Legislature(2005 - 2006)HOUSE FINANCE 519

03/07/2006 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
<Bill Hearing Rescheduled to 9:00 mtg.>
Moved CSHB 408(FIN) Out of Committee
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
Heard & Held
<Bill Hearing Rescheduled from 9:00 mtg>
                  HOUSE FINANCE COMMITTEE                                                                                       
                       March 7, 2006                                                                                            
                         1:46 P.M.                                                                                              
CALL TO ORDER                                                                                                                 
Co-Chair Meyer called the House  Finance Committee meeting to                                                                   
order at 1:46:39 PM.                                                                                                          
MEMBERS PRESENT                                                                                                               
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Bill Stoltze, Vice-Chair                                                                                         
Representative Mike Hawker                                                                                                      
Representative Jim Holm                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Beth Kerttula                                                                                                    
Representative Carl Moses                                                                                                       
MEMBERS ABSENT                                                                                                                
Representative Richard Foster                                                                                                   
Representative Bruce Weyhrauch                                                                                                  
ALSO PRESENT                                                                                                                  
Representative  Mark  Neuman;   Senator  Con  Bunde;  Senator                                                                   
Gretchen Guess;  Portia Parker,  Deputy Director,  Department                                                                   
of  Corrections;   Susan  Parks,  Deputy   Attorney  General,                                                                   
Criminal Division,  Department of  Law; Rynnieva  Moss, Staff                                                                   
to Rep. Coghill;  Tammy Sandoval, Acting Director  Offices of                                                                   
Children's  Services; Janet  Clarke, Assistant  Commissioner,                                                                   
Division of  Finance and  Management Services, Department  of                                                                   
Health  and  Social  Services;   Virginia  Smiley,  Director,                                                                   
Division of  Pioneer Homes, Department  of Health  and Social                                                                   
Services;  Sharleen  Griffin,  Acting Director,  Division  of                                                                   
Administrative  Services, Department  of Corrections;  Robynn                                                                   
Wilson,  Director, Division  of Tax,  Department of  Revenue;                                                                   
Jerry Burnett,  Legislative Liaison,  Department of  Revenue;                                                                   
Mila Cosgrove,  Director, Division  of Personnel,  Department                                                                   
of Administration.                                                                                                              
PRESENT VIA TELECONFERENCE                                                                                                    
Quinlan  Steiner, Director,  Office of  Public Defender;  Jan                                                                   
Rutherdale, Assistant Attorney General, Department of Law.                                                                      
CS SB 218(FIN)                                                                                                                  
          An Act relating to sex offenders and child                                                                            
          kidnappers; relating to reporting of sex offenders                                                                    
          and   child   kidnappers;  relating   to   periodic                                                                   
          polygraph  examinations for sex offenders  released                                                                   
          on  probation or parole;  relating to  sexual abuse                                                                   
          of  a   minor;  relating  to  the   definitions  of                                                                   
          'aggravated  sex offense'  and 'child  kidnapping';                                                                   
          relating to  penalties for failure to  report child                                                                   
          abuse  or neglect; relating  to sentencing  for sex                                                                   
          offenders  and  habitual criminals;  and  providing                                                                   
          for an effective date.                                                                                                
          CS  SB 218 (FIN)  was HEARD  and HELD in  Committee                                                                   
          for further consideration.                                                                                            
HB 408    An Act  relating to the definition  of 'child abuse                                                                   
          and  neglect' for  child  protection purposes;  and                                                                   
          providing for an effective date.                                                                                      
          CS HB408  (FIN) was REPORTED OUT of  Committee with                                                                   
          individual    recommendations  and  2  zero  fiscal                                                                   
          notes (#1, DHSS; New, HFC).                                                                                           
HB 485    An Act  amending the  State Personnel Act  to place                                                                   
          in  the exempt service  pharmacists and  physicians                                                                   
          employed  in the  Department of  Health and  Social                                                                   
          Services  or in the  Department of Corrections  and                                                                   
          corporate income tax  forensic auditors employed by                                                                   
          the   division  of   the   Department  of   Revenue                                                                   
          principally  responsible  for  the  collection  and                                                                   
          enforcement  of  state   taxes  who  specialize  in                                                                   
          apportionment   analysis   and  tax   shelters   of                                                                   
          multistate  corporate taxpayers; and  providing for                                                                   
          an effective date.                                                                                                    
          HB 485 was HEARD and  HELD in Committee for further                                                                   
CS FOR SENATE BILL NO. 218(FIN)                                                                                               
     "An Act relating to sex offenders  and child kidnappers;                                                                   
     relating  to  reporting   of  sex  offenders  and  child                                                                   
     kidnappers; relating to periodic  polygraph examinations                                                                   
     for  sex  offenders  released on  probation  or  parole;                                                                   
     relating  to sexual abuse  of a  minor; relating  to the                                                                   
     definitions  of  'aggravated  sex  offense'  and  'child                                                                   
     kidnapping';  relating  to   penalties  for  failure  to                                                                   
     report child  abuse or  neglect; relating to  sentencing                                                                   
     for sex offenders and habitual  criminals; and providing                                                                   
     for an effective date."                                                                                                    
SENATOR  CON  BUNDE,  SPONSOR,   thanked  the  Committee  and                                                                   
pointed  out   examples  from  weekend  news   articles  from                                                                   
Anchorage  recounting   various  sexual  crimes,   especially                                                                   
noting an incident  when an perpetrator committed  an assault                                                                   
hours after being  release from prison.   Her  concluded that                                                                   
this  was  an  indication  of  the  need  for  longer  prison                                                                   
1:48:17 PM                                                                                                                    
Co-Chair Chenault   MOVED  to ADOPT Work Draft  #24-LS1307\U,                                                                   
Luckhaupt,  3/6/06, as  the version  of the  bill before  the                                                                   
Committee. There being NO OBJECTION,  the motion was ADOPTED.                                                                   
Senator  Bunde  referred  to  SUSAN  PARKS,  DEPUTY  ATTORNEY                                                                   
GENERAL, CRIMINAL DIVISION, DEPARTMENT  OF LAW to address the                                                                   
bill.    Ms.  Parks  highlighted  changes  in  the  Committee                                                                   
Substitute.  She  noted changes in Section 1  and 2, referred                                                                   
to as the "peer group amendment".   She stated that there was                                                                   
a concern about  whether conduct between teenage  peers hould                                                                   
be  considered  criminal.   She  explained that  the  changes                                                                   
specified the  need for one of  the teenagers to be  17 years                                                                   
of age or older,  and for there to be four  years' difference                                                                   
in ages to constitute a criminal act.                                                                                           
1:50:58 PM                                                                                                                    
Ms.  Parks  also  noted  another major  change  to  the  bill                                                                   
contained  in Section  8, page  7.   She  explained that  the                                                                   
original  bill  mandated  that  there be  probation  for  sex                                                                   
offenses.    She  pointed out  that  probation  only  carried                                                                   
weight  if it  pertained  to  suspended time,  which  enabled                                                                   
violators  of probation  to  be punished.    She stated  that                                                                   
Section  8 required  a certain  amount of  suspended time  so                                                                   
that mandatory  probation carried significance.   She pointed                                                                   
out that  there were amendments  to the ranges that  had been                                                                   
increased by 5 years to allow for required suspended time.                                                                      
1:52:00 PM                                                                                                                      
Ms.  Parks also  pointed out  that on  Page 6,  line 11,  the                                                                   
range of sentence  was changed from "one to  twelve years" to                                                                   
"two to twelve years".                                                                                                          
Representative  Stoltze referred  to a sentencing  proceeding                                                                   
that reminded him of the truth  in sentencing provisions, and                                                                   
asked about the actual provisions.                                                                                              
1:53:11 PM                                                                                                                    
Ms.  Parks  emphasized  that a  prior  sexual  offense  would                                                                   
guarantee  a  severe  sentence   for  a  subsequent  offense,                                                                   
whereas  a  first  time  offender  might  receive  a  lighter                                                                   
sentence,  such  as  four  years,  with  the  possibility  of                                                                   
discretionary parole.                                                                                                           
Representative Stoltze   noted  that the offender to which he                                                                   
referenced in  Wasilla had received  a sentence of  99 years,                                                                   
being eligible for parole in 23 years.                                                                                          
1:54:20 PM                                                                                                                    
Co-Chair Meyer MOVED to ADOPT Amendment #1.                                                                                     
     Page 3, lines 18-21                                                                                                        
     Delete subsection (b)                                                                                                      
          (b) This statute does not apply if any of the                                                                         
     circumstances   or  conduct  establishing   the  offense                                                                   
     relate to  an attorney-client relationship  with the sex                                                                   
     offender or child kidnapper.                                                                                               
     The defendant may file notice  pre-trial that subsection                                                                   
     (b) applies.   The  notice merely  requires that  a good                                                                   
     faith  basis for its  filing exist.   The defendant  may                                                                   
     request a pre-trial ruling  by the Judge, or may request                                                                   
     a  jury  determination, or  both.    The State  has  the                                                                   
     burden  to prove  beyond  a reasonable  doubt that  sub-                                                                   
     section (b) does not apply.                                                                                                
Representative Stoltze OBJECTED.                                                                                                
Co-Chair Meyer referred  to Ms. Parks  for discussion  of the                                                                   
amendment.  Ms. Parks explained  that the amendment pertained                                                                   
to the "failure to report" provisions  contained in Section 3                                                                   
of  the bill.    She  explained  that the  Public  Defender's                                                                   
office  raised  concerns that  the  bill created  an  ethical                                                                   
dilemma  for a  defense attorney  representing  a client  who                                                                   
should  have been  registered and  was not  registered.   She                                                                   
stated that  the language had  been developed  in cooperation                                                                   
with the  Public Defender's office  in order to  mitigate the                                                                   
ethical issue.                                                                                                                  
QUINLAN  STEINER,   DIRECTOR,   OFFICE  OF  PUBLIC   DEFENDER                                                                   
testified online,  stating that he had worked  with Ms. Parks                                                                   
on the language to remedy the ethical dilemma.                                                                                  
Representative Stolze WITHDREW his OBJECTION.                                                                                   
There being no further objection,  the Amendment was ADOPTED.                                                                   
Representative Kerttula  MOVED to WITHDRAW Amendments  #2 and                                                                   
Representative  Kerttula then  MOVED to  ADOPT Amendment  #4,                                                                   
24-LS1307\U.2, Luckhaupt, 3/7/06.                                                                                               
1:57:38 PM                                                                                                                    
Representative Hawker OBJECTED.                                                                                                 
Representative Kerttula  explained  that  her amendments  did                                                                   
not indicate a  lack of support or respect  for the sponsors,                                                                   
but  rather  pertained  to  the  complicated  nature  of  the                                                                   
legislation.    She thanked  the  sponsors for  changing  the                                                                   
crime of omission and for extending statutory rape.                                                                             
Representative Kerttula  specified    that    Amendment    #4                                                                   
pertained  to sentencing for  Class A  and Class B  felonies.                                                                   
She  conceded  that these  were  serious crimes  that  should                                                                   
carry  serious penalties,  however  pointed out  that if  the                                                                   
sentences  were increased  to this degree  it would  generate                                                                   
commensurate  costs.   She  proposed bringing  the  sentences                                                                   
within a range that allowed for a more gradual impact.                                                                          
Senator Bunde  agreed that  the bill  would generate  a cost.                                                                   
He  discussed the  merits of  the  costs as  compared to  the                                                                   
quality  of safety  in society.    He also  pointed out  that                                                                   
large sentences,  as  well as incarcerating  offenders  for a                                                                   
long  and costly  period, also  served  as a  deterrent.   He                                                                   
concluded  that  the  societal cost  therefore  balanced  the                                                                   
financial costs.                                                                                                                
2:01:19 PM                                                                                                                    
REPRESENTATIVE    NEUMAN   (Co-Sponsor)   emphasized    that,                                                                   
particularly  for victims  age  13 or  younger,  the cost  of                                                                   
rehabilitation   lasted   a  lifetime.      He  referred   to                                                                   
discussions   on  the  cost   of  such  rehabilitation,   and                                                                   
estimated  it at  $45,000 per  victim.   He  also noted  that                                                                   
there were  518 reported victims,  resenting only  16 percent                                                                   
of sexual crimes  committed that were actually  reported.  He                                                                   
also reminded the Committee about  the rate of recidivism due                                                                   
to  the  inability  to  rehabilitate   offenders.    He  also                                                                   
recalled discussions  with Commissioner Tandeske,  confirming                                                                   
that these  offenders also committed  other types  of crimes.                                                                   
He concluded that all of these  costs should be considered in                                                                   
the entire picture.                                                                                                             
2:03:47 PM                                                                                                                    
SENATOR  GUESS  (CO-SPONSOR)   spoke  in  opposition  to  the                                                                   
amendment, but  welcomed the discussion  of the issues.   She                                                                   
referred  to  previously  passed  bills  (Sen.  French),  and                                                                   
testimony  by administration  stating that  the bill  did not                                                                   
pertain as  much to sentences  as to compliance with  a court                                                                   
case.    She  emphasized  that  the  bill  sponsors  did  not                                                                   
contemplate appropriate sentence  ranges.  She noted that the                                                                   
Legislature  discussed such  policy  issues at  length.   She                                                                   
pointed out that Senator French's  bill did not address first                                                                   
time offenders or the sentencing structure.                                                                                     
2:05:34 PM                                                                                                                    
Senator  Guess also  referred  to the  third  section of  the                                                                   
amendment  that reduced probation  requirements. She  pointed                                                                   
out that probation  stipulations allowed for the  best use of                                                                   
the polygraph  in helping prevent offenders  from recurrence.                                                                   
She stated her opinion that it  was wrong to reduce sentences                                                                   
and  probation   on  a  policy   basis.    She   agreed  with                                                                   
Representative  Neuman  that  the  societal  cost  of  sexual                                                                   
crimes was  significant, if  somewhat unknown, and  concluded                                                                   
that it outweighed any other costs.                                                                                             
Representative Hawker MAINTINED his OBJECTION.                                                                                  
Representative Kerttula  concurred    with   the    Sponsors'                                                                   
addition  of  probation  to  the  Committee  Substitute,  and                                                                   
explained  that her  amendment  was an  effort  to bring  the                                                                   
sentencing   down  into   a  somewhat   reduced  range   with                                                                   
commensurate  probation periods.   She  stated that  this was                                                                   
the most difficult of her proposed amendments.                                                                                  
Responding to a question by Co-Chair  Chenault, Senator Guess                                                                   
clarified  an  earlier  observation   that  sexual  offenders                                                                   
responded   well    to   the   structured    environment   of                                                                   
incarceration.  She referred to  Senator French's bill, and a                                                                   
supporting  document confirming  that sexual offenders  often                                                                   
received  "good  time",  which under  the  current  amendment                                                                   
would be eight years.                                                                                                           
Representative  Bunde noted that  sex offenders  often sought                                                                   
vulnerable victims.                                                                                                             
2:09:19 PM                                                                                                                    
A roll call vote was taken on the motion.                                                                                       
IN FAVOR:      Moses, Kertulla                                                                                                  
OPPOSED:       Stoltze, Hawker, Holm, Joule, Kelly, Meyer,                                                                      
The Amendment FAILED on a vote of 7 to 2.                                                                                       
Representative  Kerttula  MOVED to  ADOPT  Amendment #5,  24-                                                                   
LS1307\U.1, Luckhaupt, 3/7/06.                                                                                                  
Representative Stoltze OBJECTED.                                                                                                
Representative   Kerttula   explained  that   the   amendment                                                                   
pertained  to Class  C  Felonies.   While  she conceded  that                                                                   
these  offenses could  indicate serious  behavior, she  noted                                                                   
that  it could  also include  less serious  behavior such  as                                                                   
touching.  She  stated her belief that the  maximum sentences                                                                   
were often disproportionate to  the less serious crimes.  She                                                                   
also  noted  that  the  Amendment  contained  a  commensurate                                                                   
reduction of probationary periods.                                                                                              
2:11:02 PM                                                                                                                    
Representative Stoltze   referred  to  comments  made in  the                                                                   
Senate Judiciary Committee regarding  the issue of incidental                                                                   
touch,  and asked  how often  instances of  this nature  were                                                                   
SUSAN  PARKS,  DEPUTY ATTORNEY  GENERAL,  CRIMINAL  DIVISION,                                                                   
DEPARTMENT OF LAW  referred to case examples  and stated that                                                                   
in 2004,  of over  100 case that  were charged with  touching                                                                   
offenses,  only 40 times  did they  receive the most  serious                                                                   
offense,  and  usually when  accompanied  by  a more  serious                                                                   
charge. She noted  a case in Anchorage when a  young girl had                                                                   
received touches  over an eight year period,  that eventually                                                                   
developed into more serious conduct,  and concluded that this                                                                   
was often  the case.  She  also noted that  touching offenses                                                                   
were often prosecuted when offenders  had been interrupted or                                                                   
fought off.  She noted several  cases of touching offenses in                                                                   
various serious circumstances  and concluded that these could                                                                   
be potentially serious offenses.                                                                                                
2:15:16 PM                                                                                                                    
Representative Stoltze   concluded    that    the    touching                                                                   
offenses in a  situation of an accidental or  "barroom grope"                                                                   
were  rarely prosecuted.    Ms.  Parks responded  that  those                                                                   
types of cases were not usually charged.                                                                                        
Representative  Neuman referred to  the first section  of the                                                                   
amendment, deleting  the numbers  "99" and "20",  and pointed                                                                   
out that  the bill  language actually  stated "not  more than                                                                   
99/20".  He also referred to lines  22 to 23 of the amendment                                                                   
proposing to  delete "99" and  insert "9 to 20",  and pointed                                                                   
out  that  these  sentences  pertained   to  a  third  felony                                                                   
2:17:10 PM                                                                                                                    
Responding  to a  comment by  Co-Chair  Meyer, Senator  Guess                                                                   
stated  that the  Sponsors  were  opposed to  the  amendment.                                                                   
Senator Guess  noted that at the  third degree level,  a wide                                                                   
variety of conducts were included.   She noted a recent study                                                                   
about  the problem  of  rape in  prisons,  as  well as  about                                                                   
incest.  She   concluded  that  there  were   serious  crimes                                                                   
included in this range.  She explained  that a wider range of                                                                   
sentences  at  this  level  of offense  was  to  give  courts                                                                   
2:18:44 PM                                                                                                                    
Representative Kerttula  expressed     that     while     she                                                                   
appreciated  the  benefit  of   flexibility,  she  maintained                                                                   
concern over  the large range of  offenses in the bill.   She                                                                   
proposed breaking  the bill apart, and separating  the lesser                                                                   
offenses  from  much  more  serious   behaviors.    She  also                                                                   
commented  that,   along  with  flexibility,  an   amount  of                                                                   
discretion remained to the courts.   She noted that low level                                                                   
thefts  were   also  included  within  the  same   level  and                                                                   
therefore subject to the same sentencing structure.                                                                             
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Moses, Kertulla                                                                                                       
OPPOSED:  Stoltze,  Hawker,  Holm,  Joule,  Kelly,  Chenault,                                                                   
The motion FAILED on a vote of 2 to 7.                                                                                          
Representative Kerttula MOVED to ADOPT Amendment #6.                                                                            
Representative Hawker OBJECTED.                                                                                                 
Representative Kerttula  commented  that in her experience as                                                                   
a defense  attorney  she had  dealt with  offenders who  were                                                                   
well aware of sentencing ranges.  She stated her concern that                                                                   
such  knowledge  of sentences  might  induce  an offender  to                                                                   
murder a victim  of a sexual assault in an attempt  to obtain                                                                   
a lighter sentence.                                                                                                             
Representative  Hawker  strongly  maintained  his  objection,                                                                   
expressing  his concern  for victims of  sexual assaults  who                                                                   
serve a "life sentence" of suffering.                                                                                           
2:23:51 PM                                                                                                                    
Representative  Neuman stressed that  the majority  of crimes                                                                   
referred to by the amendments  were committed against persons                                                                   
under  the  age  of  thirteen.     He  also  noted  that  the                                                                   
perpetrators often  carried firearms, thereby  justifying the                                                                   
higher sentences.                                                                                                               
Representative  Bunde   pointed  out  that  in   any  of  the                                                                   
sentences, a single mitigating  circumstance could reduce the                                                                   
sentence  by as  much  as half.   He  noted  that courts  and                                                                   
juries  could  exercise a  certain  amount of  discretion  in                                                                   
these  circumstances.   He mentioned  that  other states  had                                                                   
substantially increased  penalties for sexual  predators.  He                                                                   
also pointed  out that  offenders often  moved from  state to                                                                   
state, and  was concerned  that Alaska  could become  a prime                                                                   
destination  for  sexual  predators  if  our  sentences  were                                                                   
Representative Kerttula  clarified  that  her amendments  did                                                                   
not address repeat offenses, and  only pertained to the lower                                                                   
end of the offenses.  She proposed  that the lower end of the                                                                   
sentence should be  lower than that for murder  in the second                                                                   
Representative Bunde stated that  research showed that by the                                                                   
time  a perpetrator  was arrested  and tried  they often  had                                                                   
committed a number of unreported offenses.                                                                                      
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Kertulla                                                                                                              
OPPOSED:  Hawker, Holm, Joule,  Kelly, Moses, Stoltze, Meyer,                                                                   
The motion FAILED on a vote of 1 to 8.                                                                                          
2:27:26 PM                                                                                                                    
Representative Bunde departed  the meeting and stated that he                                                                   
was opposed to any amendments.                                                                                                  
Representative  Kerttula  MOVED to  ADOPT  Amendment #7  (24-                                                                   
LS1307\U.4, Luckhaupt, 3/7/06).                                                                                                 
Representative Hawker OBJECTED.                                                                                                 
Representative Kerttula  explained  that the amendment  dealt                                                                   
with  the  failure  to  report   sexual  offenders  or  child                                                                   
kidnappers.   She  noted that  this section  of the bill  had                                                                   
been amended  to address  ethical considerations  for defense                                                                   
2:29:08 PM                                                                                                                    
Representative  Kerttula suggested  that the standard  should                                                                   
be one of  "knowingly" disregarding requirements  rather than                                                                   
"recklessly".   She noted that  in an earlier  discussion Ms.                                                                   
Parks had  referred to  other legislation  that employs  such                                                                   
duel standards.   Representative  Kerttula proposed  that the                                                                   
current standards  in the  bill would  make it confusing  and                                                                   
more difficult to prosecute.                                                                                                    
Senator Guess stated  that she was opposed to  the amendment,                                                                   
and confirmed their belief that  the duel standards would not                                                                   
cause confusion.                                                                                                                
2:30:25 PM                                                                                                                    
Ms. Parks  stated her belief  that changing the  mental state                                                                   
to "recklessly"  would  make it more  difficult to  prosecute                                                                   
the cases.   She noted that  certain offenses contain  both a                                                                   
"reckless" and  "knowing" terminology.  She  pointed out that                                                                   
"recklessly"  was  a difficult  standard  to  meet, since  it                                                                   
requires  that  the  offender  is aware  of  and  consciously                                                                   
disregards   a  substantial   risk,   constituting  a   gross                                                                   
deviation  from  a  reasonable  standard  of  conduct.    She                                                                   
expressed concern  that those who wish to remain  ignorant of                                                                   
circumstantial  evidence  can  simply claim  to  "not  know",                                                                   
whereas  it can be  proven that  a person  acted in  reckless                                                                   
disregard of the evidence.                                                                                                      
2:32:15 PM                                                                                                                    
Representative  Stoltze asked  how it  would affect  a family                                                                   
situation.   Ms. Parks  confirmed that  the concern  would be                                                                   
that individuals would choose not to confirm suspicions.                                                                        
2:32:45 PM                                                                                                                    
Representative  Hawker observed  that use  of the  "reckless"                                                                   
standard  had  been  adequately  defended.    He  questioned,                                                                   
however,    the    double    standard    "and    knowlingly".                                                                   
Representative  Hawker asked  whether, if  an individual  was                                                                   
unaware of location of a perpetrator,  their knowing could be                                                                   
2:34:02 PM                                                                                                                    
Representative Neuman  stated his opinion that  the standards                                                                   
were  a  policy  decision.    He  questioned  whether  if  an                                                                   
individual knew of incest in a  family, or a sexual molester,                                                                   
and purposefully  did not bring these facts  forward, or even                                                                   
witnessed an  act while under  the influence of  a substance,                                                                   
they would  bear some measure  of guilt.    He observed  that                                                                   
the victims should  be given first consideration,  along with                                                                   
our  responsibility  to society.    He suggested  that  there                                                                   
should be a greater aptitude toward  societal responsibility.                                                                   
Representative Hawker  commented that in the  construction of                                                                   
statute,  they were  obligated  to protect  the innocent,  as                                                                   
well  as provide  a  vehicle to  prosecute  the  guilty.   He                                                                   
expressed  concern that  with the current  bill, the  statute                                                                   
might prosecute the innocent.                                                                                                   
2:36:50 PM                                                                                                                    
Senator    Guess   acknowledged    Representative    Hawker's                                                                   
observation  as valid,  and conceded that  language might  be                                                                   
changed to  protect an  individual who  failed to report  the                                                                   
location of a sex offender due to their lack of knowledge.                                                                      
2:37:58 PM                                                                                                                    
Representative  Hawker   asked  if  it  was   the  chairman's                                                                   
intention to report the bill out  of Committee, and suggested                                                                   
that  the language  could be  remedied  during discussion  of                                                                   
other amendments.                                                                                                               
Co-Chair Meyer recommended that the amendment be withdrawn.                                                                     
Representative Kerttula WITHDREW Amendment #7.                                                                                  
Co-Chair  Meyer stated  that  the  bill would  be  HELD.   He                                                                   
requested that updated fiscal  notes be prepared for the next                                                                   
hearing to take into account any bill changes.                                                                                  
2:39:08 PM                                                                                                                    
Representative Kerttula  requested that the remainder  of her                                                                   
amendments  (#8-10)   be  withdrawn  in  order   for  further                                                                   
consideration before the next hearing.                                                                                          
2:39:38 PM                                                                                                                    
CS  SB   218  (FIN)  was   HELD  in  Committee   for  further                                                                   
2:40:18 PM                                                                                                                    
HOUSE BILL NO. 408                                                                                                            
     "An Act relating to the definition of 'child abuse and                                                                     
     neglect' for child protection purposes; and providing                                                                      
     for an effective date."                                                                                                    
2:42:27 PM                                                                                                                    
Co-Chair  Chenault MOVED  to  ADOPT work  draft  #24-BH202\Y.                                                                   
There being no objection, the DRAFT was ADOPTED.                                                                                
Rynnvieva  Moss noted  that  the bill  was  sponsored by  the                                                                   
Governor, and  explained the influence  of last  year's House                                                                   
Bill  53, combined  with efforts  of  the Administration  and                                                                   
various  legislators  into  one vehicle,  called  the  Family                                                                   
Rights  Act  of 2006.    She acknowledged  the  inclusion  of                                                                   
legislation   by  Representative   Chenault,   Representative                                                                   
Coghill,  and  changes  added  by the  Office  of  Children's                                                                   
Services (OCS).                                                                                                                 
Ms.  Moss  addressed Representative  Coghill's  concern  with                                                                   
section  5 of the  Committee Substitute.  She explained  that                                                                   
last year,  under the previous law  as written in HB  53, OCS                                                                   
could  only discuss  the  report of  harm  that involved  the                                                                   
disclosing information in the  case of a resulting death.  At                                                                   
that time, the Attorney General's  office stipulated that the                                                                   
agency  could only  discuss the  most recent  report of  harm                                                                   
that actually resulted in the  death.  She clarified that the                                                                   
revised bill  now allows them  to discuss any report  of harm                                                                   
once requirements  had been met, regarding any  child in this                                                                   
Ms. Moss  also noted that  another concern by  Representative                                                                   
Coghill  was   addressed  by  Section  7  of   the  Committee                                                                   
Substitute.  Ms. Moss explained  that this amendment resulted                                                                   
from  a  situation  occurring   in  Representative  Coghill's                                                                   
district  where two  teenage children  had been  placed in  a                                                                   
foster home and  foster parents had collected  the children's                                                                   
previous pfd's.   In this case, the foster  placement did not                                                                   
work out, but  the children's dividends were lost.   The bill                                                                   
stipulates that once  a child has been placed  in the custody                                                                   
of OCS, their dividends will accrue  until they reach the age                                                                   
of 18, at which  time they will have one year  to collect the                                                                   
2:46:09 PM                                                                                                                    
Ms. Moss pointed  out that Section 4 incorporated  House Bill                                                                   
327,  by  Representative  Chenault,  requiring  that  when  a                                                                   
public  official  requested information,  the  Department  be                                                                   
given  five  working  days  to   collect  information.    She                                                                   
expressed  that  the  Sponsor   was  very  pleased  with  the                                                                   
Committee  Substitute,  and  thought that  the  language  was                                                                   
2:47:16 PM                                                                                                                    
TAMMY  SANDOVAL,  DEPUTY  COMMISSION FOR  THE  DEPARTMENT  OF                                                                   
HEALTH  AND SOCIAL  SERVICES OFFICES  OF CHILDREN'S  SERVICES                                                                   
testified regarding the bill.    She stated that the original                                                                   
intent  of HB  408  was  to comply  with  federal  law.   The                                                                   
"Keeping  Children and  Families Safe  Act" of 2003,  amended                                                                   
the Child  Abuse Prevention  and Treatment  Act (CAPTA),  and                                                                   
enacted new  federal requirements for those  states receiving                                                                   
CAPTA  funds.   She then  explained  that the  bill had  been                                                                   
amended to include  a reporting requirement at  delivery by a                                                                   
health  care  provider  determining  that a  child  has  been                                                                   
"adversely affected  by or is  withdrawing from expose  to, a                                                                   
controlled  substance  or  alcohol".     She  explained  that                                                                   
Sections  1,  2  &  3  related   to  reasonable  efforts  and                                                                   
involuntary termination of parental  rights.  She stated that                                                                   
these sections had been amended  to require the court to find                                                                   
clear and  convincing evidence,  rather than a  preponderance                                                                   
of evidence, prior to terminating parental rights.                                                                              
Ms. Sandoval  referred to Jan Rutherdale,  Assistant Attorney                                                                   
General,  Department of  Law, who  was online  to answer  any                                                                   
Ms.  Sandoval   also  referred  to  Section   4,  related  to                                                                   
Department   of   Health   and  Social   Services   and   the                                                                   
Administration's disclosure to  public officials.  Sections 5                                                                   
and 6  related to  disclosure of  agency records, amended  to                                                                   
comply with the intent of HB 53,  as it relates to disclosing                                                                   
information about  high profile  child protection case.   She                                                                   
noted that  they had experienced  the function of HB  53, and                                                                   
suggested the  new language to provide more  transparency and                                                                   
accountability.    She  concluded   that  Section  7  changes                                                                   
conditions  under  which  OCS  could release  a  child's  PFD                                                                   
account trust monies.                                                                                                           
2:49:46 PM                                                                                                                    
Representative Kerttula  asked    regarding   changing    the                                                                   
evidence  standard to  clear  and convincing,  and  expressed                                                                   
concern that  currently if the  court found by  preponderance                                                                   
of evidence,  which was a  lower standard, children  could be                                                                   
pulled out for a number of serious  circumstances.  She asked                                                                   
how the department of law felt about raising the standard.                                                                      
2:50:58 PM                                                                                                                    
JAN  RUTHERDALE, ASSISTANT  ATTORNEY  GENERAL, DEPARTMENT  OF                                                                   
LAW  noted  that  the  amendments   involve  the  termination                                                                   
statutes only,  and not the  initial removal, which  is under                                                                   
temporary  custody and  adjudication.   She  stated that  the                                                                   
department of  law actually pointed out the  current problem,                                                                   
due  to the  constitutional  argument  that  the standard  of                                                                   
evidence was too low.                                                                                                           
2:51:59 PM                                                                                                                    
Co-Chair Chenault referred to  the indeterminate fiscal note,                                                                   
and asked  if OCS  would be  affected by  the requirement  to                                                                   
track permanent  fund monies  for children  until the  age of                                                                   
18.   Rep  Chenault asked  how many  children were  currently                                                                   
tracked in this way.                                                                                                            
Ms.  Sandoval  noted that  the  indeterminate  note had  been                                                                   
prepared  earlier, but  that  after clarification  about  the                                                                   
intent of  the provision  with the  sponsor, the fiscal  note                                                                   
was changed to zero.  She responded  that only 17 children in                                                                   
this year had been placed in guardianship.                                                                                      
2:53:12 PM                                                                                                                    
Representative Kerttula  asked  about the section  that added                                                                   
alcohol into the definition of  child abuse and neglect.  She                                                                   
noted a concern with section 8  regarding the level of effect                                                                   
from alcohol that would constitute  the definition.  She gave                                                                   
the example  that an individual  might have consumed  alcohol                                                                   
before  knowing they were  pregnant, and  expressed that  she                                                                   
did not believe this should fall under the definition.                                                                          
2:54:58 PM                                                                                                                    
Ms. Rutherdale  responded from  a legal standpoint  that this                                                                   
section  applied only  with children born  with very  obvious                                                                   
fetal alcohol syndrome, but not  when a person had consumed a                                                                   
minor amount of alcohol prior  to knowing they were pregnant.                                                                   
She stated  that other affects  of alcohol were  not apparent                                                                   
until  a  child  had entered  school  age,  presenting  in  a                                                                   
child's ability to focus, poor judgment ability, etc..                                                                          
2:56:31 PM                                                                                                                    
Co-Chair Meyer opened  the floor to public testimony.   There                                                                   
was  no  one  available  for  testimony,  and  testimony  was                                                                   
Co-Chair Meyer asked  about  the indeterminate  fiscal  note,                                                                   
and Ms. Rutherdale reiterated  that once a confusion had been                                                                   
clarified, the fiscal note had been reflected as zero.                                                                          
2:57:50 PM                                                                                                                    
Ms. Moss explained the concern  that, in the way the bill had                                                                   
been written,  OCS would be  required to apply  for dividends                                                                   
for children that were no longer  in their custody but with a                                                                   
legal guardian.    She explained that dividends  were applied                                                                   
for only when the child was in  the custody of OCS; otherwise                                                                   
their legal guardian would apply.                                                                                               
2:58:35 PM                                                                                                                    
Co-Chair  Chenault MOVED  to create  a Zero  Fiscal Note  for                                                                   
Health and  Social Services, Children's Services,  Children's                                                                   
Services Management,  Component #2666 (3/07/06).  There being                                                                   
NO OBJECTION, it was so ordered.                                                                                                
2:59:11 PM                                                                                                                    
Co-Chair Chenault   thanked  Ms. Sandoval  for her  good work                                                                   
resolving cases.  He then MOVED  to REPORT CS HB408 (FIN) out                                                                   
of  Committee  with individual  recommendations  and  2  zero                                                                   
fiscal notes (#1, DHSS; New, HFC).                                                                                              
There being NO  OBJECTIONS, the bill was passed  by UNANIMOUS                                                                   
HOUSE BILL NO. 485                                                                                                            
     "An Act  amending the  State Personnel  Act to  place in                                                                   
     the exempt  service pharmacists and  physicians employed                                                                   
     in the  Department of Health  and Social Services  or in                                                                   
     the Department  of Corrections and corporate  income tax                                                                   
     forensic  auditors  employed  by  the  division  of  the                                                                   
     Department  of Revenue principally  responsible  for the                                                                   
     collection   and   enforcement   of  state   taxes   who                                                                   
     specialize  in apportionment  analysis and tax  shelters                                                                   
     of multistate corporate taxpayers;  and providing for an                                                                   
     effective date."                                                                                                           
3:00:53 PM                                                                                                                    
JANET  CLARKE, ASSISTANT  COMMISSIONER,  DIVISION OF  FINANCE                                                                   
AND  MANAGEMENT SERVICES,  DEPARTMENT  OF  HEALTH AND  SOCIAL                                                                   
SERVICES,  referred   to  Virginia  Smiley  to   speak  to  a                                                                   
situation which generated the bill.                                                                                             
3:01:55 PM                                                                                                                    
VIRGINIA SMILEY, DIRECTOR, DIVISION  OF PIONEER HOMES gave an                                                                   
overview  of the  pharmacist duties  in  the Pioneer's  Home.                                                                   
She  gave  the   following  overview  of  the   pharmacy  and                                                                   
pharmacist duties as follows:                                                                                                 
     "The  six Pioneer  Homes  located  in Ketchikan,  Sitka,                                                                   
     Juneau,  Anchorage,  Palmer and  Fairbanks  all rely  on                                                                   
     receiving  medications  for  their  residents  from  the                                                                   
     Division's central pharmacy located in APH.                                                                                
     Per state  and federal  law the  pharmacy must  be under                                                                   
     the  oversight of  licensed pharmacists.  We can  and do                                                                   
     use school of pharmacy interns  and pharmacy assistants,                                                                   
     but three pharmacists are  necessary to supervise staff,                                                                   
     dispense  medications, comply with  Medicare Part  D and                                                                   
     Medicaid    documentation,    and    provide    clinical                                                                   
     consultation  to  physicians, residents,  families,  and                                                                   
     In  the  quarter  ending  Dec  31,  2005,  the  pharmacy                                                                   
     packaged  and  dispensed  353,821  individual  doses  of                                                                   
     medications.  Dispensing   that  volume  of  medications                                                                   
     requires a full staff present and working.                                                                                 
     We have  almost a  full year's  history in first  losing                                                                   
     our pharmacists  to jobs that pay much  higher wages and                                                                   
     then not being able to attract  new pharmacists to apply                                                                   
     for the vacant positions.                                                                                                  
     The  federal   government  is  paying  wages   that  are                                                                   
     competitive  with  the  private   sector,  and  offering                                                                   
     signing bonuses and forgiveness of student loans.                                                                          
     Nationally, the  same is true in the private  sector, as                                                                   
     shown by  lucrative offers being made to  pharmacists in                                                                   
     recruitment   letters   and  advertising   in   national                                                                   
     For  eight   months  of  last  year  we   had  a  single                                                                   
     pharmacist on  our payroll. It  was necessary for  us to                                                                   
     sign contracts with two temp  agencies, and we were able                                                                   
     to  fill many,  but not all,  of the  vacant shifts.  We                                                                   
     paid   the   contract   agencies   $70  hr   for   their                                                                   
     At this critical point we  finally placed the pharmacist                                                                   
     PCN into a temporary higher  paying category in order to                                                                   
     recruit  and  hire  more   competitively.  However,  the                                                                   
     Division of  Personnel advised us we would  have to seek                                                                   
     a  more permanent  solution.  That is  why  we are  here                                                                   
     The problem  is that  under the  present wage  scale for                                                                   
     permanent pharmacist  positions in the state  system, we                                                                   
     are not competitive with other employers.                                                                                  
     We are asking to have pharmacists  moved into the exempt                                                                   
     service  with other professional  classifications  as it                                                                   
     will provide  the needed  flexibility to be  competitive                                                                   
     in the marketplace.                                                                                                        
     She noted  that pharmacists dispensed an  extremely high                                                                   
     number of  doses of medication,  but that they  were not                                                                   
     able  to  attract  or retain  qualified  pharmacists  as                                                                   
     compared with  other states.  She notes  that during the                                                                   
     following  year, only  one pharmacist  was on  contract,                                                                   
     requiring  them to  hire temporary  pharmacists at  over                                                                   
     double the salary paid to the contract employee."                                                                          
3:04:19 PM                                                                                                                    
Ms. Clarke  noted that  eight pharmacy  positions existed  in                                                                   
the Department  of Health and  Social Services: three  at the                                                                   
Pioneer  Home,  two at  API,  two  in  Medicaid, and  one  in                                                                   
epidemiology  and public health.   She  stated that  those in                                                                   
these   positions  were   required   to  provide   high-level                                                                   
consultation  services,  meaning  that  risks were  great  if                                                                   
these  positions were  not filled.    She noted  that in  the                                                                   
private sector,  pharmacists were paid  $55 to $65  per hour,                                                                   
or up to $70 per hour for temporary  employees.  She proposed                                                                   
that  pharmacists belonged  in  the same  exempt category  as                                                                   
psychiatrists, medical examiners, etc.                                                                                          
3:06:36 PM                                                                                                                    
LAURA LINK,  DIVISION OF ADMINISTRATIVE SERVICES,  DEPARTMENT                                                                   
OF  CORRECTIONS  expressed that  her  department  experienced                                                                   
similar  problems  in  recruiting   and  retaining  qualified                                                                   
Responding to a  question by Co-Chair Meyer,  she stated that                                                                   
pharmacists  maintained similar  educational requirements  as                                                                   
3:08:26 PM                                                                                                                    
JERRY   BURNETT,   DIRECTOR   OF   ADMINISTRATIVE   SERVICES,                                                                   
DEPARTMENT OF REVENUE  spoke to the second part  of the bill,                                                                   
regarding corporate  tax forensic auditors, moving  them into                                                                   
the exempt category.                                                                                                            
ROBYNN  WILSON,  DIRECTOR  OF  TAX  DIVISION,  DEPARTMENT  OF                                                                   
REVENUE explained  the function of auditors for  the State of                                                                   
Alaska.    She  discussed  the  method  for  determining  the                                                                   
taxable income of  large groups of companies.   She noted the                                                                   
complexities  involved   in  dealing  with   multi-state  and                                                                   
worldwide companies  that did business in Alaska,  as well as                                                                   
the wide  variety of  taxpayers.  She  explained the  goal of                                                                   
determining value of property, sales, vessels, etc.                                                                             
3:11:03 PM                                                                                                                    
Ms. Wilson  noted her experience  as an auditor hired  by the                                                                   
State of  Alaska 11 years  ago.  She  explained that  at that                                                                   
time, a number  of their more experienced auditors  came from                                                                   
the  internal  revenue  service.     She  noted  that  public                                                                   
auditors  made  money by  working  long hours,  as  employees                                                                   
gained experience.   She  pointed out that  at that  time the                                                                   
state paid a wage competitive with the federal government.                                                                      
3:12:18 PM                                                                                                                    
Ms. Wilson  then explained how  circumstances had  changed in                                                                   
several  ways:     1)  large  public  accounting   firms  had                                                                   
condensed, decreasing supply of  employees;  2) the manner of                                                                   
business  had  changed,  with  a new  focus  on  selling  tax                                                                   
structures;  3) accounting rules  had developed out of recent                                                                   
corporate upsets,  increasing the  wages for auditors  in the                                                                   
private sector.   She  pointed out that  the state  of Alaska                                                                   
had maintained  an even wage,  while wages in the  public and                                                                   
federal sectors  had increased.   She  stated that  in recent                                                                   
years, the  number of  state auditors  decreased from  ten to                                                                   
two, a number too small to complete the workload.                                                                               
3:14:00 PM                                                                                                                    
She noted that  the department had tried  several recruitment                                                                   
methods  for   auditors.    She  discussed   methods  seeking                                                                   
auditors from the  University of Alaska that had  as yet been                                                                   
unsuccessful, and  noted that even if it had  succeeded; they                                                                   
did  not  have  the  ability to  train  new  auditors.    She                                                                   
concluded  that salary  was the problem  in recruitment,  and                                                                   
proposed  that the  bill would  help  to attract  experienced                                                                   
auditors by  establishing three  exempt positions  that could                                                                   
compete with the private market.                                                                                                
3:15:43 PM                                                                                                                    
Responding to a question by Co-Chair Meyer, Ms.        Wilson                                                                   
noted  the  curiosity  over whether  new  auditors  might  be                                                                   
needed in developing the new PPD tax.                                                                                           
Responding  to  a  further  question,   she  noted  that  the                                                                   
educational  requirements   for  auditors  would   include  a                                                                   
Masters Degree or Certified Public Accountant certificate.                                                                      
Representative Joule asked  for clarification  on the  exempt                                                                   
status.   Mr. Burnett explained  that an exempt  position was                                                                   
not covered by  the personnel rules adopted  by the Personnel                                                                   
Board  and  not  subject  to the  salary  schedule  of  other                                                                   
employees,  enabling  salaries  to  be paid  by  a  different                                                                   
Representative Joule asked     whether exempt positions  were                                                                   
only appointed,  such as government  officials.   Mr. Burnett                                                                   
explained  that certain  positions in  Department of  Revenue                                                                   
were exempt, not due to political  appointment, but rather to                                                                   
skills sets.                                                                                                                    
3:18:41 PM                                                                                                                    
Representative Stoltze   asked    what    aspect    of    the                                                                   
classification status solved the salary problems.                                                                               
Mr.  Burnett clarified  that the  issue  at hand  was one  of                                                                   
salary,  and not  classification.   He noted  that they  were                                                                   
currently unable  to pay beyond  the classification  limit of                                                                   
range.   He stated that  the department  was not able  to pay                                                                   
the level  of salary  expected by  an experienced CPA,  which                                                                   
could exceed $100 thousand.                                                                                                     
Responding  to another  question  by Representative  Stoltze,                                                                   
Ms. Wilson  noted that a salary  survey focused on  the Level                                                                   
3, revealed  a large  salary disparity  at the higher  level,                                                                   
higher than the  disparity on levels 1 and 2.   She explained                                                                   
that even  moving an auditor  up by  one or two  ranges could                                                                   
not  provide a  competitive salary  within the  market.   She                                                                   
concluded  that  this was  the  reason  for  the need  for  a                                                                   
3:21:30 PM                                                                                                                    
Representative Kerttula  commented   that  exempt   employees                                                                   
were  easier  to  terminate.   She  wondered  if  this  would                                                                   
present  a problem  with the  coming  oil taxes.   She  asked                                                                   
whether it was  possible to simply negotiate  higher salaries                                                                   
in the collective bargaining process.                                                                                           
Mr.  Burnett conceded  there  might  be some  possibility  of                                                                   
negotiating a  higher salary within  classified service.   He                                                                   
pointed out that  the terms of the negotiation  would need to                                                                   
be approved  by the legislature,  which he proposed  would be                                                                   
an inefficient method of hiring.                                                                                                
Representative  Kertulla  commented that  it  might be  worth                                                                   
that method considering the importance  of the upcoming jobs.                                                                   
Representative  Kelly  asked if  it  was standard  for  these                                                                   
types of positions  to be exempt in the private  sector.  Mr.                                                                   
Burnet  clarified  that the  types  of  jobs in  the  private                                                                   
sector  were  structured  differently.     He  surmised  that                                                                   
auditors might not be terminated for political reasons.                                                                         
Representative Hawker    noted  his own experience during his                                                                   
tenure at  the Legislature of  auditors being  terminated for                                                                   
political reasons.                                                                                                              
3:24:26 PM                                                                                                                    
JIM  DUNCAN,   BUSINESS  MANAGER,   ALASKA  STATE   EMPLOYEES                                                                   
ASSOCIATION testified.   He  concurred that both  pharmacists                                                                   
and auditors were difficult to  recruit and required a higher                                                                   
salary,  but disagreed  with creating  an exempt position  to                                                                   
solve  the  problem,   pointing  out  that  other   types  of                                                                   
positions were difficult to fill.   He reminded the Committee                                                                   
that the  merit system of  employment was established  by the                                                                   
Alaska State  Constitution, with  those elected or  appointed                                                                   
being  exempt from  the system.   He  expressed concern  over                                                                   
changing the system through this  bill, and observed that the                                                                   
issue at hand was salary rates and not policy.                                                                                  
3:27:43 PM                                                                                                                    
Mr. Duncan  proposed that  in exempt  service there  would be                                                                   
political pressure.  He gave the  example of an auditor being                                                                   
placed  under pressure  by  a large  corporation  to slow  an                                                                   
audit by means of the exempt system.   He further pointed out                                                                   
that  as the  State  considered  changing its  corporate  tax                                                                   
structure,  it might  not be  wise  timing to  move those  in                                                                   
charge  of  collecting  tax and  auditing  corporations  into                                                                   
exempt  status where  they might  be  subjected to  political                                                                   
pressure.   He referred to  recent occurrences  in Department                                                                   
of Natural Resources.                                                                                                           
3:28:51 PM                                                                                                                    
Mr. Duncan  commented that the  classified system was  not at                                                                   
issue, but  rather the pay structure  within the system.   He                                                                   
reminded  the  Committee that  the  pay plan  was  mandatory,                                                                   
subject to bargaining, enabling  the Administration to change                                                                   
the pay  plan due to an  inability to attract employees.   He                                                                   
stated  that  he was  currently  composing  a letter  to  the                                                                   
Administration proposing  that ranges 28, 29 and  30 be added                                                                   
to  the  pay  scale  in order  to  solve  the  problem.    He                                                                   
suggested  that the classified  service  ought to afford  the                                                                   
same  salary  as  in  exempt  service.    He  encouraged  the                                                                   
Administration to  examine the ability for movement  to other                                                                   
pay scales  through internal/external comparisons  and market                                                                   
based studies.                                                                                                                  
3:30:34 PM                                                                                                                    
He   suggested    that   currently   they    were   comparing                                                                   
inappropriate job classes, and  that other comparisons should                                                                   
be made  to perhaps create a  new job class family  for these                                                                   
forensic auditors.                                                                                                              
Mr. Duncan  stated  that he did  not believe  the bill  would                                                                   
serve the  State's problems  well and  would erode  the merit                                                                   
system.   He addressed the issue  of pharmacists, noting that                                                                   
federally funded  positions were required to be  subject to a                                                                   
merit  based pay  system, and  asked  how these  requirements                                                                   
would be satisfied or if federal funding would be lost.                                                                         
3:33:23 PM                                                                                                                    
Mr.  Duncan  also  noted  that  pharmacists'  positions  were                                                                   
established, and pointed out that  our constitution prevented                                                                   
repairing a  contract by passing  a statute.  He  pointed out                                                                   
that the pharmacists  were covered by the  current collective                                                                   
bargaining  agreement.   He proposed  that the statute  would                                                                   
violate the contract provision.   He stated that although the                                                                   
Union  did  not wish  to  enter  into  a debate,  they  would                                                                   
certainly demand enforcement of their current contract.                                                                         
3:35:35 PM                                                                                                                    
Mr. Duncan expressed  his confusion over the  description for                                                                   
the position  of forensic tax  auditor.  He noted  the theory                                                                   
that a description would be written  after hiring the type of                                                                   
individual needed  for the job and proposed  that the process                                                                   
should  work in a  different manner.   He  stated his  belief                                                                   
that a forensic tax auditor was  a Revenue Auditor 4 and read                                                                   
from the description  of that position:  "work  with multiple                                                                   
and  complex   accounting  methods   and  systems,   generate                                                                   
significant  revenue from  the collection  of taxes,  apply a                                                                   
wide diverse  body of authorities dealing  with apportionment                                                                   
issues,  determine   correct  unitary  group,   apportionable                                                                   
income, be aware  of state statute and  federal regulations".                                                                   
He concluded  that the new  positions duplicated  a position,                                                                   
which occurred  within the classified service.   He suggested                                                                   
that a new pay  plan be discussed with the Union,  and that a                                                                   
job description be developed,  prior to a hiring process.  In                                                                   
summary, he stated  his belief that the proposed  process was                                                                   
flawed, ignoring  the mandatory  bargaining agreement  of the                                                                   
state  and perhaps  other representing  unions.   Mr.  Duncan                                                                   
also  surmised  that  the proposed  legislation  would  place                                                                   
these revenue  auditors at will  and subject to  pressures by                                                                   
those corporations they audit.   He observed that while a new                                                                   
revenue  system   was  being   considered,  they   were  also                                                                   
considering  placing those  overseeing  the taxes  in an  "at                                                                   
will" position subject to political  pressure.  He urged care                                                                   
in considering this legislation.                                                                                                
3:38:49 PM                                                                                                                    
Representative Hawker    asked   whether   Mr.   Duncan   had                                                                   
discussed these  issues with the Administration.   Mr. Duncan                                                                   
stated that the Union had not  been briefed in advance by the                                                                   
Administration, but that they  now intended to follow up with                                                                   
discussion.   In response  to a  follow up by  Representative                                                                   
Hawker, Mr.  Duncan expressed  his belief in the  possibility                                                                   
for  productive  discussion  and  the  implementation  of  an                                                                   
improved pay  plan.   He emphasized  that his proposal  would                                                                   
not  open the  discussion  of changing  pay  plans for  other                                                                   
3:40:24 PM                                                                                                                    
Representative Kelly asked   if  such   a  circumstance   had                                                                   
occurred before.  Mr. Duncan referred  to a list of positions                                                                   
that had been added to the exempt  service.  He noted however                                                                   
that these  jobs were  formerly in  commissions, for  example                                                                   
the Mental  Health Trust, when  employees were  actually laid                                                                   
off and then rehired into exempt  service.  He urged caution,                                                                   
since  there  were  other  jobs where  pay  scales  were  not                                                                   
Representative  Kelly  asked   if  the  system  proposed  was                                                                   
flexible enough  to allow for  downward changes.   Mr. Duncan                                                                   
responded  that although  the  union would  not advocate  for                                                                   
lower pay, there had been determinations  for positions to be                                                                   
classified downward in the past.                                                                                                
3:42:54 PM                                                                                                                    
Clarifying  an issue  for  Representative  Kelly, Mr.  Duncan                                                                   
commented that the  pharmacist shortage had been  solved on a                                                                   
temporary  basis.   Representative Kelly  asked whether  this                                                                   
would be  a method to carry  forward until the next  round of                                                                   
bargaining  to  solve  the  current   problem.    Mr.  Duncan                                                                   
conceded that  this was possible.   He pointed  out, however,                                                                   
that since  the proposed  legislation  would not take  effect                                                                   
until July,  and a new pay period  could be in place  by that                                                                   
3:43:59 PM                                                                                                                    
Co-Chair Meyer expressed  the intention  to HOLD the  bill in                                                                   
Committee, and  a desire to view  Mr. Duncan's letter  to the                                                                   
Administration.  He suggested  that there be a representative                                                                   
from the  Administrative present at  the next hearing  of the                                                                   
MILA COSGROVE,  DIRECTOR, DIVISION  OF PERSONNEL,  DEPARTMENT                                                                   
OF ADMINISTRATION  clarified that  there were three  types of                                                                   
employees:    1)  Classified,  fully  subject  to  the  merit                                                                   
system,  including  the  classifications  and  pay  plan;  2)                                                                   
Partially Exempt,  not subject to  all rules, but  subject to                                                                   
classification and  pay plan; and  3) Exempt, which  were not                                                                   
subject  to classification  or pay plan,  but still  possibly                                                                   
subject to  collective bargaining,  such as employees  of the                                                                   
Marine Highway System.                                                                                                          
3:46:25 PM                                                                                                                    
Ms. Cosgrove noted that while  some exempt positions were "at                                                                   
will", such  as Commissioners  and high level  policy makers,                                                                   
other  exempt  employees  were  held  at  a  higher  bar  for                                                                   
dismissal  from state service.   She  pointed out that  these                                                                   
state  employees  were  treated  fairly  and  equitably  with                                                                   
management rights and not easily dismissed.                                                                                     
3:47:26 PM                                                                                                                    
Ms. Cosgrove also  emphasized that wages for  pharmacists and                                                                   
other such  professionals were  very volatile at  the current                                                                   
time.  She suggested  that these wages were  well beyond what                                                                   
could be  negotiated under  the current classification  plan,                                                                   
which relies  upon the  concept of  internal alignment.   She                                                                   
explained that  all job classes  must bear some  relationship                                                                   
to one another.  She followed  that revenue auditor positions                                                                   
would  have  to  increase  to   remain  in  relation  to  the                                                                   
increased wages for top-level  auditors. She also pointed out                                                                   
that the state  was considering a market based  pay plan, but                                                                   
stressed  that internal  alignment  would still  apply.   She                                                                   
concluded that the market based  pay plan would not solve the                                                                   
problem  of pharmacists  and auditors  at the highest  level.                                                                   
She expressed  a desire to reply  in more detail at  the next                                                                   
3:49:15 PM                                                                                                                    
Co-Chair Meyer stated that HB  485 would be HELD in Committee                                                                   
for further consideration.                                                                                                      
The meeting was adjourned at 3:49 P.M.                                                                                          

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