill.                                                                              
                                                                                                                                
Co-Chair Meyer asked if licensing  fees would decrease.   Mr.                                                                   
Urion replied that the amount is miniscule.                                                                                     
                                                                                                                                
1:51:44 PM                                                                                                                    
                                                                                                                                
Representative Hawker MOVED to adopt Amendment 3:                                                                               
                                                                                                                                
     Page 1, line 1                                                                                                           
     After "An act relating to"                                                                                                 
     Delete "occupational licensing fees and receipts;"                                                                         
     Page 1, line 7                                                                                                           
     Delete Section 1                                                                                                           
     Page 2, line 28                                                                                                          
     Delete Section 2                                                                                                           
     Page 3, line 9                                                                                                           
     Delete Section 3                                                                                                           
     Page 3, line 20                                                                                                          
     Delete Section 4                                                                                                           
     Page 4, line 22                                                                                                          
     Delete Section 11                                                                                                          
     Page 4, line 27                                                                                                          
     Delete Section 12                                                                                                          
     Renumber remaining sections accordingly.                                                                                 
                                                                                                                                
Co-Chair Meyer OBJECTED for discussion purposes.                                                                                
                                                                                                                                
Representative Hawker explained  that the Amendment 3 deletes                                                                   
all sections  in the  bill not related  to the extensions  of                                                                   
the boards.  The committee has  attempted in the past to keep                                                                   
board extensions  clean and not cluttered with  other issues,                                                                   
not mix  policy with  ministerial activities.   He  suggested                                                                   
that the committee would need  to hear from all of the boards                                                                   
in order to know that they all  are supportive of the new CS.                                                                   
                                                                                                                                
Mr. Urion  related that  last year he  was directed  to write                                                                   
this  bill in  its current  form.   He expressed  frustration                                                                   
about the turn of events with the addition of Amendment 3.                                                                      
                                                                                                                                
Vice-Chair  Stoltze  noted  that  it is  important  to  clean                                                                   
sunsets up.                                                                                                                     
                                                                                                                                
Co-Chair Meyer WITHDREW his OBJECTION.                                                                                          
                                                                                                                                
There being NO OBJECTION, Amendment 3 was adopted.                                                                              
                                                                                                                                
1:55:46 PM                                                                                                                    
                                                                                                                                
JOHN  WALSH,  LOBBYIST,  ALASKA   PSYCHOLOGICAL  ASSOCIATION,                                                                   
asked if  Amendment 3 amends  the bill as previously  amended                                                                   
by  Amendment  1.    Representative   Hawker  responded  that                                                                   
Amendment 3 amends Version Y, the Labor and Commerce CS.                                                                        
                                                                                                                                
Representative Foster  moved to report CSHB 123  (FIN) out of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal note.                                                                                                       
                                                                                                                                
CSHB  123 (FIN)  was REPORTED  out  of Committee  with a  "no                                                                   
recommendation"  recommendation and  with fiscal impact  note                                                                   
#1  by the  Department of  Commerce,  Community and  Economic                                                                   
Development.                                                                                                                    
                                                                                                                                
1:59:10 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 71                                                                                                             
                                                                                                                                
     "An  Act relating  to a credit  for certain  exploration                                                                   
     expenses  against  oil  and  gas  properties  production                                                                   
     taxes on oil  and gas produced from a  lease or property                                                                   
     in  the state;  relating  to  the deadline  for  certain                                                                   
     exploration   expenditures  used   as  credits   against                                                                   
     production tax  on oil and gas produced from  a lease or                                                                   
     property  in the  Alaska Peninsula  competitive oil  and                                                                   
     gas areawide  lease sale  area after  July 1,  2004; and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
WILLIAM   CORBUS,   COMMISSIONER,  DEPARTMENT   OF   REVENUE,                                                                   
related:                                                                                                                        
                                                                                                                                
     House Bill 71 extends from  July 1, 2007 to July 1, 2010                                                                   
     the   deadline   for   making    qualified   exploration                                                                   
     expenditures under new AS  43.55.025 (passed in 2003) in                                                                   
     the  Bristol  Bay area.     Leases  in  the Bristol  Bay                                                                   
     (Alaska  Peninsula) Competitive Oil  and Gas  Lease Sale                                                                   
     are not  expected to  be issued prior  to the  spring of                                                                   
     2006.   Production  expenditures  on  these leases  thus                                                                   
     will most  likely be  made after July  1, 2007  and will                                                                   
     not qualify for tax credits under the current law.                                                                         
                                                                                                                                
     House Bill  71 is intended to encourage  exploration and                                                                   
     development  of one of  the largest undeveloped  onshore                                                                   
     oil and  gas fields remaining  in Alaska outside  of the                                                                   
     North  Slope.    Development   of  this  field  has  the                                                                   
     potential to bring stable,  high paying, year round jobs                                                                   
     to an area which has traditionally  relied on a seasonal                                                                   
     commercial  fishing economy.   Gas  from this  field can                                                                   
     provide an  efficient relatively low cost  energy source                                                                   
     for  heating and  the production  of electricity  to the                                                                   
     Alaska  Peninsula area.    Oil and  gas development  can                                                                   
     provide  transportation  infrastructure  and  lower  the                                                                   
     cost  of  living in  this  area.   Local  residents  and                                                                   
     commercial interests,  including native  corporations in                                                                   
     the  Alaska Peninsula  area support  development of  the                                                                   
     gas and oil resources in  this area.  Under the terms of                                                                   
     the lease  sale, any  development of  oil and  gas under                                                                   
     state waters  within the three-mile limit  would have to                                                                   
     be done by directional drilling from onshore.                                                                              
                                                                                                                                
     Three changes were made to  HB 71 in the House Resources                                                                   
     Committee substitute:                                                                                                      
                                                                                                                                
     1. A  change to HB 71  was added in the  House Resources                                                                   
     Committee to extend the exploration  tax credit to wells                                                                   
     drilled in the Nenana Basin  through July 1, 2008.   The                                                                   
     Administration supports this amendment.                                                                                    
     2.  A second  change added  in  the Resources  Committee                                                                   
     substitute  eliminates the  exploration  tax credit  for                                                                   
     exploration in ANWR.                                                                                                       
     3. The third change added  in House Resources eliminates                                                                   
     the exploration tax credit  for certain wells that might                                                                   
     be considered  delineation wells under the  current law.                                                                   
     The  Administration  does  not support  this  change  to                                                                   
     existing tax policy.  The  idea behind the original bill                                                                   
     was if an  explorer was going to push  the boundaries of                                                                   
     the area under  production out 25 miles,  then the state                                                                   
     would  underwrite  the well  work associated  with  that                                                                   
     exploration,  even to  the  extent of  figuring out  how                                                                   
     much  production is  there.   All the  other limits  -of                                                                   
     kinds of expense and when  the work has to be done still                                                                   
     exist.  We think that was  good idea then, we think it's                                                                   
     a good idea  now and if explorers thought it  was a good                                                                   
     idea, we shouldn't change  the law now.  These companies                                                                   
     have made and  are making decisions based on  a law that                                                                   
     was to  be in effect from  July 1, 2004 to July  1, 2007                                                                   
     it would  be inappropriate to  make changes to  that law                                                                   
     at this time.                                                                                                              
                                                                                                                                
2:04:20 PM                                                                                                                    
                                                                                                                                
Representative  Hawker asked which  change was not  endorsed.                                                                   
Commissioner Corbus deferred to Dan Dickinson.                                                                                  
                                                                                                                                
2:05:01 PM                                                                                                                    
                                                                                                                                
DAN  DICKINSON,   DIRECTOR,  TAX   DIVISION,  DEPARTMENT   OF                                                                   
REVENUE, (via  teleconference) responded that the  tax policy                                                                   
change   made  in   the  House   Resources   CS,  which   the                                                                   
Administration  is not  endorsing,  changed the  requirements                                                                   
and limitations  on which  wells might  or might not  qualify                                                                   
for the last two years of the  four years from which this tax                                                                   
credit can apply.                                                                                                               
                                                                                                                                
Representative   Hawker  asked   for  clarification   on  the                                                                   
language at issue.                                                                                                              
                                                                                                                                
Mr. Dickinson  replied the  language is  found in Section  1,                                                                   
lines 7-10  (new subsection  3), Section 3,  4 and 5.   Under                                                                   
the current legislation, a 20  percent credit is set up if an                                                                   
exploration  well  is  drilled  more  than 3  miles  from  an                                                                   
existing  well.   There is  also a  20 percent  credit if  an                                                                   
exploration well is more than  25 miles from a unit boundary,                                                                   
as  it existed  on  the  date  in the  bill.   If  a  company                                                                   
qualifies  for both  credits,  then a  40  percent credit  is                                                                   
possible.   The  CS does not allow for credit  for wells that                                                                   
are less  than 3 miles  from a prior  well, but more  than 25                                                                   
miles from a leased boundary.  He gave an example.                                                                              
                                                                                                                                
2:09:30 PM                                                                                                                    
                                                                                                                                
Representative Hawker inquired  about the rational behind the                                                                   
change.   Mr. Dickinson replied  that once hydrocarbons  have                                                                   
been  found,  the  thought  is that  the  state  should  stop                                                                   
subsidizing and  not allow any  more dollars for  the credit.                                                                   
If the boundaries are pushed out,  the credit is then earned.                                                                   
The  issue is  how far  the boundaries  can  be extended  and                                                                   
still qualify for credit.                                                                                                       
                                                                                                                                
Representative  Hawker asked  if there  could be  one or  two                                                                   
wells  in proximity  to  each  other as  part  of an  initial                                                                   
exploratory find, or if that is prohibited.                                                                                     
                                                                                                                                
Mr. Dickinson  replied that the  new language  would prohibit                                                                   
that situation.   HB 61  created a credit  in the  income tax                                                                   
for  certain exploration  and  development work  in the  Cook                                                                   
Inlet.    It  is appropriate   at times  to  issue  a  credit                                                                   
pertinent   to  the   activity  needed   to  get   additional                                                                   
production, which  is the goal.  Representative  Hawker noted                                                                   
that  the  line  is clear  in  this  CS  between  exploration                                                                   
drilling and development drilling.                                                                                              
                                                                                                                                
Co-Chair   Meyer  asked   if   Mr.  Dickinson   agreed   with                                                                   
Representative Hawker.   He replied that the  definitions are                                                                   
based on the location of the well.                                                                                              
                                                                                                                                
2:13:13 PM                                                                                                                    
                                                                                                                                
Representative Weyhrauch noted  on page 2, line 6, in Version                                                                   
S, the  word "or"  appears.   He recalled  that the  Ways and                                                                   
Means version  had the  word "and".   He asked  if this  is a                                                                   
change.  Mr. Dickinson thought  the wording should say "and".                                                                   
He  clarified  that  the  Resource  Committee  set  up  three                                                                   
situations in subsections 1, 2, and 3.                                                                                          
                                                                                                                                
2:16:26 PM                                                                                                                    
                                                                                                                                
Representative  Weyhrauch  referred to  Section  4 and  asked                                                                   
whether  outer boundaries  that have not  been delineated  by                                                                   
the required date  might prevent eligibility.   Mr. Dickinson                                                                   
explained  that  the lack  of  a  unit boundary  would  still                                                                   
qualify a new well in the Bristol  Bay extension area for the                                                                   
20  percent  credit.  Mr.  Dickinson  recalled  that  if  the                                                                   
boundary had not been delineated, you did not qualify.                                                                          
                                                                                                                                
REPRESENTATIVE RALPH SAMUELS explained  that is a policy call                                                                   
about the  second well.   In response  to the question  about                                                                   
"and" and  "or", he  explained that  the Resources  Committee                                                                   
switched from  "and" to  "or" because  it didn't want  anyone                                                                   
receiving an 80  percent credit.  He opined  that the wording                                                                   
still  needs  clarification.    He  shared  discussions  that                                                                   
happened in the Resources Committee Meeting.                                                                                    
                                                                                                                                
2:21:26 PM                                                                                                                    
                                                                                                                                
Representative  Holm  asked  about  the  rationale  for  only                                                                   
allowing one well.                                                                                                              
                                                                                                                                
Representative  Samuels  explained  the thinking  behind  the                                                                   
decision.   The idea was not  to give credit  for exploration                                                                   
on a known property.                                                                                                            
                                                                                                                                
Mr. Dickinson strongly  urged that the committee  adopt HB 71                                                                   
be adopted with the additional conceptual language changes.                                                                     
                                                                                                                                
2:23:43 PM                                                                                                                    
                                                                                                                                
MITCH  USIBELLI, MANAGER,  USIBELLI  ENERGY, NENANA,  related                                                                   
that his  company is involved  in two projects,  Nenana Basin                                                                   
and Healy  Basin.   He referred to  handouts on each  project                                                                   
(copy on  file.)  He shared  the history of the  Nenana Basin                                                                   
project and  explained the  maps in the  handout.   He termed                                                                   
this   project   an   exciting,    yet   high-risk   frontier                                                                   
exploration.     He   highlighted   the   summary  sheet   of                                                                   
Exploration  Incentive Credit  Programs.   He noted  that the                                                                   
sunset date on the project is 2007.                                                                                             
                                                                                                                                
2:30:33 PM                                                                                                                    
                                                                                                                                
Mr. Usibelli  described  the history of  the second  project,                                                                   
the proposed  Healy Basin exploration  license.  He  spoke of                                                                   
projects delays.   He described  the maps in the handout.  He                                                                   
noted that  this project is  a gas-only project,  for coalbed                                                                   
methane  and shallow gas  exploration.   The coalbed  methane                                                                   
industry  has grown rapidly  and the  Department of  Energy's                                                                   
forecast  is for the  production of  non-conventional  gas to                                                                   
increase.     He  reviewed   the  summary   sheet  on   Healy                                                                   
Exploration  License Application  and  discussed the  current                                                                   
timeline.                                                                                                                       
                                                                                                                                
2:35:40 PM                                                                                                                    
                                                                                                                                
In response to  a question from Co-Chair Meyer,  Mr. Usibelli                                                                   
replied that he thinks that this tax system works.                                                                              
                                                                                                                                
Representative  Holm  asked  how  long before  data  will  be                                                                   
available  on the projects.   Mr.  Usibelli replied  that his                                                                   
company is processing  that data now and will  know more over                                                                   
next two to three months, by mid-summer.                                                                                        
                                                                                                                                
In  response to  a question  from  Representative Kelly,  Mr.                                                                   
Usibelli replied  that both areas' wells would  be outside of                                                                   
the 25-mile  and 3-mile  limits.   He added  that if  well is                                                                   
over the 30 years old the limit does not apply.                                                                                 
                                                                                                                                
2:39:05 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault  asked how this  tax incentive is  going to                                                                   
affect  his  company's  coalbed  methane, and  oil  and  gas,                                                                   
exploration.   Mr. Usibelli replied that  initial exploration                                                                   
work would  qualify for this  tax credit.  Co-Chair  Chenault                                                                   
referred  to the  Healy Basin  and  asked about  its size  in                                                                   
relation to the  tax incentive.  Mr. Usibelli said  it is his                                                                   
understanding  that the  area  falls outside  of the  25-mile                                                                   
limit.  He explained that there  is plenty of opportunity for                                                                   
exploration there.                                                                                                              
                                                                                                                                
2:41:55 PM                                                                                                                    
                                                                                                                                
Co-Chair   Meyer  suggested   that  a   new  CS  be   written                                                                   
incorporating   potential   amendments.      He   asked   for                                                                   
information  about  Cook  Inlet   drilling.    Mr.  Dickinson                                                                   
reported  that  AS  43.55.025.  applies  to any  gas  or  oil                                                                   
exploration  drilling in  the state and  creates a  four-year                                                                   
window.  This  bill expands the window for  specific areas at                                                                   
the request of the Governor.                                                                                                    
                                                                                                                                
2:44:25 PM                                                                                                                    
                                                                                                                                
Representative Kelly suggested  finding middle ground between                                                                   
the  extremes of  opinion surrounding  this bill.   He  noted                                                                   
that he feels  under-informed about the bill.   Mr. Dickinson                                                                   
offered to provide  additional information.   He related that                                                                   
Representative Samuels summed it up earlier.                                                                                    
                                                                                                                                
Co-Chair  Chenault noted  that  the mile  limits  need to  be                                                                   
addressed and that he would be offering amendments.                                                                             
                                                                                                                                
2:48:56 PM                                                                                                                    
                                                                                                                                
Mr.  Dickinson summarized  that  the intent  is  to push  the                                                                   
boundaries  of exploration.   The  Cook Inlet  would only  be                                                                   
able to  move south.   A  lot of activity  would be  excluded                                                                   
that would otherwise qualify.                                                                                                   
                                                                                                                                
2:50:12 PM                                                                                                                    
                                                                                                                                
Representative   Kelly  asked   for   clarification  on   the                                                                   
department's  position.  Mr. Dickinson  observed  that  there                                                                   
were  several changes  made. The  department  has no  problem                                                                   
with the  extension to  the Nenana Basin.  There is  only one                                                                   
aspect that the department objects to.                                                                                          
                                                                                                                                
HB 71 was HELD in Committee for further consideration.                                                                          
                                                                                                                                
2:51:19 PM                                                                                                                    
                                                                                                                                
At ease.                                                                                                                        
                                                                                                                                
3:03:56 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 219                                                                                                            
                                                                                                                                
     "An Act relating to crimes and dangerous instruments."                                                                     
                                                                                                                                
3:04:19 PM                                                                                                                    
                                                                                                                                
Representative Hawker,  sponsor, explained that  the idea for                                                                   
the bill  was brought  to him by  an expert forensics  nurse,                                                                   
Ms.  Tara Henry.   The  crime of  strangulation is  currently                                                                   
prosecuted as a  misdemeanor.  The bill would  change that to                                                                   
make  strangulation  a  felony,  a  serious  life-threatening                                                                   
assault.  The  Department of Law, the Public  Safety Employee                                                                   
Association, police  departments, the Alaska  State Troopers,                                                                   
the   domestic  violence   prevention   community,  and   the                                                                   
forensics  community support  this  bill.   HB  219 has  zero                                                                   
fiscal impact  notes, except for  the Public Defender  Agency                                                                   
indeterminate note.                                                                                                             
                                                                                                                                
Vice-Chair Stoltze  asked if the bill could  adversely affect                                                                   
a Good Samaritan  or someone performing CPR.   Representative                                                                   
Hawker  added  that  another  possible  concern  is  about  a                                                                   
strangling  occurred in  self-defense.   He  opined that  the                                                                   
bill does not compromise any other  area within criminal law.                                                                   
He shared  a story about  law enforcement training,  which is                                                                   
no longer allowed to use chokeholds.                                                                                            
                                                                                                                                
Representative Kelly  asked about this  law as it  applies in                                                                   
other states.  Representative  Hawker noted that is a popular                                                                   
issue in other states.                                                                                                          
                                                                                                                                
3:10:49 PM                                                                                                                    
                                                                                                                                
TARA HENRY,  SEXUAL ABUSE  NURSE EXAMINER (SANE),  ANCHORAGE,                                                                   
(via teleconference)  related that she is forensic  nurse who                                                                   
provides    expert   testimony    on   assaults,    including                                                                   
strangulation.   Strangulation is  commonly used  in domestic                                                                   
violence   assaults.      She  explained   the   physics   of                                                                   
strangulation and  the lack of  visible symptoms.   She urged                                                                   
the passage of  HB 219 so that these cases  can be prosecuted                                                                   
as felonies.    She listed other states that have,  or are in                                                                   
the process of having, strangulation bills.                                                                                     
                                                                                                                                
3:15:21 PM                                                                                                                    
                                                                                                                                
Representative  Croft inquired if  the problem is  difficulty                                                                   
in proving the  crime.  Ms. Henry explained  that one problem                                                                   
is  that a  medical  expert is  needed  to  testify in  these                                                                   
cases.    Also,  a  jury is  often  unable  to  see  physical                                                                   
evidence in this crime.                                                                                                         
                                                                                                                                
TAMARA DELUCIA,  OFFICE OF  VICTIMS' RIGHTS, ANCHORAGE,  (via                                                                   
teleconference)   related   that   strangulation   is   under                                                                   
prosecuted.   She elaborated  upon the  physical symptoms  of                                                                   
strangulation,  some which  lead to  brain death.   The  bill                                                                   
would not require  the prosecutor to show physical  injury in                                                                   
order to charge  the felony conduct.  She shared  that Alaska                                                                   
ranks number one  in the nation for domestic  violence death,                                                                   
many of  which are a result  of strangulation.   She strongly                                                                   
urged support of HB 219.                                                                                                        
                                                                                                                                
3:20:31 PM                                                                                                                    
                                                                                                                                
Representative  Hawker  spoke   to  the  fiscal  notes.    He                                                                   
disagreed  with the  Public Defender  Agency's  indeterminate                                                                   
fiscal note, saying that it should be a zero note.                                                                              
                                                                                                                                
Co-Chair Chenault opined that  there would be increased court                                                                   
costs if  strangulation is  changed from  a misdemeanor  to a                                                                   
felony.  He added that he would not oppose the zero note.                                                                       
                                                                                                                                
Representative  Weyhrauch agreed  with Co-Chair Chenault  and                                                                   
asked what  happens when it  does cost more.   Representative                                                                   
Hawker  explained  the difference  between  an  indeterminate                                                                   
note   and  a   zero  note.     Co-Chair   Meyer  said   that                                                                   
indeterminate notes  are counted as zero notes  for budgeting                                                                   
purposes.                                                                                                                       
                                                                                                                                
Representative Weyhrauch asked  about the dates on the notes.                                                                   
Co-Chair Meyer explained that  the proposed fiscal note would                                                                   
be a zero note.                                                                                                                 
                                                                                                                                
3:27:41 PM                                                                                                                    
                                                                                                                                
Representative  Holm  wondered if  there  is  an increase  in                                                                   
trial court costs due to felony trials.                                                                                         
                                                                                                                                
Representative Hawker spoke in favor of the zero note.                                                                          
                                                                                                                                
Representative   Kelly  wondered   if  the   change  from   a                                                                   
misdemeanor  to a  felony would  be easier,  yet riskier,  to                                                                   
prosecute.                                                                                                                      
                                                                                                                                
3:30:08 PM                                                                                                                    
                                                                                                                                
LINDA  WILSON,  DEPUTY  DIRECTOR,   PUBLIC  DEFENDER  AGENCY,                                                                   
DEPARTMENT OF ADMINISTRATION,  (via teleconference) responded                                                                   
that the indeterminate fiscal  note is appropriate.  Felonies                                                                   
are much more costly to prosecute,  even though some domestic                                                                   
violence charges may  be handled by the city.   She predicted                                                                   
that there  would be  more felony  prosecutions and  a fiscal                                                                   
impact.                                                                                                                         
                                                                                                                                
Representative  Hawker said that  the crime of  strangulation                                                                   
is already a felony and this bill  would not change that, but                                                                   
activities  may be realigned  within the  legal process.   He                                                                   
indicated that it works out to  be a zero sum gain within the                                                                   
individual organizations.                                                                                                       
                                                                                                                                
3:33:58 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer asked  how many  more  case are  anticipated.                                                                   
Ms. Wilson replied she could not guess that number.                                                                             
                                                                                                                                
Co-Chair Meyer accepted the new zero fiscal note.                                                                               
                                                                                                                                
3:35:54 PM                                                                                                                    
                                                                                                                                
Representative Hawker MOVED to  ADOPT Conceptual Amendment 1:                                                                   
                                                                                                                                
     Page 1, line 1:                                                                                                            
     Delete "crimes and dangerous instruments"                                                                                
     Insert "the definition of 'dangerous instrument' as                                                                      
     applied within the criminal code"                                                                                        
                                                                                                                                
Co-Chair Meyer OBJECTED for discussion purposes.                                                                                
                                                                                                                                
Representative  Hawker  explained  that the  amendment  would                                                                   
tighten  up  the  title  to  include  hands  as  a  dangerous                                                                   
instrument.                                                                                                                     
                                                                                                                                
Co-Chair Meyer WITHDREW his OBJECTION.                                                                                          
                                                                                                                                
There being NO OBJECTION, Amendment 1 was adopted.                                                                              
                                                                                                                                
3:37:24 PM                                                                                                                    
                                                                                                                                
Representative  Croft  indicated  that  he expected  to  find                                                                   
strangulation  described  under  the  definition  of  serious                                                                   
physical  injury.    He  wondered   why  it  fell  under  the                                                                   
dangerous instruments category.                                                                                                 
                                                                                                                                
Representative  Hawker   explained  that  was   the  original                                                                   
approach  to   the  bill,  but  legislative   legal  and  the                                                                   
Department  of  Law  agreed  it   would  be  too  wide  of  a                                                                   
definition.   The House  Judiciary Committee determined  that                                                                   
it  is  a  tight,  but not  overriding  bill.    The  current                                                                   
language  is  a  precise,  targeted,  and  effective  way  of                                                                   
accomplishing the intention of the bill.                                                                                        
                                                                                                                                
Representative Croft asked for  the Public Defender's opinion                                                                   
whether it is cleaner in the dangerous  instrument definition                                                                   
or in the serious physical definition.   Ms. Wilson responded                                                                   
that Representative  Croft might be confusing  deadly weapons                                                                   
with dangerous  instruments.  She  opined that it  makes more                                                                   
sense to include it with dangerous instruments.                                                                                 
                                                                                                                                
3:41:30 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze MOVED  to report  CSHB 219  (FIN) out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal impact notes.   There being NO OBJECTION,                                                                   
it was so ordered.                                                                                                              
                                                                                                                                
CSHB  219 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass"  recommendation  and  with  three  zero  fiscal  impact                                                                   
notes: #1  CRT, #2  LAW, #3 DPS,  and a  new ADM zero  fiscal                                                                   
note.                                                                                                                           
                                                                                                                                
3:43:03 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 91                                                                                                             
                                                                                                                                
     "An Act relating to indecent exposure."                                                                                    
                                                                                                                                
Representative Coghill, sponsor,  explained that the bill was                                                                   
a result of an indecent exposure  incident where the criminal                                                                   
was charged with  a misdemeanor.  HB 91 states  that if there                                                                   
is a  second exposure  conviction,  the crime  moves up  to a                                                                   
Class C felony.                                                                                                                 
                                                                                                                                
Representative Weyhrauch asked  if the bill involves exposure                                                                   
and  masturbation.   Representative  Coghill  responded  that                                                                   
pending  testimony  would help  clarify  that  question.   He                                                                   
explained that if there is a previous  conviction of indecent                                                                   
exposure,   a   second   instance    would   be   a   felony.                                                                   
Representative Weyhrauch  asked for more information  about a                                                                   
second  incident.    Representative   Coghill  explained  the                                                                   
elements of purposeful, and knowingly committing the crime.                                                                     
                                                                                                                                
Representative  Croft asked  if  it applies  to minors  only.                                                                   
Representative Coghill replied that it does.                                                                                    
                                                                                                                                
3:48:24 PM                                                                                                                    
                                                                                                                                
DEBBIE JOSLIN, EAGLE RIVER, (via  teleconference) spoke of an                                                                   
exposure  incident  in  Delta   Junction  involving  her  two                                                                   
daughters,  ages  2 and  7.    Because masturbation  was  not                                                                   
involved, the man  was charged with a misdemeanor.   He had a                                                                   
history of  exposure to  children.  She  termed it  a gateway                                                                   
crime to abuse of children.  The  bill applies to second-time                                                                   
incidents with minors under 16.                                                                                                 
                                                                                                                                
3:53:36 PM                                                                                                                    
                                                                                                                                
Representative Croft spoke of  his own two children and fears                                                                   
of something  happening  to them.   He noted  that Section  1                                                                   
clearly talks about exposure in  front of a minor.  Section 2                                                                   
needs language  added such as "exposure or  conduct described                                                                   
above  in front  of a  minor".   Representative Coghill  said                                                                   
that was also his concern.  He  noted that reckless disregard                                                                   
would have to be proven.  He stated  an intention that it say                                                                   
"for those under 16".                                                                                                           
                                                                                                                                
Representative  Croft  noted  he  would  contact  legislative                                                                   
legal about this issue.                                                                                                         
                                                                                                                                
Representative Weyhrauch  noted that the prosecution  of this                                                                   
crime  would be  determined by  the  child's perceptions  and                                                                   
testimony.    He  question how  innocent  behavior  could  be                                                                   
safeguarded.  Representative Coghill  said that's why he went                                                                   
to  AS 11.41.460 to include "knowingly,  purposeful act", and                                                                   
AS 11.41.458, which addresses masturbation.                                                                                     
                                                                                                                                
Representative Kelly asked if  the exposer would be listed as                                                                   
a sex offender.  Representative Coghill said yes.                                                                               
                                                                                                                                
4:01:00 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze MOVED to  report HB  91 out of  Committee                                                                   
with individual  recommendations and the  accompanying fiscal                                                                   
impact notes.  There being NO OBJECTION, it was so ordered.                                                                     
                                                                                                                                
HB  91  was  REPORTED  out of  Committee  with  a  "do  pass"                                                                   
recommendation  and with three  zero fiscal impact  notes: #1                                                                   
ADM, #2 LAW, and #3 CRT.                                                                                                        
                                                                                                                                
4:02:19 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 109                                                                                                            
                                                                                                                                
     "An Act relating to establishing  a screening, tracking,                                                                   
     and intervention program  related to the hearing ability                                                                   
     of  newborns  and  infants; providing  an  exemption  to                                                                   
     licensure   as  an  audiologist   for  certain   persons                                                                   
     performing   hearing   screening  tests;   relating   to                                                                   
     insurance  coverage  for   newborn  and  infant  hearing                                                                   
     screening; and providing for an effective date."                                                                           
                                                                                                                                
REPRESENTATIVE JAY  RAMRAS, sponsor, explained  that the bill                                                                   
is for mandatory screening for  hearing loss for newborns, an                                                                   
investment  in  the  future.    The  fiscal  note  is  minor,                                                                   
$30,000, to  handle 10,000  live births  in Alaska  per year.                                                                   
Hearing loss  is the number  one congenital birth  defect and                                                                   
it affects 30 to 40 Alaskans per  year.  The cost of tracking                                                                   
a child who's  hearing loss goes undetected in  the first two                                                                   
to three  years of  life is  about $412,000  per child.   The                                                                   
$30,000  annual fiscal  note would protect  from a  potential                                                                   
$12  million future  liability.   Hearing loss  is often  not                                                                   
detected until children are between  2 and 3 years old, which                                                                   
effects their  cognitive development.  This  mandate has been                                                                   
adopted in 33 other states.                                                                                                     
                                                                                                                                
Vice-Chair   Stoltze   asked  if   there   are  any   service                                                                   
organizations that take on this cause.                                                                                          
                                                                                                                                
Representative  Ramras   explained  that  the   Quota  Club's                                                                   
mission is to  help with hearing issues.   Currently children                                                                   
are  not being  tracked  and there  is a  need  to develop  a                                                                   
statistical base.                                                                                                               
                                                                                                                                
4:06:08 PM                                                                                                                    
                                                                                                                                
DEBBIE   GOLDEN,    MARCH   OF    DIMES,   ANCHORAGE,    (via                                                                   
teleconference)  explained the history  and mission  of March                                                                   
of Dimes.  Hearing loss is the  most common birth disability.                                                                   
She spoke  of the  costs and savings  of hearing  screenings.                                                                   
Passing HB 109 will assure that all newborns are tested.                                                                        
                                                                                                                                
COLLEEN CHINN-ACCA,  FAIRBANKS,  (via teleconference)  read a                                                                   
statement  from Sarah  Pate urging  support for  HB 109.  She                                                                   
stressed the effectiveness of  early intervention.  She spoke                                                                   
in support of  the legislation.  She noted  that children who                                                                   
don't hear, miss  the early language-learning  period.  Early                                                                   
language  intervention  allows  the possibility  of  cochlear                                                                   
implants.                                                                                                                       
                                                                                                                                
4:14:30 PM                                                                                                                    
                                                                                                                                
LISA  OWENS,  AUDIOLOGIST,  ANCHORAGE,  (via  teleconference)                                                                   
spoke  in  support  of  the  legislation.  She  stressed  the                                                                   
importance of early intervention.   Children under three with                                                                   
hearing loss show speech delays,  and difficulties in reading                                                                   
and  in  social  interaction.    They  require  more  special                                                                   
resources as children and as adults.   Those children who are                                                                   
identified  before  the  age  of three  have  less  need  for                                                                   
support  and  special  programs   and  have  opportunity  for                                                                   
cochlear implants.                                                                                                              
                                                                                                                                
4:18:07 PM                                                                                                                    
                                                                                                                                
In  response  to a  question  by  Co-Chair Meyer,  Ms.  Owens                                                                   
described methods  used to test  children under  three. Tests                                                                   
can  be  done by  a  variety  of health  care  and  childcare                                                                   
professions.  She described the  testing procedure.  Co-Chair                                                                   
Meyer  asked if  an ear,  nose, and  throat specialist  would                                                                   
typically  test  hearing loss.    Ms.  Owens replied  that  a                                                                   
specialist would need to perform the tests using the new                                                                        
technology.  She explained various types of hearing loss.                                                                       
                                                                                                                                
MARTIN BEALS, JR., M.D. PEDIATRICIAN, ANCHORAGE, (via                                                                           
teleconference) testified in support of the legislation.  He                                                                    
noted that early intervention saves costs.                                                                                      
                                                                                                                                
4:23:28 PM                                                                                                                    
                                                                                                                                
Representative Foster spoke in support of the legislation.                                                                      
                                                                                                                                
HB 109 was HELD in Committee for further consideration.                                                                         
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 4:25 PM                                                                                            

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