Legislature(2013 - 2014)

04/18/2014 09:48 AM FIN


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* first hearing in first committee of referral
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                  HOUSE FINANCE COMMITTEE                                                                                       
                      April 18, 2014                                                                                            
                         9:48 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:48:11 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze called the  House Finance Committee meeting                                                                    
to order at 9:48 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Alan Austerman, Co-Chair                                                                                         
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Mark Neuman, Vice-Chair                                                                                          
Representative Mia Costello                                                                                                     
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative David Guttenberg                                                                                                 
Representative Lindsey Holmes                                                                                                   
Representative Cathy Munoz                                                                                                      
Representative Steve Thompson                                                                                                   
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Laura   Pierre,  Staff,   Senator  Anna   Fairclough;  Diane                                                                    
Barrans,   Executive   Director,    Alaska   Commission   on                                                                    
Postsecondary Education,  Department of Education  and Early                                                                    
Development;  Senator   Anna  Fairclough,   Sponsor;  Jordan                                                                    
Shilling, Staff,  Senator John  Coghill; Ron  Taylor, Deputy                                                                    
Commissioner, Department of  Corrections; Representative Bob                                                                    
Herron;  Joe  Balash,  Commissioner, Department  of  Natural                                                                    
Resources.                                                                                                                      
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Tiffany  Thomas,  Driver  Licensing Manager,  Department  of                                                                    
Motor Vehicles, Department of Administration.                                                                                   
                                                                                                                                
SUMMARY                                                                                                                       
CSSB 64(FIN)                                                                                                                    
          OMNIBUS CRIME/CORRECTIONS/RECIDIVISM BILL                                                                             
                                                                                                                                
          CSSB 64(FIN)  was HEARD and HELD  in committee for                                                                    
          further consideration.                                                                                                
                                                                                                                                
CSSB 138(FIN)am                                                                                                                 
          GAS PIPELINE; AGDC; OIL & GAS PROD. TAX                                                                               
                                                                                                                                
          CSSB 138(FIN)am  was HEARD  and HELD  in committee                                                                    
          for further consideration.                                                                                            
                                                                                                                                
CSSB 195(FIN)                                                                                                                   
          POSTSECONDARY EDUCATION LOANS/GRANTS                                                                                  
                                                                                                                                
          HCS CSSB  195(FIN) was  REPORTED out  of committee                                                                    
          with  a  "do  pass" recommendation  and  with  one                                                                    
          previously  published  fiscal   impact  note:  FN2                                                                    
          (DEED).                                                                                                               
                                                                                                                                
SJR 23    CONST. AM: STUDENT LOAN DEBT                                                                                          
                                                                                                                                
          SJR 23  was REPORTED out  of committee with  a "do                                                                    
          pass"  recommendation  and   with  one  previously                                                                    
         published fiscal impact note: FN1 (GOV).                                                                               
                                                                                                                                
CS FOR SENATE BILL NO. 195(FIN)                                                                                               
                                                                                                                                
     "An  Act relating  to the  membership and  authority of                                                                    
     the  Alaska  Commission   on  Postsecondary  Education;                                                                    
     relating  to  the   Alaska  Student  Loan  Corporation;                                                                    
     relating  to  teacher   education  loans;  relating  to                                                                    
     interest   on   and  consolidation   of   postsecondary                                                                    
     education  loans;   relating  to   Alaska  supplemental                                                                    
     education  loans;  relating to  AlaskAdvantage  grants;                                                                    
     relating to  the Alaska family education  loan program;                                                                    
     relating  to  postsecondary  educational  institutions;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
9:49:10 AM                                                                                                                    
                                                                                                                                
LAURA PIERRE, STAFF, SENATOR ANNA FAIRCLOUGH, offered a                                                                         
sponsor statement:                                                                                                              
                                                                                                                                
     Senate   Bill   195    makes   both   substantive   and                                                                    
     housekeeping changes  to statutes regarding  the Alaska                                                                    
     Commission  on Postsecondary  Education and  the Alaska                                                                    
     Student   Loan  Corporation.   These  changes   include                                                                    
     allowing  the commission  to  set  favorable terms  for                                                                    
     borrowers, increase the total  loan limit a student may                                                                    
     borrow, and  define "on-time" status  for a  student to                                                                    
     reach completion.                                                                                                          
                                                                                                                                
     With  increasing  amounts  of  debt  in  the  state  of                                                                    
     Alaska,  borrowers  need  to make  the  best  and  most                                                                    
     informed   decisions  when   they   borrow  for   their                                                                    
     education, as well as when  they are preparing to enter                                                                    
     repayment.   By  allowing   the   corporation  to   set                                                                    
     favorable terms,  Alaska's students will  receive their                                                                    
     education for the best deal.                                                                                               
                                                                                                                                
     The  cost  of  tuition  is going  up  at  postsecondary                                                                    
     institutions   around  the   country;  however,   state                                                                    
     education  loan  maximums  have not  been  modified  in                                                                    
     almost twenty  years. Increased loan limits  will allow                                                                    
     students  easier access  to enough  financial aid  from                                                                    
     one  loan servicer,  thereby  easing  the processes  of                                                                    
     both borrowing and repayment.                                                                                              
                                                                                                                                
     National  trends show  students  are  taking longer  to                                                                    
     complete  their postsecondary  education. In  the past,                                                                    
     an undergraduate  degree took,  on average,  four years                                                                    
     to  complete. Now  it is  more common  to see  students                                                                    
     take  longer to  complete their  degree. By  staying in                                                                    
     school  longer, students  are  accruing  more debt  and                                                                    
     delaying entry  into the workforce.  Defining "on-time"                                                                    
     status as  15 credits per semester  encourages students                                                                    
     to complete  their postsecondary education in  a timely                                                                    
     manner.  This, in  turn, will  keep  their debt  lower,                                                                    
     more manageable, and allow them  to enter the workforce                                                                    
     sooner.                                                                                                                    
                                                                                                                                
     The changes proposed in Senate  Bill 195 will allow the                                                                    
     commission to  better assist Alaskans  accessing higher                                                                    
     education. It  will create  incentives for  students to                                                                    
     enroll in sufficient credits  to expedite completion of                                                                    
     their degree as  well as begin their career  as part of                                                                    
     Alaska's workforce.                                                                                                        
                                                                                                                                
Ms.  Pierre noted  that the  bill interplayed  with SJR  23,                                                                    
both would allow for a  lower interest rate for students and                                                                    
incentivize early and on-time graduation.                                                                                       
                                                                                                                                
DIANE  BARRANS,  EXECUTIVE  DIRECTOR, ALASKA  COMMISSION  ON                                                                    
POSTSECONDARY EDUCATION,  DEPARTMENT OF EDUCATION  AND EARLY                                                                    
DEVELOPMENT, testified  that the  legislation would  help to                                                                    
better meet the needs of students in the state.                                                                                 
                                                                                                                                
Co-Chair  Stoltze thought  that  a constitutional  amendment                                                                    
that would be  a mechanism to reduce student  loan rates was                                                                    
an attractive provision.                                                                                                        
                                                                                                                                
Ms. Barrans  relayed that  the relatively  attractive market                                                                    
prior to 2008 had never  returned. She said that through the                                                                    
combination of  the bill and  the resolution, debt  could be                                                                    
issued at a lower rate than could be otherwise achieved.                                                                        
                                                                                                                                
Co-Chair Stoltze  asked about the federal  interplay related                                                                    
to student loan rates.                                                                                                          
                                                                                                                                
Ms. Barrans  answered that Congress and  the U.S. Department                                                                    
of  Education  had   created  barriers  between  non-federal                                                                    
lenders and the  consumer. She felt that this  had been done                                                                    
under the guise  of consumer protection but  with respect to                                                                    
other  governmental agencies,  such as  the state  trying to                                                                    
offer low  rates to students,  they had created  barriers in                                                                    
terms of schools being able to recommend state programs.                                                                        
                                                                                                                                
Representative  Holmes asked  for clarification  on interest                                                                    
rate changes and borrowing amounts.                                                                                             
                                                                                                                                
Ms.  Barrans replied  that  one advantage  would  be a  rate                                                                    
decrease  of between  1 and  1.25 percent  of what  could be                                                                    
achieved  with a  revenue  backed bond.  She  said that  the                                                                    
other  advantage  would  be that  rating  agencies  and  the                                                                    
market  looked  to  the  rating status  of  the  state  when                                                                    
examining   general  obligation   debts   rather  than   the                                                                    
underlying  collateral. She  said that  credit criteria  had                                                                    
been  imposed  in recent  years  that  made the  loans  less                                                                    
accessible  to Alaska  residents.  She  believed that  while                                                                    
credit criteria would  need to remain in place,  it could be                                                                    
moderated and  make the loans more  generally available. She                                                                    
hoped that by increasing the  loan limits varied loan limits                                                                    
would   be  set   according  to   the  student's   level  of                                                                    
enrollment.                                                                                                                     
                                                                                                                                
9:57:05 AM                                                                                                                    
                                                                                                                                
Representative Gara  asked if the  bill would allow  for the                                                                    
reduction of the student loan  rate by 1.25 percent compared                                                                    
to other bonds used currently.                                                                                                  
                                                                                                                                
Ms.  Barrans  replied that  yes,  when  comparing a  revenue                                                                    
backed bond with a general obligation backed bond.                                                                              
                                                                                                                                
Representative  Gara  asked  whether the  1.25  percent  was                                                                    
lower than the current rate.                                                                                                    
                                                                                                                                
Ms. Barrans replied in the affirmative.                                                                                         
                                                                                                                                
Representative   Gara  asked   whether  students   would  be                                                                    
required  to  have  a guarantor.  He  wondered  whether  low                                                                    
income students would be eligible to get the loan.                                                                              
                                                                                                                                
Ms. Barrans  answered that it  would depend on  the students                                                                    
credit  score.  She said  that  the  combination of  changes                                                                    
would  not eliminate  the  need to  have  a performing  loan                                                                    
portfolio. She  furthered that the  concept behind  the bill                                                                    
was that  general obligation debt  would be issued  but that                                                                    
the  state would  not be  expected  to repay  the debt;  the                                                                    
revenue on the  loans would repay the debt.  It was expected                                                                    
that  the credit  criteria  could be  reduced  from what  it                                                                    
currently was,  but it could  not be  eliminated altogether.                                                                    
She said that  a student would need to  have adequate credit                                                                    
or a credit worthy co-signer.                                                                                                   
                                                                                                                                
Representative  Gara asked  how  low  income families,  with                                                                    
little or no credit, could qualify for the program.                                                                             
                                                                                                                                
Ms. Barrans replied  that the student would need  to look to                                                                    
federal  aid and  state and  federal grants.  She said  that                                                                    
under  the legislation  the maximum  grant  amount would  be                                                                    
increased and  the hope was  that students would be  able to                                                                    
package other aid to meet their needs.                                                                                          
                                                                                                                                
10:00:27 AM                                                                                                                   
                                                                                                                                
SENATOR ANNA  FAIRCLOUGH, SPONSOR, hoped that  the committee                                                                    
would support  both the legislation and  SJR 23 unanimously.                                                                    
She said that the bill  was one step closer to consolidating                                                                    
loans and making  sure that students could  borrow what they                                                                    
needed a t  a particular point in time instead  of having to                                                                    
go to  several creditors. She  noted that students  that had                                                                    
to go  to several creditors  had higher interest  rates than                                                                    
the state was  charging; 7.3 percent. She  asserted that the                                                                    
bill  would expand  the state's  authority  to let  students                                                                    
borrow loans in one place and reduce their debt.                                                                                
                                                                                                                                
10:03:00 AM                                                                                                                   
                                                                                                                                
Co-Chair Stoltze  mentioned a 1982  constitutional provision                                                                    
for veteran's housing bonds. He  requested an explanation as                                                                    
to why  the state constitution required  provisions like SJR                                                                    
23.                                                                                                                             
                                                                                                                                
Senator Fairclough  testified that SJR 23  proposed to amend                                                                    
Article  9,  section 8  of  the  Alaska State  Constitution.                                                                    
Currently,  state  debt can  only  be  borrowed for  capital                                                                    
projects and veteran's homes. She  asserted that the state's                                                                    
forefathers  could never  have  imagined  what student  debt                                                                    
would look  like in the  future. She  said that at  the time                                                                    
that the constitution  was written debt was a  bad thing and                                                                    
most things were paid for  in cash. She stated that students                                                                    
could  not pay  for  school  in cash  and  needed to  borrow                                                                    
money. She  shared that the legislature  could help students                                                                    
borrow money at  a lower interest rate by  offering the full                                                                    
faith and credit of the  State of Alaska. She explained that                                                                    
the  constitutional amendment  would insert  very few  words                                                                    
into the  constitution that would  allow the ability  of the                                                                    
full faith  and credit of the  state to be used  for student                                                                    
loans and  the advancement  of postsecondary  education. She                                                                    
believed   that   if   the   amendment   passed   then   the                                                                    
postsecondary education student  loan corporation would have                                                                    
to advance  a plant to  the legislature asking  whether debt                                                                    
should be  taken on, but  this time  when going to  the bond                                                                    
market the  interest rate would  be a full  percentage point                                                                    
lower  for students.  She  said that  as  the student  loans                                                                    
would all  be repaid. She  emphasized that the  language was                                                                    
permissive  and  would  allow  the  state  under  the  right                                                                    
circumstances to use  a better way to  finance student loans                                                                    
if the state  wanted to take on or  offer additional student                                                                    
loans.                                                                                                                          
                                                                                                                                
Co-Chair  Stoltze   appreciated  the   need  to   amend  the                                                                    
constitution by anybody but the court system.                                                                                   
                                                                                                                                
10:07:28 AM                                                                                                                   
                                                                                                                                
Representative   Gara   offered    his   support   for   the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Co-Chair Stoltze CLOSED public  testimony. He MOVED to ADOPT                                                                    
Amendment 1:                                                                                                                    
                                                                                                                                
     Page 13, line 6:                                                                                                           
          Delete "8,000"                                                                                                        
          Insert "10,000"                                                                                                       
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Co-Chair Stoltze spoke to the amendment.                                                                                        
                                                                                                                                
Senator Fairclough had  no problem with the  addition of the                                                                    
amendment. She  noted that  the bill had  yet to  be amended                                                                    
and a concurrence vote would be required.                                                                                       
                                                                                                                                
Co-Chair Stoltze appreciated the notation.                                                                                      
                                                                                                                                
Vice-Chair Neuman offered support for the amendment.                                                                            
                                                                                                                                
Representative  Guttenberg noted  that the  $2,000 was  more                                                                    
significant for students pursuing vocational education.                                                                         
                                                                                                                                
Representative  Holmes supported  the  amendment but  warned                                                                    
that comparing  one student category  with another  could be                                                                    
unfair.                                                                                                                         
                                                                                                                                
Representative  Thompson  requested  confirmation  that  the                                                                    
amendment  would  change the  amount  given  to an  eligible                                                                    
student attending a career education program to $10,000.                                                                        
                                                                                                                                
Co-Chair Stoltze  thought that  the amendment could  be made                                                                    
clearer.                                                                                                                        
                                                                                                                                
10:12:31 AM                                                                                                                   
                                                                                                                                
Ms.  Barrans  interjected  that currently  career  education                                                                    
students  could borrow  more than  one certificate,  the cap                                                                    
that applied to them was the undergraduate cap.                                                                                 
                                                                                                                                
Co-Chair Stoltze  wondered if the amendment  would cause any                                                                    
kind of drafting deficiency.                                                                                                    
                                                                                                                                
Ms.  Barrans replied  in  the negative.  She  said that  the                                                                    
vocational loans  covered a  broader array  of certificates;                                                                    
historically,  the   limit  had   been  lower   because  the                                                                    
vocational programs had higher  default rates. She said that                                                                    
differentiation between  high value and those  that produced                                                                    
a lower return on investment  could be researched during the                                                                    
interim.                                                                                                                        
                                                                                                                                
Representative Edgmon expressed support for the amendment.                                                                      
                                                                                                                                
Representative  Gara  asked   whether  the  amendment  would                                                                    
hamper  the  department's  ability  to  make  loans  to  all                                                                    
classes of students.                                                                                                            
                                                                                                                                
Ms. Barrans answered no.                                                                                                        
                                                                                                                                
Representative Thompson understood  that under the amendment                                                                    
a student could borrow up  to $56,000 for a career education                                                                    
loan.                                                                                                                           
                                                                                                                                
Ms.  Barrans replied  that the  student would  have to  have                                                                    
borrowed  to  gain  a  series   of  credentials;  under  the                                                                    
amendment they could borrow up  to $10,000 for each separate                                                                    
program of study, up to $56,000.                                                                                                
                                                                                                                                
Representative  Thompson understood  that  the $10,000  loan                                                                    
would  be  for  one  program. Ms.  Barrans  replied  in  the                                                                    
affirmative.                                                                                                                    
                                                                                                                                
Co-Chair Stoltze expounded  on the history of  abuses of the                                                                    
system in the vocational education field.                                                                                       
                                                                                                                                
10:19:36 AM                                                                                                                   
                                                                                                                                
Representative   Wilson  WITHDREW   her  OBJECTION   to  the                                                                    
adoption of  Amendment 1. There being  NO further OBJECTION,                                                                    
Amendment 1 was ADOPTED.                                                                                                        
                                                                                                                                
10:22:14 AM                                                                                                                   
                                                                                                                                
Co-Chair Stoltze OPENED public testimony.                                                                                       
                                                                                                                                
Co-Chair Stoltze CLOSED public testimony.                                                                                       
                                                                                                                                
10:23:14 AM                                                                                                                   
                                                                                                                                
Co-Chair Stoltze queried the fiscal note for SB 195.                                                                            
                                                                                                                                
Representative   Costello  discussed   the  one   previously                                                                    
published  fiscal   impact  note  from  the   Department  of                                                                    
Education and Early Development.                                                                                                
                                                                                                                                
Vice-Chair Neuman MOVED  to REPORT HCS CSSB  195(FIN) out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
HCS CSSB 195(FIN)  was REPORTED out of committee  with a "do                                                                    
pass"  recommendation  and  with  one  previously  published                                                                    
fiscal impact note: FN2 (DEED).                                                                                                 
                                                                                                                                
SENATE JOINT RESOLUTION NO. 23                                                                                                
                                                                                                                                
     Proposing  an  amendment  to the  Constitution  of  the                                                                    
     State of Alaska relating  to contracting state debt for                                                                    
     postsecondary student loans.                                                                                               
                                                                                                                                
10:26:15 AM                                                                                                                   
                                                                                                                                
Representative Costello  discussed the  previously published                                                                    
fiscal note from the Office of the Governor.                                                                                    
                                                                                                                                
Vice-Chair Neuman  MOVED to REPORT  SJR 23 out  of committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
SJR  23 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation  and  with  one previously  published  fiscal                                                                    
impact note: FN1 (GOV).                                                                                                         
                                                                                                                                
10:27:42 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:48:42 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR SENATE BILL NO. 64(FIN)                                                                                                
                                                                                                                                
     "An  Act  relating  to  theft  and  property  offenses;                                                                    
     relating to  the definition of 'prior  convictions' for                                                                    
     certain   theft  offenses;   establishing  the   Alaska                                                                    
     Criminal   Justice   Commission    and   providing   an                                                                    
     expiration  date; relating  to the  crime of  custodial                                                                    
     interference;  relating to  the  duties  of the  Alaska                                                                    
     Judicial  Council;  relating  to jail-time  credit  for                                                                    
     offenders   in    court-ordered   treatment   programs;                                                                    
     relating  to  conditions  of  release,  probation,  and                                                                    
     parole;  relating  to  duties of  the  commissioner  of                                                                    
     corrections and  board of  parole; establishing  a fund                                                                    
     for  reducing recidivism  in the  Department of  Health                                                                    
     and  Social  Services;  requiring the  commissioner  of                                                                    
     health and  social services  to establish  programs for                                                                    
     persons  on conditions  of  release  or probation  that                                                                    
     require   testing   for   controlled   substances   and                                                                    
     alcoholic beverages;  requiring the board of  parole to                                                                    
     establish programs  for persons on parole  that require                                                                    
     testing   for  controlled   substances  and   alcoholic                                                                    
     beverages; relating to the duties  of the Department of                                                                    
     Health  and  Social  Services;  and  providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
10:48:59 AM                                                                                                                   
                                                                                                                                
Co-Chair Stoltze  discussed that the committee  would hear a                                                                    
presentation on the bill.                                                                                                       
                                                                                                                                
JORDAN SHILLING,  STAFF, SENATOR  JOHN COGHILL,  stated that                                                                    
SB  64  had had  21  hearings  since its  introduction,  the                                                                    
summary of  changes explaining the bills  evolution could be                                                                    
found in member  packets (copy on file). He  stated that the                                                                    
bill had been  created with the help of many  experts in the                                                                    
Department of  Law, Corrections,  the Court System,  and the                                                                    
Public  Defender   Agency.  He  introduced   the  PowerPoint                                                                    
presentation:       "Senate       Bill      64       Omnibus                                                                    
Crime/Corrections/Recidivism Bill" (copy on file).                                                                              
                                                                                                                                
Mr. Shilling spoke to Slide 7, "Bill Components":                                                                               
                                                                                                                                
   · 24/7 Sobriety                                                                                                              
   · Alaska Criminal Justice Commission                                                                                         
   · Probation Reform (P.A.C.E.)                                                                                                
   · More Risk-Needs Assessments                                                                                                
   · Recidivism Reduction Fund                                                                                                  
   · Limited Licenses                                                                                                           
   · Stricter penalties for attempted abduction                                                                                 
   · Adjusting the Felony Theft Threshold                                                                                       
   · Incentivizing Residential Treatment                                                                                        
   · PTSD Mitigating Factor                                                                                                     
   · Confidentiality of Criminal Records                                                                                        
                                                                                                                                
Vice-Chair  Neuman expressed  concern  about the  Recidivism                                                                    
Reduction  Fund.   He  believed   that  the   Department  of                                                                    
Corrections (DOC) had  not used the funding  it had received                                                                    
in  FY14  through  the  Department   of  Health  and  Social                                                                    
Services  (DHSS) because  DOC  had not  had  the ability  to                                                                    
catch the shorter  term people in need. He asked  how it was                                                                    
envisioned that the  fund would work; where  would the money                                                                    
come from and how much money was expected.                                                                                      
                                                                                                                                
Mr. Shilling understood that  Vice-Chair Neuman's office was                                                                    
in communication  with DOC concerning movement  of the fund.                                                                    
He deferred the question to the department.                                                                                     
                                                                                                                                
10:53:46 AM                                                                                                                   
                                                                                                                                
RON TAYLOR, DEPUTY  COMMISSIONER, DEPARTMENT OF CORRECTIONS,                                                                    
stated that  $1 million had  lapsed in terms  of programming                                                                    
funds  for  substance  abuse   treatment  programs  and  sex                                                                    
offender treatment programs.                                                                                                    
                                                                                                                                
Co-Chair Stoltze  asked if  it was due  to the  inability to                                                                    
transfer the money to other programs.                                                                                           
                                                                                                                                
Mr.  Taylor  replied that  the  funds  designated for  those                                                                    
programs was  not spent due to  a number of factors  and had                                                                    
not been transferred to other programs.                                                                                         
                                                                                                                                
Vice-Chair Neuman  queried why the money  available for drug                                                                    
treatment programs was not being  used by the department for                                                                    
those programs.                                                                                                                 
                                                                                                                                
Mr. Taylor  replied that contracts with  providers needed to                                                                    
be   vetted;   additionally,   when   the   contracts   were                                                                    
established  it  was on  a  fee  for  service basis;  if  no                                                                    
services were  provided on the contract  then the department                                                                    
did  not pay  the  money.  He said  that  it was  discovered                                                                    
toward  the end  of the  fiscal year  the money  would lapse                                                                    
because of  the way that  the contracts were  structured. He                                                                    
assured  that the  department was  making efforts  to ensure                                                                    
that the  money was getting  where it needed be  in addition                                                                    
to working to include incentives  in contract to ensure that                                                                    
staffing  was appropriate.  He said  that  the sex  offender                                                                    
treatment  program in  Bethel had  been the  biggest problem                                                                    
for the  department because  there had  been no  provider in                                                                    
the area for several years.                                                                                                     
                                                                                                                                
Vice-Chair Neuman  reminded the committee that  there was an                                                                    
amendment  included   in  the  operating   budget  directing                                                                    
legislators to work with DOC to reduce recidivisms.                                                                             
                                                                                                                                
10:56:52 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stoltze   asked  which   of  the   provisions  had                                                                    
initially been a priority of the sponsor.                                                                                       
                                                                                                                                
Mr. Shilling  replied that the evidence  based programs were                                                                    
extremely   important,  the   24/7  Sobriety   Program,  the                                                                    
Probation  Reform  Program  (P.A.C.E.), and  the  Recidivism                                                                    
Reduction  Fund.  He  said  that the  purpose  of  the  fund                                                                    
differed from  the funds  previously mentioned;  the purpose                                                                    
of the  fund was to  provide resources for  individuals that                                                                    
had been incarcerated for a  long time and had been recently                                                                    
released. He  stressed that  one of  the biggest  drivers of                                                                    
the recidivism rate was the  way that prisoners were release                                                                    
without resources to be successful outside prison.                                                                              
                                                                                                                                
                                                                                                                                
Mr. Shilling shared that the  provisions that had been added                                                                    
to  the  original  legislation  were:  the  PTSD  Mitigating                                                                    
Factor,  the  Limited  License  provision,  and  Sections  2                                                                    
through 4  concerning custodial  interference were  added in                                                                    
Senate Judiciary. He related that  all other provisions were                                                                    
decided  to be  put  into  the bill  during  the interim  as                                                                    
directed by the bill sponsor.                                                                                                   
                                                                                                                                
Representative  Munoz   asked  about  the   Limited  License                                                                    
provision.                                                                                                                      
                                                                                                                                
Mr.  Shilling pointed  to Slide  23. He  explained that  the                                                                    
third  DUI  was  considered  a felony  DUI,  and  often  the                                                                    
offender  would lose  their license  for the  rest of  their                                                                    
life.  He stated  that  it was  the  sponsor's belief  that,                                                                    
while  the state  had told  them that  they could  not drive                                                                    
anymore, those  individuals were  currently on the  road and                                                                    
without  any accountability  measures. He  suggested that  a                                                                    
special license  could be granted  to those  individuals and                                                                    
referred to Slide 38, which  listed details of the provision                                                                    
found in Section 30:                                                                                                            
                                                                                                                                
     A court may grant a limited license for felony DUI if:                                                                   
                                                                                                                              
        · The person is participating in a court-ordered                                                                        
          treatment program                                                                                                     
        · Provides proof of insurance                                                                                           
        · Has an ignition interlock installed on their                                                                          
          vehicle                                                                                                               
        · Enrolled in the ASAP program.                                                                                         
        · Participating in 24/7 Sobriety                                                                                        
        · Has not been granted a limited license before                                                                         
                                                                                                                                
Representative Munoz asked for details on the ASAP program.                                                                     
                                                                                                                                
Mr. Shilling answered that is  was the Alcohol Safety Action                                                                    
Program (ASAP), a drug screening  and monitoring program. He                                                                    
related that anyone who got a  DUI in the state was enrolled                                                                    
for  a certain  period of  time. He  added that  the Limited                                                                    
License  had been  structured  in a  way  that the  offender                                                                    
would be fully  accountable and there were  no loopholes for                                                                    
them to be a danger to the public.                                                                                              
                                                                                                                                
Representative Munoz  asked about the testing  twice per day                                                                    
related to the 24/7 Sobriety provision.                                                                                         
                                                                                                                                
Mr. Shilling affirmed that that  the 24/7 provision required                                                                    
twice daily breathalyzer tests.                                                                                                 
                                                                                                                                
Representative Munoz  understood that the  alternate license                                                                    
was an alternative to permanent revocation.                                                                                     
                                                                                                                                
Mr.  Shilling replied  that  it was  an  option for  certain                                                                    
felony  DUI offenders  with lifetime  revocations that  were                                                                    
eligible for the therapeutic courts.                                                                                            
                                                                                                                                
11:02:54 AM                                                                                                                   
                                                                                                                                
Representative   Munoz   asked   whether   partial   custody                                                                    
interference and  removal of a  child for the  state against                                                                    
the wishes of the other  parent fell under the provisions of                                                                    
the bill.                                                                                                                       
                                                                                                                                
Mr. Shilling  answered no. He  furthered that  the Custodial                                                                    
Interference  section was  geared towards  non-relatives and                                                                    
dealt only with custodial interference in the 2nd degree.                                                                       
                                                                                                                                
11:05:33 AM                                                                                                                   
                                                                                                                                
Representative  Guttenberg referred  back to  Section 30  of                                                                    
the   legislation.  He   wondered  what   would  happen   to                                                                    
individuals who  received the  alternative license  and then                                                                    
continued to disregard the law.                                                                                                 
                                                                                                                                
Mr. Shilling  answered that the  same penalties  would apply                                                                    
to them as  would for individuals with  regular licenses. He                                                                    
added  that  one aspect  that  was  intended to  change  the                                                                    
behavior   was  the   requirement  that   they  successfully                                                                    
participate in the therapeutic courts.                                                                                          
                                                                                                                                
Representative Guttenberg  wondered what  would happen  if a                                                                    
person received another DUI.                                                                                                    
                                                                                                                                
Mr. Shilling  said that  if another  DUI was  received under                                                                    
the  limited  license  the person  would  lose  the  limited                                                                    
license  and would  not be  eligible again  for the  limited                                                                    
license. //                                                                                                                     
                                                                                                                                
Representative  Guttenberg asked  at what  point the  person                                                                    
would face jail time.                                                                                                           
                                                                                                                                
Mr.  Shilling  opined that  the  bill  did not  address  the                                                                    
question.                                                                                                                       
                                                                                                                                
Representative  Thompson expressed  concern  about proof  of                                                                    
insurance  and  thought  language should  be  included  that                                                                    
mandated proof of insurance for the limited licensees.                                                                          
                                                                                                                                
Mr. Shilling  pointed to Page 18,  line 30 of the  bill that                                                                    
required an individual to provide proof of insurance.                                                                           
                                                                                                                                
11:09:08 AM                                                                                                                   
                                                                                                                                
Representative  Wilson had  heard about  two different  24/7                                                                    
programs.  She wondered  which program  was included  in the                                                                    
bill.                                                                                                                           
                                                                                                                                
Mr.  Shilling answered  that the  bill contained  the felony                                                                    
limited   license  program,   the   other   program  was   a                                                                    
misdemeanor  limited  license  program that  tied  the  24/7                                                                    
program to the license.                                                                                                         
                                                                                                                                
Representative  Wilson understood  the  third  DUI would  be                                                                    
considered a felony under the bill.                                                                                             
                                                                                                                                
Mr.  Shilling  answered in  the  affirmative;  in a  10-year                                                                    
period.                                                                                                                         
                                                                                                                                
Representative Wilson  asked about the timespan  between the                                                                    
moment for  felony conviction and eligibility  for a limited                                                                    
license and what the restrictions would be on the license.                                                                      
                                                                                                                                
Mr. Shilling deferred the question to the court system.                                                                         
                                                                                                                                
11:12:14 AM                                                                                                                   
                                                                                                                                
TIFFANY  THOMAS,  DRIVER  LICENSING MANAGER,  DEPARTMENT  OF                                                                    
MOTOR   VEHICLES,   DEPARTMENT    OF   ADMINISTRATION   (via                                                                    
teleconference), relayed  that there would be  two different                                                                    
mechanisms  for a  termination of  revocation  for a  felony                                                                    
offender. The  first would be  for those offenders  that did                                                                    
not have  the opportunity  to go through  therapeutic court;                                                                    
according to AS  28.35.030, the person would have  a 10 year                                                                    
minimum period of  revocation before they could  apply for a                                                                    
termination. The  second path would involve  the people that                                                                    
participated  in  therapeutic   court;  upon  completion  of                                                                    
therapeutic court and successful  participation on a limited                                                                    
license they  would be eligible  to apply for  a termination                                                                    
of  revocation through  the department.  She  said that  the                                                                    
process could take 1 to 2 months.                                                                                               
                                                                                                                                
Representative Wilson asked how long  it would take a person                                                                    
to  get through  the  therapeutic court  system before  they                                                                    
could begin driving again.                                                                                                      
                                                                                                                                
11:16:19 AM                                                                                                                   
                                                                                                                                
Ms. Thomas  replied that the court  orders treatment program                                                                    
would take  6 months and  all other requirements  would need                                                                    
to be  met. She  thought it  could take  over a  year before                                                                    
they could apply for the termination process.                                                                                   
                                                                                                                                
Representative Wilson  asked for  a definition of  a limited                                                                    
license.                                                                                                                        
                                                                                                                                
Ms. Thomas  replied that the  division referred to it  as an                                                                    
unlimited  limited because  it was  not restricted  to work.                                                                    
She said the limitations would be outlined in the bill.                                                                         
                                                                                                                                
11:17:54 AM                                                                                                                   
                                                                                                                                
SB  64  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
11:18:27 AM                                                                                                                   
RECESSED                                                                                                                        
                                                                                                                                
5:16:34 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Stoltze called  the meeting  to order.  He relayed                                                                    
that the updated fiscal notes  for HCS CSSB 195(FIN) and SJR                                                                    
23 had not changed. The  bills had reported out of committee                                                                    
earlier in the day.                                                                                                             
                                                                                                                                
CS FOR SENATE BILL NO. 138(FIN) am                                                                                            
                                                                                                                                
     "An Act  relating to the  purposes, powers,  and duties                                                                    
     of   the   Alaska  Gasline   Development   Corporation;                                                                    
     relating  to  an  in-state  natural  gas  pipeline,  an                                                                    
     Alaska  liquefied natural  gas project,  and associated                                                                    
     funds; requiring  state agencies and other  entities to                                                                    
     expedite  reviews and  actions related  to natural  gas                                                                    
     pipelines  and projects;  relating  to the  authorities                                                                    
     and  duties of  the commissioner  of natural  resources                                                                    
     relating to a North Slope  natural gas project, oil and                                                                    
     gas and gas only leases,  and royalty gas and other gas                                                                    
     received  by  the  state   including  gas  received  as                                                                    
     payment for the production tax  on gas; relating to the                                                                    
     tax on oil  and gas production, on  oil production, and                                                                    
     on  gas  production;  relating to  the  duties  of  the                                                                    
     commissioner  of  revenue  relating to  a  North  Slope                                                                    
     natural  gas project  and gas  received as  payment for                                                                    
     tax;  relating to  confidential information  and public                                                                    
     record  status of  information provided  to  or in  the                                                                    
     custody of the Department  of Natural Resources and the                                                                    
     Department  of   Revenue;  relating   to  apportionment                                                                    
     factors of the Alaska Net  Income Tax Act; amending the                                                                    
     definition of gross value at  the 'point of production'                                                                    
     for  gas for  purposes of  the oil  and gas  production                                                                    
     tax; clarifying that  the exploration incentive credit,                                                                    
     the oil or gas producer  education credit, and the film                                                                    
     production tax credit may not  be taken against the gas                                                                    
     production tax paid in gas;  relating to the oil or gas                                                                    
     producer education  credit; requesting the  governor to                                                                    
     establish  an  interim  advisory board  to  advise  the                                                                    
     governor  on municipal  involvement  in  a North  Slope                                                                    
     natural gas  project; relating to the  development of a                                                                    
     plan  by the  Alaska  Energy  Authority for  developing                                                                    
     infrastructure  to deliver  affordable energy  to areas                                                                    
     of  the state  that will  not have  direct access  to a                                                                    
     North Slope  natural gas pipeline and  a recommendation                                                                    
     of   a  funding   source   for  energy   infrastructure                                                                    
     development; establishing the  Alaska affordable energy                                                                    
     fund; requiring the commissioner  of revenue to develop                                                                    
     a  plan  and  suggest legislation  for  municipalities,                                                                    
     regional corporations,  and residents  of the  state to                                                                    
     acquire ownership  interests in  a North  Slope natural                                                                    
     gas  pipeline  project; making  conforming  amendments;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
He relayed  his intent to  address the fiscal notes  for HCS                                                                    
CSSB  138(FIN)  [the  bill reported  out  of  committee  the                                                                    
previous  night]. He  would have  the Department  of Natural                                                                    
Resources address  the components  and costs of  each fiscal                                                                    
note.                                                                                                                           
                                                                                                                                
JOE BALASH,  COMMISSIONER, DEPARTMENT OF  NATURAL RESOURCES,                                                                    
discussed the fiscal  notes. He stated that  the stack began                                                                    
with  the Alaska  Gasline  Development Corporation  (AGDC)'s                                                                    
note.                                                                                                                           
                                                                                                                                
Co-Chair Stoltze agreed.                                                                                                        
                                                                                                                                
Commissioner   Balash    noted   that   there    were   AGDC                                                                    
representatives  available via  teleconference  to speak  to                                                                    
the details of the note.                                                                                                        
                                                                                                                                
Co-Chair Stoltze  relayed his intent to  adjourn the meeting                                                                    
and resume the conversation  in the subsequent meeting. [See                                                                    
minutes dated 4/18/14 5:19 pm.]                                                                                                 
                                                                                                                                
CSSB 138(FIN)am was HEARD and  HELD in committee for further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
5:19:36 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 5:19 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

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