Legislature(2011 - 2012)HOUSE FINANCE 519

02/22/2011 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 3 REQUIREMENTS FOR DRIVER'S LICENSE TELECONFERENCED
Moved CSHB 3(STA) Out of Committee
+ HB 7 SYNTHETIC CANNABINOIDS AS SCHEDULE IIA TELECONFERENCED
Heard & Held
+ HB 19 SPECIAL REQUEST LICENSE PLATES TELECONFERENCED
<Bill Held Over to 2/24/11>
+ HB 119 AIDEA: PROCUREMENT; PROJECTS TELECONFERENCED
Moved CSHB 119(EDT) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 22, 2011                                                                                          
                         1:36 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:36:31 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze called the  House Finance Committee meeting                                                                    
to order at 1:36 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Bill Thomas Jr., Co-Chair                                                                                        
Representative Anna Fairclough, Vice-Chair                                                                                      
Representative Mia Costello                                                                                                     
Representative Mike Doogan                                                                                                      
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative David Guttenberg                                                                                                 
Representative Reggie Joule                                                                                                     
Representative Mark Neuman                                                                                                      
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Cathy  Munoz,  Sponsor;  Representative  Bob                                                                    
Lynn, Sponsor; Representative  Lance Pruitt, Sponsor; Kendra                                                                    
Kloster,   Staff,   Representative    Cathy   Munoz;   Jerry                                                                    
Luckhaupt, Assistant Revisor  of Statutes, Legislative Legal                                                                    
Services; Kate Burkhart,  Executive Director, Advisory Board                                                                    
of  Alcoholism  and Drug  Abuse,  Department  of Health  and                                                                    
Social  Services; Thomas  Reiker, Staff,  Representative Bob                                                                    
Lynn;  Mark  Davis,  Economic  Development  Officer,  Alaska                                                                    
Industrial Development and Export Authority.                                                                                    
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Orin Dym, Forensic Laboratory  Manager, Department of Public                                                                    
Safety  Scientific Crime  Detection  Lab; Whitney  Brewster,                                                                    
Director,   Division  of   Motor  Vehicles,   Department  of                                                                    
Administration;   Erling    Johansen,   Assistant   Attorney                                                                    
General, Department  of Law; Mr. Jeffrey  Mittman, Executive                                                                    
Director, American Civil Liberties  Union of Alaska; Mr. Ted                                                                    
Leonard, Executive  Director, Alaska  Industrial Development                                                                    
and Export Authority.                                                                                                           
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 7      SYNTHETIC CANNABINOIDS AS SCHEDULE IIA                                                                                
                                                                                                                                
          HB 7 was HEARD and HELD in committee for further                                                                      
          consideration.                                                                                                        
                                                                                                                                
HB 3      REQUIREMENTS FOR DRIVER'S LICENSE                                                                                     
                                                                                                                                
          CSHB 3 (STA) was REPORTED out of committee with a                                                                     
          "do pass" recommendation and with previously                                                                          
          published zero impact note: FN1 (DOA).                                                                                
                                                                                                                                
HB 119    AIDEA: PROCUREMENT; PROJECTS                                                                                          
                                                                                                                                
          CSHB 119 (EDT) was REPORTED out of committee with                                                                     
          a "do pass" recommendation and with previously                                                                        
         published zero impact note: FN1 (DCCED).                                                                               
                                                                                                                                
HB 19     SPECIAL REQUEST LICENSE PLATES                                                                                        
                                                                                                                                
          HB 19 was SCHEDULED but not HEARD.                                                                                    
                                                                                                                                
1:37:30 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 7                                                                                                              
                                                                                                                                
     "An Act classifying certain synthetic cannabinoids as                                                                      
     schedule IIA controlled substances; and providing for                                                                      
     an effective date."                                                                                                        
                                                                                                                                
REPRESENTATIVE  CATHY  MUNOZ,   SPONSOR,  discussed  CSHB  7                                                                    
(JUD).  She  delineated  that  synthetic  cannabinoids  were                                                                    
materials that contained  hallucinogenic chemicals that were                                                                    
sprayed on leafy plant material.  The materials were sold on                                                                    
the  internet  and  in  stores  under  a  variety  of  names                                                                    
including  K2   and  Spice.   To  increase   popularity  and                                                                    
distinguish  the  product  from   drugs  such  as  LSD,  the                                                                    
products were marketed as a  synthetic marijuana or incense.                                                                    
She had first  heard about Spice or K2 from  the parent of a                                                                    
boy who  had experienced a  serious adverse reaction  to the                                                                    
drug. She  explained that within  moments of  inhalation the                                                                    
young man experienced severe vomiting,  loss of reality, the                                                                    
inability to walk and talk,  and violent outbursts. She read                                                                    
an excerpt from a letter written by the young man:                                                                              
                                                                                                                                
     "I  only  had a  small  amount  and  in less  than  two                                                                    
     minutes I was losing my  perception of what was real in                                                                    
     every way.  I lost  control of my  legs and  I couldn't                                                                    
     walk.  I  couldn't talk.  I  can  remember thinking  to                                                                    
     myself  that  I  wasn't  going  to  come  out  of  this                                                                    
     craziness  and this  might be  how  I end  up dying.  I                                                                    
     remember telling  my brother to  call 911 and  going to                                                                    
     the hospital."                                                                                                             
                                                                                                                                
Representative Munoz  relayed that many similar  stories had                                                                    
surfaced  since her  office began  working on  the bill  and                                                                    
that  many   states  had  enacted  bans   on  the  material.                                                                    
Synthetic  cannabinoids were  relatively new  to the  United                                                                    
States and  were manufactured in China  and Europe. Germany,                                                                    
Sweden,  Russia and  England had  all banned  the substance.                                                                    
Given the accessibility of the  substance, its low cost, and                                                                    
its difficulty  to drug test,  popularity was  increasing in                                                                    
the  U.S.,  particularly  among the  youth  population.  She                                                                    
explained that  the herbal  and chemical  compounds commonly                                                                    
produced  a  reaction  similar to  marijuana.  The  original                                                                    
legislation   would  have   classified  the   substances  as                                                                    
schedule  IIA,  which   included  compounds  that  contained                                                                    
hallucinogenic   substances.   With   the  advice   of   the                                                                    
Department of  Law (DOL), the  bill was amended  to classify                                                                    
certain synthetic  cannabinoids as schedule  IIIA controlled                                                                    
substances. She asked a member  of her staff to describe the                                                                    
legislation in detail.                                                                                                          
                                                                                                                                
1:40:51 PM                                                                                                                    
                                                                                                                                
KENDRA   KLOSTER,   STAFF,   REPRESENTATIVE   CATHY   MUNOZ,                                                                    
explained  that they  had worked  with  DOL and  Legislative                                                                    
Legal to classify the product  as a schedule IIIA controlled                                                                    
substance.  Other   synthetic  THCs  [tetrahydrocannabinols]                                                                    
fell under the IIIA category.  The bill listed the different                                                                    
chemical  compounds of  the synthetic  THC contained  in the                                                                    
product that  were determined by  the DEA  [Drug Enforcement                                                                    
Agency]  and   research  conducted  in  other   states.  The                                                                    
Municipality  of  Anchorage  supported the  legislation  and                                                                    
already  had  a  ban  on   the  substance.  Sergeant  Robert                                                                    
Thompson of  the Fairbanks Police Department  had provided a                                                                    
written  statement expressing  the  department's support  of                                                                    
the bill  (copy on file).  The department had  experienced a                                                                    
problem with  a driver who  had been under the  influence of                                                                    
K2  and had  experienced seizures.  The department  had been                                                                    
unable to charge  the driver with an offence  as the product                                                                    
was   not  classified   as  a   controlled  substance.   The                                                                    
legislation  was also  supported by  many constituents,  the                                                                    
Advisory  Board on  Alcoholism and  Drug  Abuse, the  Mat-Su                                                                    
Substance  Abuse  Prevention  Coalition,  the  Alaska  Peace                                                                    
Officers Association,  the Alaska  Association of  Chiefs of                                                                    
Police, and the Women Police of Alaska.                                                                                         
                                                                                                                                
Co-Chair  Stoltze  informed  the  committee  that  technical                                                                    
questions about  the classification  of the  substance could                                                                    
be directed  to the  Department of Public  Safety Scientific                                                                    
Crime Detection Lab (SCDL).                                                                                                     
                                                                                                                                
Representative Gara wondered  if the effects of  K2 or Spice                                                                    
resembled  those of  marijuana  or hashish  and whether  the                                                                    
penalty should be similar to one of those substances.                                                                           
                                                                                                                                
ORIN DYM, FORENSIC LABORATORY  MANAGER, DEPARTMENT OF PUBLIC                                                                    
SAFETY SCIENTIFIC CRIME  DETECTION LAB (via teleconference),                                                                    
was not  a toxicologist and  could not speak to  the effects                                                                    
of  the substances.  He explained  that synthetic  compounds                                                                    
were  not natural  products and  had to  be synthesized  and                                                                    
that K2  or Spice was  definitely a synthetic  or "designer"                                                                    
drug.  Marijuana   was  a  plant  material   that  naturally                                                                    
excreted THCs. He could not  speak to how the product should                                                                    
be specifically classified.                                                                                                     
                                                                                                                                
JERRY LUCKHAUPT, ASSISTANT  REVISOR OF STATUTES, LEGISLATIVE                                                                    
LEGAL SERVICES,  informed the  committee that  the Judiciary                                                                    
Committee had  placed the synthetic  THCs in with  the other                                                                    
classified  THCs.  Currently  schedule IIIA  drugs  included                                                                    
natural THC,  the active ingredient in  marijuana; and three                                                                    
synthetic  THCs. The  committee elected  to place  the drugs                                                                    
under the  same category  given their similarities  and same                                                                    
classification.                                                                                                                 
                                                                                                                                
Representative  Gara asked  about  the penalty  for a  first                                                                    
conviction.  Mr.  Luckhaupt  replied that  the  penalty  for                                                                    
distribution  or manufacturing  was a  felony. There  was no                                                                    
major difference  between schedules  I, II, and  III related                                                                    
to  penalties  for  the  manufacturing   or  delivery  of  a                                                                    
substance.  Possession  could  be   either  a  felony  or  a                                                                    
misdemeanor, depending upon the  amount of the substance. He                                                                    
explained that  for schedule  III substances  the possession                                                                    
of less than  three grams was a misdemeanor  and above three                                                                    
grams was  a felony.  The possession of  a schedule  II drug                                                                    
was a felony in any amount.                                                                                                     
                                                                                                                                
1:47:12 PM                                                                                                                    
                                                                                                                                
Representative Gara  asked how  three grams compared  to the                                                                    
size of a marijuana joint.  Mr. Dym responded that a typical                                                                    
marijuana cigarette weighed approximately  0.3 grams or one-                                                                    
third of a  gram and that three  grams equaled approximately                                                                    
nine to ten hand-rolled cigarettes.                                                                                             
                                                                                                                                
Representative  Guttenberg wondered  how  the substance  was                                                                    
manufactured.  He  asked  whether   an  organic  product  or                                                                    
chemicals for  a lab  were required  to make  the substance.                                                                    
Mr.  Dym  responded  that the  process  involved  an  exotic                                                                    
chemistry  that required  quite a  bit of  knowledge, skill,                                                                    
and  equipment.  The  process was  not  a  typical  backyard                                                                    
"clandestine" operation.                                                                                                        
                                                                                                                                
Representative   Guttenberg  asked   whether  there   was  a                                                                    
specific  source  that  provided  most  of  the  product  to                                                                    
Alaska.  Mr.  Dym replied  that  he  did not  have  specific                                                                    
detail   and  that   previous  testimony   had  traced   the                                                                    
production to a couple of overseas companies.                                                                                   
                                                                                                                                
Representative Neuman  asked what the prison  sentence would                                                                    
be for  the possession of  3 grams. Mr.  Luckhaupt responded                                                                    
that the  penalty for a  class A  misdemeanor was up  to one                                                                    
year in  jail and that  the maximum  sentence for a  class C                                                                    
felony  was  up   to  5  years  in  prison.   There  was  no                                                                    
presumptive  term  for a  class  C  felony and  typically  a                                                                    
person who was convicted would  receive a prison sentence of                                                                    
less than one year.                                                                                                             
                                                                                                                                
Representative Neuman  asked about the typical  sentence for                                                                    
three grams of marijuana.                                                                                                       
                                                                                                                                
Co-Chair Stoltze noted that DOL  and the Alaska Court System                                                                    
could  probably provide  more  precise  information. He  had                                                                    
hoped to move  the bill out of committee but  there had been                                                                    
several   fiscal  note   questions  raised   by  Legislative                                                                    
Finance.                                                                                                                        
                                                                                                                                
Representative Wilson  asked how  a police officer  would be                                                                    
able to test whether a driver  was under the influence of K2                                                                    
or Spice.                                                                                                                       
                                                                                                                                
Ms. Kloster replied that  police departments would determine                                                                    
how tests should  be conducted. She explained  that the drug                                                                    
impacted people  much differently than alcohol  did. Current                                                                    
drug testing  methods were not able  to pick up K2  or Spice                                                                    
and tests  for the  drug were more  invasive than  tests for                                                                    
alcohol.                                                                                                                        
                                                                                                                                
Representative Wilson  wondered whether  a blood  test would                                                                    
be a  reliable method to  determine that a person  was under                                                                    
the influence of the drug.  Mr. Luckhaupt responded that the                                                                    
prosecution of a person who  had been under the influence of                                                                    
a controlled  substance was always  problematic. Prosecutors                                                                    
attempted  to prove  a person's  altered  state based  other                                                                    
factors such  as, possession of  drugs, a  person's actions,                                                                    
and  a blood  test  taken at  the time  of  the offence.  He                                                                    
relayed that currently  a test was not  available that would                                                                    
reveal  the  drug.  The  reason   the  person  in  Fairbanks                                                                    
admitted that he  had taken the drug was because  it had not                                                                    
been illegal.                                                                                                                   
                                                                                                                                
1:54:35 PM                                                                                                                    
                                                                                                                                
Representative Wilson wondered  whether prosecution would be                                                                    
based on the possession of  the substance rather than on its                                                                    
ingestion. Mr.  Luckhaupt replied  that proof that  a person                                                                    
was  driving  under  the  influence  (DUI)  would  still  be                                                                    
required.  He communicated  that  it was  difficult but  not                                                                    
impossible  to   convict  a  person  for   being  under  the                                                                    
influence of a controlled substance.                                                                                            
                                                                                                                                
Representative  Gara believed  that  in  previous years  the                                                                    
legislature had  classified too many things  as felonies. He                                                                    
stated that  a misdemeanor was  a serious crime and  was the                                                                    
appropriate  crime level  in some  cases.  He was  concerned                                                                    
about  the  practice of  adding  non-violent  crimes to  the                                                                    
felony list.  He wondered  whether there was  a way  to make                                                                    
the  distribution of  a  significant amount  of  the drug  a                                                                    
felony  and to  make  the  possession of  a  small amount  a                                                                    
misdemeanor.                                                                                                                    
                                                                                                                                
Mr. Luckhaupt  responded that the Judiciary  Committee tried                                                                    
to  reduce the  penalty so  that the  possession of  a small                                                                    
amount would  result in a misdemeanor.  The distribution and                                                                    
sale of  a schedule III  substance was always a  felony. The                                                                    
sale  of  a  schedule  IVA   substance  would  result  in  a                                                                    
misdemeanor.  He  stated  that   dropping  the  level  to  a                                                                    
schedule IVA would be problematic  given that normal THC and                                                                    
the  existing  three  synthetic   THCs  were  classified  as                                                                    
schedule III substances.                                                                                                        
                                                                                                                                
Representative  Gara  asked  whether  it  was  possible  for                                                                    
distribution to  remain a felony  and for the  possession of                                                                    
more than three grams to be classified as a misdemeanor.                                                                        
                                                                                                                                
Mr.  Luckhaupt answered  in  the  affirmative. He  explained                                                                    
that  a fourth  or fifth  degree of  misconduct involving  a                                                                    
controlled substance  could be  created and that  a specific                                                                    
level could be specified for the synthetic THCs.                                                                                
                                                                                                                                
Representative Gara  discussed that felony charges  would be                                                                    
fought much harder than misdemeanor  charges and that it was                                                                    
important to  factor in the  fairness and the costs  of jail                                                                    
time, and prosecution.                                                                                                          
                                                                                                                                
Co-Chair Stoltze opened public testimony.                                                                                       
                                                                                                                                
Vice-Chair  Fairclough  MOVED  to  ADOPT CSHB  7  (JUD)  27-                                                                    
LS0044\T.                                                                                                                       
                                                                                                                                
KATE  BURKHART,   EXECUTIVE  DIRECTOR,  ADVISORY   BOARD  OF                                                                    
ALCOHOLISM AND  DRUG ABUSE, DEPARTMENT OF  HEALTH AND SOCIAL                                                                    
SERVICES, discussed  that the board  was created  by statute                                                                    
to advise  the executive and legislative  branches on issues                                                                    
related to substance abuse. The  board was located under the                                                                    
Department of Health  and Social Services but  did not speak                                                                    
for the  department. She voiced  the board's support  of the                                                                    
legislation. She  delineated that  the chemicals used  in K2                                                                    
were created as part of  a federally funded research project                                                                    
that  studied the  effects of  THC on  the human  brain. The                                                                    
product  was made  in  a highly  sophisticated  lab and  was                                                                    
never intended  for human consumption. The  reported effects                                                                    
of  the  product were  not  similar  to naturally  occurring                                                                    
substances  such as  marijuana.  She  referred to  testimony                                                                    
provided by a  Juneau doctor that discussed  the symptoms of                                                                    
a person who  had been admitted to the  intensive care unit.                                                                    
The  American  Association  of Poison  Control  Centers  had                                                                    
received over  3,000 calls regarding poisoning  incidents in                                                                    
the prior year and 400  calls in January 2011. The substance                                                                    
was implicated  in criminal  activity, DUIs,  violent crime,                                                                    
hallucinations, one known death in  Alaska, and at least one                                                                    
suicide. The product had potential  social costs not only in                                                                    
the  loss of  life and  injury,  but in  emergency room  and                                                                    
medical  costs as  well. The  board felt  strongly that  the                                                                    
substance  should  be  regulated  at  a  higher  level  than                                                                    
marijuana  given   the  severity  of  the   effects  of  the                                                                    
substance.                                                                                                                      
                                                                                                                                
Co-Chair  Stoltze  asked  whether  the  substance  qualified                                                                    
under the  medical marijuana statute  that had  been created                                                                    
by initiative.                                                                                                                  
                                                                                                                                
Ms. Burkhart  replied that it  did not. She  emphasized that                                                                    
K2  was a  manmade product  that  was applied  to a  natural                                                                    
plant base.                                                                                                                     
                                                                                                                                
2:02:38 PM                                                                                                                    
                                                                                                                                
Representative  Edgmon  asked  whether there  had  been  any                                                                    
accounts of the substance  reaching rural Alaska and whether                                                                    
reports of  the impact of  the drug had been  statewide. Ms.                                                                    
Burkhart replied that the board  had only heard reports from                                                                    
urban  areas of  the state.  The board  was concerned  about                                                                    
extensive  reports of  abuse in  the  military. She  relayed                                                                    
that the  U.S. Army had  banned the substance and  had court                                                                    
marshaled  over one  dozen service  members  in Alaska.  The                                                                    
Navy had  also experienced the  same problem. The  board was                                                                    
concerned that  the drug might  infiltrate into  rural areas                                                                    
given  the  potential use  of  the  drug among  the  state's                                                                    
National Guardsmen.                                                                                                             
                                                                                                                                
Representative Neuman asked whether  there were other common                                                                    
drugs or  substances with a similar  chemical structure that                                                                    
could be confused  with K2. Ms. Burkhart  responded that the                                                                    
chemicals  were  very  specific  formulas.  The  bill  would                                                                    
regulate five  very specific  chemical compositions.  Due to                                                                    
the specificity  of the bill,  products that may  be similar                                                                    
were not included.  The board appreciated that  the bill was                                                                    
tracking with  the temporary  federal regulation  enacted by                                                                    
the  Drug Enforcement  Agency and  was following  regulation                                                                    
planned by the  federal government and 13  other states. She                                                                    
believed that  a chemist could manufacture  a substance that                                                                    
was equally  exciting and harmful with  a different chemical                                                                    
composition that would not be controlled by the bill.                                                                           
                                                                                                                                
Co-Chair Stoltze closed public testimony.                                                                                       
                                                                                                                                
Vice-Chair  Fairclough communicated  that  she  had a  young                                                                    
constituent who  had experienced an adverse  reaction to the                                                                    
drug that had  resulted in the girl's inability  to move and                                                                    
subsequently in an emergency room  visit. She was in support                                                                    
of the  bill and  wanted to  make certain  that it  was done                                                                    
correctly. She  believed that there  were only  two national                                                                    
labs that were able to test  for the drug. One lab did urine                                                                    
analysis  and the  other tested  blood.  She wondered  about                                                                    
economic   opportunity  and   whether  something   could  be                                                                    
marketed through SCDL for  other laboratories throughout the                                                                    
state  that  would help  fund  the  position and  provide  a                                                                    
safety net for Alaskans that  were having a violent reaction                                                                    
to the  drug. She  referenced the  fiscal note  and wondered                                                                    
whether  the state  could provide  an engine  to help  other                                                                    
states quantify people taking the  drug. She opined that the                                                                    
issue at  hand was one of  safety and hoped that  anyone who                                                                    
was having an  adverse reaction to the  drug would recognize                                                                    
what  was happening  immediately.  She  hoped that  officers                                                                    
would  ask  the appropriate  questions  to  identify that  a                                                                    
person's reaction  was different  than anticipated  and that                                                                    
medical treatment would be sought immediately.                                                                                  
                                                                                                                                
Vice-Chair Fairclough discussed  the corrected Department of                                                                    
Corrections (DOC) fiscal note #2  that had been changed from                                                                    
zero to almost  $200,000 per person. She  explained that the                                                                    
range listed on the fiscal note  was not very helpful to the                                                                    
committee. She  wondered whether  there was  someone present                                                                    
from the  department that could  speak to  the indeterminate                                                                    
note.                                                                                                                           
                                                                                                                                
2:08:21 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough asked  Representative Munoz to contact                                                                    
DOC regarding the fiscal note.                                                                                                  
                                                                                                                                
Co-Chair  Stoltze clarified  that the  co-chair staff  would                                                                    
contact the department.                                                                                                         
                                                                                                                                
Representative Munoz  agreed that the increased  fiscal note                                                                    
#2 was unclear and that they would communicate with DOC.                                                                        
                                                                                                                                
Co-Chair   Stoltze  noted   that  David   Teal,  Legislative                                                                    
Finance,  and  James   Armstrong,  staff  to  Representative                                                                    
Stoltze would also participate in  a discussion to determine                                                                    
the accuracy of the fiscal note.                                                                                                
                                                                                                                                
Representative  Costello  pointed  out   that  some  of  the                                                                    
documentation referred  to the  substance as a  schedule IIA                                                                    
and in  other areas as a  schedule IIIA. She wanted  to make                                                                    
certain it was shown consistently as schedule IIIA.                                                                             
                                                                                                                                
Representative  Munoz  clarified  that  the  bill  had  been                                                                    
amended   in  the   Judiciary   Committee   to  change   the                                                                    
classification of the substance from IIA to IIIA.                                                                               
                                                                                                                                
Ms.  Kloster relayed  that  the fiscal  notes  would all  be                                                                    
updated to reference the schedule IIIA classification.                                                                          
                                                                                                                                
Representative  Costello  appreciated that  the  legislation                                                                    
had been  introduced. She emphasized  that the drug  had hit                                                                    
the streets of  Anchorage with a tenacity that  needed to be                                                                    
addressed.                                                                                                                      
                                                                                                                                
Representative  Munoz  expressed  that  testimony  from  her                                                                    
community had  moved and motivated  her to help  address the                                                                    
problem.                                                                                                                        
                                                                                                                                
Vice-Chair Fairclough moved  on to fiscal note  #3. The note                                                                    
had  a  $126,800 first  year  impact  that was  followed  by                                                                    
$106,600.  She wondered  whether  the  Department of  Public                                                                    
Safety  (DPS)  could  provide  clarity  on  the  appropriate                                                                    
testing  mechanism  for  the  product,  the  cost,  and  the                                                                    
expected turnaround time. Mr.  Dym responded that there were                                                                    
two tests  available. The first  was a toxicology  test that                                                                    
involved the  analysis of  blood or  urine. The  second test                                                                    
related to the analysis  of solid material possession cases.                                                                    
The  SCDL currently  had no  toxicology program  and testing                                                                    
was outsourced to the State  of Washington. A grant from the                                                                    
Alaska Highway  Safety Office paid  for the  sample testing.                                                                    
He explained  that Washington subcontracted the  work in the                                                                    
case  of synthetic  cannabinoids because  there were  only a                                                                    
few places that  were able to test for the  drug. The fiscal                                                                    
note related  to possession cases  and funded  the necessary                                                                    
workforce to handle the increased  number of submissions and                                                                    
to  ensure the  laboratory maintained  its rapid  turnaround                                                                    
time.                                                                                                                           
                                                                                                                                
Vice-Chair  Fairclough   asked  for  clarification   on  the                                                                    
meaning of rapid turnaround time.  Mr. Dym replied that most                                                                    
drug cases moved to court from  the time of incident in less                                                                    
than 60  days and more  frequently in  45 days. The  lab was                                                                    
turning 68  percent of the drug  cases in less than  31 days                                                                    
and it worked to not exceed the 45-day to 50-day window.                                                                        
                                                                                                                                
Vice-Chair Fairclough  appreciated the  excellent turnaround                                                                    
time. She  asked whether the  fiscal note  contained funding                                                                    
related  to  tests that  were  outsourced  to the  State  of                                                                    
Washington. Mr.  Dym replied  that the  fiscal note  did not                                                                    
include funding  related to  outsourced tests.  He explained                                                                    
that  all  driving  offenses  would  be  handled  under  the                                                                    
department's existing contract and grant money.                                                                                 
                                                                                                                                
2:14:38 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough asked whether  the 480 cases supported                                                                    
by the  fiscal note were  only related to  possession cases.                                                                    
Mr. Dym answered  in the affirmative. The lab  would be able                                                                    
to  handle   up  to  480   samples  before   increasing  the                                                                    
turnaround time.                                                                                                                
                                                                                                                                
Vice-Chair Fairclough asked whether  the fiscal note focused                                                                    
only  on   distributors  and  did   not  cover   people  who                                                                    
experienced  adverse safety  implications. Mr.  Dym answered                                                                    
in  many  cases a  person  suspected  of driving  under  the                                                                    
influence  was also  in possession  of illegal  material. In                                                                    
such cases  an analysis was  conducted on a blood  sample to                                                                    
test for the  DUI and another analysis was  conducted on the                                                                    
substance.                                                                                                                      
                                                                                                                                
Vice-Chair  Fairclough questioned  whether a  blood analysis                                                                    
for  alcohol would  identify  the presence  of  K2. Mr.  Dym                                                                    
replied that the  test would not identify  the substance. He                                                                    
added that when  alcohol was suspected and  the blood sample                                                                    
at  the lab  came  back  negative, the  lab  would send  the                                                                    
sample out for toxicology analysis.                                                                                             
                                                                                                                                
Vice-Chair Fairclough asked whether  local hospitals had the                                                                    
ability to  perform toxicology  testing that  would identify                                                                    
K2 in  the blood  of an  admitted patient.  Mr. Dym  did not                                                                    
know. He  doubted that  they would be  able to  identify the                                                                    
substance given the rarity of expertise on the material.                                                                        
                                                                                                                                
Vice-Chair Fairclough recounted a  story about a young woman                                                                    
who had  been found unconscious.  It had only  been possible                                                                    
to determine  what was wrong  with the girl  because another                                                                    
youth came  forward with information about  a substance that                                                                    
they had  smoked that  they had  thought was  marijuana. She                                                                    
explained  that the  hospital had  run  toxicology tests  to                                                                    
identify the poison in the girl's bloodstream.                                                                                  
                                                                                                                                
Representative  Wilson  asked   whether  the  substance  was                                                                    
routinely tested  for when  a person was  pulled over  for a                                                                    
DUI. She asked  whether a sample that was  sent for analysis                                                                    
would  automatically  be  tested  for  everything.  Mr.  Dym                                                                    
explained  that toxicology  samples were  initially screened                                                                    
for alcohol  and were then  passed on for  further analysis.                                                                    
An officer  or the prosecutor's  office could request  for a                                                                    
sample  to  undergo  additional toxicology  testing  when  a                                                                    
person suspected of impairment  tested negative for alcohol.                                                                    
He  noted  that  the  lab  had  just  received  their  first                                                                    
positive toxicology test.                                                                                                       
                                                                                                                                
Representative Wilson asked  what it would cost  to send all                                                                    
samples to  the State of Washington  for toxicology testing.                                                                    
Mr.  Dym   replied  that  the   fiscal  note   only  covered                                                                    
possession cases that  would go to SCDL.  The lab's contract                                                                    
covered up  to 520  requests per year  and it  believed that                                                                    
there was  enough room to  cover potential DUI  samples that                                                                    
could arise.                                                                                                                    
                                                                                                                                
Representative Guttenberg  pointed to Page 2,  Sections 7-16                                                                    
of the bill that described  various compounds. In Section 16                                                                    
the  bill discussed  ensuring  that  similar compounds  were                                                                    
included. He  communicated that the  bill appeared  to focus                                                                    
on  specific  definitions  and  also  included  language  to                                                                    
prevent  the exclusion  of  certain  products with  slightly                                                                    
altered  chemical  compositions.  He  wondered  whether  any                                                                    
other  products  could  potentially be  included  under  the                                                                    
description in the bill.                                                                                                        
                                                                                                                                
Mr.  Dym  answered  that  the   bill  included  language  on                                                                    
geometric   or  positional   isomers.   He  explained   core                                                                    
components  had been  identified that  could be  modified by                                                                    
chemists.  Language about  positional isomers  took care  of                                                                    
most items that  could be similar. He  noted that explaining                                                                    
the  chemical  terms  and definitions  would  put  a  slight                                                                    
burden on the lab particularly  in court. He delineated that                                                                    
the  bill would  not cover  a new  drug but  it would  cover                                                                    
cases  in which  there  had been  rapidly modified  chemical                                                                    
tweaks.                                                                                                                         
                                                                                                                                
Representative  Guttenberg  asked   whether  the  focus  was                                                                    
limited to  the particular  drug and  did not  include items                                                                    
that it  did not intend,  such as aspirin. Mr.  Dym believed                                                                    
that the language  in the bill was specific to  the class of                                                                    
synthetic  cannabinoids and  others that  were very  closely                                                                    
related.                                                                                                                        
                                                                                                                                
Ms.  Kloster  discussed  that   the  bill  updated  language                                                                    
related to schedule  III drugs that was  similar to existing                                                                    
language  for  schedule II  drugs.  She  discussed that  the                                                                    
removal of one molecule would  not have a significant effect                                                                    
on the substance.                                                                                                               
                                                                                                                                
Representative Guttenberg  wanted to  make certain  that the                                                                    
bill did  not include a  substance that they did  not intend                                                                    
to make illegal.                                                                                                                
                                                                                                                                
Representative Doogan  cited concern  about fiscal  note #4.                                                                    
He  discussed that  the drug  was probably  not produced  in                                                                    
Alaska, there was no test in  Alaska to determine use of the                                                                    
substance,  and only  one positive  test  had been  received                                                                    
from  an  outsourced lab.  He  did  not understand  how  the                                                                    
fiscal note could be $126,000 and  was not inclined to add a                                                                    
position given the  lack of evidence that there  was a need.                                                                    
He  explained that  a position  could always  be added  at a                                                                    
later time in the event that  the substance turned out to be                                                                    
widespread.                                                                                                                     
                                                                                                                                
2:25:22 PM                                                                                                                    
                                                                                                                                
Co-Chair   Stoltze   remarked   that  there   would   be   a                                                                    
conversation with  his staff, the  Office of  Management and                                                                    
Budget  (OMB),  and the  sponsor  and  regarding the  fiscal                                                                    
notes.                                                                                                                          
                                                                                                                                
Vice-Chair Fairclough hoped to  communicate that there was a                                                                    
harmful substance  in Alaska that  looked similar  to rolled                                                                    
marijuana  and that  people should  be  aware that  products                                                                    
were  labeled  controlled  substances   for  a  reason.  She                                                                    
relayed that  people should  be careful  and that  they were                                                                    
risking their lives by using the substance.                                                                                     
                                                                                                                                
Representative  Gara  wondered   whether  prosecutions  that                                                                    
would  occur  as  a  result of  the  legislation  should  be                                                                    
included in a  fiscal note from the  Public Defender Agency,                                                                    
DOL, or the Office of Public Advocacy.                                                                                          
                                                                                                                                
Co-Chair Stoltze  reported that DOL was  following the issue                                                                    
and that  there would be  a conversation with OMB  about the                                                                    
fiscal notes.                                                                                                                   
                                                                                                                                
HB  7   was  HEARD  and   HELD  in  committee   for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 3                                                                                                              
                                                                                                                                
    "An Act relating to issuance of driver's licenses."                                                                         
                                                                                                                                
2:29:20 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough moved CSHB 3 (STA) 27-LS0010\X.                                                                           
                                                                                                                                
REPRESENTATIVE BOB  LYNN, SPONSOR,  explained that  the bill                                                                    
was   very  different   from  legislation   that  had   been                                                                    
introduced the  previous session. Currently a  person in the                                                                    
country with  a passport, visa,  or green card  that expired                                                                    
the  following day  could still  get a  driver's license  in                                                                    
Alaska that would last for  five years. He explained that HB                                                                    
3 would allow the Division  of Motor Vehicles (DMV) to issue                                                                    
a license  that would  match the  term of  the non-citizen's                                                                    
legal presence document. He stated  that a visa that expired                                                                    
in  six months  time would  mean that  the driver's  license                                                                    
would expire at the same time.                                                                                                  
                                                                                                                                
THOMAS  REIKER, STAFF,  REPRESENTATIVE  BOB LYNN,  explained                                                                    
that  the Department  of Homeland  Security was  responsible                                                                    
for  determining whether  a foreign  national could  stay in                                                                    
the  U.S.  and   that  it  was  important   to  ensure  that                                                                    
legislation  would not  contradict  any ruling  made by  the                                                                    
federal  government.  The  bill  would put  an  end  to  the                                                                    
contradiction  by   allowing  the  DMV  to   issue  driver's                                                                    
licenses  for less  than five  years  when the  length of  a                                                                    
person's  authorized  stay was  less  than  five years.  The                                                                    
legislation  would  ensure  that a  person's  license  would                                                                    
expire on  the same date  as their legal presence.  A person                                                                    
who was  authorized to stay  in the U.S.  indefinitely would                                                                    
have  a  license that  expired  in  one  year and  it  would                                                                    
require  annual  renewal  until  they  received  a  definite                                                                    
length of  legal stay. Annual  renewal fees would  be waived                                                                    
and applicants could  renew by mail for up to  five years to                                                                    
prevent an overly  burdensome process for people  who had an                                                                    
indefinite  length  of authorized  stay.  The  bill did  not                                                                    
include ID  cards which were  controlled by  regulation. The                                                                    
DMV  had sufficient  statutory authority  to  change the  ID                                                                    
cards  and  intended  to  match  the  terms  that  would  be                                                                    
implemented   for  licenses   under   the  legislation.   He                                                                    
emphasized  that  the  bill  did not  make  changes  to  the                                                                    
application  process  for  driver's  licenses  and  did  not                                                                    
require a person  to offer proof of  their authorized length                                                                    
of stay to  obtain a license. However, a  person who applied                                                                    
for a  license with a  visa, passport, or  other immigration                                                                    
document  would receive  a license  that was  linked to  the                                                                    
length of stay listed on the document.                                                                                          
                                                                                                                                
2:34:20 PM                                                                                                                    
                                                                                                                                
Representative  Wilson wondered  how  the license  extension                                                                    
process  would work  by mail.  Mr. Reiker  responded that  a                                                                    
person  would  need  to  be  physically  present  when  they                                                                    
applied for  their initial license  and that  renewals could                                                                    
be  done by  mail.  He  believed that  a  copy of  extension                                                                    
paperwork provided  by the U.S. Citizenship  and Immigration                                                                    
Services  would be  sufficient documentation  for a  license                                                                    
extension by mail.                                                                                                              
                                                                                                                                
Representative Lynn  clarified that  the bill  was primarily                                                                    
focused on visitors to the U.S., not immigrants.                                                                                
                                                                                                                                
Representative Wilson  asked whether a person  that received                                                                    
an extension on their length  of stay could provide the same                                                                    
paperwork repeatedly  to obtain  future extensions  of their                                                                    
driver's  license. Mr.  Reiker confirmed  that an  applicant                                                                    
would be required  to send in documentation  that provided a                                                                    
new  authorized   length  of  stay  or   that  extended  the                                                                    
indefinite period.                                                                                                              
                                                                                                                                
Representative Gara  wondered whether a person  could obtain                                                                    
a  license  if  they   had  submitted  a  valid  immigration                                                                    
application and  were in Alaska  because they were  a victim                                                                    
of domestic violence.                                                                                                           
                                                                                                                                
Representative Lynn  responded that a person  could obtain a                                                                    
driver's  license   for  the  period   of  time   they  were                                                                    
authorized to  stay. An indefinite  status would  allow them                                                                    
to  receive a  license  for a  one-year  period. Mr.  Reiker                                                                    
agreed.                                                                                                                         
                                                                                                                                
Representative  Gara  communicated  that  a  person  with  a                                                                    
pending application  would not  have obtained  an authorized                                                                    
period of stay.                                                                                                                 
                                                                                                                                
Co-Chair  Stoltze asked  whether the  default was  one year.                                                                    
Mr. Reiker  replied that the term  "indefinite" was slightly                                                                    
misleading.  He  explained that  a  more  accurate word  was                                                                    
"pending." A  person would be  able to obtain a  license for                                                                    
one year if  they could provide proof that  they had applied                                                                    
for authorized stay  status. In order to  extend the license                                                                    
after the one-year  period the person would  have to provide                                                                    
proof that their status had been adjudicated.                                                                                   
                                                                                                                                
Representative  Gara relayed  that  under  the current  bill                                                                    
only a person with an  authorized stay would be permitted to                                                                    
obtain a  driver's license. He  believed the  language would                                                                    
need to  be changed if  the goal  was to include  people who                                                                    
had a valid application  underway. Mr. Reiker responded that                                                                    
the sponsor  would be okay  with changing the  language from                                                                    
"indefinite"  to "pending."  He  believed  the change  would                                                                    
address the concern that had been raised.                                                                                       
                                                                                                                                
Representative Gara  explained that the language  would also                                                                    
need to be amended to  say something other than "authorized"                                                                    
because a  pending application  would mean  that it  had not                                                                    
yet been authorized.                                                                                                            
                                                                                                                                
WHITNEY  BREWSTER,  DIRECTOR,  DIVISION OF  MOTOR  VEHICLES,                                                                    
DEPARTMENT    OF   ADMINISTRATION    (via   teleconference),                                                                    
discussed  that   HB  3  allowed   the  DMV   to  promulgate                                                                    
regulations to shorten  the length of time that  it issued a                                                                    
driver's license  for. The zero  fiscal note  reflected that                                                                    
the legislation would not impact  the existing procedures of                                                                    
the DMV.  The only  change would be  that the  license would                                                                    
expire  at  a different  time  than  the standard  five-year                                                                    
period.  Currently the  DMV required  proof  of legal  name,                                                                    
date of birth, resident  address, and social security number                                                                    
(if  one existed).  Immigrants would  typically present  the                                                                    
DMV  with  a  permanent   resident  card  and  international                                                                    
visitors  typically  provided  a passport  and  accompanying                                                                    
visa. The documents were commonly  seen at the DMV and under                                                                    
the legislation  a license would  expire at the time  of the                                                                    
legal document expiration. She believed  it was important to                                                                    
note  that the  DMV received  and honored  letters from  the                                                                    
United States  Citizenship and Immigration  Services (USCIS)                                                                    
on  a regular  basis.  The documents  would  continue to  be                                                                    
honored  by the  division. She  explained that  there was  a                                                                    
specific  category for  victims who  were granted  temporary                                                                    
legal stay  while their cases  were under  investigation and                                                                    
that  U.S.  Immigration  and  Customs  Enforcement  and  law                                                                    
enforcement  were familiar  with  the process.  She had  met                                                                    
with the USCIS and  U.S. Immigration and Customs Enforcement                                                                    
regarding  the  specific  topic   and  felt  satisfied  that                                                                    
victims  were   protected  and  would  not   face  immediate                                                                    
deportation.                                                                                                                    
                                                                                                                                
2:43:39 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough believed  she had  attended the  same                                                                    
meeting. Ms. Brewster replied in the affirmative.                                                                               
                                                                                                                                
Vice-Chair  Fairclough relayed  that  she had  met with  law                                                                    
enforcement and  the federal  government during  the interim                                                                    
to discuss  concerns she  had expressed  about the  bill the                                                                    
prior  session.  She  had  been assured  that  a  victim  of                                                                    
domestic violence or sex trafficking  would be given a valid                                                                    
residency status for  a temporary period within  24 hours to                                                                    
48  hours.  She  believed  the  particular  issue  had  been                                                                    
sufficiently  managed. She  wondered why  the State  Affairs                                                                    
Committee had changed  language in the bill  from "shall" to                                                                    
"may."  She   also  asked  DOL   about  the   definition  of                                                                    
"indefinite" in regards to the bill.                                                                                            
                                                                                                                                
Mr. Reiker  noted that DMV  had some concern that  the five-                                                                    
year length  of time was  laid out  in statute and  that the                                                                    
division was  not authorized  to promulgate  regulations for                                                                    
driver's  licenses.   The  sponsor   did  not  want   to  be                                                                    
restrictive of  DMV and  decided that  the bill  should read                                                                    
"may"  and  not  "shall."  Representative  Paul  Seaton  and                                                                    
others had expressed concerns that  the bill would be overly                                                                    
burdensome  on   people  with   an  indefinite   or  pending                                                                    
authorized stay.  In order to address  the concerns language                                                                    
had been  included to  allow the  division to  waive renewal                                                                    
fees and  to enable people  to complete the  renewal process                                                                    
by mail.                                                                                                                        
                                                                                                                                
Vice-Chair  Fairclough read  from the  original legislation,                                                                    
"If  a   period  of  authorized   stay  is   indefinite  the                                                                    
department may  not issue the  license with the  validity of                                                                    
greater  than  a  year." She  explained  that  the  original                                                                    
premise  was for  the DMV  to have  the ability  to issue  a                                                                    
license for  anywhere up to  a year and the  current version                                                                    
of  the  legislation  would   give  individuals  a  one-year                                                                    
license regardless  of their length  of stay in  Alaska. Mr.                                                                    
Reiker replied  that she was  correct. Their  office learned                                                                    
in a  discussion with U.S. Immigration  and Customs Services                                                                    
for the State  of Alaska that the office  provided 30-day to                                                                    
90-day  extensions to  people with  indefinite status.  They                                                                    
did  not want  people in  the middle  of the  process to  be                                                                    
required  to  apply  for  a   new  license  every  30  days.                                                                    
Additionally, they  did not want  the department to  take on                                                                    
the cost of issuing a new license every 30 days.                                                                                
                                                                                                                                
Vice-Chair  Fairclough emphasized  that  the department  had                                                                    
expressed  its need  for flexibility  around its  ability to                                                                    
determine the length of time  a license would be issued. She                                                                    
thought  the intent  of the  bill was  to match  licenses to                                                                    
other  documentation. She  was not  opposed to  the language                                                                    
and she  did not want a  person who had applied  for a valid                                                                    
stay in  the U.S. to  have to go  through a hurdle  every 30                                                                    
days and did  not want to burden the  department, however, a                                                                    
mandate  that  required  the department  to  issue  one-year                                                                    
licenses  would deny  the it  flexibility. She  repeated her                                                                    
earlier  question to  DOL regarding  the  definition of  the                                                                    
term "indefinite" for the purposes of the legislation.                                                                          
                                                                                                                                
2:50:27 PM                                                                                                                    
                                                                                                                                
ERLING JOHANSEN,  ASSISTANT ATTORNEY GENERAL,  DEPARTMENT OF                                                                    
LAW (via teleconference), responded  that in relation to the                                                                    
bill  the  term  "indefinite" meant  "non-finite"  terms.  A                                                                    
pending  application  and  a continuing  authorization  were                                                                    
both examples of a non-finite term.                                                                                             
                                                                                                                                
Vice-Chair Fairclough  remarked that for Webster's  the term                                                                    
meant continuing  on and  on, which  was different  than the                                                                    
definition  that had  been presented  to the  committee. The                                                                    
provided  definition  indicated  that  there  was  something                                                                    
pending  that was  awaiting an  action that  would determine                                                                    
when the indefinite period ended.                                                                                               
                                                                                                                                
Mr. Reiker agreed with the  interpretation. He also believed                                                                    
that their  Webster's working definition for  indefinite was                                                                    
"not  definite."  He  understood   that  it  could  also  be                                                                    
interpreted to mean "in perpetuity."                                                                                            
                                                                                                                                
Representative   Guttenberg   noted    the   Department   of                                                                    
Administration's  zero  fiscal  note. He  wondered  what  it                                                                    
would take  to familiarize DMV employees  with documentation                                                                    
and   whether  staff   would  phone   the  Immigration   and                                                                    
Naturalization  Service  (INS)  [now  called  United  States                                                                    
Citizenship and Immigration Services]  or go online in order                                                                    
to  authorize the  issuance of  a new  driver's license.  He                                                                    
wondered how the  department was prepared to  handle the new                                                                    
procedures that would be required under the legislation.                                                                        
                                                                                                                                
Ms. Brewster responded that the  DMV was currently receiving                                                                    
immigration  documents  and  that   there  would  not  be  a                                                                    
substantial  change from  the  current  process. The  change                                                                    
would be  to the expiration  date of the license  that would                                                                    
match the date on the  provided documents. The training that                                                                    
would be required would be  minimal and could be absorbed in                                                                    
the  current  DMV budget.  She  elaborated  that DMV  had  a                                                                    
strong  relationship  with  USCIS  and they  would  have  no                                                                    
problem asking for assistance if necessary.                                                                                     
                                                                                                                                
Representative Edgmon  discussed that the bill  could impact                                                                    
Alaskan communities like Sand  Point, King Cove, Akutan, and                                                                    
Unalaska, in a  way that had not been  anticipated. He asked                                                                    
how  the DMV  would  handle communities  that  did not  have                                                                    
year-round  DMV service.  Ms. Brewster  noted that  Unalaska                                                                    
was the  only community  listed that  had a  year-round DMV.                                                                    
She did not believe a  substantial change would occur in the                                                                    
areas  where there  were a  number of  cannery workers.  She                                                                    
explained  that  the  requirements   to  obtain  a  driver's                                                                    
license  were   in  statute  and   would  not   change.  The                                                                    
requirements included  proof of  legal name, date  of birth,                                                                    
residence, and  social security card  (if one  existed). The                                                                    
only  significant change  would be  that a  person's license                                                                    
would expire  at the time  of the  legal stay listed  on the                                                                    
authorization documentation.                                                                                                    
                                                                                                                                
2:56:35 PM                                                                                                                    
                                                                                                                                
MR.  JEFFREY  MITTMAN,  EXECUTIVE DIRECTOR,  AMERICAN  CIVIL                                                                    
LIBERTIES  UNION OF  ALASKA (via  teleconference), testified                                                                    
that the  union's concern was  related to the  potential for                                                                    
differential  treatment of  immigrants.  The union  believed                                                                    
that the  bill raised  constitutional issues related  to the                                                                    
equal  protection rights  of immigrants.  Immigrants were  a                                                                    
suspect  class under  most  federal  discrimination law  and                                                                    
would receive a different  and second-class type of license.                                                                    
There  could   be  a   reasonable  government   interest  in                                                                    
providing  the differential  class of  license in  the event                                                                    
that  the term  of stay  was related  to a  person's safety,                                                                    
ability to  drive, or the  DMV mandate of  issuing licenses.                                                                    
He explained that because the  purpose of a driver's license                                                                    
was to identify that a person  was a safe driver the idea of                                                                    
a second-class  type of license raised  significant concerns                                                                    
that a court may have contention with.                                                                                          
                                                                                                                                
Representative Gara  was concerned that  a person who  had a                                                                    
valid application  in for legal  presence in the  U.S. would                                                                    
not be covered under  the bill's "authorized stay" language.                                                                    
Mr.  Mittman responded  that the  union believed  that there                                                                    
were some  language problems with  the bill and  the problem                                                                    
at  hand   put  the  DMV   in  the  position  of   making  a                                                                    
determination that  would be best  made by a federal  INS or                                                                    
immigration  agency.  He  explained  that  it  was  an  open                                                                    
question  that  did not  relate  to  a person's  ability  to                                                                    
safely drive  a vehicle or  understand road laws.  The union                                                                    
believed  that the  new  law would  deny  an individual  the                                                                    
right to obtain  a license under a procedure  that all other                                                                    
individuals were entitled to.                                                                                                   
                                                                                                                                
Vice-Chair Fairclough  wondered whether Mr. Mittman  saw any                                                                    
reference  to  the  immigration  issue  in  the  legislation                                                                    
before the  committee. Mr. Mittman responded  that the issue                                                                    
was related  to an individual's length  of stay. Information                                                                    
had  been   provided  that  pertained  to   lawful  presence                                                                    
requirements   that  many   states  could   constitutionally                                                                    
implement. However,  the union believed  that it would  be a                                                                    
reasonable assumption  that a  differential type  of license                                                                    
would  be  related  to a  person's  immigration  status.  He                                                                    
explained  that presumably  every U.S.  citizen was  able to                                                                    
stay in the country for  an indefinite period that was until                                                                    
their  death. Presuming  the intention  of the  bill was  to                                                                    
provide  differential  licenses to  people  who  may not  be                                                                    
citizens  or  lawful  permanent  residents  the  presumption                                                                    
would be  that the majority of  the people would be  in some                                                                    
sort of immigrant status.                                                                                                       
                                                                                                                                
Vice-Chair  Fairclough discussed  that DMV  was specifically                                                                    
required to provide a license  for five years and that there                                                                    
were  reasons  that  the  division might  want  to  limit  a                                                                    
driver's license  that were  outside of  immigration issues.                                                                    
She explained that  the law before the  committee was taking                                                                    
a  step to  meet the  specific need  and that  she had  also                                                                    
introduced  a piece  of legislation  that worked  to provide                                                                    
DMV with  the flexibility  to issue a  license for  a period                                                                    
that  was different  than five  years. Mr.  Mittman answered                                                                    
that there could be a  constitutionally appropriate and non-                                                                    
discriminatory  reason for  having  a differential  license.                                                                    
His concern was that as HB  3 was currently drafted the bill                                                                    
was  susceptible  to  discriminatory  treatment  that  could                                                                    
violate federal constitutional standards.                                                                                       
                                                                                                                                
Representative Wilson did not  understand why there would be                                                                    
an objection  to the  issuance of  licenses for  a different                                                                    
period of  time. She recognized  that it would be  one thing                                                                    
to issue  a license that  looked notably different  from the                                                                    
standard  license,  but that  everyone  in  the room  had  a                                                                    
different expiration date on their license.                                                                                     
                                                                                                                                
Mr.  Mittman  replied that  the  change  made by  the  State                                                                    
Affairs  Committee that  lessened the  burden on  renewing a                                                                    
license  was  an  improvement  on  the  original  bill.  The                                                                    
differential  treatment  was  related  the  more  burdensome                                                                    
process that  individuals who could  be of  immigrant status                                                                    
would have  to undergo  on an  annual basis.   Additionally,                                                                    
there  was  concern  about  regulatory  processes  that  may                                                                    
provide discretion  for a DMV  employee to require  a person                                                                    
who  they  thought  looked  like  an  immigrant  to  provide                                                                    
differential documentation.                                                                                                     
                                                                                                                                
3:04:16 PM                                                                                                                    
                                                                                                                                
Representative Joule  asked whether a citizen  in the United                                                                    
States had  a bit more  of an advantage than  a non-citizen.                                                                    
Mr.  Mittman  remarked   that  there  were  constitutionally                                                                    
permissible  instances where  citizens  had certain  rights,                                                                    
privileges, or opportunities that  non-citizens did not. The                                                                    
union believed  that the federal  government would  not find                                                                    
it appropriate  to treat an immigrant  differentially in the                                                                    
case of the issuance of a driver's license.                                                                                     
                                                                                                                                
Vice-Chair  Fairclough wondered  whether a  driver's license                                                                    
was  a right  or a  privilege. Mr.  Mittman replied  that in                                                                    
many  states a  driver's license  was a  privilege. However,                                                                    
once  a   state  instituted   policies  or   procedures  for                                                                    
individuals   obtaining  licenses,   there   could  not   be                                                                    
inappropriately discriminatory  processes for  providing the                                                                    
privilege.                                                                                                                      
                                                                                                                                
Vice-Chair Fairclough believed that  driving in the state of                                                                    
Alaska was a privilege.                                                                                                         
                                                                                                                                
Representative  Wilson  noted  that a  problem  was  created                                                                    
because a driver's license was  used as a legal document for                                                                    
things unrelated to driving.                                                                                                    
                                                                                                                                
Co-Chair Stoltze closed public testimony.                                                                                       
                                                                                                                                
Representative  Gara  asked whether  a  person  that fled  a                                                                    
domestic  violence situation  or persecution  in their  home                                                                    
country and  had a valid  application in for  legal presence                                                                    
in the  U.S. would be  covered under the  bill's "authorized                                                                    
stay" language.                                                                                                                 
                                                                                                                                
Mr. Johansen  understood that a  person who was in  the U.S.                                                                    
legally   that  experienced   trouble  providing   proof  of                                                                    
identity  could go  to the  appropriate  federal agency  for                                                                    
temporary  authorization  or application  pending  paperwork                                                                    
that would  be accepted  by the DMV.  He explained  that his                                                                    
understanding was  in part  based on  a meeting  he attended                                                                    
with state and federal agencies earlier in the year.                                                                            
                                                                                                                                
Ms. Brewster understood that under  the legislation a person                                                                    
that applied  for legal  status from  USCIS would  receive a                                                                    
pending letter  and that the  DMV would issue a  license for                                                                    
one year  as required  in the  indeterminate section  of the                                                                    
bill.                                                                                                                           
                                                                                                                                
Representative Gara  was happy provided that  the department                                                                    
made a  commitment to  its understanding  of the  issue. Ms.                                                                    
Brewster replied that was her commitment to the committee.                                                                      
                                                                                                                                
Co-Chair Stoltze discussed the zero fiscal note.                                                                                
                                                                                                                                
3:10:55 PM                                                                                                                    
                                                                                                                                
Co-Chair  Thomas  MOVED  to  report  CSHB  3  (STA)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
CSHB 3 (STA) was REPORTED out  of committee with a "do pass"                                                                    
recommendation  and with  previously  published zero  impact                                                                    
note: FN #1 (DOA).                                                                                                              
                                                                                                                                
HOUSE BILL NO. 119                                                                                                            
                                                                                                                                
     "An  Act  relating  to  the  procurement  of  supplies,                                                                    
     services, professional  services, and  construction for                                                                    
     the   Alaska   Industrial    Development   and   Export                                                                    
     Authority; relating to the definition  of 'own' for the                                                                    
     economic   development   account;   relating   to   the                                                                    
     definitions   of    'development   project',   'plant',                                                                    
     'facility',  and 'project'  for  the Alaska  Industrial                                                                    
     Development and Export Authority;  and providing for an                                                                    
     effective date."                                                                                                           
                                                                                                                                
3:11:54 PM                                                                                                                    
                                                                                                                                
MARK DAVIS, ECONOMIC  DEVELOPMENT OFFICER, ALASKA INDUSTRIAL                                                                    
DEVELOPMENT  AND EXPORT  AUTHORITY,  discussed  that HB  119                                                                    
worked to  modernize the  Alaska Industrial  Development and                                                                    
Export  Authority (AIDEA).  The bill  allowed the  agency to                                                                    
have  the  same  procurement   provisions  as  other  public                                                                    
corporations  in the  state,  including  the Alaska  Housing                                                                    
Finance Corporation.  The agency would also  be permitted to                                                                    
own  a percentage  of  a project  it  developed through  the                                                                    
means  of  a  corporation  or a  limited  liability  company                                                                    
(LLC). The  previous year the legislature  had allowed AIDEA                                                                    
to own  a percentage of  a project; however,  DOL determined                                                                    
that the percentage did not  clearly provide the agency with                                                                    
the power to be a member of an LLC.                                                                                             
                                                                                                                                
Mr. Davis  discussed that the  agency also sought  to expand                                                                    
the types  of projects  it could undertake.  Currently AIDEA                                                                    
could do natural  resources, energy, tourism infrastructure,                                                                    
and   industrial  development   projects.  The   agency  was                                                                    
provided  the  opportunity  to   invest  in  a  health  care                                                                    
facility  that would  be leased  to the  federal government;                                                                    
however,  DOL determined  that AIDEA  was not  authorized to                                                                    
invest in a health clinic.  Additionally, AIDEA was asked to                                                                    
construct a  facility that it  would build and lease  to the                                                                    
Coast  Guard, but  it  was  denied the  ability  to build  a                                                                    
federal facility.  Other expansions  would be  for community                                                                    
public  purpose,  transportation, and  prototype  commercial                                                                    
applications.  The agency  had conducted  a survey  of other                                                                    
economic  development authorities  throughout  the U.S.  and                                                                    
had discovered that most of  the agencies had the ability to                                                                    
support new technologies  or new prototypes as a  way to use                                                                    
state development capital to  promote the diversification of                                                                    
the state economy. The  legislation added clarification that                                                                    
AIDEA  could build  roads. The  current statute  allowed the                                                                    
agency to  build a road  to a natural  resource development,                                                                    
such as  the DeLong  Mountain Transportation System  for the                                                                    
Red Dog  Mine; however,  it was not  clear whether  it could                                                                    
build a road that was not  directly lined up with a project.                                                                    
He explained that if the  agency could get revenues from the                                                                    
road it would  do so. The caveat was that  anything built on                                                                    
the transportation  of roads would  need to pay  for itself,                                                                    
be  a project  that was  bondable,  and would  have to  meet                                                                    
economic development  goals; therefore it could  not be used                                                                    
for general transportation.                                                                                                     
                                                                                                                                
3:15:24 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough moved CSHB 119 (EDT) 27-GH1745\M.                                                                         
                                                                                                                                
Representative  Gara  asked  whether the  legislation  would                                                                    
allow AIDEA to  underwrite and fund something  like the Knik                                                                    
Arm crossing. Mr.  Davis did not believe that  it would. The                                                                    
agency's   current   reserves   limited  bonding   for   any                                                                    
particular  project   to  between  $250  million   and  $300                                                                    
million.  He believed  that the  bridge would  be much  more                                                                    
expensive.  The  agency's  intent   was  to  build  economic                                                                    
development projects;  therefore, the transportation  of the                                                                    
roads it would  build would lead to  an economic development                                                                    
project that  would be  tied to one  of the  agency's stated                                                                    
purposes.                                                                                                                       
                                                                                                                                
Representative Gara  referred to  the "omnibus  energy" bill                                                                    
passed  in the  previous  session that  created a  revolving                                                                    
loan fund  to help  private businesses upgrade  their energy                                                                    
efficiencies.  He believed  that  the fund  had been  placed                                                                    
under AIDEA but not under  the Alaska Energy Authority (AEA)                                                                    
that  governed   energy  efficiency  matters.   He  wondered                                                                    
whether  AIDEA  would  have  any  objection  to  moving  the                                                                    
revolving loan fund over to  AEA. Mr. Davis replied that the                                                                    
fund belonged  under AEA  and that  AIDEA was  not concerned                                                                    
with the energy conservation  efforts that were conducted by                                                                    
its sister agency.                                                                                                              
                                                                                                                                
Representative  Gara wondered  why  AIDEA  should be  exempt                                                                    
from the state procurement code.  Mr. Davis replied that the                                                                    
agency  was not  looking for  a total  exemption. The  board                                                                    
could adopt  regulations through  a public process  when the                                                                    
agency worked  on a development project  with another entity                                                                    
like the  Alaska Housing Finance  Corporation. A  person who                                                                    
had a  disagreement with the  procurement would  be required                                                                    
to file a  protest with the board of AIDEA  and not with the                                                                    
Departments  of  Transportation  and  Public  Facilities  or                                                                    
Administration. The  process would be faster  given that the                                                                    
board  would  have  the  expertise  on  what  it  wished  to                                                                    
purchase.  He  believed  that  the  streamlined  system  was                                                                    
better for the agency and for protestors.                                                                                       
                                                                                                                                
MR.  TED  LEONARD,  EXECUTIVE  DIRECTOR,  ALASKA  INDUSTRIAL                                                                    
DEVELOPMENT  AND  EXPORT   AUTHORITY  (via  teleconference),                                                                    
discussed that  the bill worked  to provide AIDEA  with more                                                                    
tools that would  help it to be effective when  it worked on                                                                    
development projects with the private sector.                                                                                   
                                                                                                                                
Representative  Neuman liked  the  type  of legislation.  He                                                                    
referenced  the  Alaska  Administrative  Procedure  Act  and                                                                    
procurement codes. He wondered  about the "basic sideboards"                                                                    
of  the  maximum  funding  that  was  available.  Mr.  Davis                                                                    
responded that  AS 36.30.170(b) referenced  on Page  2, Line                                                                    
11,  would require  a  bidder to  have  business license  as                                                                    
proof that  they conducted business  in the state.  The bill                                                                    
dealt with procurement for  development finance and required                                                                    
an  agency to  request  bids when  they  wanted to  purchase                                                                    
items  such as  computers or  desks. He  relayed that  there                                                                    
would not be changes to the prevailing wage requirements.                                                                       
                                                                                                                                
Representative  Neuman asked  whether  there  was a  maximum                                                                    
amount  of  money  that  AIDEA  could  spend  to  develop  a                                                                    
corporation. Mr.  Davis replied  that the limits  were based                                                                    
on  the amount  of available  cash for  a project  and could                                                                    
vary  depending   upon  the  amount  of   reserve  cash.  He                                                                    
discussed that there  was an open process and  the board was                                                                    
required to  approve spending. The current  buying authority                                                                    
was  approximately $250  million.  Additionally, the  agency                                                                    
was required to seek legislative  approval for any bond over                                                                    
$10  million and  approval from  local  communities for  any                                                                    
bond over $6 million. There  was a $400 million annual limit                                                                    
on the number of bonds AIDEA could issue.                                                                                       
                                                                                                                                
Representative Neuman  was glad to  hear AIDEA had  at least                                                                    
$150  million. He  asked  whether  manufacturing would  fall                                                                    
under the "project"  definition on Page 3,  Section 6, which                                                                    
read  "a plant  or  facility  used or  intended  for use  in                                                                    
connection with making,  processing, preparing, transporting                                                                    
or  producing…"  He  wondered whether  manufacturing  was  a                                                                    
factor  when AIDEA  looked at  different development  plants                                                                    
and  the  development  of   Alaska's  resources.  Mr.  Davis                                                                    
responded   that  AIDEA   was   formed   as  an   industrial                                                                    
development  authority and  had always  been focused  on job                                                                    
development   under   AS   44.88.010.  He   expressed   that                                                                    
manufacturing  was one  of the  agency's goals  when it  was                                                                    
available.                                                                                                                      
                                                                                                                                
3:24:31 PM                                                                                                                    
                                                                                                                                
Representative  Doogan asked  about  the cash  limit of  the                                                                    
agency. Mr. Davis  replied that there were two  ways to look                                                                    
at the  cash limit. First, under  AIDEA's Loan Participation                                                                    
Program, loans were  capped at a maximum of  $20 million per                                                                    
loan. The  amount the  agency could  invest in  a particular                                                                    
project was based  on its cash reserves and  it was required                                                                    
to seek legislative approval for  any bond over $10 million.                                                                    
Additionally,  the  agency  was  required  to  obtain  board                                                                    
approval, hold  a public hearing,  file a finance  plan, and                                                                    
to obtain  the approval  of local  communities for  any bond                                                                    
exceeding $6 million.                                                                                                           
                                                                                                                                
Representative  Doogan  understood  that  there  were  legal                                                                    
definitions about how the LLCs  would work. He was concerned                                                                    
about the state's  legal and factual liability  in the event                                                                    
that a project under one of AIDEA's LLCs went "belly-up."                                                                       
                                                                                                                                
Mr. Davis replied that AIDEA's  bonds for a project were not                                                                    
moral obligations of  the state by statute.  Any recourse on                                                                    
a bond  would go  to AIDEA  or to the  project itself  if it                                                                    
were  a revenue  bond. The  use of  an LLC  to effectuate  a                                                                    
development project would mean  that anyone seeking recourse                                                                    
would go against the assets of  the LLC first and would have                                                                    
to show there was an ability  to go beyond that by "piercing                                                                    
the corporate veil."  Usually when an LLC  went bankrupt the                                                                    
assets  were those  of the  LLC. The  agency was  seeking to                                                                    
coordinate with  other investors  to leverage its  funds and                                                                    
as they looked  at determining what percentage  of a project                                                                    
they  would undertake,  the developers  notified AIDEA  that                                                                    
they  would  need a  legal  structure  in order  to  conduct                                                                    
business with the  agency. The LLC would be the  same as any                                                                    
other LLC on the market and  the intention of the agency was                                                                    
to  work  with other  investors.  He  elaborated that  there                                                                    
would also  be insurance on  an LLC, therefore,  there would                                                                    
be various pots of money available to potential creditors.                                                                      
                                                                                                                                
Representative Doogan  remarked that there was  a fish plant                                                                    
in  his district  that had  been  substantially financed  by                                                                    
state  funds  and  had essentially  gone  through  the  same                                                                    
process. He wasn't  certain what the project  cost the State                                                                    
of Alaska. Mr. Davis responded  that the fish plant cost the                                                                    
state  approximately  $50  million and  was  liquidated.  He                                                                    
explained  that the  occurrence was  exactly the  reason for                                                                    
the  legislation.  The  purpose  of private  partners  in  a                                                                    
development project  was to  determine whether  other people                                                                    
in  the  industry were  interested  in  investing their  own                                                                    
capital in a project because  they believed there would be a                                                                    
financial gain. The  agency was required by  statute to make                                                                    
a return on the invested  capital and an LLC structure would                                                                    
ensure that AIDEA  would be working with  other partners. He                                                                    
opined that  one of the  reasons the seafood plant  had been                                                                    
unsuccessful was due to the absence of sufficient partners.                                                                     
                                                                                                                                
Representative  Doogan wondered  whether it  would still  be                                                                    
possible for AIDEA to venture  into operations like the fish                                                                    
plant  or   whether  the   legislation  would   require  the                                                                    
participation  by  private  individuals under  an  LLC.  Mr.                                                                    
Davis  answered  that  under  the  legislation  AIDEA  would                                                                    
retain the  ability to  build a  development project  on its                                                                    
own. The agency's strategic plan  also called for it to work                                                                    
with private  capital. The legislation would  allow AIDEA to                                                                    
create  an LLC  in order  for it  to own  a percentage  of a                                                                    
project with other  private capital. The goal  of the agency                                                                    
was to leverage  its funds to do the most  that it could. He                                                                    
believed  the  ability  for  AIDEA   to  work  with  private                                                                    
partners moved  in the direction that  Representative Doogan                                                                    
wanted.                                                                                                                         
                                                                                                                                
Representative Doogan was trying  to ensure that there would                                                                    
not be an eventuality in  which the same mistake or enhanced                                                                    
mistakes were  made by the  introduction of  other financial                                                                    
structures. He  did not  believe that  was being  offered in                                                                    
the legislation.  He believed that AIDEA  had specified that                                                                    
although  it had  the ability  to work  alone that  it would                                                                    
prefer to work with other partners.                                                                                             
                                                                                                                                
Mr.  Davis responded  that  it was  necessary  to look  each                                                                    
particular  financial  situation.  For  example,  the  board                                                                    
could discern  that it was good  for the economy and  that a                                                                    
partnership was  not necessary for  it to invest in  a small                                                                    
and   inexpensive   development   project   that   had   new                                                                    
technology.  As the  risk  level  and cost  went  up it  was                                                                    
prudent to use  another legal vehicle such  as a corporation                                                                    
or an  LLC and to have  other partners as well.  He believed                                                                    
the safety  valve was  in the  seven-member board.  The tool                                                                    
would help to mitigate  risk, increase leverage, and achieve                                                                    
results.                                                                                                                        
                                                                                                                                
3:31:48 PM                                                                                                                    
                                                                                                                                
Representative Edgmon  asked whether  the AIDEA  board would                                                                    
always  be   the  board  of   directors  in   a  partnership                                                                    
situation.  Mr.  Davis  replied that  members  could  be  in                                                                    
control of  the LLC or  they could elect a  managing partner                                                                    
that would make  them more passive investors.  In most cases                                                                    
the  agency would  take on  a  more passive  roll and  would                                                                    
elect a  managing member  from the  private sector  that had                                                                    
expertise  in  the  specific   type  of  project.  Corporate                                                                    
governance would allow members  to place managing restraints                                                                    
on the managing member related  to spending caps, what could                                                                    
be done on  the project, and any major  structural change to                                                                    
the project.                                                                                                                    
                                                                                                                                
Representative  Joule   discussed  that  Alaska  was   in  a                                                                    
relatively good  financial position compared to  the rest of                                                                    
the  U.S.  He  referenced  potential  military  and  coastal                                                                    
infrastructure  that   may  need   to  happen   through  the                                                                    
Department  of Defense  or other.  He  wondered whether  the                                                                    
state's  strong financial  position  encouraged the  federal                                                                    
government and other businesses to  look to Alaska as a good                                                                    
business  opportunity.   Mr.  Davis  responded   that  AIDEA                                                                    
floated some bonds  in December 2010 for $60  million and he                                                                    
had received calls from several  interested brokers in other                                                                    
states. He  explained that  AIDEA's bonds  had a  AA rating,                                                                    
which  was  currently  rare. Secondly,  AIDEA  had  been  in                                                                    
contact with  a bank  in New  York the  prior week  that was                                                                    
potentially interested  in doing  business with  the agency.                                                                    
He believed  that the interest demonstrated  that Alaska was                                                                    
a  good  place   to  do  business  based   on  the  national                                                                    
landscape.                                                                                                                      
                                                                                                                                
Co-Chair Thomas  provided a hypothetical  example of  a mine                                                                    
that  was  unable to  afford  an  access road.  He  wondered                                                                    
whether financing through  an AIDEA LLC would  entitle it to                                                                    
partial  ownership of  the mine.  Mr.  Davis responded  that                                                                    
AIDEA  would   need  to   determine  what   the  appropriate                                                                    
structure would be  for the project. The  bill would provide                                                                    
more  options, however,  the  project  could potentially  be                                                                    
structured  like  the public  Red  Dog  Mine road  that  was                                                                    
controlled and  owned by the  agency. In other cases  it may                                                                    
have been prudent  to share the risk of  the entire project.                                                                    
The bill  provided the agency  with the flexibility  to make                                                                    
the  appropriate decision  for public  policy and  financial                                                                    
reasons.                                                                                                                        
                                                                                                                                
Co-Chair  Thomas noted  that  there  were always  "political                                                                    
monsters in  the closet" that had  undisclosed interests. He                                                                    
opined that  under the  guise of good  public policy  a road                                                                    
could be built  that just happened to go directly  by a mine                                                                    
that was unable  to afford to build its own  road. Mr. Davis                                                                    
replied that AIDEA's goal was  to look for financial return,                                                                    
therefore,  when it  built a  road  that was  used by  other                                                                    
people  it  was  important  to   determine  how  they  would                                                                    
contribute to  the cost  in a way  that was  consistent with                                                                    
what the agency helped them with.                                                                                               
                                                                                                                                
Co-Chair Thomas hoped  that people would be  honest with the                                                                    
agency.  He saw  the potential  for  there to  be the  state                                                                    
funded development of  roads that led to  resources that may                                                                    
provide no benefit  to the state. He opined  that there were                                                                    
legislators  that thought  mineral  royalties  were low  and                                                                    
that the state should build  "road favors." He was concerned                                                                    
about the potential for a similar scenario to occur.                                                                            
                                                                                                                                
Mr.  Davis discussed  that AIDEA  would have  to be  certain                                                                    
that a road could pay the  bonds or they would not build the                                                                    
road.                                                                                                                           
                                                                                                                                
Co-Chair Thomas appreciated the  upfront detail. He referred                                                                    
to  a Department  of Transportation  (DOT) road  development                                                                    
that had  a "golden goose" in  the form of a  mine along the                                                                    
road.                                                                                                                           
                                                                                                                                
3:38:26 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg could see  the benefits that could                                                                    
come as a result of  the legislation. He asked whether there                                                                    
was  potential  for  conflict to  occur  with  the  existing                                                                    
planning  processes of  DOT, STIP  [Statewide Transportation                                                                    
Improvement  Program], or  a  local  community. He  wondered                                                                    
whether the bill required AIDEA  to ensure that it would not                                                                    
interfere or be in  conflict with another statewide planning                                                                    
process for an energy project, road, or other.                                                                                  
                                                                                                                                
Mr.  Davis  responded  that there  were  three  constraints.                                                                    
First, statute required the agency  to obtain the consent of                                                                    
a local community. Secondly, the  board of AIDEA had to meet                                                                    
and agree  on a project  in a public process.  Thirdly, bond                                                                    
investors wanted to make certain  that a project had support                                                                    
and that  it was not in  conflict with any other  plans that                                                                    
would cause the bond market to react negatively.                                                                                
                                                                                                                                
Representative  Doogan   referred  to  an   earlier  comment                                                                    
related to  financing roads. He  wondered what was  meant by                                                                    
"a road  that might not  line up." Mr. Davis  explained that                                                                    
the  DeLong  Mountain   Transportation  System  supported  a                                                                    
specific  development   project  because  it   was  directly                                                                    
connected to  the Red Dog  Mine. Without the  legislation it                                                                    
was unclear whether  AIDEA would be allowed to  build a road                                                                    
that supported  an oil  drilling area  that did  not connect                                                                    
directly with each rig.                                                                                                         
                                                                                                                                
Vice-Chair Fairclough MOVED to report  CSHB 119 (EDT) out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSHB  119 (EDT)  was REPORTED  out of  committee with  a "do                                                                    
pass"  recommendation  and  with previously  published  zero                                                                    
impact note: FN 1 (DCCED).                                                                                                      
                                                                                                                                
HOUSE BILL NO. 19                                                                                                             
                                                                                                                                
     "An Act relating to special request registration                                                                           
     plates; and providing for an effective date."                                                                              
                                                                                                                                
HB 19 was SCHEDULED but not HEARD.                                                                                              
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 3:42 PM.                                                                                           

Document Name Date/Time Subjects
HB 3 Explanation of Changes.doc HFIN 2/22/2011 1:30:00 PM
SSTA 4/12/2012 9:00:00 AM
HB 3
HB 3 State by State Analysis.doc HFIN 2/22/2011 1:30:00 PM
SSTA 4/11/2012 9:00:00 AM
SSTA 4/12/2012 9:00:00 AM
HB 3
HB 3 Legal Opinion dated 012811.pdf HFIN 2/22/2011 1:30:00 PM
HB 3
HB 3 Sponsor Statement.doc HFIN 2/22/2011 1:30:00 PM
HB 3
HB7.supporting testimony.2.10.11.pdf HFIN 2/22/2011 1:30:00 PM
HB 7
HB7.Support Letters.2.10.11.pdf HFIN 2/22/2011 1:30:00 PM
HB 7
HB7.NCSL Research Report.10.5.10.pdf HFIN 2/22/2011 1:30:00 PM
HB 7
HB7.Memo regarding changes to CS.2.11.11.pdf HFIN 2/22/2011 1:30:00 PM
HB 7
HB7.Leg Research Report.Other states penalities.2.8.11.pdf HFIN 2/22/2011 1:30:00 PM
HB 7
HB7.Article.K2 and Spice_Straight Tox.pdf HFIN 2/22/2011 1:30:00 PM
HB 7
HB7.Article.DEA Press Release on Synthetic Materials.11.24.10.pdf HFIN 2/22/2011 1:30:00 PM
HB 7
HB7.Article.ADN Article.Assembly outlaws chemical.pdf HFIN 2/22/2011 1:30:00 PM
HB 7
CS HB 7 (JUD) Sponsor Statement.2.10.11.pdf HFIN 2/22/2011 1:30:00 PM
HB 7
HB 19 Sponsor Statement.pdf HFIN 2/22/2011 1:30:00 PM
HB 19
HB 19 Sample License Plates.pdf HFIN 2/22/2011 1:30:00 PM
HB 19
HB 19 Legal Research.doc HFIN 2/22/2011 1:30:00 PM
HB 19
HB 119 Sectional Analysis CS EDT.pdf HFIN 2/22/2011 1:30:00 PM
SFIN 4/15/2011 9:00:00 AM
HB 119
HB 119 AIDEA Bill Information Sheet and letter.pdf HFIN 2/22/2011 1:30:00 PM
SFIN 4/15/2011 9:00:00 AM
HB 119
HB7CS(JUD)NEWFN-LAW-02-18-11.pdf HFIN 2/22/2011 1:30:00 PM
HB 7
HB 7 Support Letter.pdf HFIN 2/22/2011 1:30:00 PM
HB 7
HB3 ACLU Letter.pdf HFIN 2/22/2011 1:30:00 PM
SSTA 4/11/2012 9:00:00 AM
SSTA 4/12/2012 9:00:00 AM
HB 3