Legislature(2009 - 2010)HOUSE FINANCE 519

04/11/2009 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 175 INSURANCE TELECONFERENCED
Moved CSHB 175(L&C) Out of Committee
+ HB 105 STEP PROGRAM TELECONFERENCED
Moved CSSSHB 105(L&C) Out of Committee
+ HB 141 COMPACT FOR JUVENILES; INTERSTATE COUNCIL TELECONFERENCED
Moved Out of Committee
+ HB 186 AK FIREARMS EXEMPT FROM FED. REGULATION TELECONFERENCED
Moved CSHB 186(FIN) Out of Committee
*+ HB 212 UNEMPLOYMENT AMENDMENTS: FED STIMULUS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 44 ENERGY BONDS/INVESTMENTS TELECONFERENCED
Moved CSHB 44(FIN) Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 11, 2009                                                                                           
                         9:09 a.m.                                                                                              
                                                                                                                                
9:09:53 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze  called the House Finance  Committee meeting                                                                   
to order at 9:09 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Hawker, Co-Chair                                                                                            
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Bill Thomas Jr., Vice-Chair                                                                                      
Representative Allan Austerman                                                                                                  
Representative Harry Crawford                                                                                                   
Representative Anna Fairclough                                                                                                  
Representative Les Gara                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Woodie Salmon                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Richard Foster                                                                                                   
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Jennifer  Senette, Staff,  Representative  Kurt Olson;  Linda                                                                   
Hall,  Director,   Division  of   Insurance,  Department   of                                                                   
Commerce, Community  and Economic Development;  Derek Miller,                                                                   
Staff, Representative Mike Kelly,  Sponsor; Amanda Mortensen,                                                                   
Staff, Representative John Coghill,  Sponsor; Anthony Newman,                                                                   
Program Officer, Division of Juvenile  Justice, Department of                                                                   
Health  and Social  Services;  Representative Mike  Chenault,                                                                   
Sponsor;  Tom Wright,  Staff,  Representative Mike  Chenault,                                                                   
Sponsor; Rynnieva  Moss, Staff, Representative  John Coghill,                                                                   
Sponsor;  David  Stone, Deputy  Commissioner,  Department  of                                                                   
Labor  and Workforce  Development,  Member, Alaska  Taskforce                                                                   
Investment  Board, and  Co-Chair, STEP  Taskforce; Guy  Bell,                                                                   
Assistant    Commissioner   and    Director,   Division    of                                                                   
Administrative  Services, Department  of Labor and  Workforce                                                                   
Development;  Don  Ethridge,  Alaska  Works  Partnership  and                                                                   
Alaska AFL-CIO.                                                                                                                 
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Carol  Brenckle,  Chair,  Alaska  Juvenile  Justice  Advisory                                                                   
Committee, Kenai; Doug Ward, Director,  Shipyard Development,                                                                   
Alaska  Ship and  Drydock, Ketchikan,  and Member,  Workforce                                                                   
Investment Board  and STEP Taskforce; Linda  Hulbert, Member,                                                                   
Alaska Workforce Board, Fairbanks.                                                                                              
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 44     ENERGY BONDS/INVESTMENTS/ANGDA                                                                                        
                                                                                                                                
          CS HB 44(FIN) was REPORTED out of Committee with                                                                      
          no recommendation  and attached zero note  1 by the                                                                   
          Department  of Revenue  and two  new zero  notes by                                                                   
          the Department of Revenue.                                                                                            
                                                                                                                                
HB 105    STEP PROGRAM                                                                                                          
                                                                                                                                
          CSSS HB 105(L&C) was REPORTED out of Committee                                                                        
          with a  "do pass" recommendation and  with attached                                                                   
          fiscal note 1 by Department  of Labor and Workforce                                                                   
          Development  and  fiscal note  2  by Department  of                                                                   
          Labor and Workforce Development.                                                                                      
                                                                                                                                
HB 141    COMPACT FOR JUVENILES; INTERSTATE COUNCIL                                                                             
                                                                                                                                
          HB 141 was REPORTED out of Committee with a "do                                                                       
          pass" recommendation  and attached fiscal note 1 by                                                                   
          Department  of Health and Social Services  and zero                                                                   
          note 2 by the Department of Corrections.                                                                              
                                                                                                                                
HB 175    INSURANCE                                                                                                             
                                                                                                                                
          CS HB 175 (L&C) was REPORTED out of Committee with                                                                    
          a  "do  pass"  recommendation   and  with  attached                                                                   
          fiscal  note  1  by  the  Department  of  Commerce,                                                                   
          Community and Economic Development.                                                                                   
                                                                                                                                
HB 186    AK FIREARMS EXEMPT FROM FED. REGULATION                                                                               
                                                                                                                                
          CS HB 186(FIN) was REPORTED out of Committee with                                                                     
          no  recommendation and  attached new  indeterminate                                                                   
          fiscal note by the Department of Law.                                                                                 
                                                                                                                                
HB 212    UNEMPLOYMENT AMENDMENTS: FED STIMULUS                                                                                 
                                                                                                                                
          HB 212 was HEARD and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
HOUSE BILL NO. 175                                                                                                            
                                                                                                                                
     "An  Act relating  to insurance,  including treating  as                                                                   
     confidential   certain  information  submitted   to  the                                                                   
     director  of insurance  by the  National Association  of                                                                   
     Insurance Commissioners;  clarifying conditions  for the                                                                   
     release of  insurer deposits; defining  travel insurance                                                                   
     that  may  be  sold under  a  travel  insurance  limited                                                                   
     producer  license; establishing  criteria for  licensing                                                                   
     of   nonresident  independent   adjusters  as   resident                                                                   
     adjusters;  exempting rewards  under a wellness  program                                                                   
     from treatment as insurance  discrimination or rebating;                                                                   
     making certain  insurance required of  the Comprehensive                                                                   
     Health  Insurance  Association  permissive  rather  than                                                                   
     mandatory;  providing  for  the administration  of  loss                                                                   
     reimbursement   policies   and  payments   to   guaranty                                                                   
     associations   during  insolvency  proceedings;   making                                                                   
     certain   provisions    relating   to    statements   on                                                                   
     applications and guaranteed  renewability for individual                                                                   
     health  insurance  applicable  to hospital  and  medical                                                                   
     service  corporations; making  public certain  forms and                                                                   
     related documents  filed for  approval by a  hospital or                                                                   
     medical  service corporation  after  the filing  becomes                                                                   
     effective; relating to deposits  of self-funded multiple                                                                   
     employer  welfare arrangements;  repealing reasons  that                                                                   
     the director  of insurance may  use to deny or  revoke a                                                                   
     license; and providing for an effective date."                                                                             
                                                                                                                                
9:10:55 AM                                                                                                                    
                                                                                                                                
JENNIFER SENETTE, STAFF, REPRESENTATIVE  KURT OLSON, SPONSOR,                                                                   
explained that  the bill  was offered at  the request  of the                                                                   
director of the Division of Insurance.                                                                                          
                                                                                                                                
LINDA HALL,  DIRECTOR, DIVISION  OF INSURANCE, DEPARTMENT  OF                                                                   
COMMERCE,  COMMUNITY AND  ECONOMIC  DEVELOPMENT, provided  an                                                                   
overview of the legislation using  a sectional analysis (copy                                                                   
on file).  She explained that  the changes are needed  by the                                                                   
Department  of Commerce, Community  and Economic  Development                                                                   
(DCCED)  in  order  to  effectively  regulate  the  insurance                                                                   
industry.   The  division's  overall   goals  are   solvency,                                                                   
oversight, consumer  protection, and  making sure there  is a                                                                   
healthy and competitive marketplace.                                                                                            
                                                                                                                                
Ms.  Hall  pointed out  several  sections  in the  bill  that                                                                   
streamline the division's processes:                                                                                            
                                                                                                                                
   · Section 10: Allows the division to issue a license to a                                                                    
     non-resident adjuster  whose own state does  not license                                                                   
     adjusters.                                                                                                                 
   · Section 12: Provides for third-party administrators.                                                                       
   · Section 18: Allows acceptance of another regulator's                                                                       
     evaluation of a nonresident with a felony conviction.                                                                      
                                                                                                                                
9:14:53 AM                                                                                                                    
                                                                                                                                
Ms. Hall  informed the  committee that  the division's  agent                                                                   
licensing  processing  is  done   electronically,  which  has                                                                   
greatly streamlined the process.                                                                                                
                                                                                                                                
Ms. Hall turned to sections with clarifying language:                                                                           
                                                                                                                                
   · Sections 5 and 6: Tighten language and clarify how                                                                         
     deposits of both domestic and other state insurers are                                                                     
     treated and when the deposits are given to guarantee                                                                       
     funds.                                                                                                                     
   · Section 29: Defines "working day" uniformly throughout.                                                                    
                                                                                                                                
Ms.  Hall  pointed out  sections  of  the bill  that  provide                                                                   
uniformity with national standards.  She explained that state                                                                   
regulators have been concerned  with a major push for federal                                                                   
regulation of  insurance; the more uniform  state regulations                                                                   
are, the less likely that is to happen.                                                                                         
                                                                                                                                
   · Section 1: Allows for analysis ratios and examinations                                                                     
     submitted to the director from the National Association                                                                    
     of Insurance Commissioners (NAIC) to be confidential.                                                                      
   · Section 8: A uniformity standard saying that a                                                                             
     compliance officer for an insurance agency does not                                                                        
     have to be licensed in all the lines of business that                                                                      
     the agency does.                                                                                                           
   · Section 9: Updates products that can be sold under a                                                                       
     limited travel licensee.                                                                                                   
                                                                                                                                
9:17:15 AM                                                                                                                    
                                                                                                                                
Ms. Hall  approached new  issues covered  by Section  11. She                                                                   
believed  the  section  was a  policy  call  the  legislature                                                                   
needed to  make. The  section permits a  director to  order a                                                                   
summary  suspension  of a  producer  license  if there  is  a                                                                   
finding that  suspension is necessary  for the  protection of                                                                   
the  public  in  an  emergency   action.  She  described  two                                                                   
instances  of agent behavior  that needed  to be  immediately                                                                   
stopped. In normal circumstances,  the department would issue                                                                   
a letter  of accusation and get  a request for a  hearing and                                                                   
begin a process  that has taken up to a year  and a half. She                                                                   
reported  the   worst  instance  of  agent  behavior   as  an                                                                   
individual who took  premium money from 72 victims;  the case                                                                   
is pending with 32 felony counts.                                                                                               
                                                                                                                                
Ms. Hall  emphasized the importance  of immediate  action. In                                                                   
the  example,   the  adjuster  voluntarily   surrendered  his                                                                   
license. Had  he not, the  department would have  been forced                                                                   
to allow  him to  continue his  business practices  until the                                                                   
hearing.  The department  does  not believe  that waiting  in                                                                   
certain  circumstances  would  be  in the  best  interest  of                                                                   
consumers.                                                                                                                      
                                                                                                                                
9:20:07 AM                                                                                                                    
                                                                                                                                
Ms. Hall  described another incident  in which  premium trust                                                                   
money had been  taken from an employer. The  employer brought                                                                   
the  employee  to  the  division  offices  to  surrender  the                                                                   
license. She noted that other states had the provision.                                                                         
                                                                                                                                
Representative  Fairclough stated  that  she was  comfortable                                                                   
with  the first  component of  page  8, section  11, lines  3                                                                   
through  17.   She  was  not  comfortable  with   the  second                                                                   
component requiring  the appeal to  go to the  same director.                                                                   
She had  questions about due  process. Ms. Hall  replied that                                                                   
other  sections  provide  for  due process  in  hearings.  In                                                                   
addition, anything a director  does is subject to overview in                                                                   
superior court. She emphasized  the need to use the authority                                                                   
in special circumstances, especially urgent ones.                                                                               
                                                                                                                                
Representative  Fairclough   commended  the   department  and                                                                   
acknowledged  the  difficulty.  She stated  concerns  that  a                                                                   
director could  be unduly burdened  or could use  the measure                                                                   
to punish individuals.                                                                                                          
                                                                                                                                
9:23:27 AM                                                                                                                    
                                                                                                                                
Ms. Hall thought  there were adequate protections  built into                                                                   
the system. She  noted that discussion about  the process had                                                                   
taken place in the Labor and Commerce Committee.                                                                                
                                                                                                                                
Representative  Crawford  pointed  to  Section  10  regarding                                                                   
licensing  of out-of-state  adjustors and  queried the  level                                                                   
and circumstances  of need. Ms. Hall opined that  there was a                                                                   
shortage of adjusters.  She cited an emergency  provision for                                                                   
disasters  and described independent  agencies whose  trained                                                                   
adjustors have left Alaska but  still work long-distance. The                                                                   
department wants the adjusters to have a resident license.                                                                      
                                                                                                                                
Representative  Crawford  stated   concerns  about  adjustors                                                                   
moving from Alaska.  He thought it was important  for them to                                                                   
stay in the state. Ms. Hall replied  that there were a number                                                                   
of non-resident adjustors and  a large number of non-resident                                                                   
licensees; out  of approximately 38,000 insurance  adjusters,                                                                   
34,000 are non-residents.                                                                                                       
                                                                                                                                
Ms.  Hall  agreed  with  Representative   Crawford  that  the                                                                   
numbers  were  overwhelming.  She  explained  that  insurance                                                                   
company call  centers license  all their  people on  the off-                                                                   
chance that they might take a  call from an Alaskan consumer.                                                                   
She did not think there was enough  insurance business in the                                                                   
state to warrant 38,000 licensees.                                                                                              
                                                                                                                                
9:27:57 AM                                                                                                                    
                                                                                                                                
Ms.  Hall  turned  to  Section   17,  which  would  allow  an                                                                   
insurance  company  to  offer  an incentive  for  a  wellness                                                                   
program  without  considering  the incentive  a  rebate.  The                                                                   
department  feels   built-in  incentives  that   meet  Health                                                                   
Insurance   Portability   and  Accountability   Act   (HIPAA)                                                                   
requirements are a good idea.                                                                                                   
                                                                                                                                
Ms. Hall explained  Section 23, which changes  the definition                                                                   
of  "resident"  to  mirror  the  permanent  fund  eligibility                                                                   
definition for a high-risk pool.                                                                                                
                                                                                                                                
Ms.  Hall  continued  that  Section   28  would  add  deposit                                                                   
administration  for  self-funded healthcare  entities,  which                                                                   
are small  employer, single-industry  groups called  multiple                                                                   
employer welfare arrangements.  The division had an entity in                                                                   
the recent  past that was insolvent  and worked with  them to                                                                   
make sure claims were paid.                                                                                                     
                                                                                                                                
Ms. Hall discussed  Section 26, which makes  statutes dealing                                                                   
with  hospital medical  service  corporations  have the  same                                                                   
requirements as  other companies with regard  to applications                                                                   
and  the guaranteed  renewability  of  individual  healthcare                                                                   
plans.                                                                                                                          
                                                                                                                                
Representative  Gara  asked  whether  out-of-state  adjusters                                                                   
were charged a fee so that the  state did not lose money. Ms.                                                                   
Hall  responded  that  out-of-state  adjusters  were  charged                                                                   
double.                                                                                                                         
                                                                                                                                
Representative  Gara  asked if  money  was lost  through  the                                                                   
regulatory  process related  to  out-of-state adjusters.  Ms.                                                                   
Hall did  not think there were  a significant number  of out-                                                                   
of-state  residents; the  numbers  used  previously were  not                                                                   
licensees who adjust claims.                                                                                                    
                                                                                                                                
Representative  Gara   asked  for  clarification.   Ms.  Hall                                                                   
responded that the 38,000 agents  sell insurance. She did not                                                                   
have the number of adjusters.                                                                                                   
                                                                                                                                
9:31:36 AM                                                                                                                    
                                                                                                                                
Representative  Fairclough referred  to the state's  wellness                                                                   
survey with  a $100  incentive. She  wondered how the  survey                                                                   
information was kept confidential.  Ms. Hall replied that the                                                                   
state select benefits plan does  not come under the oversight                                                                   
of  Title  XXI, so  the  division  does not  have  regulatory                                                                   
oversight  of  the  plan.  She  referred  to  identity  theft                                                                   
legislation.  She  informed  the   committee  that  insurance                                                                   
entities  have  very specific  confidentiality  and  personal                                                                   
information  protection   provisions  in  both   statute  and                                                                   
regulation; the provisions to  not apply to the state benefit                                                                   
plan.                                                                                                                           
                                                                                                                                
Representative Fairclough  asked whether state  was exempt or                                                                   
if the $100  was considered a rebate. Ms. Hall  answered that                                                                   
the state was exempt.                                                                                                           
                                                                                                                                
9:33:32 AM                                                                                                                    
                                                                                                                                
Representative Kelly referred  to a constituent complaint and                                                                   
asked whether  the state had  implemented a survey  of people                                                                   
who had  complaints. Ms. Hall  responded that the  survey was                                                                   
implemented  in 2007 and  was still  being used. The  summary                                                                   
result of the surveys was available.                                                                                            
                                                                                                                                
Co-Chair Stoltze referred to a zero note with a narrative.                                                                      
                                                                                                                                
Representative  Fairclough  asked whether  "foreign  insurer"                                                                   
was  defined in  statute.  Ms.  Hall answered  that  "foreign                                                                   
insurer" meant anything in another  state, "domestic insurer"                                                                   
meant  domiciled  in the  state,  and "alien  insurer"  meant                                                                   
domiciled in another country.                                                                                                   
                                                                                                                                
9:36:07 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker  MOVED  to  report CS  HB  175(L&C)  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note. There  being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS  HB 175(L&C)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation  and with attached fiscal note  1 by the                                                                   
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                
HOUSE BILL NO. 186                                                                                                            
                                                                                                                                
     "An Act declaring that certain  firearms and accessories                                                                   
     are exempt from federal regulation."                                                                                       
                                                                                                                                
9:37:17 AM                                                                                                                    
                                                                                                                                
Representative  Mike Kelly,  Sponsor,  described support  for                                                                   
the  legislation   in  Alaska   because  of  concerns   about                                                                   
increased federal  regulation of firearms. He  explained that                                                                   
the bill would separate firearms  manufactured in Alaska from                                                                   
federal regulation.                                                                                                             
                                                                                                                                
DEREK  MILLER,  STAFF, REPRESENTATIVE  MIKE  KELLY,  SPONSOR,                                                                   
provided an overview of the legislation:                                                                                        
                                                                                                                                
   · Section 1: Finds the authority of the bill in the                                                                          
     Second  Amendment, the  right  to bear  arms; the  Ninth                                                                   
     Amendment, guaranteeing  rights to people  not listed in                                                                   
     the Constitution;  and the  Tenth Amendment,  protecting                                                                   
     states'  rights. The  section also  finds that  Congress                                                                   
     has  not   expressly  pre-empted  state   regulation  of                                                                   
     interstate commerce pertaining  to the manufacture on an                                                                   
     interstate basis of firearms and accessories.                                                                              
                                                                                                                                
   · Section 2: States that a personal firearm or accessory                                                                     
     manufactured  in  the  state and  remaining  within  the                                                                   
     borders of  the state is  not subject to federal  law or                                                                   
     regulation.  The  firearm  must have  "Made  in  Alaska"                                                                   
     clearly stamped on a central metallic part. The section                                                                    
     also includes definitions of all parts of firearms and                                                                     
     accessories.                                                                                                               
                                                                                                                                
   · Section 3: Applies the legislation to firearms built                                                                       
     and retained in Alaska after October 1, 2009.                                                                              
                                                                                                                                
9:41:05 AM                                                                                                                    
                                                                                                                                
Representative Gara  pointed to page 2, line  23, saying that                                                                   
a  firearm  manufactured  in  the state  is  not  subject  to                                                                   
federal  regulation.  He  did   not  think  the  state  could                                                                   
determine the  reach of federal  legislation. He  queried the                                                                   
point  of the  provision. Representative  Kelly replied  that                                                                   
the federal  government increasingly  impinges on  the rights                                                                   
of  individual states.  He  thought Alaska  was  particularly                                                                   
targeted and listed examples.                                                                                                   
                                                                                                                                
Representative  Kelly  understood   that  the  measure  would                                                                   
challenge  the federal  government. He  gave some history  of                                                                   
the evolution  of the legislation.  He acknowledged  that the                                                                   
citizen  manufacturing  firearms  may be  challenged  in  the                                                                   
future by the  federal government and would  not be protected                                                                   
by the  state's attorney general.  He did not think  the risk                                                                   
could be avoided.                                                                                                               
                                                                                                                                
9:44:13 AM                                                                                                                    
                                                                                                                                
Representative Gara  did not think a state  statute could say                                                                   
federal rules do  not apply. The federal rules  apply or they                                                                   
do not in Alaska  regardless of what the state  may argue. He                                                                   
questioned the point of the legislation.                                                                                        
                                                                                                                                
Representative  Kelly emphasized  that the legislation  could                                                                   
send a message  that the federal government  is overreaching.                                                                   
He stressed the need to make a strong statement.                                                                                
                                                                                                                                
Representative  Gara   understood  the  argument.   The  U.S.                                                                   
Supreme  Court  says the  federal  government  has a  certain                                                                   
amount  of  authority  to regulate  firearms  in  states;  he                                                                   
thought  the issue  should be  argued  in court  and not  the                                                                   
legislature. Representative Kelly  thought the issue could be                                                                   
argued in court.  He pointed out other areas  where Alaska is                                                                   
"talking back" to the federal government.                                                                                       
                                                                                                                                
Co-Chair Hawker  stated his support  for the bill.  He stated                                                                   
that  he liked  the original  version and  asked whether  the                                                                   
committee   should  return   to   it.  Representative   Kelly                                                                   
acknowledged concerns about the original version.                                                                               
                                                                                                                                
9:48:22 AM                                                                                                                    
                                                                                                                                
Representative  Gara clarified that  he is not  nervous about                                                                   
standing up  to the  federal government.  He opined  that the                                                                   
language  in  the  bill  was   meaningless.  He  thought  the                                                                   
language belonged in a resolution.                                                                                              
                                                                                                                                
Representative  Gara asked  whether  violating federal  rules                                                                   
was   a  crime.   Representative  Kelly   responded  in   the                                                                   
affirmative.                                                                                                                    
                                                                                                                                
Representative  Gara asked  what  would happen  if the  state                                                                   
encouraged    individuals    to   violate    federal    laws.                                                                   
Representative   Kelly  understood   that  the  concern   was                                                                   
constitutional.  He acknowledged  that  an  Alaskan could  be                                                                   
sued by the federal government while following Alaskan law.                                                                     
                                                                                                                                
9:52:00 AM                                                                                                                    
                                                                                                                                
Co-Chair Hawker pointed to precedent  in the state related to                                                                   
the private use of marijuana.                                                                                                   
                                                                                                                                
Representative  Gara reiterated  his  concerns with  allowing                                                                   
Alaskans   to  violate   federal  law   through  state   law.                                                                   
Representative Kelly emphasized  how frequently Alaskans came                                                                   
up  against  the issue.  He  acknowledged  that the  bill  is                                                                   
contentious.                                                                                                                    
                                                                                                                                
Representative Gara  referred to an  April 8, 2009  memo from                                                                   
Legislative Legal Services saying  that violating federal law                                                                   
can lead  to prosecution, and  that the bill will  not change                                                                   
federal law  (copy on  file). He  emphasized that passage  of                                                                   
the   bill   would   set   Alaskans   up   for   prosecution.                                                                   
Representative  Kelly replied  that he  had studied  the memo                                                                   
and agreed with it: Someone following  state law could get in                                                                   
trouble with the federal government.  He stated he is leaning                                                                   
towards putting the attorney general  out there to defend the                                                                   
rights   of  Alaskans   where  the   federal  government   is                                                                   
infringing.                                                                                                                     
                                                                                                                                
HB 186 was set aside until later in the meeting.                                                                                
                                                                                                                                
9:56:27 AM     AT EASE                                                                                                        
9:57:25 AM     RECONVENED                                                                                                     
                                                                                                                                
HOUSE BILL NO. 141                                                                                                            
                                                                                                                                
     "An  Act   relating  to   the  Interstate   Compact  for                                                                   
     Juveniles; relating to the  State Council for Interstate                                                                   
     Adult and Juvenile Offender  Supervision; amending Rules                                                                   
     4  and  24(b),  Alaska Rules  of  Civil  Procedure;  and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
9:57:50 AM                                                                                                                    
                                                                                                                                
AMANDA   MORTENSEN,  STAFF,   REPRESENTATIVE  JOHN   COGHILL,                                                                   
SPONSOR, explained  the legislation (Sponsor  Statement, copy                                                                   
on file).  The bill  would enact  the new interstate  compact                                                                   
for juveniles  into law and  replace the old  compact created                                                                   
in  1955.  The  compact  provides  the  procedural  means  to                                                                   
regulate the  movement of  juveniles under court  supervision                                                                   
across   state    lines.   The    Association   of    Compact                                                                   
Administrators  estimates  that  the  Interstate  Compact  on                                                                   
Juveniles  is   used  in  20,000   to  30,000   transfer  and                                                                   
supervision cases annually.                                                                                                     
                                                                                                                                
Ms.   Mortensen   stressed   that    the   compact   improves                                                                   
communication between  states by making language  consistent.                                                                   
The bill  also provides  for the  collection of  standardized                                                                   
information  and information-sharing  systems.  She  informed                                                                   
the committee that 36 states had  already passed the compact;                                                                   
without it,  Alaska would have to  deal with each state  on a                                                                   
case-by-case basis.                                                                                                             
                                                                                                                                
ANTHONY  NEWMAN,   PROGRAM  OFFICER,  DIVISION   OF  JUVENILE                                                                   
JUSTICE, DEPARTMENT  OF HEALTH AND SOCIAL SERVICES,  spoke in                                                                   
support  of   the  legislation.   The  department   would  be                                                                   
responsible  for  administering  the  interstate  compact  on                                                                   
juveniles.  He reported  that  about 160  juveniles enter  or                                                                   
leave Alaska each year and the  interstate compact has helped                                                                   
oversee  their  travel.  The division  had  agreed  that  the                                                                   
compact needed to  be updated and that Alaska  needed to join                                                                   
other states that have the compact.                                                                                             
                                                                                                                                
Mr. Newman  detailed that  the compact  changes apply  at the                                                                   
national  and  state level.  Under  the new  compact,  Alaska                                                                   
would support  establishment of  an independent and  national                                                                   
operating  authority to help  administer compact  activities.                                                                   
The  authority   would  establish   uniform  procedures   and                                                                   
coordinate  standardized  training.  Alaskan  representatives                                                                   
would be appointed  by the governor's office  and be expected                                                                   
to  serve on  a national  commission. Alaska  would agree  to                                                                   
abide  by   the  rules   of  the   compact,  be  subject   to                                                                   
interventions  to correct non-compliance,  and would  collect                                                                   
data as needed.  Alaska would agree to pay dues  and would be                                                                   
expected  to  set  up a  state  council  to  oversee  compact                                                                   
operations in the state.                                                                                                        
                                                                                                                                
10:01:43 AM                                                                                                                   
                                                                                                                                
CAROL  BRENCKLE,  CHAIR,  ALASKA  JUVENILE  JUSTICE  ADVISORY                                                                   
COMMITTEE,  KENAI (via teleconference)  testified in  support                                                                   
of  the legislation.  She described  experience  representing                                                                   
juveniles  for 25 years  as a  criminal defense attorney  and                                                                   
noted that the  compact would provide uniform  standards. She                                                                   
stated  concerns about  expense to the  state, especially  in                                                                   
staff time,  if the  bill is not  promptly passed.  Her other                                                                   
concern  was  that  other  states  were  already  setting  up                                                                   
regulations and Alaska should  be part of the process to best                                                                   
protect its interests.                                                                                                          
                                                                                                                                
10:05:26 AM                                                                                                                   
                                                                                                                                
Co-Chair Stoltze referred to the $45,000 fiscal note.                                                                           
                                                                                                                                
Mr. Newman clarified  that the department would  not create a                                                                   
new council  but would share  efforts with an  existing state                                                                   
council that oversees the adult offender compact.                                                                               
                                                                                                                                
Co-Chair Hawker MOVED to report  HB 141 out of Committee with                                                                   
individual  recommendations   and  the  accompanying   fiscal                                                                   
notes. There being NO OBJECTION, it was so ordered.                                                                             
                                                                                                                                
HB  141  was REPORTED  out  of  Committee  with a  "do  pass"                                                                   
recommendation  and attached fiscal  note 1 by  Department of                                                                   
Health and Social Services and  zero note 2 by the Department                                                                   
of Corrections.                                                                                                                 
                                                                                                                                
10:07:59 AM         AT EASE                                                                                                   
10:17:16 AM         RECONVENED                                                                                                
                                                                                                                                
HOUSE BILL NO. 44                                                                                                             
                                                                                                                                
     "An Act  relating to  investments applicable  to energy;                                                                   
     authorizing  the Alaska  Permanent  Fund Corporation  to                                                                   
     make   in-state   energy    project   investments;   and                                                                   
     authorizing certain  public corporations to  issue bonds                                                                   
     for energy projects."                                                                                                      
                                                                                                                                
10:17:30 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE MIKE  CHENAULT, SPONSOR, testified  in support                                                                   
of HB 44.                                                                                                                       
                                                                                                                                
Co-Chair  Stoltze  provided  some   history  and  called  for                                                                   
amendments.                                                                                                                     
                                                                                                                                
Representative Gara MOVED Amendment 3:                                                                                          
                                                                                                                                
     Page 3, line 9, following "gas shortfalls":                                                                                
                                                                                                                                
     Insert ", the impact on consumers and the economy of                                                                       
     high cost energy,"                                                                                                         
                                                                                                                                
Co-Chair Stoltze OBJECTED for DISCUSSION.                                                                                       
                                                                                                                                
Representative  Gara explained the  amendment. He  thought it                                                                   
was in the  state's best interest  to move ahead with  an in-                                                                   
state  gas  pipeline,  but  was   concerned  that  a  company                                                                   
building a gas pipeline might  not prioritize consumer costs.                                                                   
The  amendment  would  ensure  that the  Alaska  Natural  Gas                                                                   
Development  Authority  (ANGDA)   retains  the  authority  to                                                                   
evaluate a  project to make sure  it is in the  best interest                                                                   
of consumers.                                                                                                                   
                                                                                                                                
Representative  Chenault  stated  that  he  did  not  have  a                                                                   
problem with the amendment. His intent was cheap gas.                                                                           
                                                                                                                                
10:21:13 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stoltze  removed  his  OBJECTION.  There  being  no                                                                   
further objection, Amendment 3 was ADOPTED.                                                                                     
                                                                                                                                
Co-Chair Stoltze discussed the fiscal notes.                                                                                    
                                                                                                                                
TOM  WRIGHT, STAFF,  REPRESENTATIVE  MIKE CHENAULT,  SPONSOR,                                                                   
noted concerns  about ANGDA  going out  to bond, but  assured                                                                   
the committee that Representative  Chenault would keep an eye                                                                   
on the situation.                                                                                                               
                                                                                                                                
Vice-Chair Thomas commented that  he wanted an audit of ANGDA                                                                   
to see what they  have done with the money given  them in the                                                                   
past.                                                                                                                           
                                                                                                                                
Representative  Fairclough pointed  out the possibility  that                                                                   
the legislation could allow a  small number of legislators to                                                                   
take away or  improperly delegate power. She  stated that she                                                                   
wanted a  clear record  reflecting the  desire for  a stopgap                                                                   
measure. She  referred to an  opinion from Legislative  Legal                                                                   
Services on April 2, 2009.                                                                                                      
                                                                                                                                
10:25:03 AM                                                                                                                   
                                                                                                                                
Mr.  Wright noted  that HB  152  also gave  authority to  the                                                                   
Legislative Budget and Audit Committee to approve projects.                                                                     
                                                                                                                                
Representative  Fairclough stated  that she  wanted it  clear                                                                   
for the record  that a small group of legislators  could make                                                                   
a decision  that changes  the  action of the  full body.  She                                                                   
highlighted  the  issue because  of  a recent  supreme  court                                                                   
ruling   against  a   legislative  action   related  to   the                                                                   
university; the  issue of the transfer of  legislative powers                                                                   
on appropriations was challenged and won.                                                                                       
                                                                                                                                
Co-Chair  Hawker  MOVED  to  report  CS  HB  44(FIN)  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  notes. There being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS  HB  44(FIN)  was  REPORTED   out  of  Committee  with  no                                                                   
recommendation and attached zero  note 1 by the Department of                                                                   
Revenue and two new zero notes  by the Department of Revenue.                                                                   
                                                                                                                                
10:27:26 AM         AT EASE                                                                                                   
10:27:56 AM         RECONVENED                                                                                                
                                                                                                                                
HOUSE BILL NO. 186                                                                                                            
                                                                                                                                
     "An Act declaring that certain firearms and accessories                                                                    
     are exempt from federal regulation."                                                                                       
                                                                                                                                
10:28:05 AM                                                                                                                   
                                                                                                                                
Representative Kelly MOVED to  return to the original version                                                                   
of HB 168, 26-LS0627\R.  There being no OBJECTION,  it was so                                                                   
ordered.                                                                                                                        
                                                                                                                                
Representative Kelly MOVED to ADOPT Amendment 1:                                                                                
                                                                                                                                
     Page 1 line 10:                                                                                                            
     Delete: "understood"                                                                                                       
     Insert: "intended"                                                                                                         
                                                                                                                                
     Page 2 line 2:                                                                                                             
     Delete: "understood"                                                                                                       
     Insert:   "intended"                                                                                                       
                                                                                                                                
     Page 2 line 12:                                                                                                            
     Delete: "understood"                                                                                                       
     Insert:   "intended"                                                                                                       
                                                                                                                                
Co-Chair Stoltze OBJECTED for DISCUSSION.                                                                                       
                                                                                                                                
Representative Kelly  explained that the  Judiciary Committee                                                                   
(JUD)  had one  amendment to  replace  the word  "understood"                                                                   
with "intended" in three places.                                                                                                
                                                                                                                                
Representative  Fairclough queried  the  discussion that  had                                                                   
taken place in JUD regarding the  word change. Representative                                                                   
Kelly  replied  that  he agreed  with  JUD's  statement  that                                                                   
"intended"  was a  better  way  to describe  what  HB 186  is                                                                   
attempting to do. "Understood"  meant that everyone had to be                                                                   
on the same page.                                                                                                               
                                                                                                                                
Co-Chair  Stoltze  removed  his  OBJECTION.  There  being  no                                                                   
further OBJECTION, Amendment 1 was ADOPTED.                                                                                     
                                                                                                                                
10:29:55 AM                                                                                                                   
                                                                                                                                
Co-Chair Hawker  pointed to two  provisions on page  3(d). He                                                                   
liked  the first  provision saying  that  the state  attorney                                                                   
general shall defend citizens  if they are prosecuted through                                                                   
acting in compliance  with HB 186. He had concerns  about the                                                                   
second  provision  regarding  the  attorney  general  seeking                                                                   
declaratory  judgment from  the  courts that  the section  is                                                                   
consistent with  the U.S. Constitution. He  requested further                                                                   
explanation.   Representative   Kelly  responded   that   the                                                                   
provision had come from Montana.  The sponsors were concerned                                                                   
that intent did not carry enough weight.                                                                                        
                                                                                                                                
Co-Chair Hawker thought that intent  to manufacture a firearm                                                                   
was a  lot different than  an accessory.  He did not  want to                                                                   
inadvertently  trap someone.  He  asked  whether the  sponsor                                                                   
would accept  leaving in  the first  sentence and taking  out                                                                   
the notice and intent sentence.                                                                                                 
                                                                                                                                
10:32:47 AM         AT EASE                                                                                                   
10:37:07 AM         RECONVENED                                                                                                
                                                                                                                                
Co-Chair Hawker proposed conceptual Amendment 2:                                                                                
                                                                                                                                
     Page 3, commencing on line 22, remove the sentence                                                                         
     beginning with "On receipt of" and ending with "the                                                                        
     Constitution of the United States."                                                                                        
                                                                                                                                
Representative Gara  OBJECTED for discussion. He  agreed with                                                                   
the amendment  and guessed it  could save the  state $200,000                                                                   
each year.  With the  sentence, the state  would have  to pay                                                                   
costs   for  anyone   wanting   to  file   civil   litigation                                                                   
challenging the federal regulation.  He anticipated that lots                                                                   
of people would want to litigate  and the state would have to                                                                   
respond each time.                                                                                                              
                                                                                                                                
Co-Chair Stoltze stated his concerns.                                                                                           
                                                                                                                                
Co-Chair Hawker maintained the amendment.                                                                                       
                                                                                                                                
Representative  Gara removed  his OBJECTION.  There being  no                                                                   
further OBJECTION, conceptual Amendment 2 was ADOPTED.                                                                          
                                                                                                                                
10:39:27 AM                                                                                                                   
                                                                                                                                
Co-Chair Hawker  clarified for the record that  the committee                                                                   
was moving HB 186 as amended, not the JUD version.                                                                              
                                                                                                                                
Representative  Crawford commented  that the  bill was  about                                                                   
manufacturing,  not just  about  firearms.  He wondered  what                                                                   
would happen to a person who wanted  to manufacture something                                                                   
else, such  as a pesticide to  use in state that  was against                                                                   
federal  law. He  thought equal  protection  issues could  be                                                                   
opened up. Representative  Kelly responded that  the focus of                                                                   
the bill is strictly on the Second  Amendment. He agreed that                                                                   
similar  arguments   could  be   made  for  other   federally                                                                   
regulated  materials that  the  state believes  it should  be                                                                   
regulating.                                                                                                                     
                                                                                                                                
Representative Crawford  asked if the legislation  could then                                                                   
have   far-reaching   ramifications.   Representative   Kelly                                                                   
thought the concept of arguing  state sovereignty could carry                                                                   
over,  but   he  did  not   believe  the  legislation   would                                                                   
necessarily trigger the response.                                                                                               
                                                                                                                                
Representative  Crawford  reiterated his  question  regarding                                                                   
the manufacture  of federally  regulated goods in  the state.                                                                   
He   thought   others   would    want   similar   protection.                                                                   
Representative  Kelly  agreed   that  other  areas  could  be                                                                   
discovered  where the  federal  government was  overreaching,                                                                   
but  thought  the focus  of  the  bill  was more  on  state's                                                                   
rights.                                                                                                                         
                                                                                                                                
Representative  Crawford  returned  to  the  example  of  the                                                                   
pesticide. The  federal government  had strong concerns,  but                                                                   
he could foresee someone in the  state wanting to manufacture                                                                   
the pesticide because it would  be profitable. Representative                                                                   
Kelly agreed, but  reiterated his belief that  the bill would                                                                   
not trigger the response.                                                                                                       
                                                                                                                                
10:44:30 AM                                                                                                                   
                                                                                                                                
Representative Fairclough asked  whether the "Made in Alaska"                                                                   
reference was  tied to Alaska's  procurement code  or defined                                                                   
elsewhere. Representative  Kelly replied  that the  stamp was                                                                   
simply stating where the product  was made. The provision was                                                                   
not attempting to connect to any other definition.                                                                              
                                                                                                                                
DEREK  MILLER,  STAFF, REPRESENTATIVE  MIKE  KELLY,  SPONSOR,                                                                   
added   that  the   provision  was   modeled  after   Montana                                                                   
legislation. He offered to check the procurement code.                                                                          
                                                                                                                                
Representative  Fairclough  pointed  out that  inserting  the                                                                   
code would strengthen  the legislation. She  explained anyone                                                                   
could stamp  "Made in  Alaska" on a  product and  trigger the                                                                   
interstate commerce clause. Specific  criteria must be met by                                                                   
a manufacturer if  the defined procurement code  is used. Mr.                                                                   
Miller offered to find the "Made in Alaska" statute.                                                                            
                                                                                                                                
Representative  Gara turned  to page  3, lines  15 to 17.  He                                                                   
wondered  whether there  were rules in  Alaska regarding  the                                                                   
proper  and safe  manufacturing  of firearms.  Representative                                                                   
Kelly thought  there were rules governing the  manufacture of                                                                   
products, although not specifically firearms.                                                                                   
                                                                                                                                
Representative  Gara noted that  under federal law  there may                                                                   
be regulations that some view  as abusive, but there are also                                                                   
rules that  are good, such  as prohibiting the  production of                                                                   
guns that blow  up and safety rules that protect  hunters. He                                                                   
cautioned against  putting a "Made in Alaska" stamp  on a gun                                                                   
that does not follow those rules.                                                                                               
                                                                                                                                
10:49:12 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hawker requested  the citation  for the  applicable                                                                   
federal  statute. Representative  Gara  thought  it would  be                                                                   
helpful  to go  through  the  federal statutes.  He  believed                                                                   
certain kind of dangerous firearms were regulated.                                                                              
                                                                                                                                
Representative  Kelly emphasized  that HB  186 would  trigger                                                                   
Alaska regulation.  He believed the issue would  be addressed                                                                   
through the regulatory process.                                                                                                 
                                                                                                                                
Co-Chair Hawker pointed  out that the paragraph  (c) does not                                                                   
deal with the manufacturing process  but only provides for an                                                                   
Alaskan identifier. Representative  Kelly added that the bill                                                                   
does  not  purport  to  be  the   only  thing  governing  the                                                                   
manufacture process.                                                                                                            
                                                                                                                                
Representative Gara  pointed to page  2, line 23,  which says                                                                   
that  a personal  firearm manufactured  in the  state is  not                                                                   
subject to federal  law, and maintained that  a firearm could                                                                   
be manufactured in the state without  following federal rules                                                                   
about  safety. He  cautioned that  an unintended  consequence                                                                   
could be advertising to the public  the possibility of unsafe                                                                   
weapons, which  could have a damaging  effect on the  sale of                                                                   
Alaska  products.  Co-Chair Hawker  did  not  agree that  the                                                                   
provision was saying that the product was inferior.                                                                             
                                                                                                                                
10:53:03 AM                                                                                                                   
                                                                                                                                
Representative     Gara    suggested    protecting     Alaska                                                                   
manufacturers  from possible unintended  consequences  by not                                                                   
exempting  firearms from  federal rules  related to  consumer                                                                   
safety.  He  stressed  that  the law  as  written  would  not                                                                   
require regulation that included safe manufacture.                                                                              
                                                                                                                                
Representative  Kelly stated  that  the law  intended to  get                                                                   
away from federal  regulation. He emphasized that  it did not                                                                   
preclude state  regulation, particularly  related to  safety.                                                                   
He added that general rules regarding safety would apply.                                                                       
                                                                                                                                
Representative Gara  wondered if the sponsors  would consider                                                                   
a provision  saying manufacturers  are not exempted  from the                                                                   
safety portions of federal law.  Representative Kelly replied                                                                   
that he  would object  because  that would  gut the bill.  He                                                                   
thought that federal safety regulations  adopted by the state                                                                   
would then be state regulations.                                                                                                
                                                                                                                                
Representative  Gara  reiterated  concerns: first,  the  bill                                                                   
communicates approval of committing  a federal crime; second,                                                                   
the state  will pay for legal  fees when someone  commits the                                                                   
crime; and three, safety issues.                                                                                                
                                                                                                                                
Representative  Kelly  thought  the safety  issues  would  be                                                                   
addressed  in regulation.  Regarding the  second concern,  he                                                                   
believed the  state had  been mistaken  in failing  to defend                                                                   
rights  to  manage  fish  and  game  and  regulate  navigable                                                                   
waters.  He wanted the  state to  defend individual  Alaskans                                                                   
from the federal government.                                                                                                    
                                                                                                                                
10:57:54 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hawker  MOVED  to  report CS  HB  186(FIN)  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note. There  being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS  HB  186(FIN)  was  REPORTED  out  of  Committee  with  no                                                                   
recommendation and attached new  indeterminate fiscal note by                                                                   
the Department of Law.                                                                                                          
                                                                                                                                
HOUSE BILL NO. 105                                                                                                            
                                                                                                                                
     "An Act relating to the state training and employment                                                                      
     program; and providing for an effective date."                                                                             
                                                                                                                                
10:59:51 AM                                                                                                                   
                                                                                                                                
RYNNIEVA MOSS,  STAFF, REPRESENTATIVE JOHN  COGHILL, SPONSOR,                                                                   
explained that  the State Training Employment  Program (STEP)                                                                   
was established  in 1989  and had  been re-authorized  by the                                                                   
legislature seven  times. The  seventh time, the  legislature                                                                   
asked  the  Department  of Labor  and  Workforce  Development                                                                   
(DLWD)  to   improve  the   program,  especially   addressing                                                                   
concerns about training given  to non-residents and a lack of                                                                   
participation  with  private  enterprise.  A task  force  was                                                                   
formed to study the program and make recommendations.                                                                           
                                                                                                                                
Ms.  Moss noted  that the  taskforce  recommended taking  the                                                                   
politics  out  of  the  program   by  empowering  the  Alaska                                                                   
Workforce  Investment Board  to become  an active partner  in                                                                   
the  STEP  process, including  annual  supervision  over  the                                                                   
scoring  of  projects  and  who  would  obtain  the  training                                                                   
grants,  and  oversight  of  regulations   adopted  by  DLWD.                                                                   
Provisions  were also  added requiring  Alaskan residency  to                                                                   
participate,    strengthening   partnership    with   private                                                                   
business,  and limiting  how  much money  could  be spent  on                                                                   
administration   costs.  Finally,   the  bill  requires   the                                                                   
adoption of  regulations to implement  an appeal  process for                                                                   
applicants who have been denied a grant.                                                                                        
                                                                                                                                
DAVID  STONE, DEPUTY  COMMISSIONER, DEPARTMENT  OF LABOR  AND                                                                   
WORKFORCE  DEVELOPMENT, MEMBER,  ALASKA WORKFORCE  INVESTMENT                                                                   
BOARD, and CO-CHAIR, STEP TASKFORCE,  reported the bill was a                                                                   
result  of  recommendations  from   the  STEP  taskforce.  He                                                                   
detailed  that  the  taskforce  was composed  of  ten  people                                                                   
representing  employers, employees,  the  U.S. Department  of                                                                   
Labor,  the  University  of  Alaska,   and  Alaska  Workforce                                                                   
Investment Board. Taskforce recommendations include:                                                                            
                                                                                                                                
   · Offering services to an expanded pool of workers who                                                                       
     may be displaced;                                                                                                          
   · Clarifying the Workforce Investment Board's oversight                                                                      
     and accountability;                                                                                                        
   · Supporting resident hire through targeted projects and                                                                     
     services;                                                                                                                  
   · Increasing input from local businesses and regional                                                                        
     advisory councils;                                                                                                         
   · Streamlining the grantee application reporting process;                                                                    
     and                                                                                                                        
   · Making STEP a permanent program.                                                                                           
                                                                                                                                
11:03:58 AM                                                                                                                   
                                                                                                                                
Mr. Stone added  that STEP has been the most  successful job-                                                                   
training  program  in  Alaska.   The  program  is  funded  by                                                                   
unemployment  insurance (UI)  employee  contributions at  the                                                                   
rate  of  1/10 of  1  percent.  The program  has  worked  for                                                                   
Alaskans seeking  training, and  unemployed or  underemployed                                                                   
workers;  by   reducing  the  amount  of  time   workers  are                                                                   
employed, the program  has reduced the amount  of UI benefits                                                                   
paid out.                                                                                                                       
                                                                                                                                
Vice-Chair  Thomas pointed to  page 7,  line 20 referring  to                                                                   
residency and queried adding language  such as being eligible                                                                   
for the permanent  fund dividend. Ms. Moss did  not think the                                                                   
language  would  be a  problem  but  did  not know  what  the                                                                   
ramifications would be.                                                                                                         
                                                                                                                                
Co-Chair  Stoltze cautioned  that  the criteria  for the  two                                                                   
programs are different.                                                                                                         
                                                                                                                                
Vice-Chair Thomas  noted that people  are allowed to  vote as                                                                   
residents of Alaska  when living out-of-state  or moving back                                                                   
and forth. He  opined that people should receive  a permanent                                                                   
fund check  or be eligible for  one before spending  money on                                                                   
them  through  STEP.  Ms.  Moss   suggested  conferring  with                                                                   
Legislative Legal  Services and offering an  amendment on the                                                                   
floor if applicable.                                                                                                            
                                                                                                                                
Representative Joule  referred to life-long residents  who do                                                                   
not  apply  for  the  permanent  fund  dividend  for  various                                                                   
reasons,  but may  want  to participate  in  STEP. He  stated                                                                   
concerns about citizens who would be cut off.                                                                                   
                                                                                                                                
11:07:11 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Thomas clarified  that  he meant  the person  may                                                                   
either be eligible  or receive the dividend; he  did not mean                                                                   
the person had to receive the dividend.                                                                                         
                                                                                                                                
Representative  Kelly queried the  balance between  union and                                                                   
non-union and  rural and non-rural  access to the  program as                                                                   
per earlier  concerns.  Ms. Moss responded  that the  sponsor                                                                   
was confident that the concerns had been addressed.                                                                             
                                                                                                                                
Representative Gara  pointed to page 4, line 12  of the bill,                                                                   
and  wondered  if it  unintentionally  excluded  people  from                                                                   
STEP. The  provision protects people  who have had a  job and                                                                   
who run out of UI benefits or  are receiving UI benefits, but                                                                   
may not  allow people without  a job history  to participate.                                                                   
Ms.  Moss did  not think  the  status would  change with  the                                                                   
legislation. Section  4 removes language setting  a six-month                                                                   
limit  on employees  liable to  be  displaced under  existing                                                                   
statute; however,  because the  funds come from  UI benefits,                                                                   
STEP participants must have contributed to UI.                                                                                  
                                                                                                                                
Representative Gara  queried expanding the program  to people                                                                   
who were  new to the work  force. Ms. Moss thought  the issue                                                                   
was a policy question.                                                                                                          
                                                                                                                                
11:10:15 AM                                                                                                                   
                                                                                                                                
GUY BELL,  ASSISTANT COMMISSIONER  AND DIRECTOR,  DIVISION OF                                                                   
ADMINISTRATIVE  SERVICES, DEPARTMENT  OF LABOR AND  WORKFORCE                                                                   
DEVELOPMENT, agreed with Ms. Moss's answer.                                                                                     
                                                                                                                                
Representative Gara offered language  for a third category of                                                                   
people: "or  are seeking employment."  Mr. Bell  thought that                                                                   
would  be  a  policy call  for  the  legislature,  since  the                                                                   
funding  is derived  from employee  contributions  to UI.  He                                                                   
noted  that the  policy in  the past  has been  to limit  the                                                                   
program to those who have contributed to UI.                                                                                    
                                                                                                                                
Co-Chair Stoltze  pointed out  that the legislature  has made                                                                   
policy calls in the past with  direction from the department.                                                                   
He asked if the department had  an opinion. Mr. Guy responded                                                                   
that the  department has  funds for  youth training  that are                                                                   
separate from STEP, providing other options for youth.                                                                          
                                                                                                                                
Representative  Gara  asked  whether STEP  had  training  not                                                                   
provided  in  other  programs  that would  be  beneficial  to                                                                   
youth. Mr.  Stone replied  that STEP  is a funding  mechanism                                                                   
for  funding  training  specifically   for  underemployed  or                                                                   
unemployed workers who have contributed  through the UI fund;                                                                   
there are other funds that can be used for youth.                                                                               
                                                                                                                                
Representative Gara  queried STEP job training  services that                                                                   
would be  beneficial to youth.  Mr. Bell answered  that there                                                                   
were services,  and added that the STEP  demographic includes                                                                   
youth as young Alaskans have contributed to UI.                                                                                 
                                                                                                                                
11:14:08 AM                                                                                                                   
                                                                                                                                
Representative Gara  wondered the downside of  allowing youth                                                                   
without  a job  history accessing  STEP training.   Ms.  Moss                                                                   
thought the  downside was  that STEP  is designed for  people                                                                   
who have worked and are about  to lose work or are unemployed                                                                   
or underemployed.  She  stressed that  the program is  unique                                                                   
for an existing workforce; there  are many other programs for                                                                   
youth.                                                                                                                          
                                                                                                                                
Representative Gara gave the example  of another program with                                                                   
limited funds and spoke of young  people who cannot get jobs.                                                                   
Ms. Moss  emphasized that  STEP was a  limited pool  of money                                                                   
that the sponsors wanted to protect.                                                                                            
                                                                                                                                
Representative  Joule reported  experience  related to  youth                                                                   
vocational education and financial  aid through the Bureau of                                                                   
Indian  Affairs. He  stated  that there  are  funds for  many                                                                   
rural  young people  coming out  of high school,  as well  as                                                                   
local scholarships.  He noted that people in  rural areas are                                                                   
supportive of  vocational and  technical training  for youth.                                                                   
He recalled deciding to use the  UI funds for the program and                                                                   
thought the bill accomplished what it meant to.                                                                                 
                                                                                                                                
11:19:27 AM                                                                                                                   
                                                                                                                                
DOUG WARD,  DIRECTOR, SHIPYARD  DEVELOPMENT, ALASKA  SHIP AND                                                                   
DRYDOCK,  and MEMBER,  WORKFORCE  INVESTMENT  BOARD and  STEP                                                                   
TASKFORCE,  KETCHIKAN  (via  teleconference),   testified  in                                                                   
support of the  legislation. He listed membership  in several                                                                   
groups working  to employ  and train  people. He stated  that                                                                   
Alaska  Ship and Drydock  participates  in STEP. He  reminded                                                                   
the  committee that  in 2007  the  commissioner directed  the                                                                   
board to  provide for oversight.  He reported that  the board                                                                   
has successfully done the job,  as has the STEP taskforce. He                                                                   
urged passage of the legislation.                                                                                               
                                                                                                                                
Mr. Ward  spoke to  programs for  youth. He noted  individual                                                                   
training  accounts at  job centers  that can  be accessed  by                                                                   
youth seeking employment.                                                                                                       
                                                                                                                                
11:23:14 AM                                                                                                                   
                                                                                                                                
LINDA  HULBERT,  MEMBER, ALASKA  WORKFORCE  BOARD,  FAIRBANKS                                                                   
(via   teleconference),   testified   in   support   of   the                                                                   
legislation.   She   listed    extensive   involvement   with                                                                   
employment and  training programs  in Alaska. She  echoed the                                                                   
comments of  those supporting  the provision. She  emphasized                                                                   
that the fund is for a specific  group of people not normally                                                                   
funded by other  federal employment training  funds. Research                                                                   
and   analysis   by   DLWD   has   consistently   shown   the                                                                   
effectiveness of the program in  getting people back into the                                                                   
workforce. She  noted the importance  of Alaskans  being able                                                                   
to  control  the  funds  and  urged  passage  of  the  unique                                                                   
program.                                                                                                                        
                                                                                                                                
DON ETHRIDGE,  ALASKA WORKS  PARTNERSHIP AND ALASKA  AFL-CIO,                                                                   
spoke  in support  of the  bill.  He pointed  out that  rural                                                                   
areas  were targeted  by  Alaska  Works. He  addressed  youth                                                                   
training and stated he preferred not to use STEP funds.                                                                         
                                                                                                                                
Co-Chair Stoltze referred to the fiscal note.                                                                                   
                                                                                                                                
Co-Chair Hawker asked how funding  levels shown on the fiscal                                                                   
note  compared  with  the  current   funding  level  for  the                                                                   
program. Mr. Bell responded that  the levels were equivalent.                                                                   
                                                                                                                                
Vice-Chair  Thomas asked  whether  there was  a  GED or  high                                                                   
school requirement  to participate in STEP. Mr.  Bell did not                                                                   
think there was the requirement.                                                                                                
                                                                                                                                
11:28:10 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Thomas  noted  GED   or  high  school  graduation                                                                   
requirement for the apprenticeship  program. Mr. Bell replied                                                                   
that there  were entrance  criteria set  by various  training                                                                   
programs; the  criteria are  not set by  STEP. He  added that                                                                   
often a training  component is added for persons  who need to                                                                   
get to a certificate level.                                                                                                     
                                                                                                                                
Vice-Chair Thomas stated concerns  that with the high rate of                                                                   
dropout, there  might be  more incentive  to quit school.  He                                                                   
suggested  a  side  bar  requiring   a  GED  or  high  school                                                                   
equivalency.                                                                                                                    
                                                                                                                                
Co-Chair Stoltze read the legislation another way.                                                                              
                                                                                                                                
Ms. Moss  noted that a GED  is not required for  the program.                                                                   
She stated concerns  that the requirement could  be a problem                                                                   
for someone who has been working for years without a GED.                                                                       
                                                                                                                                
Vice-Chair  Thomas  reiterated  concerns  regarding  drop-out                                                                   
rates. Ms. Moss  thought the point should be  brought up with                                                                   
Department  of Education  and Early Development,  as  part of                                                                   
the  problem  could  be  youth  who  do  not  get  vocational                                                                   
training in high school. She gave  an example of a North Pole                                                                   
school with a program that kept youth from dropping out.                                                                        
                                                                                                                                
11:31:10 AM                                                                                                                   
                                                                                                                                
Representative Gara  queried DLWD involvement  with Education                                                                   
and Training  Voucher (ETV)  funds provided  to youth  at the                                                                   
Office of  Child Services (OCS)  and wondered if there  was a                                                                   
way to ensure  the funds are  not cut off. Mr.  Bell promised                                                                   
to get more information.                                                                                                        
                                                                                                                                
Co-Chair  Hawker MOVED  to  report CCSS  HB  105(L&C) out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  notes. There being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSSS HB  105(L&C) was  REPORTED out of  Committee with  a "do                                                                   
pass"  recommendation  and with  attached  fiscal  note 1  by                                                                   
Department  of Labor  and  Workforce Development  and  fiscal                                                                   
note 2 by Department of Labor and Workforce Development.                                                                        
                                                                                                                                
HOUSE BILL NO. 212                                                                                                            
                                                                                                                                
     "An  Act  modifying the  Alaska  unemployment  insurance                                                                   
     statutes to comply with the  requirements of the federal                                                                   
     economic  stimulus bill  by redefining  the base  period                                                                   
     for determining  eligibility for unemployment  benefits;                                                                   
     and providing for an effective date."                                                                                      
                                                                                                                                
11:33:11 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  HARRY CRAWFORD,  SPONSOR, explained  that the                                                                   
legislation  would  allow  the  state to  put  $15.6  million                                                                   
stimulus money into the UI trust  fund. He addressed concerns                                                                   
that the provision  would cost Alaskan employers  and assured                                                                   
the  committee that  the rates  employers would  have to  pay                                                                   
would be lowered.                                                                                                               
                                                                                                                                
Representative Crawford  added that the base  period would be                                                                   
calculated  differently  with  the stimulus  money,  but  the                                                                   
state could return to present operations at a later date.                                                                       
                                                                                                                                
GUY BELL,  ASSISTANT COMMISSIONER  AND DIRECTOR,  DIVISION OF                                                                   
ADMINISTRATIVE  SERVICES, DEPARTMENT  OF LABOR AND  WORKFORCE                                                                   
DEVELOPMENT,  referred   to  past  testimony   regarding  the                                                                   
alternate base period.                                                                                                          
                                                                                                                                
Representative  Gara asked whether  funds would be  left over                                                                   
that could  be used without  negatively impacting  employers.                                                                   
Mr. Bell  explained that the  provision would make  the state                                                                   
eligible to  receive the $15.6  million. The amount  would be                                                                   
deposited  into Alaska's unemployment  insurance (UI)  trust,                                                                   
which  would  then  be  available to  pay  UI  benefits.  The                                                                   
legislature would  be able to appropriate some or  all of the                                                                   
excess money  for other purposes  identified in  the stimulus                                                                   
bill  for re-employment  services  or UI  administration  for                                                                   
quality enhancements.                                                                                                           
                                                                                                                                
11:37:20 AM                                                                                                                   
                                                                                                                                
Co-Chair Hawker queried the administration's  position on the                                                                   
legislation.  Mr. Bell  replied  that the  administration  is                                                                   
neutral.                                                                                                                        
                                                                                                                                
Representative  Crawford  MOVED  conceptual  Amendment  1  to                                                                   
change the effective  date from "immediately"  to "January 1,                                                                   
2010."                                                                                                                          
                                                                                                                                
Co-Chair Stoltze OBJECTED for DISCUSSION.                                                                                       
                                                                                                                                
Mr.  Bell  supported  the amendment  and  explained  how  the                                                                   
department's  program  worked  using  the  calendar  year  in                                                                   
calculating benefits.                                                                                                           
                                                                                                                                
11:40:02 AM                                                                                                                   
                                                                                                                                
Representative Crawford  WITHDREW conceptual Amendment  1. He                                                                   
MOVED conceptual Amendment 2 to  change the effective date to                                                                   
"the benefit year starting on January 1, 2010."                                                                                 
                                                                                                                                
Co-Chair Hawker  OBJECTED for  DISCUSSION. He asked  that the                                                                   
bill  be held  to get  the amendment  into  writing. He  also                                                                   
wanted the  second DLWD issue  related to tribal  language to                                                                   
be sorted out.                                                                                                                  
                                                                                                                                
HB  212  was   HEARD  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 11:42 AM.                                                                                          

Document Name Date/Time Subjects
02 SSHB105 Sponsor Statement.pdf HFIN 4/11/2009 9:00:00 AM
HB 105
01 HB141 Sponsor Statement.pdf HFIN 4/11/2009 9:00:00 AM
HB 141
07 CSHB175_L&C_ Sponsor Statement.pdf HFIN 4/11/2009 9:00:00 AM
HB 175
06 CSHB175_L&C_ Sectional Analysis.pdf HFIN 4/11/2009 9:00:00 AM
HB 175
06 SSHB105 29 USC 50 Apprentice Labor Federal Law.pdf HFIN 4/11/2009 9:00:00 AM
HB 105
05 SSHB105 AK Workforce Investment Board Resolution.pdf HFIN 4/11/2009 9:00:00 AM
HB 105
04 SSHB105 AK Workforce Investment Board Recommendations.pdf HFIN 4/11/2009 9:00:00 AM
HB 105
03 SSHB105 Sectional Analysis.pdf HFIN 4/11/2009 9:00:00 AM
HB 105
03 HB141 Sectional.pdf HFIN 4/11/2009 9:00:00 AM
HB 141
07 HB141 Letters of SupportOpposition.pdf HFIN 4/11/2009 9:00:00 AM
HB 141
05 HB186 Backup.pdf HFIN 4/11/2009 9:00:00 AM
HB 186
03 Sectional for CSHB186 version E.pdf HFIN 4/11/2009 9:00:00 AM
HB 186
Amendment 1.doc HFIN 4/11/2009 9:00:00 AM
HB 44
HB 141 backup.pdf HFIN 4/11/2009 9:00:00 AM
HB 141
HB 141 backup2.pdf HFIN 4/11/2009 9:00:00 AM
HB 141
HB 186 Explanation of Changes.pdf HFIN 4/11/2009 9:00:00 AM
HB 186
HB 141 DHSS Response to HJUD.pdf HFIN 4/11/2009 9:00:00 AM
HB 141
HB 186 Sponsor Statement.pdf HFIN 4/11/2009 9:00:00 AM
HB 186
HB 186--legal memo.pdf HFIN 4/11/2009 9:00:00 AM
HB 186
HB 212 sectional.pdf HFIN 4/11/2009 9:00:00 AM
HB 212
HB 212 sponsor statement.pdf HFIN 4/11/2009 9:00:00 AM
HB 212
NCSL Pending Firearm Legislation April 2009.pdf HFIN 4/11/2009 9:00:00 AM
HB 186
HB186CS(JUD)-LAW-CRIM-4-8-09Fical Note New Replace.pdf HFIN 4/11/2009 9:00:00 AM
HB 186
HB212-DOLWD-UI-04-10-09.pdf HFIN 4/11/2009 9:00:00 AM
HB 212
SB 133 Additional backup.pdf HFIN 4/11/2009 9:00:00 AM
SB 133
SB 57 JSD Letter.pdf HFIN 4/11/2009 9:00:00 AM
SB 57
SB1 133 Q & A Sen. Paskvan.pdf HFIN 4/11/2009 9:00:00 AM
SB 133
SB133_Backup_AK_HISPC_Project_Summary.pdf HFIN 4/11/2009 9:00:00 AM
SB 133
SB133_Backup_Cost_Savings.pdf HFIN 4/11/2009 9:00:00 AM
SB 133
SB133_Backup_Media.pdf HFIN 4/11/2009 9:00:00 AM
SB 133
SB133_Backup_NCSL_HIT_State_Legislation.pdf HFIN 4/11/2009 9:00:00 AM
SB 133
SB133_Letters_of_Support.pdf HFIN 4/11/2009 9:00:00 AM
SB 133
SB133_Presentation_AeHN overview April 2009.ppt HFIN 4/11/2009 9:00:00 AM
SB 133
Tennessee Firearms Freedom Act.pdf HFIN 4/11/2009 9:00:00 AM
HB 186
SB133_Sponsor Statement.pdf HFIN 4/11/2009 9:00:00 AM
SB 133