Legislature(2007 - 2008)HOUSE FINANCE 519
02/18/2008 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HCR13 | |
| HB320 | |
| HB65 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 320 | TELECONFERENCED | |
| + | HCR 13 | TELECONFERENCED | |
| += | HB 65 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 18, 2008
1:43 P.M.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 1:43:08 PM.
MEMBERS PRESENT
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Les Gara
Representative Mike Hawker
Representative Mike Kelly
Representative Mary Nelson
Representative Bill Thomas Jr.
MEMBERS ABSENT
Representative Mike Chenault, Co-Chair
Representative Harry Crawford
Representative Reggie Joule
Representative John Harris
ALSO PRESENT
Representative John Coghill; Eddy Jeans, Director, Education
Support Services, Department of Education and Early
Development; Michael Pawlowski, Staff, Co-Chair Meyer; Brad
Thompson, Director, Division of Risk Management, Department
of Administration; Jerry Burnett, Director, Division of
Administrative Services, Department of Revenue; Karen
Lidster, Staff, Representative John Coghill
PRESENT VIA TELECONFERENCE
Charles Springer, Alaska Search & Rescue, Anchorage;
Lieutenant Rodney Dial, Deputy Commander, Division of Alaska
State Troopers, Department of Public Safety
SUMMARY
HB 65 An Act relating to breaches of security involving
personal information, credit report and credit
score security freezes, consumer credit
monitoring, credit accuracy, protection of social
security numbers, care of records, disposal of
records, identity theft, furnishing consumer
credit header information, credit cards, and debit
cards, and to the jurisdiction of the office of
administrative hearings; amending Rule 60, Alaska
Rules of Civil Procedure; and providing for an
effective date.
HB 65 was HEARD & HELD in Committee for further
consideration.
HB 320 An Act relating to certification of search and
rescue personnel and organizations; requiring
certain search and rescue personnel to be
considered state employees for purposes of
workers' compensation coverage; and allowing
municipalities to elect to provide workers'
compensation insurance coverage for search and
rescue personnel.
CS HB 320 (FIN) was reported out of Committee with
a "do pass" recommendation and with zero note #1
by the Department of Administration, indeterminate
note #2 by the Department of Administration and a
new fiscal note by the House Finance Committee.
HCR 13 Establishing and relating to the Education Funding
District Cost Factor Commission.
CS HCR 13 (FIN) was reported out of Committee with
a "do pass" recommendation and with a new note by
the House Finance Committee.
1:44:27 PM
HOUSE CONCURRENT RESOLUTION NO. 13
Establishing and relating to the Education Funding
District Cost Factor Commission.
REPRESENTATIVE MIKE HAWKER, SPONSOR, explained that the
resolution resulted from a long history of legislative
contention regarding the district cost factor component of
school district funding formula. He provided a brief
history of the process, reiterating debates between Co-Chair
Chenault and Co-Chair Meyer regarding school district cost
funding formula. The dialogue resulted in the Legislature
setting up a Task Force to review the funding cost formula
in order to stabilize school funding across the State.
The House Finance Committee has discussed and passed on
those funding component recommendations. The Task Force
recognized that there were issues beyond their ability to
provide a single policy recommendation. Amongst those
issues are cost factor components, a factor built into the
district cost formula, which attempts to recognize the
differing costs from operations in various statewide
regional areas, recognizing it costs more to operate in the
remote villages. Anchorage is viewed as the base community.
Representative Hawker continued, in the existing school
funding formula, there is a table, established in statute,
providing a fixed number. The accuracy of the numbers has
become a gradation issue before the Legislature since 1998.
While the funding formula changes recommended in a
previously considered bill were the result of a compromise
and consensus which included dissenting opinions.
The Task Force did acknowledge that the school differential
numbers used in the recommendation are suspect and subject
to query, question and debate. In order to break the
deadlock forward funding, the Task Force opted to move
forward with a phased-in implementation of cost factors
recommended by the Legislative Budget and Audit Agency (LBA)
hiring consultant. Representative Hawker expressed that the
cost factors put in statute were no more or less precise
than the numbers was being replaced. They represent a
degree of change, which is a good thing. The five year
phase in period for those cost factors was specifically
included to allow the Legislature to implement another
recommendation made by the Education Funding Task Force to
continue the work with an additional approach bringing
together legislators to help craft a durable mechanism for
the recurring redetermination of the cost factors, which HCR
13 accomplishes.
1:49:50 PM
Representative Hawker continued. HCR 13 creates the
Education Funding District Cost Factor Task Force, which is
tasked with examining school district cost differentials and
determining a formula to adequately fund education
throughout Alaska.
Representative Hawker opined that the only way to achieve
any harmony in the Legislature as well as achieving parity
across the State is to create a calculation mechanism,
acceptable to the Legislature in an open, public task force
approach, bringing everyone together dedicated to the cause
for redefining cost factors. He emphasized that the State
has historically failed to recalculate the cost factors.
Everything that went into the calculation was not acceptable
to the body politics. He envisioned that the Task Force
would develop a by-in and consensus along the way, proving a
methodology that works. He urged the Committee's support of
the resolution.
1:52:52 PM
Representative Gara asked if the proposal was unanimously
supported by the Task Force. Representative Hawker replied
that there had been unanimous agreement that the district
cost factor calculations are one of the biggest issues for
the State. He hesitated to say that everyone supported the
numbers. He recollected that the process did provide
concurrence for establishing an approach to create a durable
model. There is a strong difference of opinion as whether
the process should be dominantly a legislative or
administrative one.
Representative Hawker concurred with the consensus
recommendation of the Task Force, making it a legislative
process, which he believed would be appropriate. He noted
that by operating in a bicameral, bipartisan basis, a buy-in
was achieved, necessary to carry the policy decisions
forward. He reiterated his support for using the
legislative approach.
1:55:30 PM
Representative Gara asked about dissenting voices in the
process. He understood that there had been disagreement
regarding what the cost factors should be. He said he was
sympathetic to the argument that the rural schools have been
substantially underfunded and that the resolution provides
an opportunity to look at those issues.
Representative Hawker advised that the Task Force report
contains an extensive response supporting the proposal &
arguments for another perspective. The debate has been
entered into the public record.
1:56:45 PM
Representative Thomas pointed out that the University has
not complained about the cost differentials and asked if
there is a better formula used by them. Representative
Hawker commented that cost differentials exist across the
State in a number of business arenas. He believed that the
University encounters similar issues. He hoped that the
Legislative body could come up with a modeling system that
provides sufficient buy-in support.
Representative Kelly advised he had voted against the
recommendations of the Task Force. He was concerned that
the tasks of the study commission would fail. These issues
have been more successfully addressed in the State. He
noted concern that if the State is going to provide a cost
study reflective of the issue, the concern should focus on
how cost factors not harm the delivery of a first class
education to rural areas, while significantly improving that
delivery. He hoped it would be more inclusive. He
mentioned offering an amendment later.
Representative Kelly outlined his concerns:
· The academic outcomes should be the chief driver
· /schools with 10 students or less, should be a part
of the debate regarding whether the system can
st
deliver 1 class education to them
· An understanding regarding when schools help
· Consideration of using delivery technology
· Concerns of offering high salaries paid in certain
parts of the State where at the same time, those
areas have huge unemployment rates
Representative Kelly encouraged that more rural students go
through the teacher training programs so that they can
return to teach in the village areas. He thought that could
help address the high teacher turnover. It has not happened
to date and many students seeking education do not return to
the State, particularly the rural areas.
He recommended that life success be addressed rather than
creating more difficulties for the State. The Legislative
Body should discuss first-class education in the rural areas
and excellent outcomes. In order to make a model work,
other items will be affected. He added that the Task Force
should have been awarded more time to accomplish the
vastness of these goals.
2:04:33 PM
Representative Hawker maintained that points raised by
Representative Kelly is the type of discussion that should
take place in a properly managed task force. There is a
fine line between rewriting the school district funding
formula and fixing a broken component within the existing
formula. There is nothing in the format of the Task Force
that prohibits a new vision approach to school operations
funding management. The Task Force concept recognizes that
there is a funding mechanism in place and that there are
real problems with the school district cost factors. He
maintained that a managed task force approach could address
many of the identified problems. He referenced the Moore
decision, which had been addressed in the Alaska Court last
summer [2007], a response to a lawsuit against the State of
Alaska for not providing adequate funding for schools across
the State. There was extensive discussion and the outcome
of that decision determined that the Legislature is
responsible for the outcome in the schools. He maintained,
it is imperative to examine the true differentials between
the urban and rural areas, a critical step addressing the
comprehensive manner of the issues.
2:07:46 PM
EDDY JEANS, DIRECTOR, EDUCATION SUPPORT SERVICES, DEPARTMENT
OF EDUCATION AND EARLY DEVELOPMENT, advised that the
Department of Education and Early Development and the Office
of the Governor support HCR 13.
PUBLIC TESTIMONY CLOSED
2:08:29 PM
Representative Gara voiced confidence in the resolution,
pointing out that that the argument has come forward every
year with regards "who gets what money". The answer can
only be determined once the needs of each school district
are known. He maintained that more information is needed to
determine the needs and that there must be further
discussion within the statewide education system.
Representative Nelson addressed disparaging comments
regarding rural schools made by Representative Kelly. She
pointed out that many rural schools, which hover around ten
students, are doing well, making the Adequate Yearly
Progress (AYP) 0 multiple years in a row. The larger
schools are not doing that well. She pointed out that there
are cases of small schools offering generational teachers.
She listed school districts with Native success rates.
There are Native teachers that went to University of Alaska-
Fairbanks (UAF), returning to their village areas, who are
now retiring out of the system. She maintained that there
are advances being made in some of those small, fewer than
ten student schools and noted that not every school hovering
around ten should be considered to be closed because of low
student enrollment.
2:12:02 PM
Representative Hawker MOVED to ADOPT Conceptual Amendment 1.
Co-Chair Meyer OBJECTED for discussion purposes.
Representative Hawker noted Amendment 1:
· Page 2, Line 1, following "differentials", deleting
"and" and inserting","
· Page 2, Line 2, following "providing education",
inserting ", and contracting for research,
consultants and experts, as the commission considers
necessary, to create the model".
2:12:49 PM
Representative Hawker explained that the amendment addresses
a question raised in a previous committee. The amendment
clarifies that it is expected that the Task Force process
contracts with economists or other professionals to assist
determining the intent to utilize outside consultant skills.
The amendment language acknowledges that.
Co-Chair Meyer WITHDREW his OBJECTION. There being NO
further OBJECTION, it was adopted.
2:14:30 PM
Co-Chair Meyer referenced the fiscal note submitted by the
Legislative Affairs Agency (LAA). Representative Hawker
requested latitude to revise the fiscal note. He pointed
out that fiscal notes often submitted in addition to the
operating budget. It is envisioned that all the costs of
the Task Force could be encompassed in existing legislative
authority. He added that the Legislative Budget and Audit
(LBA) Committee ran the two previous studies that never
reached sufficient legislative buy-in to provide consensus.
Co-Chair Meyer agreed.
2:15:48 PM
Vice-Chair Stoltze MOVED to REPORT CS HCR 13 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
2:16:22 PM
CS HCR 13 (FIN) was reported out of Committee with a "do
pass" recommendation and with a new zero note by the House
Finance Committee.
2:16:43 PM
HOUSE BILL NO. 320
An Act relating to certification of search and rescue
personnel and organizations; requiring certain search
and rescue personnel to be considered state employees
for purposes of workers' compensation coverage; and
allowing municipalities to elect to provide workers'
compensation insurance coverage for search and rescue
personnel.
MICHAEL PAWLOWSKI, STAFF, CO-CHAIR KEVIN MEYER, addressed
the philosophy behind the bill and some of the changes made
during the committee process. He stated that the concern
had been brought forward by a constituent involved in the
Search and Rescue community.
He pointed out that Section 3, AS 18.60.125, addresses civil
immunity and provides the essence of the bill. Through the
workers compensation statute, an employee and employer come
to an agreement that in an injury, the workers comp system
would be used rather than going to court to deliver benefits
to the injured employee.
At present time, Search & Rescue volunteers are expressly
prohibited from suing the State under existing statute,
indicated as civil immunity located in Section 3. There has
been a voluntary policy issued through the Division of Risk
Management is not consistent; it is a secondary policy. He
emphasized that these are a group of volunteers, whom the
State relies upon to deliver search & rescue services and
assist Alaska State Troopers for statewide outdoor
activities. He noted that the sponsor believes that this
group of people are basically State employees for the
purposes of those missions.
Mr. Pawlowski mentioned other groups who receive workers
compensation that are also volunteers such as the volunteer
fire fighters, volunteer emergency medical attendants and
emergency relief workers. They are all considered State
employees for the purposes of workers compensation. When
considering the volunteer needs, HB 320 was drafted to
provide workers with compensation coverage.
Mr. Pawlowski acknowledged that there have been few
accidents in the history of Search & Rescue in the State.
The bill attempts to be proactive, in the past six years,
more than 2,300 people have been saved by the efforts of
search and rescue volunteers, assisting State Troopers.
2:20:03 PM
Mr. Pawlowski highlighted changes made to the bill during
the committee process. The requirement for certification
and registration was removed and some volunteers did not
like that. A fiscal note was included, requiring one
statewide full time employee to work with the volunteers in
coordinating the effort.
Mr. Pawlowski summarized, HB 320 provides coverage to a
group of people in the State, who perform an important and
valuable service and guarantees they are covered in case of
an accident. Certification has been removed and authority
for training was added.
2:21:17 PM
Representative Gara asked if a person were entitled to
workers compensation insurance, would they loose their
ability to be able to sue in Court. He understood that if
the injured person did not have workers comp insurance, they
could sue. He asked if there was 100% certainty that only
those that receive State workers comp insurance would not be
entitled to sue.
Mr. Pawlowski explained that in existing statute; civil
immunity already exists. The legislation provides coverage
currently unavailable in existing statute. He requested
that the Department of Labor and Workforce Development
address the issue.
Representative Gara requested the classification of those
who would not be able to sue in Court.
2:23:08 PM
Representative Gara did not want to see a circumstance,
where someone doing search and rescue work and not covered
by insurance, if they were injured, then not being allowed
to sue. Mr. Pawlowski replied that in existing law, it is
not an either/or situation. Right now, there is no coverage
and there is prohibition from suing so the civil immunity
statute would remain in place and they would receive
coverage.
Representative Gara asked if the bill was passed, would all
volunteers doing search and rescue receive either coverage
by insurance or the ability to sue. Mr. Pawlowski addressed
two areas where a person does not have coverage under the
proposed bill:
· A person performing a Search & Rescue outside the
State Troopers with no authorization for the
mission; and/or
· When the request is drawn-up by a municipality, as
indicated in Section I.
He acknowledged there are places where a volunteer would not
be covered and did not know how civil immunity would be
affected.
2:25:17 PM
Representative Gara maintained that if the intent was to
protect the search & rescue workers, language could be added
to clarify that the State have immunity to the extent that
they provide insurance to that person. If the State has not
provided insurance to the volunteer, they have no immunity.
Mr. Pawlowski referenced that observation to the Division of
Risk Management.
2:26:11 PM
Co-Chair Meyer hoped the legislature would make the statute
consistent with the voluntary Emergency Medical Technician's
(EMT) workers compensation coverage.
Representative Kelly inquired how many other states offer
the coverage. Mr. Pawlowski did not know, but offered to
check. In Title 23, there are extensive lists of statewide
groups that receive compensation. Some sections of the bill
were taken directly from AS 23.32.44, the emergency disaster
relief volunteers.
2:27:53 PM
CHARLES SPRINGER, (TESTIFIED VIA TELECONFERENCE), ALASKA
SEARCH & RESCUE, ANCHORAGE, testified in support of the
legislation which will provide basic protection for
volunteers who put their health and safety at risk in
volunteer efforts for the State.
2:29:26 PM
PUBLIC TESTIMONY CLOSED
2:29:36 PM
BRAD THOMPSON, DIRECTOR, DIVISION OF RISK MANAGEMENT,
DEPARTMENT OF ADMINISTRATION, advised that the Division
administers the State of Alaska's self insurance program,
which extends to State agencies and employees. HB 320 would
create a statutory employee for a search and rescue
participant under the direction of the Department of Public
Safety. Mr. Thompson pointed out that it would be a new
extension of the workers compensation benefit for the member
under the direction of that Department. It has been the
policy and practice to extend to those participants that
volunteer for State service under a similar provision. The
volunteer is not eligible to receive the workers
compensation benefit but there has been a service agreement
which extends to the participant a similar benefit paid only
if there is no other source of coverage. In the proposed
statute, it would be noted that there is a service agreement
that medical costs be paid. The proposed statute makes the
State primarily responsible to pay medical indemnity for
wage loss based on the average weekly wage.
2:31:24 PM
Representative Gara wanted a guarantee that those persons
who do search & rescue work are protected in either their
ability to go to Court to get the coverage or to get
insurance. He asked if there could be any gap, to any
person that volunteers for search and rescue efforts. Mr.
Thompson reiterated that the bill creates a statutory
benefit of workers compensation; the State is self-insured.
It would pay the same benefit to those participants that it
would to a State employee with the benefit based on an
average weekly wage. Existing civil immunity language does
address the State & municipality's exposure for liability
claims from Search & Rescue missions and extends to those
individuals.
2:32:43 PM
Representative Gara advised that in the general workmen's
comp language, if an individual is not covered, there would
be no benefit from immunity; it would be one or the other.
He asked if there would be objection from the Administration
to guarantee that every person doing search and rescue work,
has one or the other option. Mr. Thompson argued that there
is no direct action and that the employee has the exclusive
remedy listed under the workers compensation law. There is
no direct-action legal ability to pursue a civil action
against an employer. The present civil immunity statute
addresses participants and third parties. The proposed
benefit enacts a practice, which provides commitment to pay
workers compensation and does not change the existing civil
immunity. If the volunteers were under the control of the
Department of Public Safety, they would be paid the benefit.
The State is self-insured and would make that benefit
payment.
2:34:24 PM
Representative Gara asked the recourse under the bill, if
the State or municipality did not provide insurance for the
individual if that person was hurt. Mr. Thompson explained
that if the volunteer was acting under the control of State
authority, they would be covered; if a municipality offered
their own Search & Rescue, not under the direction of the
Department of Public Safety, they would have the option to
extend similar statutory benefits to those responders. If
they choose not to offer it, there could be a situation in
which the volunteer would be without compensated benefits.
Representative Gara asked if they would be without the right
to get a remedy in Court. Mr. Thompson said yes.
Representative Gara asked if Mr. Thompson would support
language added to address that. Mr. Thompson said he was
not sure that tweaking the civil liability statute should be
undertaken.
2:36:42 PM
Representative Gara inquired how it could be fair for
someone risking their life to save another not receive
coverage either through insurance or court. Mr. Thompson
responded that if working for the State through the
Department of Public Safety, the volunteer would not be
placed in that dilemma. However, it is the municipality's
choice not to extend the statutory benefit. He could not
respond for them. Co-Chair Meyer agreed.
2:37:38 PM
Mr. Thompson was not aware of other states offering the
extension. He explained the difference between what is
being offered and what is being proposed and that the State
would assume out of pocket payment; otherwise, there would
be no covered medical.
2:38:33 PM
Representative Kelly inquired if a volunteer was hurt while
performing the operations, would the State be paying them
for the next two years. Mr. Thompson explained that the
benefit would be based on the Alaska average weekly wage,
whether prior earnings or not.
Vice-Chair Stoltze suggested that HB 320 would increase the
number of people with coverage. The bill provides a
tangible benefit to volunteers. He spoke in support of the
bill as it increases benefit and coverage to more volunteers
that help with statewide safety.
2:40:58 PM
Representative Thomas provided a hypothetical situation
based on personal experience when responding to emergency
situations. He wondered if there would be an authorization
period required by the bill.
Representative Kelly observed that the current situation
allows for lawsuits; he wondered how many of the volunteers
have sued over the past five years. Mr. Thompson reported
that the State has received no such civil action claims.
Representative Kelly asked if small claims payments could
involve paying wages in the old scenario. Mr. Thompson
replied that the State would have paid wage replacement
based on the minimum comp rate available at that time.
Representative Gara noted frustration with the Department's
testimony. He reiterated that the volunteer is not allowed
to sue under current law, which is why almost no one has
sued. He emphasized his frustration that the Department has
not provided "straight answers" to the questions being
asked.
2:45:26 PM
Mr. Pawlowski addressed concerns voiced by Representative
Gara. He commented that Mr. Thompson did explain the
municipal exception well. In drafting the bill and working
with the communities, the intent was not to create an
unfunded mandate where the community would be required to
add coverage. Changing the civil liability statute places a
municipality at risk for being sued. He recommended hearing
testimony from Kevin Smith of the Municipal League regarding
the joint insurance arrangement discussing types of
liabilities the communities could be at risk for. If the
bill passes, concerns voiced by Representative Gara would be
mute.
Representative Gara understood the intent was to expand
coverage to people barred from suing. If the municipalities
have concerns, it would not surprise him. He believed that
the work of the Division of Risk Management should be to
protect the State from liability, not to provide
remedies. He wanted the loopholes addressed.
Co-Chair Meyer pointed out that the municipalities have the
option to either opt in or out.
2:48:16 PM
LIEUTENANT RODNEY DIAL, (TESTIFIED VIA TELECONFERENCE),
DEPUTY COMMANDER, DIVISION OF ALASKA STATE TROOPERS,
DEPARTMENT OF PUBLIC SAFETY, spoke to the fiscal note. He
requested one additional full time position to oversee and
provide training for the program.
Representative Hawker recommended the fiscal note be zeroed
out. He acknowledged that the Department of Public Safety
is understaffed; however, HB 320 is not the vehicle for
solving those problems. Lt. Dial pointed out the bill
requires required oversight, training and management for
over 1,000 statewide volunteers. Representative Hawker
disagreed.
Representative Kelly aligned with comments made by
Representative Hawker, noting the hidden expenses contained
in the note.
2:54:06 PM
In response to Representative Kelly, Mr. Pawlowski pointed
out the expanded responsibilities of the Commissioner and
different from the version submitted by the House Labor and
Commerce Committee. Section 1 does not requiring it and the
language provides coverage for the authorized training
mission. The Department envisions some sort of training
coordination within the communities will need to happen. He
added, the certification provisions had been removed.
Representative Gara agreed that the cost to the State should
be less than zero, but acknowledged that there could be
unanticipated expenses. Mr. Thompson explained that Risk
Management is funded by inter-agency receipts. Cost of risk
is based on:
· The cost of claims; and
· Exposure.
The actual costs generated from the claims are collected for
a 5-year window and then proportionately shared to each
department. The portfolio of risk changes every year. The
revision could increase a portion of it. Each year when the
Risk Management budget request is prepared, all payments are
taken into account.
2:57:49 PM
Co-Chair Meyer MOVED to ADOPT Amendment 1. (Copy on File).
Vice-Chair Stoltze OBJECTED.
Page 3, Line 17, following "wage" would delete "but the
gross weekly earnings for calculating compensation may
not be less than the minimum wage computed based on 40
hours of work a week".
Mr. Pawlowski explained the intent of the Amendment to
provide clarification.
Vice-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 1 was adopted.
2:59:13 PM
Representative Hawker asked the decision on the Department
of Public Safety fiscal note. Co-Chair Meyer recommended
cutting it in half.
Representative Hawker MOVED to zero out the note. Co-Chair
Meyer OBJECTED.
Representative Hawker restated the request urging that more
in depth discussion occur on the Department of Public Safety
operating budget.
Co-Chair Meyer suggested consideration of an indeterminate
note. Representative Hawker emphasized zeroing out the
note, suggesting that the Division of Risk Management may or
may not carry a consequence.
Co-Chair Meyer WITHDREW his OBJECTION. There being NO
further OBJECTION, the fiscal note was zeroed out for the
Department of Public Safety and an indeterminate note for
Division of Risk Management.
3:02:03 PM
Vice-Chair Stoltze MOVED to REPORT CS HB 320 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes. Representative Kelly OBJECTED.
Representative Kelly indicated his concern about moving away
from a volunteer system throughout the State. He restated
that it could end up costing a lot more. He emphasized that
the current system works well.
Representative Kelly WITHDREW his OBJECTION.
Representative Gara OBJECTED, but disagreed with comments
made by Representative Kelly. He maintained if there was
universal health care, the State would not need the bill.
Representative Gara WITHDREW his OBJECTION.
There being NO further OBJECTION, it was so ordered.
CS HB 320 (FIN) was reported out of Committee with a "do
pass" recommendation and with zero note #1 by the Department
of Administration, indeterminate note #2 by the Department
of Administration and a new fiscal note by the House Finance
Committee.
3:05:38 PM
HOUSE BILL NO. 65
An Act relating to breaches of security involving
personal information, credit report and credit score
security freezes, consumer credit monitoring, credit
accuracy, protection of social security numbers, care
of records, disposal of records, identity theft,
furnishing consumer credit header information, credit
cards, and debit cards, and to the jurisdiction of the
office of administrative hearings; amending Rule 60,
Alaska Rules of Civil Procedure; and providing for an
effective date.
REPRESENTATIVE JOHN COGHILL, SPONSOR, commented on the
amendments to the work draft \L version, previously adopted
by the Committee on 2/13/08. He mentioned the need for
discussion, whether to keep the Permanent Fund reporting
inclusion. He preferred leaving it out of the bill.
Representative Coghill referenced Amendment 1, the risk harm
component of reporting located on Page 4, Line 3, which
creates a new subsection.
3:08:37 PM
Co-Chair Meyer MOVED to ADOPT Amendment 1. (Copy on File).
Representative Hawker OBJECTED.
Page 4, after Line 3, inserting a new subsection (c)
"Notwithstanding (a) of this section, notification is
not required, if after an appropriate investigation or
after consultation with relevant federal, state, or
local agencies responsible for law enforcement, the
person or government entity determines that no
reasonable likelihood of harm to the consumers whose
personal information has been acquired has resulted or
will result from the breach. Such a determination must
be documented in writing and the documentation must be
maintained for five years."
Page 14, Line 28, after "discovering", inserting "or
notification of".
Representative Coghill explained the proposed language would
address concerns with a breach of information, maintaining a
notification requirement. Notification could attempt to
balance risk and harm. The amendment clarifies the risk
assessment. There has been an attempt to provide reasonable
effort when information has been compromised. He voiced
support for the amendment.
3:11:43 PM
Representative Hawker concurred with the appropriateness
associated with the risk of harm provision. He cautioned
that the language does not accomplish the intent. One of
two things which must occur is an appropriate investigation
or a consultation with the agency. He was not sure what "an
appropriate investigation" was or who would make that
determination; the burden of decision will be vested to the
information provider.
3:14:12 PM
Representative Gara thought that language stipulates a "good
neighbor" aspect. The bill indicates that it is mandatory
to tell. The companies came forward saying that they do not
want to always tell; if a decision is made, no one gets the
information. Representative Gara offered three choices:
· If personal privacy is violated, they must be
informed.
· The companies want a standard indicating that if the
person finds out that their information has been
breeched and determine that they have been harmed,
then the company has to notify them. He commented,
the consumer might never find that out.
· Middle ground: If the company determines that the
information was accidentally released and no one
will ever see it, as long as it is documented, they
would not have to send out the notices.
Representative Gara supported Amendment 1, which he thought
would provide reasonable middle ground.
Representative Coghill added, it would accompany acquisition
of information. He differed from ideas of Representative
Gara regarding the companies' responsibility during the
assessment process. He realized the risk in information
taken, which requires an investigation and consultation with
the enforcers. There also would be a need for the
reasonable likelihood of harm, which is the standard
language.
3:17:10 PM
Representative Coghill pointed out that Section B provides a
similar standard making exposure of time possible without
unreasonable delay. There are ways to determine that the
companies did not take reasonable efforts; i.e., soft
standards.
Representative Hawker WITHDREW his OBJECTION to Amendment 1.
There being NO further OBJECTION, Amendment 1 was adopted.
3:19:31 PM
Representative Gara MOVED to ADOPT Amendment 2, #25-
LS0311\L.3, Bannister, 2/18/08. (Copy on File). Co-Chair
Meyer OBJECTED.
Page 6, Line 16, following "however" inserting "(1)";
Page 6, Line 19, following "$50,000", inserting "; and
(2) damages that may be awarded against the information
collector under (A) AS 45.50.5311 are limited to actual
economic damages that do not exceed $500; and (B) AS
45.50.537 are limited to actual economic damages".
Representative Gara advised that there had been concerns
regarding the actual economic damages. Legislative Legal
wrote the bill to clarify that the person could not receive
non-economic damages, however, left out the limitation
needed on Page 6.
Co-Chair Meyer WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 2 was adopted.
3:20:14 PM
Representative Nelson MOVED to ADOPT Amendment 3, #25-
LS0311\K.2, Bannister, 2/07/08. (Copy on File).
Representative Hawker OBJECTED.
Page 1, Line 1, deleting "the disclosure of permanent
fund dividend applicant records,"; Page 2, Line 4
through Page 3, Line 18, deleting all material and then
renumber the following bill sections accordingly: Page
29, Line 17, deleting "sec. 5", inserting "sec. 3";
Page 29, Line 21, deleting "sec. 5", inserting "sec.
3"; Page 29, Line 24, deleting "sec. 5", inserting
"sec. 3"; Page 29, Line 26, deleting "sec. 6",
inserting "sec. 4".
Representative Nelson commented that the Permanent Fund
Dividend (PFD) application being distributed to business
owners was counter-intuitive to the bill. She maintained
that Alaska should not need be in the business of
distributing personal information.
Vice-Chair Stoltze added that the amendment seeks to return
the State to the policy of privacy for dividend application
information; he did not think the request should be stuck
inside a privacy bill and recommended other avenues for
delivery by considered. He mentioned concerns expressed by
victims of domestic violence. He thought that would be a
worthy discussion.
Representative Hawker indicated his opposition to Amendment
3, which seeks to remove language added in the House
Judiciary Committee following extensive discussion. He
reiterated that it would be inappropriate to treat the two
databases of the registered voters in a different manner
than the Permanent Fund database. There was language added
placing an appropriate sidebar around access and utilization
of that data. He encouraged that the Committee consider the
protection of individuals as well as presumptive evidence.
He wanted to see the language of the bill preserved.
3:25:15 PM
Vice-Chair Stoltze stated that the information on the
Permanent Fund Dividend (PFD) is the most current by
necessity. It is not as common to update information on
one's driver's license or voter registration card because
the nature of the dividend is that applicants want to
receive their checks. He maintained the need for extra
effort to protect individuals.
3:26:38 PM
A roll call vote was taken on the MOTION to ADOPT Amendment
3.
IN FAVOR: Nelson, Stoltze, Thomas, Gara
OPPOSED: Hawker, Kelly, Meyer
Representatives Joule, Crawford, Harris and Chenault were
not present for the vote.
The MOTION FAILED (4-3).
Representative Nelson requested the amendment be HELD for
RESCIND at the next meeting, when enough members are
present.
Representative Thomas asked if the social security numbers
listed in the PFD information, would be distributed. Co-
Chair Meyer remembered that was optional information.
Representative Nelson pointed out that Representative
Coghill has sponsored numerous pieces of legislation
attempting to protect individual's social security numbers.
Representative Hawker requested clarifying testimony from
authorities.
3:29:07 PM
Representative Hawker MOVED to ADOPT Amendment 4, #25-
LS0311\K.1, Bannister, 1/20/08. (Copy on File).
Representative Nelson OBJECTED.
Page 2, Line 22, following "information" inserting
"except applicant information about individuals who are
under 18 years of age".
Representative Hawker explained that the amendment provides
language determined by the Department of Revenue and another
interested party's to resolve concerns of access of
children's information. He understood that the Department
of Revenue fully supports the amendment.
Representative Kelly asked if the sponsor was in supported
the amendment. Representative Coghill affirmed.
Representative Nelson WITHDREW her OBJECTION. There being
NO further OBJECTION, it was adopted.
3:30:22 PM
Representative Gara recommended that Amendment 3 be
addressed on the House Floor. Representative Nelson did not
agree, maintaining her request.
Representative Kelly anticipated an answer to the social
security question relative to Amendment 3. Representative
Coghill recommended that the Permanent Fund Dividend
representative address that issue.
3:31:57 PM
JERRY BURNETT, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF REVENUE, responded to the query
regarding whether or not social security numbers could be
released with PFD information under the bill as written.
The answer is that the bill limits information to only names
and addresses not social security numbers. There is a
limitation in the bill regarding what applicant information
can be distributed.
HB 65 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting was adjourned at 3:32 P.M.
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