Legislature(2005 - 2006)

04/22/2005 02:48 PM FIN


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                   HOUSE FINANCE COMMITTEE                                                                                      
                       April 22, 2005                                                                                           
                          2:48 P.M.                                                                                             
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer  called the House Finance Committee  meeting to                                                                  
order at 2:48:43 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 Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Carl Moses                                                                                                       
Representative Bruce Weyhrauch                                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative Max Gruenberg; Representative Harry Crawford;                                                                    
Pete  Ecklund,   Staff,  Representative  Kevin   Meyer;  Devon                                                                  
Mitchell,  Executive  Director,  Alaska  Municipal  Bond  Bank                                                                  
Authority,  Department  of  Revenue;   Rynnieva  Moss,  Staff,                                                                  
Representative   John   Coghill;    Tammy   Sandoval,   Acting                                                                  
Director,  Offices  of  Children's   Services,  Department  of                                                                  
Health  & Social  Services;  Stacy Kraly,  Assistant  Attorney                                                                  
General,   Department   of   Law;    Heather   Beaty,   Staff,                                                                  
Representative    Harry   Crawford;   Bill   Kramer,    Chief,                                                                  
Unemployment  Insurance,  Division   of  Employment  Security,                                                                  
Alaska  Department of  Labor  and Workforce  Development;  Pat                                                                  
Shier,  Employment   Security  Tax,  Division   of  Employment                                                                  
Security,   Alaska   Department   of   Labor   and   Workforce                                                                  
Development;  Anne Carpeneti,  Assistant    Attorney  General,                                                                  
Legal Services  Section-Juneau, Criminal Division,  Department                                                                  
of Law;  Kelly Huber,  Self, Juneau;  Heather Nobrega,  Staff,                                                                  
Representative   Norm  Rokeberg;  Wayne  Stevens,   President,                                                                  
Alaska State Chamber of Commerce                                                                                                
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Michael  Barton, Commissioner,  Department  of  Transportation                                                                  
and Public  Facilities, Anchorage;  Dick Cattanach,  Executive                                                                  
Director,   Associated   General    Contractors   of   Alaska,                                                                  
Anchorage;  Pat Luby,  Alaska Association  of Retired  Persons                                                                  
(AARP),   Anchorage;   Tami   Elder,   Network    Coordinator,                                                                  
Volunteers   of  America  (VOA),   Anchorage;  Scott   Calder,                                                                  
Fairbanks                                                                                                                       
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 7      An Act relating to the calculation and payment of                                                                     
          unemployment  compensation  benefits; and  providing                                                                  
          for an effective date.                                                                                                
                                                                                                                                
          CS HB 7 (FIN) was reported out of Committee with a                                                                    
          "do  pass" recommendation  and  with a  new note  by                                                                  
          the  Department of Administration,  a new  zero note                                                                  
          by the  Department of Labor & Workforce  Development                                                                  
          and   fiscal   note   #2  by   the   Department   of                                                                  
          Administration.                                                                                                       
                                                                                                                                
HB 12     An Act relating to televisions and monitors in                                                                        
          motor vehicles.                                                                                                       
                                                                                                                                
          HB 12 was HEARD and HELD in Committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
HB 53     An    Act    relating    to    child-in-need-of-aid                                                                   
          proceedings;  amending the construction  of statutes                                                                  
          pertaining  to children in need of aid;  relating to                                                                  
          a  duty  and  standard   of  care  for  services  to                                                                  
          children   and  families;  amending   court  hearing                                                                  
          procedures  to allow public attendance  at child-in-                                                                  
          need-of-aid  proceedings; establishing  a right to a                                                                  
          trial  by  jury in  termination  of parental  rights                                                                  
          proceedings;  reestablishing  and relating  to state                                                                  
          and  local  citizens'   review  panels  for  certain                                                                  
          child   custody  matters;   amending  the   duty  to                                                                  
          disclose  information pertaining to  a child in need                                                                  
          of   aid;  establishing   a  distribution   age  for                                                                  
          permanent  fund dividends held in trust  for a child                                                                  
          committed  to  the  custody  of  the  Department  of                                                                  
          Health  and Social Services; mandating  reporting of                                                                  
          the   medication  of  children  in   state  custody;                                                                  
          prescribing  the rights  of grandparents related  to                                                                  
          child-in-  need-of-aid   cases  and  establishing  a                                                                  
          grandparent   priority   for  adoption  in   certain                                                                  
          child-  in-need-of-aid   cases;  modifying  adoption                                                                  
          and   placement  procedures  in  certain   child-in-                                                                  
          need-of-aid   cases;   amending  treatment   service                                                                  
          requirements   for  parents  involved  in  child-in-                                                                  
          need-of-aid  proceedings;  amending Rules 3  and 18,                                                                  
          Alaska  Child  in Need  of Aid  Rules of  Procedure;                                                                  
          and providing for an effective date.                                                                                  
                                                                                                                                
          HB 53 was HEARD and HELD in Committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
HB 101    An Act relating to sex trafficking and tourism.                                                                       
                                                                                                                                
          CS HB  101 (JUD) was reported out of  Committee with                                                                  
          a  "do pass"  recommendation and  with zero  note #1                                                                  
          by  the Department of  Administration, zero  note #2                                                                  
          by  the Department of  Corrections, zero note  #3 by                                                                  
          the  Alaska  Court  System,  zero  note  #4  by  the                                                                  
          Department   of  Law  and   zero  note  #5   by  the                                                                  
          Department of Public Safety.                                                                                          
                                                                                                                                
HB 275    An  Act  authorizing  financing for  certain  public                                                                  
          transportation   projects;  giving   notice  of  and                                                                  
          approving  the  entry  into,  and  the  issuance  of                                                                  
          revenue  obligations that provide participation  in,                                                                  
          lease-financing       agreements      for      those                                                                  
          transportation   projects;  and  providing   for  an                                                                  
          effective date.                                                                                                       
                                                                                                                                
          HB 275 was HEARD and HELD for further                                                                                 
          consideration.                                                                                                        
                                                                                                                                
2:51:15 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 275                                                                                                            
                                                                                                                                
     An   Act  authorizing   financing   for  certain   public                                                                  
     transportation  projects; giving notice of  and approving                                                                  
     the entry  into, and the issuance of revenue  obligations                                                                  
     that    provide   participation    in,    lease-financing                                                                  
     agreements   for  those   transportation  projects;   and                                                                  
     providing for an effective date.                                                                                           
                                                                                                                                
PETE  ECKLUND, STAFF,  REPRESENTATIVE  KEVIN MEYER,  explained                                                                  
that  HB 275  would  fund  $115 million  of  highway  projects                                                                  
around  the State, using  Grant Anticipation  Revenue  Vehicle                                                                  
(GARVEE) bonds.                                                                                                                 
                                                                                                                                
Since 1998,  eighteen  states have  leveraged federal  highway                                                                  
money by  using GARVEE  bonds.   Those transactions  accounted                                                                  
for more  than $12 billion  dollars par  value.  As  a result,                                                                  
the GARVEE  approach is  now an accepted  method of  financing                                                                  
needed transportation infrastructure projects.                                                                                  
                                                                                                                                
To  be  eligible  for inclusion  in  a  GARVEE  bond  package,                                                                  
projects must  qualify for federal  highway aid and  appear on                                                                  
the  Statewide  Transportation  Improvement   Program  (STIP).                                                                  
All  of the  projects listed  in HB  275  qualify for  federal                                                                  
highway aid.                                                                                                                    
                                                                                                                                
Future  federal  highway funds  would  be  used to  repay  the                                                                  
bonds.  The  interest earnings on  the bonds would be  used to                                                                  
pay  for   the  federal  highway   match,  saving   the  State                                                                  
approximately $15 million in general fund match.                                                                                
                                                                                                                                
Mr. Ecklund highlighted  the factors taken into  consideration                                                                  
when placing a project into GARVEE consideration.                                                                               
                                                                                                                                
   ·    A large project that might take more years to do,                                                                       
        could  save  the  inflation  costs  over  time.    The                                                                  
        average  cost  for  heavy  construction  projects  has                                                                  
        risen 15% per year.   Before that, rises  were between                                                                  
        2-3% per year.                                                                                                          
   ·    Other states that have GARVEEs have received                                                                            
        authorization  for  3x  coverage,   which  gives  them                                                                  
        authorization  to pledge  up to 33%  of there  federal                                                                  
        highway  aid for  the repayment  of  that  debt.   The                                                                  
        current program  is at $300  million dollars  per year                                                                  
        and the State is  paying back $13 million  per year on                                                                  
        current GARVEE.   The State  has been conservation  up                                                                  
        to this  time  and  has  not leveraged  a  very  large                                                                  
        portion of the GARVEE program.                                                                                          
                                                                                                                                
2:56:47 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  requested an explanation  of the fiscal  note.                                                                  
Mr.  Ecklund  explained that  if  the  State bonded  for  $150                                                                  
million dollars  worth of projects, it would create  a payment                                                                  
schedule for  15 years with an  interest rate of 5.4%.   There                                                                  
are  four  states  recently  doing   GARVEE  issuance.    They                                                                  
received  a  AA  rating  by  pledging  their  federal  highway                                                                  
receipts for repayment.   At current rates, a  GARVEE could be                                                                  
issued at a 4%  rate per day; 5.4% used in preparing  the note                                                                  
is high.   In  order to issue  $116 million  dollars worth  of                                                                  
bonds,  the State  would be  paying back  about $11.4  million                                                                  
dollars  at  the 5.4%  interest.   Inserting  the  current  4%                                                                  
interest  rate,  the  annual   payment  drops  by  $1  million                                                                  
dollars per year.                                                                                                               
                                                                                                                                
DEVON  MITCHELL,  EXECUTIVE  DIRECTOR,  DEBT  MANAGER,  ALASKA                                                                  
MUNICIPAL   BOND  BANK  AUTHORITY,   DEPARTMENT  OF   REVENUE,                                                                  
acknowledged  that   the  Department  did  use   the  high-end                                                                  
interest rate when preparing the note.                                                                                          
                                                                                                                                
Co-Chair Meyer  asked if the fiscal note would  be adjusted or                                                                  
if  the Department  anticipated  interest  rates to  increase.                                                                  
Mr. Mitchell explained  that the note is an estimate  and when                                                                  
the Department  prepares a note,  they address the  worst-case                                                                  
scenario   under  which   they  are  borrowing.     There   is                                                                  
uncertainty regarding  interest rates and he was  reluctant to                                                                  
revise the note.                                                                                                                
                                                                                                                                
3:00:15 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer asked  the  last time  the  State sold  GARVEE                                                                  
bonds.   Mr. Ecklund  replied  2002.   Mr. Mitchell  clarified                                                                  
that  they had  been authorized  in  2002, but  sold in  2003.                                                                  
Mr.  Ecklund added,  the  principle  amount was  $102  million                                                                  
dollars.                                                                                                                        
                                                                                                                                
Co-Chair  Meyer pointed  out that  the roads  included in  the                                                                  
list, were  ones included  in the  Governor's funding  request                                                                  
proposal from the Amerada Hess monies.                                                                                          
                                                                                                                                
Representative  Kelly  asked  the  anticipated  longest  term.                                                                  
Mr. Ecklund explained  it would make most sense  to use the 6-                                                                  
year  increments,  following  similar  terms  of  the  federal                                                                  
reauthorization  bills.   At present  time, Alaska  is a  year                                                                  
and a  half into  that deal.   There are  four and half  years                                                                  
left  on the  current  reauthorization.   Given  two  more-six                                                                  
year periods,  would  provide around  16 years.   The bill  is                                                                  
written for a 15-year repayment.                                                                                                
                                                                                                                                
3:02:23 PM                                                                                                                    
                                                                                                                                
Representative   Joule  referenced  the  number   of  projects                                                                  
transferred  from the  Amerada  Hess component,  pointing  out                                                                  
that the numbers  were different.  Co-Chair Meyer  interjected                                                                  
that  a  couple  of  the  projects  would  not  fit  into  the                                                                  
program.    Mr.   Ecklund  added  that  the  project   amounts                                                                  
different from  those in the Amerada Hess.  If  the Department                                                                  
of Transportation  & Public Facilities  used the  Amerada Hess                                                                  
or  other State  funds,  it would  cost  less  for the  entire                                                                  
package and would  not go through the federal  process.  Under                                                                  
the  GARVEE  bond  bill, all  projects  have  to  fall  within                                                                  
federal guidelines.   Each has a different requirement,  which                                                                  
adds time and cost.                                                                                                             
                                                                                                                                
Mr. Ecklund  anticipated discussion  regarding whether  or not                                                                  
the  GARVEE bonds  would  affect  the State's  credit  rating.                                                                  
The under-writers  believe it could  be structured so  that it                                                                  
would not be affected.                                                                                                          
                                                                                                                                
3:05:32 PM                                                                                                                    
                                                                                                                                
Representative  Hawker referenced  comments  from the  sponsor                                                                  
statement  indicating  that  interest  earnings on  the  bonds                                                                  
could  be  used  to  pay  the  federal   highway  match.    He                                                                  
understood  that bonds  are  a debt  obligation  and that  the                                                                  
State  would have  expense on  bonds,  not interest  earnings.                                                                  
Mr. Ecklund  stated that  it would result  from investing  the                                                                  
bond proceeds.                                                                                                                  
                                                                                                                                
Representative   Hawker  explained   what   really  would   be                                                                  
happening  is that  the State  would be  investing the  unused                                                                  
portion of  the bond proceeds  and use  that interest  to off-                                                                  
set the  cost of  the bonds and  pay the  highway match.   Mr.                                                                  
Mitchell  replied  that  the  Federal  Highway  Administration                                                                  
(FHA) allows the  State to use all investment  earnings on the                                                                  
construction  fund as a State match.   The projects  would not                                                                  
be completed  quickly.  All the  earnings would accrue  to the                                                                  
benefit of the  State.  Historically, low short-term  interest                                                                  
rates have resulted.                                                                                                            
                                                                                                                                
Representative  Hawker  asked  the possibility  of  the  State                                                                  
saving money  on the match.   Mr. Mitchell  did not know.   He                                                                  
expected  that   with  those  assumptions,  the   State  could                                                                  
possibly achieve around $13 million dollars.                                                                                    
                                                                                                                                
3:08:46 PM                                                                                                                    
                                                                                                                                
MICHAEL     BARTON,    (TESTIFIED     VIA    TELECONFERENCE),                                                                   
COMMISSIONER,   DEPARTMENT    OF   TRANSPORTATION   &   PUBLIC                                                                  
FACILITIES,  ANCHORAGE,  testified   in  opposition  to  using                                                                  
GARVEE bonds.   He pointed out  that the State has  identified                                                                  
over $10  billion dollars  in transportation  needs,  provided                                                                  
by the  Statewide Transportation  Improvement Program  (STIP).                                                                  
He stated that  GARVEE could have a negative impact  on future                                                                  
programs  and that the  GARVEE debt service  would need  to be                                                                  
subtracted from the annual STIP.                                                                                                
                                                                                                                                
GARVEE  bonds are  federal  funds and  must  follow a  federal                                                                  
process,  which  adds time  and  dollars.   The  project  time                                                                  
could  be  extended  1  to 3  years  with  the  project  costs                                                                  
increasing 10-30%.                                                                                                              
                                                                                                                                
Commissioner  Barton pointed out  that federal funding  is not                                                                  
clear  at this  time given  the U.S.  Senate  reauthorization.                                                                  
It needs  to be considered what  Alaska can expect  to receive                                                                  
from  that   program  in  future   years.    There   has  been                                                                  
discussion  in Washington  D.C. regarding  continued  funding.                                                                  
Future reauthorizations  will need to be achieved  without the                                                                  
benefit  of  Congressmen  Young  and  Stevens  chairing  their                                                                  
respective committees.                                                                                                          
                                                                                                                                
Commissioner  Barton   pointed  out  that  the   Governor  had                                                                  
proposed  using the  Amerada Hess  match for  the federal  aid                                                                  
program.   GARVEEs  cannot be used  for that.   He  reiterated                                                                  
his serious  concerns  with using  GARVEE and  urged that  the                                                                  
Committee look elsewhere for a funding source.                                                                                  
                                                                                                                                
3:13:14 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  pointed out that the roads already  chosen for                                                                  
the GARVEE bond  funding are ones currently being  recommended                                                                  
by  the Governor.   Commissioner  Barton  did  not oppose  the                                                                  
roads chosen but  the vehicle used to fund that  construction.                                                                  
                                                                                                                                
Co-Chair  Meyer  asked  if using  the  GARVEE's  could  create                                                                  
delays  on other  projects  on the  STIP list.    Commissioner                                                                  
Barton said  yes.  The roads listed  are all part of  the need                                                                  
and   those    Governor's   package    deals   with    getting                                                                  
transportation  infrastructure needs  addressed.  The  goal is                                                                  
to  have  everything  in  place   for  the  structure  of  the                                                                  
pipeline  by 2009.  Currently,  there is  an effort to  expand                                                                  
the transportation needs throughout the State.                                                                                  
                                                                                                                                
3:14:50 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  noted that the  GARVEE proposal was a  back up                                                                  
if  the Amerada  Hess  was not  possible  or did  not make  it                                                                  
through  the   Legislative  process.     Commissioner   Barton                                                                  
disagreed with  the statement that  the roads would  never get                                                                  
addressed  and  acknowledged that  it  would take  longer  and                                                                  
require the State to move the timeline further out.                                                                             
                                                                                                                                
3:15:31 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze asked  if Commissioner  Barton's  position                                                                  
was  a  "political  preference"  and  requested  clarification                                                                  
about the funding source.                                                                                                       
                                                                                                                                
Commissioner  Barton advised  that the  first priority  is not                                                                  
GARVEE  bonding and  that Amerada  Hess would  be the  logical                                                                  
choice.                                                                                                                         
                                                                                                                                
   ·    The GARVEE bonds would extend the project time from                                                                     
        1 to 3 years.                                                                                                           
   ·    It would increase the project costs 10-30%.                                                                             
   ·    It would impact the STIP and projects currently on                                                                      
        the STIP would be delayed.                                                                                              
   ·    The State does not know how much money there will be                                                                    
        in the future against which the GARVEE debt payment                                                                     
        would be based.                                                                                                         
                                                                                                                                
3:17:58 PM                                                                                                                    
                                                                                                                                
In  response  to comments  by  Commissioner  Barton  regarding                                                                  
"anything  except GARVEE"  for  the funding  of the  projects,                                                                  
Co-Chair Meyer  asked if that would include using  the general                                                                  
fund.  Commissioner Barton replied it does.                                                                                     
                                                                                                                                
DICK  CATTANACH,  (TESTIFIED  VIA  TELECONFERENCE),  EXECUTIVE                                                                  
DIRECTOR,   ASSOCIATED   GENERAL    CONTRACTORS   OF   ALASKA,                                                                  
ANCHORAGE,  testified   against  the  use  of   GARVEE  bonds.                                                                  
GARVEE  bonds  are  not  the way  to  go  if  building  Alaska                                                                  
infrastructure.   GARVEE bonds do  not increase the  number of                                                                  
dollars going  into the  hiring fund.   They will only  change                                                                  
the timing.   Future projects  would be accelerated  and there                                                                  
would  be fewer.    If  inflation were  under  control,  there                                                                  
would  be fewer  projects because  interest would  need to  be                                                                  
paid.   It is  important to  recognize  that Alaska  currently                                                                  
gets $5.37  for every dollar that  they send into  the Highway                                                                  
Trust Fund.                                                                                                                     
                                                                                                                                
Mr. Cattanach continued,  when our U.S. Congressmen  Young and                                                                  
Stevens  leave, the  likelihood  of continued  funding at  the                                                                  
current  level  will  be  greatly   diminished.    The  amount                                                                  
referenced when  combined with current GARVEE  payments, would                                                                  
indicate that 15%  to 20% is used to payoff GARVEE  bonds.  He                                                                  
recommended  that  the  State  look  at  alternative  ways  to                                                                  
increase  the  highway  program.    That  was  what  initially                                                                  
enticed   the   State's   builders    about   the   Governor's                                                                  
recommendation,  using Amerada  Hess funds  for adding  to the                                                                  
highway program.                                                                                                                
                                                                                                                                
3:22:04 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  acknowledged that  the Legislature  is looking                                                                  
for alternatives  for getting the roads built.   Mr. Cattanach                                                                  
responded that  GARVEE bonds represent  $9 dollars  of federal                                                                  
money for  each dollar the State  puts in.  That does  not add                                                                  
to  the road  funds because  the State  would  get those  same                                                                  
dollars  anyway.    Considering  the  needs of  the  State  as                                                                  
addressed  by Commissioner  Barton  with  $10 billion  dollars                                                                  
worth  of projects,  would take  more than  25 years and  does                                                                  
not consider maintenance.                                                                                                       
                                                                                                                                
Mr. Cattanach stressed  that Alaska is the only  State without                                                                  
a  State  road  program.    Alaska's  State  road  program  is                                                                  
entirely  supported by  the federal government.   Every  other                                                                  
state supports their roads.                                                                                                     
                                                                                                                                
3:24:00 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer   agreed,  however,   commented  that   it  is                                                                  
difficult  to compare Alaska  to other  states when  including                                                                  
aspects as the Alaska Marine Highway System (AMHS).                                                                             
                                                                                                                                
Representative   Hawker   reaffirmed   that  Alaska   is   the                                                                  
wealthiest State  in the Nation.  Co-Chair Meyer  echoed those                                                                  
sentiments,  recommending  that  Alaska come  up  with a  road                                                                  
funding system.   Mr. Cattanach concurred that  the State does                                                                  
need a  program to  address infrastructure  concerns and  that                                                                  
the State can no longer wait for the federal government.                                                                        
                                                                                                                                
3:25:55 PM                                                                                                                    
                                                                                                                                
AT EASE:        3:27:04 PM                                                                                                    
RECONVENE:      3:28:18 PM                                                                                                    
                                                                                                                                
Co-Chair Meyer  indicated a new committee substitute  would be                                                                  
forthcoming  and that HB  275 would be  HELD in Committee  for                                                                  
further consideration.                                                                                                          
                                                                                                                                
3:29:42 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 53                                                                                                             
                                                                                                                                
     An  Act  relating  to child-in-need-of-aid   proceedings;                                                                  
     amending  the  construction  of  statutes  pertaining  to                                                                  
     children  in  need  of   aid;  relating  to  a  duty  and                                                                  
     standard of  care for services to children  and families;                                                                  
     amending   court  hearing  procedures  to   allow  public                                                                  
     attendance    at    child-in-need-of-aid     proceedings;                                                                  
     establishing  a right to a  trial by jury in  termination                                                                  
     of  parental   rights  proceedings;  reestablishing   and                                                                  
     relating to  state and local citizens' review  panels for                                                                  
     certain  child  custody  matters;  amending the  duty  to                                                                  
     disclose  information pertaining  to a  child in  need of                                                                  
     aid; establishing  a distribution age for  permanent fund                                                                  
     dividends  held in  trust for  a child  committed to  the                                                                  
     custody   of  the   Department  of   Health  and   Social                                                                  
     Services;  mandating   reporting  of  the  medication  of                                                                  
     children  in state  custody;  prescribing  the rights  of                                                                  
     grandparents  related to child-in- need-of-aid  cases and                                                                  
     establishing  a  grandparent  priority  for  adoption  in                                                                  
     certain child-  in-need-of-aid cases; modifying  adoption                                                                  
     and placement  procedures  in certain child-in-  need-of-                                                                  
     aid cases;  amending treatment  service requirements  for                                                                  
     parents  involved  in child-in-need-of-aid   proceedings;                                                                  
     amending  Rules 3  and 18,  Alaska Child  in Need of  Aid                                                                  
     Rules  of  Procedure;  and  providing  for  an  effective                                                                  
     date.                                                                                                                      
                                                                                                                                
Vice-Chair  Stoltze MOVED  to ADOPT  work draft  #24-LS0251\N,                                                                  
Mischel,  4/21/05,  as the  version  of  the bill  before  the                                                                  
Committee.  There being NO OBJECTION, it was adopted.                                                                           
                                                                                                                                
3:30:19 PM                                                                                                                    
                                                                                                                                
RYNNIEVA  MOSS,  STAFF, REPRESENTATIVE  JOHN  COGHILL,  stated                                                                  
that the bill  is a "family's  right act".  The proposed  bill                                                                  
would  open child-in-need-of-aid  (CHINA)  proceedings to  the                                                                  
public.  HB 53  provides placement and adoption  preference to                                                                  
relatives.  It  establishes in statute a grievance  procedure,                                                                  
a citizen's review  panel and that school interviews  are done                                                                  
discretely.   The  legislation  encourages  the  use of  child                                                                  
advocacy  centers  and  the  use  of   videotaping.    Current                                                                  
language is  mandatory; Representative  Coghill has  agreed to                                                                  
an  amendment   making  it  permissive.    HB   53  eliminates                                                                  
language  in AS 47.10.960,  which states  there is no  duty or                                                                  
standard of care for children in State custody.                                                                                 
                                                                                                                                
Ms. Moss noted  that HB 17 was  rolled into HB 53  with regard                                                                  
to  the  confidential   information.    It  will   extend  the                                                                  
relationship with  Office of Child's Service (OCS)  beyond the                                                                  
termination  of  parental  rights.     The  legislation  gives                                                                  
preference to  adoption by a family  member who has  cared for                                                                  
the child during the previous 12 months.                                                                                        
                                                                                                                                
3:36:16 PM                                                                                                                    
                                                                                                                                
Representative  Weyhrauch referred  to an  abuse situation  in                                                                  
Wasilla and  asked if  provisions in  the bill addressed  that                                                                  
specific case.                                                                                                                  
                                                                                                                                
3:37:10 PM                                                                                                                    
                                                                                                                                
HEATHER   NOBREGA,  STAFF,   REPRESENTATIVE   NORM   ROKEBERG,                                                                  
related  that portions  of the  bill resulted  from that  case                                                                  
and relate to adult  family members of the children  that have                                                                  
been adopted.   She pointed out  that their office  had worked                                                                  
to help assert their rights into the process.                                                                                   
                                                                                                                                
Representative  Weyhrauch  questioned  if  provisions  in  the                                                                  
bill  could  have  prevented   the  situation.    Ms.  Nobrega                                                                  
explained  that  the  abuse  happened   after  the  kids  were                                                                  
adopted.   She  added that  family members  had contacted  the                                                                  
Office of  Child Services before  they had been adopted.   The                                                                  
bill attempts  to help  adult family members  early on  to get                                                                  
more active in placement of children in adoption.                                                                               
                                                                                                                                
Vice-Chair  Stoltze commented the  bill could offer  relief to                                                                  
the appropriate family members.                                                                                                 
                                                                                                                                
3:39:15 PM                                                                                                                    
                                                                                                                                
Ms. Moss  opined that the bill  could not have prevented  that                                                                  
situation  and that no  legislator was  contacted until  after                                                                  
the abuse had occurred.  There was no way to prevent it.                                                                        
                                                                                                                                
Representative  Croft thought that it could have  been avoided                                                                  
if the Division  of Family and Youth Services  (DFYS) had been                                                                  
given more  consideration  during placement  of the  children.                                                                  
If preference  had been given to  an adult relative,  it could                                                                  
have possibly been addressed.                                                                                                   
                                                                                                                                
3:40:57 PM                                                                                                                    
                                                                                                                                
Representative  Croft requested  information about the  fiscal                                                                  
note.   Ms.  Moss  explained  that changes  in  the  committee                                                                  
substitute  impacted the  fiscal note.   Representative  Croft                                                                  
wondered  if some  of the  problems  in the  fiscal note  were                                                                  
caused by biological preference.                                                                                                
                                                                                                                                
STACY KRALY,  ASSISTANT ATTORNEY  GENERAL, DEPARTMENT  OF LAW,                                                                  
replied  that the federal  government required  that OCS  only                                                                  
disclose confidential  information  with a parent.   There was                                                                  
a  previous  version  in  the  bill  that  allowed  a  broader                                                                  
exposure.  If the  bill were passed as previously  amended, it                                                                  
could  have meant  about a  $30 million  dollar federal  loss.                                                                  
Representative  Croft questioned  if that  had been  addressed                                                                  
in the proposed  version.  Ms.  Kraly replied it had  and that                                                                  
there no  longer was  a problem with  preference with  respect                                                                  
to placement,  but  the issue  of disclosure  of  confidential                                                                  
information remains.                                                                                                            
                                                                                                                                
3:43:40 PM                                                                                                                    
                                                                                                                                
Representative  Holm remembered a  case in which  grandparents                                                                  
wanted custody  of their grandchildren;  he asked if  that was                                                                  
one of  the current cases.   Ms. Moss  provided details  about                                                                  
that case  and noted that  one of  the provisions included  in                                                                  
the bill resulted  from that case.   The State has a  right to                                                                  
stay involved as long as the child is in State custody.                                                                         
                                                                                                                                
3:46:35 PM                                                                                                                    
                                                                                                                                
TAMMY  SANDOVAL,   ACTING  DEPUTY  COMMISSIONER,   OFFICES  OF                                                                  
CHILDREN'S  SERVICES  (OCS),  DEPARTMENT  OF HEALTH  &  SOCIAL                                                                  
SERVICES, related  that HB 53 addresses changes  in the child-                                                                  
in-need-of-aid  statutes.  The bill focuses on  accountability                                                                  
for  professionals  involved   in  those  cases.    It  should                                                                  
improve practice  and allow for detecting transparency  in the                                                                  
children's  system.   HB  53 incorporates  identical  language                                                                  
from  the  Governor's   bills,  HB  113  and   HB  114.    The                                                                  
Department  supports passage of  HB 53 with recommendation  of                                                                  
a few small changes.                                                                                                            
                                                                                                                                
Representative   Kelly   inquired   if   the   attached   four                                                                  
amendments  addressed Ms. Sandoval's  concerns.  Ms.  Sandoval                                                                  
replied they did.                                                                                                               
                                                                                                                                
3:49:08 PM                                                                                                                    
                                                                                                                                
PAT LUBY,  (TESTIFIED  VIA TELECONFERENCE),  DIRECTOR,  ALASKA                                                                  
ASSOCIATION  OF RETIRED  PEOPLE (AARP),  ANCHORAGE,  testified                                                                  
in  support  of  HB 53.    He  pointed  out that  AARP  is  an                                                                  
organization  of  grandparents.     Unfortunately,  there  are                                                                  
situations  that put  a parent's right  at risk.   HB 53  puts                                                                  
other family members,  including grandparents  as the priority                                                                  
order  for guardianship  and adoption  rights.   Often  times,                                                                  
placement  with a grandparent  would be  in the best  interest                                                                  
of a minor  child.  AARP encourages  the Committee to  pass HB                                                                  
53.                                                                                                                             
                                                                                                                                
3:49:58 PM                                                                                                                    
                                                                                                                                
TAMI   ELDER,   (TESTIFIED   VIA   TELECONFERENCE),    NETWORK                                                                  
COORDINATOR,  VOLUNTEERS OF AMERICA  (VOA), ANCHORAGE,  shared                                                                  
stories  of the importance  of being  raised by  grandparents.                                                                  
Grandparents  usually attempt to  keep their families  in tact                                                                  
and provide  a safe and loving  home for their  grandchildren.                                                                  
Most families  in those  situations have  not had  involvement                                                                  
with OCS.    Ms. Elder spoke in favor of HB 53.                                                                                 
                                                                                                                                
3:54:35 PM                                                                                                                    
                                                                                                                                
SCOTT  CALDER,  (TESTIFIED  VIA  TELECONFERENCE),   FAIRBANKS,                                                                  
expressed disappointment  that certain  sections had  not been                                                                  
included in the bill:                                                                                                           
                                                                                                                                
   ·    Chapter 117, SLA 19.90 language, which established                                                                      
        the citizen review panel for planning, an act never                                                                     
        permitted to be implemented on the duty of the                                                                          
        standard of care language;                                                                                              
   ·    Construction language regarding the fact that                                                                           
        parents possesses inherent individual right to                                                                          
        direct and control the education of their child.                                                                        
                                                                                                                                
Mr.  Calder  acknowledged  that  grandparents  needed  greater                                                                  
recognition in  the system, as do the parents.   He added that                                                                  
the Department  would control all the information  that people                                                                  
have on a  child, which worried  him.  Mr. Calder  highlighted                                                                  
concerns regarding  the review  panel and spoke in  opposition                                                                  
to the legislation.                                                                                                             
                                                                                                                                
4:03:50 PM                                                                                                                    
                                                                                                                                
KELLY  HUBER, SELF,  JUNEAU,  spoke in  support  of the  bill.                                                                  
She noted  that  she was a  Court appointed  special  advocate                                                                  
and  worked as  a volunteer  for  the State  for  children-in-                                                                  
need-of-aid  cases  and  from  children   removed  from  their                                                                  
homes.   She  encouraged  members  to  consider the  needs  of                                                                  
these children.                                                                                                                 
                                                                                                                                
The bill  helps young  children in Alaska.   Child  protective                                                                  
services  are "under  a microscope  right now".   She  pointed                                                                  
out that the bill  would open up court hearings  and requested                                                                  
that  the Committee  consider  the  ramifications  that  would                                                                  
have on the child.                                                                                                              
                                                                                                                                
Ms.  Huber   addressed  the   generational  abuse   that  some                                                                  
children  experience.   She urged  that the  best interest  of                                                                  
the child  always be considered.   She added her support  that                                                                  
notification is  given to living relatives if  parental rights                                                                  
are terminated.   In  a traditional-type  family setting  that                                                                  
could be  wonderful, however,  many of  these children  do not                                                                  
live in  that type  environment, compounded  with alcohol  and                                                                  
drug abuse.   She hesitated that  all living relatives  should                                                                  
be notified  and  recommended sidebars  be given  for some  of                                                                  
the requirements.                                                                                                               
                                                                                                                                
Ms. Huber pointed  out that foster homes had been  left out of                                                                  
the  preference  list  on  Page   20.    She  reiterated  that                                                                  
consideration  of the child be  the highest priority  and that                                                                  
sidebars be added for the protection of those children.                                                                         
                                                                                                                                
4:09:21 PM                                                                                                                    
                                                                                                                                
Representative  Kelly inquired  if Ms.  Huber had spoken  with                                                                  
the sponsor  regarding  her concerns.   Ms.  Huber noted  that                                                                  
she  had  been working  with  the  sponsor.   She  hoped  that                                                                  
Representative  Hawker would also  help address the  concerns,                                                                  
reiterating  the importance  of  "open hearings".   Ms.  Huber                                                                  
reminded members  that these kids  are fragile; they  have had                                                                  
a rough life.                                                                                                                   
                                                                                                                                
4:10:41 PM                                                                                                                    
                                                                                                                                
Representative  Kelly  requested  further information  on  the                                                                  
amendments.                                                                                                                     
                                                                                                                                
Representative  Holm  inquired  if  there  had  been  training                                                                  
involved representing  the children.   Ms. Huber replied  that                                                                  
there is  a training program  provided by  the court,  with an                                                                  
additional  12  hours  per  year  continued  education.    She                                                                  
pointed  out that  it  is the  only volunteer  service  within                                                                  
that system.   Ms. Huber stated  that she reports  directly to                                                                  
the  guardian  ad  liam,  who  works   for  Office  of  Public                                                                  
Advocacy (OPA).                                                                                                                 
                                                                                                                                
Representative  Holm inquired if they were certificated  to be                                                                  
advocates  for children.   Ms. Huber did  not think they  were                                                                  
certificated.                                                                                                                   
                                                                                                                                
4:12:22 PM                                                                                                                    
                                                                                                                                
HB 53 was HELD in Committee for further consideration.                                                                          
                                                                                                                                
4:13:30 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 12                                                                                                             
                                                                                                                                
     An Act relating to televisions and monitors in motor                                                                       
     vehicles.                                                                                                                  
                                                                                                                                
*REPRESENTATIVE   MAX  GRUENBERG,  SPONSOR,   noted  that  the                                                                  
purpose  of  the  bill  is  to  prevent   operators  of  motor                                                                  
vehicles  from  watching  television,  video,  and  any  other                                                                  
programming, making  it a crime.  Furthermore,  the bill would                                                                  
make it a  crime to install a  device capable of being  viewed                                                                  
while the vehicle was in operation.                                                                                             
                                                                                                                                
Representative Gruenberg provided a sectional analysis:                                                                         
                                                                                                                              
   ·    Section 1 amends AS 28.35, adds a new section.                                                                          
   ·    Paragraph (a) sets forth the general rule that a                                                                        
        person  shall   not  drive   a  motor  vehicle   while                                                                  
        watching television  or video.   The  elements of  the                                                                  
        crime  of  "driving  with  a  screen   operating"  are                                                                  
        enumerated.                                                                                                             
   ·    Paragraph  (b)  prohibits  installing  or  altering  a                                                                  
        video display  in a motor vehicle  that can  be viewed                                                                  
        by the  driver  while  the  vehicle  is moving.    The                                                                  
        paragraph goes  on to provide  for specified  means of                                                                  
        disabling the equipment lawfully.                                                                                       
   ·    Paragraph (c)     provides specific exemptions  to the                                                                  
        general  rule  including  cell  phones  and  equipment                                                                  
        that are  in  the nature  of  aides to  navigation  or                                                                  
        operation.                                                                                                              
   ·    Paragraph (d)  makes  it clear  that the  bill is  not                                                                  
        intended   to  cover   equipment   installed   in   an                                                                  
        emergency   vehicle   or   motor   vehicle   providing                                                                  
        emergency service or roadside assistance.                                                                               
   ·    Paragraph  (e) establishes  an affirmative  defense so                                                                  
        long as proper equipment is installed.                                                                                  
   ·    Paragraph (f)  prescribes the types  of crimes  that a                                                                  
        person  who is  in  violation  of  the law  will  face                                                                  
        under  various  circumstances  including   injury  and                                                                  
        death of another.                                                                                                       
   ·    A person who violates the law is guilty of -                                                                            
     (1) Class A misdemeanor;                                                                                                   
     (2) Class C felony if as a result of that violation                                                                        
        another person suffers a physical injury;                                                                               
     (3) Class B felony if as a result of that violation                                                                        
        another person suffers a serious physical injury;                                                                       
     (4) Class A felony if as a result of that violation                                                                        
        another person suffers death.                                                                                           
   ·    Paragraph (g) prescribes  the crime and punishment  of                                                                  
        a person who  installs equipment  in violation  of the                                                                  
        law.                                                                                                                    
   ·    Section 2  of the bill  sets forth  an effective  date                                                                  
        of September 1, 2005.                                                                                                   
                                                                                                                                
Representative  Gruenberg offered to  answer questions  of the                                                                  
Committee.                                                                                                                      
                                                                                                                                
4:15:50 PM                                                                                                                    
                                                                                                                                
Representative  Kelly  worried  about the  future  of  utility                                                                  
trucks using  screens in  their vehicles.   He cautioned  that                                                                  
the  legislation could  be too  restrictive.   He  anticipated                                                                  
that future  cabs, police cars  and utility trucks  could have                                                                  
"stuff" blocked by the legislation.                                                                                             
                                                                                                                                
Representative  Gruenberg  pointed  out that  those  types  of                                                                  
concern would be  exempted in language on Page  2, Lines 5-13,                                                                  
and  was language  specifically added  at the  request of  the                                                                  
industry.  Navigational  and vehicle equipment  must be legal.                                                                  
Representative  Gruenberg emphasized  that a  lot of  time had                                                                  
been taken to address those concerns adequately.                                                                                
                                                                                                                                
4:18:38 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze mentioned  police  "ride-a-longs" in  cars                                                                  
with digital  screens  and computers,  and was concerned  that                                                                  
the legislation  would affect that.   Representative Gruenberg                                                                  
stated  that  there  was  nothing  included  regarding  police                                                                  
and/or emergency printouts.                                                                                                     
                                                                                                                                
Representative  Croft   thought  that  language   on  Page  2,                                                                  
Subsection   (D),   Lines  14-16,   equipment   installed   in                                                                  
"authorized  emergency  vehicles"  would  address  Vice  Chair                                                                  
Stoltze concerns.                                                                                                               
                                                                                                                                
4:20:33 PM                                                                                                                    
                                                                                                                                
Representative Gruenberg offered  new language for authorizing                                                                  
specific vehicle exemptions.                                                                                                    
                                                                                                                                
Representative Kelly was worried  about all the "common sense"                                                                  
being excluded through language in the bill.                                                                                    
                                                                                                                                
Representative Hawker  agreed that the legislation  could lead                                                                  
the State  down a "dangerous  road by restricting  some common                                                                  
sense  language".   He asked  if  the prohibition  makes it  a                                                                  
crime to drive  with a screen or "visible  display", and about                                                                  
hand held devices.                                                                                                              
                                                                                                                                
Representative  Gruenberg  responded  that  it  would  be  any                                                                  
device installed  and visible  to the driver  while operating.                                                                  
Representative  Hawker thought a  more dangerous  device could                                                                  
be a handheld one.                                                                                                              
                                                                                                                                
4:24:16 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze indicated his  concerned with the impact of                                                                  
the legislation on hand held devices.                                                                                           
                                                                                                                                
Representative Kelly asked if  there was something in the bill                                                                  
that could address "basic speed".                                                                                               
                                                                                                                                
4:25:48 PM                                                                                                                    
                                                                                                                                
Representative  Gruenberg  responded  that the  original  bill                                                                  
would have  made it illegal to  watch a screen  while driving,                                                                  
which would  be difficult to  prove.  In the  current version,                                                                  
it would be illegal to drive  while on and in a position to be                                                                  
viewed.   That  could  be negligent  driving.   The  penalties                                                                  
recommended track  the ones cited  for traffic homicides.   He                                                                  
hoped the legislation would save lives.                                                                                         
                                                                                                                                
4:27:18 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault  understood  the  intent.    He  referenced                                                                  
Section 1  (3), "monitor or  visual display operating  while a                                                                  
person is  driving".  He asked  about driving maps  located on                                                                  
car  dashboards.   Representative  Gruenberg  pointed out  the                                                                  
exempted  items listed  on Page  2,  which include  navigation                                                                  
equipment.  The legislation was  based on model law drafted by                                                                  
the  industry.   Co-Chair  Chenault  thought  the  legislation                                                                  
would  single  out   a  small  amount  of   equipment  and  as                                                                  
technology increases, there would be more accidents.                                                                            
                                                                                                                                
Representative  Kelly mentioned  cameras  for  blind spots  on                                                                  
huge trucks.   He warned that the bill attempts  to be modern,                                                                  
but submitted  that because of the technological  movement, it                                                                  
could be outdated soon.                                                                                                         
                                                                                                                                
4:32:25 PM                                                                                                                    
                                                                                                                                
Representative Gruenberg  commented there would only  be a few                                                                  
cases prosecuted under the proposed  law.  The situation could                                                                  
be difficult  to prove, however,  the legislation  attempts to                                                                  
clarify that if proven, there is punishment.                                                                                    
                                                                                                                                
Representative  Croft  thought  that  the  area  mentioned  by                                                                  
Representative Kelly  was Section (E), Page 2,  exceptions for                                                                  
providing visual information.   He concurred with the question                                                                  
if the legislation was the correct  approach and questioned if                                                                  
it was right  to categorically define negligence  with the use                                                                  
of equipment.   He said that  is what juries are  for, to hear                                                                  
and listen to those concerns.   He supported making it illegal                                                                  
to attach TVs in cars.                                                                                                          
                                                                                                                                
ANNE CARPENETI,  ASSISTANT   ATTORNEY GENERAL,  LEGAL SERVICES                                                                  
SECTION-JUNEAU,   CRIMINAL   DIVISION,  DEPARTMENT   OF   LAW,                                                                  
acknowledged it was  difficult to write the  legislation.  She                                                                  
interpreted  a police vehicle  as an  emergency vehicle.   The                                                                  
Department of Law does support the legislation.                                                                                 
                                                                                                                                
Ms. Carpeneti  pointed  out that the  penalties track  various                                                                  
ones  already  existing  within  the  judicial  system.    She                                                                  
acknowledged  that proof  would be  difficult  and offered  to                                                                  
answer questions.                                                                                                               
                                                                                                                                
4:38:15 PM                                                                                                                    
                                                                                                                                
Representative  Kelly  inquired   what  law  currently  covers                                                                  
these  concerns.   Ms. Carpeneti  explained that  the case  in                                                                  
Kenai  was prosecuted  as  manslaughter,  which  is any  death                                                                  
caused intentionally or recklessly that amounts to murder.                                                                      
                                                                                                                                
Representative   Croft  voiced  concerned  with   categorizing                                                                  
recklessness.   The device  was installed  and operating.   If                                                                  
the driving caused  the death of another, he asked  the causal                                                                  
link between  the conduct  of concern and  that which  lead to                                                                  
the injury or death.                                                                                                            
                                                                                                                                
4:40:47 PM                                                                                                                    
                                                                                                                                
Representative  Gruenberg noted  that there  could be  unusual                                                                  
circumstances  and if there were,  he doubted that  the person                                                                  
would  be prosecuted.   It would  be impossible  to prove  the                                                                  
"watching".                                                                                                                     
                                                                                                                                
4:42:06 PM                                                                                                                    
                                                                                                                                
Representative  Holm  asked  about   "altering  the  vehicle".                                                                  
Representative  Gruenberg replied that  would be  indicated in                                                                  
Subsection  (B), Page 1,  Line 14,  which is  not currently  a                                                                  
crime.   Representative Holm commented  on good common  sense,                                                                  
pointing  out  how  reckless  endangerment   and  driving  are                                                                  
already covered in law.                                                                                                         
                                                                                                                                
4:44:16 PM                                                                                                                    
                                                                                                                                
Representative   Gruenberg  agreed   that   the  State   could                                                                  
eliminate  all   laws  except  for  the  basic   speed  limit;                                                                  
however, the  reason that there  are other laws is  to provide                                                                  
basic certainty.  Not everyone has good common sense.                                                                           
                                                                                                                                
Vice-Chair  Stoltze inquired  if the Department  of Law  would                                                                  
have  taken the  approach proposed  in the  legislation.   Ms.                                                                  
Carpeneti pointed  out that Paragraph 2, Lines  9-11, does not                                                                  
close the door  to similar means.  It is difficult  to specify                                                                  
different   types  of   technology  and   that  the   proposed                                                                  
legislation  includes  other   means  of  creating  a  visible                                                                  
display.    She summarized  that  the  Department  would  have                                                                  
crafted and does support the legislation.                                                                                       
                                                                                                                                
4:46:54 PM                                                                                                                    
                                                                                                                                
HB 12 was HELD in Committee for further consideration.                                                                          
                                                                                                                                
4:47:35 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 7                                                                                                              
                                                                                                                                
     An Act relating to the calculation and payment of                                                                          
     unemployment compensation benefits; and providing for                                                                      
     an effective date.                                                                                                         
                                                                                                                                
REPRESENTATIVE  HARRY  CRAWFORD,  SPONSOR,  stated  that HB  7                                                                  
would increase  the maximum  weekly benefit available  through                                                                  
unemployment insurance from $248 to $336.                                                                                       
                                                                                                                                
Alaska's  current  benefits  fall short  in  helping  families                                                                  
cover  living   expenses  during   periods  of   unemployment.                                                                  
Alaska's  maximum  weekly unemployment  insurance  benefit  of                                                                  
$248  is the  fourth lowest  in the  nation.   Increasing  the                                                                  
maximum weekly  benefit is not  only overdue, it is  essential                                                                  
in alleviating  skill  shortages by  ensuring Alaskan  workers                                                                  
and their families survive periods of unemployment.                                                                             
                                                                                                                                
Representative   Crawford  added   that  the  average   weekly                                                                  
benefit  amount  of  $248  dollars is  only  35%  of  Alaska's                                                                  
average  weekly  wage,  the third  lowest  percentage  in  the                                                                  
country.   Other  western   states  provide   a  much   higher                                                                  
percentage  of  average  weekly  earnings   in  their  maximum                                                                  
weekly  benefit amount:  Washington-67%;  Hawaii-66%;  Oregon-                                                                  
63%;  and  Idaho-59%.     Retaining  a  well-trained   Alaskan                                                                  
workforce  is essential  for a  strong  economy. Providing  an                                                                  
overdue  increase in the  weekly benefit  amount is  necessary                                                                  
to keep Alaska's  workers in Alaska.   Linking the  method for                                                                  
future benefit  calculations to  average weekly earnings  will                                                                  
ensure any changes are in concert with Alaska's economy.                                                                        
                                                                                                                                
4:53:35 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze  asked  if  Alaska  had  a  provision  for                                                                  
family  members.  Representative  Crawford  replied the  State                                                                  
does and  that it  is in the  amount of  $24 dollars per  week                                                                  
per  dependant  up to  three dependants.    That  has been  in                                                                  
structure since  the beginning of Alaska employment  law here.                                                                  
                                                                                                                                
4:54:36 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze  asked  if  the  statistical  size  of  an                                                                  
average  family  had  been  factored   into  that  number  and                                                                  
compared  to  the  other  states.    Representative   Crawford                                                                  
replied  there  were higher  wages  paid in  Alaska,  however,                                                                  
that has been ameliorated over the years.                                                                                       
                                                                                                                                
4:56:27 PM                                                                                                                    
                                                                                                                                
Representative  Holm referred  to the costs  to the  employers                                                                  
at  $64   dollars  per  employee   per  year.   Representative                                                                  
Crawford  explained that it  would be  spread over five  years                                                                  
and  would amount  to  an increment  of  $10 for  five  years.                                                                  
Those calculations  were based on numbers from  the Department                                                                  
of Labor  and Workforce  Development;  a determination  needed                                                                  
to keep the Unemployment Insurance (UI) Trust Fund intact.                                                                      
                                                                                                                                
4:58:36 PM                                                                                                                    
                                                                                                                                
WAYNE STEVENS,  PRESIDENT, ALASKA  STATE CHAMBER OF  COMMERCE,                                                                  
stated that the  Alaska State Chamber of Commerce  understands                                                                  
the need to raise  the benefits paid through the  unemployment                                                                  
insurance  program.  The  State Chamber  understands that  the                                                                  
Unemployment  Insurance (UI)  benefit payments  are second  to                                                                  
the lowest  in the nation.   However,  the additional  cost to                                                                  
business, combined  with the rapidly  rising costs  of Workers                                                                  
Compensation  Insurance  and  the  ever  escalating  costs  of                                                                  
health  care  insurance   for  employees,  together   make  it                                                                  
extremely difficult  for businesses to survive  without making                                                                  
dramatic cuts  to employee costs.   After a cursory  review of                                                                  
the UI  program, it appears  that the  costs of providing  the                                                                  
new level  of benefits envisioned  in HB 7 is estimated  to be                                                                  
$12.4  million  dollars  annually.   In  calendar  year  2004,                                                                  
Alaska   paid   a  total   of   $135.7  million   dollars   in                                                                  
Unemployment Insurance benefits.                                                                                                
                                                                                                                                
Mr.  Stevens  suggested   that  business  could   support  the                                                                  
increase  in UI  benefits if  there were  adjustments made  in                                                                  
other areas  of the program  that would  make the cost  of the                                                                  
increases,  revenue neutral  to business.   Alaska  is one  of                                                                  
very  few  states  that  allow  a  worker   to  separate  from                                                                  
employment  without  good  cause  and then  after  a  six-week                                                                  
disqualification  period,  is  able  to  collect  unemployment                                                                  
insurance.    Alaska is  also  one of  a  few states,  to  pay                                                                  
dependent   benefits.    Currently,   a  claimant   may  claim                                                                  
dependants'  allowance of $24 per  child up to 3 children  per                                                                  
week  in  addition  to the  base  benefit.    The  dependants'                                                                  
allowance cost  the program, totaled $12.8 million  dollars in                                                                  
2004.   To  neutralize  the increased  cost  to business,  the                                                                  
State  Chamber  encourages  extending  the separation-waiting                                                                   
period to  12 weeks.   Another option  would be to delete  the                                                                  
dependent benefit.   The changes  would pay for the  increased                                                                  
UI  benefits   without  adding   to  the  already   escalating                                                                  
insurance and workers compensation cost affecting business.                                                                     
                                                                                                                                
5:02:14 PM                                                                                                                    
                                                                                                                                
BILL  KRAMER,  CHIEF,  UNEMPLOYMENT   INSURANCE,  DIVISION  OF                                                                  
EMPLOYMENT   SECURITY,   ALASKA   DEPARTMENT   OF  LABOR   AND                                                                  
WORKFORCE  DEVELOPMENT,  responded to  queries  by Vice  Chair                                                                  
Stoltze regarding  the child benefit.  If the  State takes the                                                                  
$12.8 million  dollars  paid in dependence  allowance  in 2004                                                                  
and  divided  it equally  amongst  all  weeks paid,  it  would                                                                  
increase the  average weekly payment  by $18.73.   The maximum                                                                  
benefit  amount  without  the  allowance   factored  in  shows                                                                  
                  th                                                                                                            
Alaska ranking  48  compared to  the other states.   Including                                                                  
                                             nd                                                                                 
the dependence allowance places Alaska at 42.                                                                                   
                                                                                                                                
Representative  Holm asked  if it was  intended to change  the                                                                  
percentage paid amount.                                                                                                         
                                                                                                                                
PATRICK  SHIER, ACTING  DEPUTY DIRECTOR,  EMPLOYMENT  SECURITY                                                                  
TAX, DIVISION  OF EMPLOYMENT  SECURITY,  ALASKA DEPARTMENT  OF                                                                  
LABOR AND WORKFORCE  DEVELOPMENT, noted that the  federal rate                                                                  
was in excess  of 6% percent  against which Alaskan  employers                                                                  
enjoy a credit  of almost 100%.  The average employer  rate is                                                                  
around  3%  percent.    In 2006,  the  average  rate  for  the                                                                  
employer  portion   moved  to  2.08%;  in  Alaska,   employees                                                                  
contribute  ½  of 1%.    The  State  would be  looking  at  an                                                                  
increase  of  slightly   over  10%  over  six   years.    Some                                                                  
employers  will see  their rate  staying lower.   An  employer                                                                  
that has  fluctuations in their  payroll might see  their rate                                                                  
increase beyond that percentage.                                                                                                
                                                                                                                                
5:09:27 PM                                                                                                                    
                                                                                                                                
Representative  Holm  worried  about the  adverse  effect  for                                                                  
those employers with seasonal employees.                                                                                        
                                                                                                                                
Mr.  Shier advised  that  the employers  with  a lowest  level                                                                  
would see  less of a  rate increase that  those at the  higher                                                                  
end.   The decline  of payroll  from one  quarter to the  next                                                                  
drives  the higher rate  from one  quarter to  the next.   For                                                                  
those  employers  that  do not  have  that  experience,  their                                                                  
increase  would be real  from 1% percent  to 1.05% percent  in                                                                  
the out years up until 2012.                                                                                                    
                                                                                                                                
5:10:57 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault  MOVED to  ADOPT Amendment  #1.   (Copy  on                                                                  
File).    Vice-Chair  Stoltze  OBJECTED  for  the  purpose  of                                                                  
discussion.                                                                                                                     
                                                                                                                                
Mr. Stevens  spoke to  the amendment.   He explained  that the                                                                  
cost of  the program portion  that allows  people to  quit for                                                                  
no reason  or be fired with  cause, waiting period  be changed                                                                  
from 6  to 12  weeks.  He  emphasized that  might balance  the                                                                  
cost of the program.                                                                                                            
                                                                                                                                
5:13:14 PM                                                                                                                    
                                                                                                                                
Representative  Crawford  spoke  against  the amendment.    He                                                                  
explained that  the average amount of time for  a person to be                                                                  
unemployed in the  State of Alaska is 11 weeks.   He concluded                                                                  
that  the  average   person  would  never  collect   a  check.                                                                  
Workers would  be squeezed to the  point where they  would not                                                                  
remain in  the State.   He believed  that Alaska business  has                                                                  
been  given   a  break   over  the   past  years,  since   the                                                                  
unemployment  rates have  not increased.   The average  weekly                                                                  
benefit  paid out  with  the dependents  is  $194.04,  placing                                                                  
             th                                                                                                                 
Alaska in  49  position  nationwide.   He maintained that  the                                                                  
amendment would  create incentives  for firing employees  when                                                                  
work becomes slack.  He spoke against the amendment.                                                                            
                                                                                                                                
5:17:07 PM                                                                                                                    
                                                                                                                                
Mr. Shier  clarified that  the affect  of the amendment  would                                                                  
increase  the   period  from  6  weeks  to  12   weeks.    The                                                                  
Department  of Labor and Workforce  Development would  support                                                                  
the bill  with the amendment  as it would  reduce the  cost of                                                                  
unemployment  insurance  for  employers  and would  raise  the                                                                  
dollar amount of the weekly benefit to help employees.                                                                          
                                                                                                                                
5:19:14 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze inquired  if "discharged  for  misconduct"                                                                  
meant  more than being  fired.   Mr. Kramer  advised that  the                                                                  
language  of  the  amendment  duplicates  current  statute  in                                                                  
regard to that provision.                                                                                                       
                                                                                                                                
Vice-Chair   Stoltze  wondered   if   the  legislation   would                                                                  
encourage firing  employees, asking if legal protections  were                                                                  
in place to prevent such action.                                                                                                
                                                                                                                                
5:21:25 PM                                                                                                                    
                                                                                                                                
Mr.  Shier responded  that there  have  been many  discussions                                                                  
regarding that  issue.  There is a process to  allow employees                                                                  
to  challenge a  decision  on their  employment  status.   Mr.                                                                  
Shier noted that  the Appeal Tribunal would render  a decision                                                                  
based on the facts.                                                                                                             
                                                                                                                                
5:23:36 PM                                                                                                                    
                                                                                                                                
Representative  Croft  stated that  the  amendment  undermines                                                                  
the purpose of  the program.  There are many reasons  to leave                                                                  
a job.                                                                                                                          
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:       Holm, Kelly, Moses, Chenault                                                                                    
OPPOSED:        Croft, Joule, Stoltze                                                                                           
                                                                                                                                
Representatives  Foster, Hawker,  Meyer were  absent from  the                                                                  
vote.                                                                                                                           
                                                                                                                                
The MOTION FAILED (4-3).                                                                                                        
                                                                                                                                
5:26:38 PM                                                                                                                    
                                                                                                                                
Representative  Kelly requested to amend Amendment  #2.  (Copy                                                                  
on File).   The  change would be  to Page  6, Line 23,  insert                                                                  
"$33,250" and delete "$33,000".                                                                                                 
                                                                                                                                
Representative  Kelly  MOVED to  ADOPT the  amended  Amendment                                                                  
#2.  Co-Chair Chenault OBJECTED for discussion purposes.                                                                        
                                                                                                                                
Representative  Kelly  explained   that  the  amendment  would                                                                  
adjust the  bill to reflect a  weekly ceiling to $300  dollars                                                                  
rather than the proposed $336 dollars.                                                                                          
                                                                                                                                
Representative  Croft questioned  if  additional changes  were                                                                  
needed.   Mr. Shier  indicated that  Amendment #2 would  place                                                                  
         th                                                                                                                     
Alaska 35 nationally.                                                                                                           
                                                                                                                                
5:31:44 PM                                                                                                                    
                                                                                                                                
Representative  Crawford  stated his  intent  was to  increase                                                                  
the  amount of  unemployment  received  as much  as  possible.                                                                  
Co-Chair  Chenault WITHDREW  his  OBJECTION.   There being  NO                                                                  
further OBJECTIONS, Amendment #2 was adopted.                                                                                   
                                                                                                                                
Representative  Hawker MOVED  to REPORT  CSHB  7 (FIN) out  of                                                                  
Committee  with   individual  recommendations   and  with  the                                                                  
accompanying   revised   fiscal  notes.      There  being   NO                                                                  
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CS HB 7 (FIN) was  reported out of Committee with  a "do pass"                                                                  
recommendation  and  with  a new  note  by the  Department  of                                                                  
Administration,  a new zero note by the Department  of Labor &                                                                  
Workforce  Development and  fiscal note  #2 by the  Department                                                                  
of Administration.                                                                                                              
                                                                                                                                
5:34:36 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 101                                                                                                            
                                                                                                                                
     An Act relating to sex trafficking and tourism.                                                                            
                                                                                                                                
REPRESENTATIVE  CROFT,   SPONSOR,  pointed  out  that  in  his                                                                  
address to  the United Nations  General Assembly in  September                                                                  
2003, President  George W. Bush called the sex  trafficking of                                                                  
people "a special  kind of evil in the abuse and  exploitation                                                                  
of the  most innocent  and vulnerable."   HB 101 attacks  that                                                                  
problem at two fundamental economic stages.                                                                                     
                                                                                                                                
   ·    It targets those who traffic people for the purposes                                                                    
        of forcing them into commercial sex acts; and                                                                           
   ·    It targets the industries that create the demand for                                                                    
        the horrible acts by offering "sex tours" and other                                                                     
        promises of sex to Alaskan clients.                                                                                     
                                                                                                                                
Because  much of  the  illegal sex  trafficking  and sex  tour                                                                  
activity happens  overseas, the most direct way  for Alaska to                                                                  
help  eradicate the  black  market industry  is  to limit  the                                                                  
demand  for such  despicable  acts.   HB 101  addresses  those                                                                  
that  promote, organize  or  otherwise market  commercial  sex                                                                  
tours   and  travel   services   by  making   the   activities                                                                  
punishable to the same degree as sex trafficking itself.                                                                        
                                                                                                                                
Representative   Croft  continued,   recent  studies   by  the                                                                  
University  of Pennsylvania and  the U.S. Department  of State                                                                  
on  the prevalence  of  sex  trafficking  and sex  tours  both                                                                  
nationally  and  globally,  shows   an  astounding  number  of                                                                  
children each year  fall victim to this heinous  industry.  It                                                                  
is  important   to  do  our  part   to  end  that   abuse  and                                                                  
exploitation of our world's most vulnerable children.                                                                           
                                                                                                                                
HB 101  would make Alaska  part of the  solution and  not part                                                                  
of the problem.                                                                                                                 
                                                                                                                                
5:37:43 PM                                                                                                                    
                                                                                                                                
Representative   Holm  asked   if  this   type  activity   was                                                                  
happening in the United States.                                                                                                 
                                                                                                                                
Representative  Croft referenced  a study from the  University                                                                  
of Pennsylvania  on commercial  and sexual  exploitation.   It                                                                  
is a growing problem  happening around the world.   He pointed                                                                  
out that  the numbers of occurrences  indicates that  there is                                                                  
advertising.   He  wanted  to   make  sure  that   advertising                                                                  
agencies   know   they  cannot   respond   to   requests   for                                                                  
information regarding sex trafficking.                                                                                          
                                                                                                                                
5:40:42 PM                                                                                                                    
                                                                                                                                
In   response    to   comments   by   Representative    Kelly,                                                                  
Representative   Croft   agreed   that  advertising   is   not                                                                  
currently  happening in  Alaska, but that  Alaskans do  travel                                                                  
for such purposes.                                                                                                              
                                                                                                                                
Representative  Kelly remembered  sexual practices during  the                                                                  
height  of the  pipeline construction  and  questioned if  the                                                                  
legislation  could  address  issues  now  with  the  gas  line                                                                  
coming forth.                                                                                                                   
                                                                                                                                
5:42:26 PM                                                                                                                    
                                                                                                                                
Representative  Croft  stated the  legislation  addresses  the                                                                  
advertisement of prostitution.                                                                                                  
                                                                                                                                
Representative  Hawker asked how the legislation  would affect                                                                  
out-of-state  Internet  advertising,  and  if the  bill  would                                                                  
hold harmless  the infrastructure  providers.   Representative                                                                  
Croft explained  that the House  Judiciary Committee  inserted                                                                  
the phrase "for the purpose of".                                                                                                
                                                                                                                                
5:45:35 PM                                                                                                                    
                                                                                                                                
Representative  Croft  noted  that the  infrastructure  of  he                                                                  
Internet is not liable for pornography sites.                                                                                   
                                                                                                                                
In   response   to   a   question   by   Vice-Chair   Stoltze,                                                                  
Representative  Croft  explained  that  it  would  prohibit  a                                                                  
flyer  advertising activities  where  prostitution was  legal.                                                                  
Since  it  is illegal  in  Alaska,  it should  be  illegal  to                                                                  
advertise in Alaska.                                                                                                            
                                                                                                                                
5:48:30 PM                                                                                                                    
                                                                                                                                
Representative  Hawker  asked  if there  could  be  interstate                                                                  
commerce  concerns.   Representative Croft  concluded that  it                                                                  
would be  criminal conduct  in Alaska.   He acknowledged  that                                                                  
there  could be  legal  challenges,  but emphasized  that  the                                                                  
State's  actions  should  not  be held  to  the  lowest  moral                                                                  
calendar.   He  maintained  that  it is  not clearly  or  even                                                                  
likely to be unconstitutional  and felt that a  constitutional                                                                  
case would be won by the State.                                                                                                 
                                                                                                                                
5:50:56 PM                                                                                                                    
                                                                                                                                
Representative   Croft  stressed  that  the  use   of  younger                                                                  
persons are  the worst cases.   He noted  that there  has been                                                                  
discussion   on  penalty   levels  and   felt  it  should   be                                                                  
classified as a Class C felony.                                                                                                 
                                                                                                                                
Vice-Chair   Stoltze  asked  if   there  could  be   a  higher                                                                  
threshold for those acts directed toward children.                                                                              
                                                                                                                                
5:53:35 PM                                                                                                                    
                                                                                                                                
Representative  Holm spoke in support of the legislation.   He                                                                  
noted  that Americans  are traveling  to  other countries  for                                                                  
these  purposes,   but  there   is  no  indication   that  the                                                                  
practices  are   occurring  stateside.    He   questioned  how                                                                  
Alaskan law could affect situations here.                                                                                       
                                                                                                                                
Representative  Croft explained that  the viewer would  not be                                                                  
selling  the  service.   The  individual  would   have  to  be                                                                  
providing a service.                                                                                                            
                                                                                                                                
Representative  Croft observed  that  prostitution does  occur                                                                  
in America, noting concerns with child pornography.                                                                             
                                                                                                                                
5:58:43 PM                                                                                                                    
                                                                                                                                
In   response   to   a   question   by   Vice-Chair   Stoltze,                                                                  
Representative  Croft referred to  brothel tours and  how they                                                                  
would   be   covered   through   the   proposed   legislation.                                                                  
Traveling for commercial sex acts would be included.                                                                            
                                                                                                                                
Vice-Chair  Stoltze  MOVED to  REPORT CSHB  101  (JUD) out  of                                                                  
Committee  with   individual  recommendations   and  with  the                                                                  
accompanying fiscal  notes.  There being NO OBJECTION,  it was                                                                  
so ordered.                                                                                                                     
                                                                                                                                
CS HB  101 (JUD)  was  reported out  of Committee  with a  "do                                                                  
pass" recommendation  and with zero note #1 by  the Department                                                                  
of  Administration,   zero  note  #2  by  the   Department  of                                                                  
Corrections,  zero note #3  by the Alaska  Court System,  zero                                                                  
note  #4 by the  Department  of Law  and zero  note #5 by  the                                                                  
Department of Public Safety.                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 6:01 P.M.                                                                                          
                                                                                                                                
                                                                                                                                

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