Legislature(1995 - 1996)
04/27/1995 02:05 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE April 27, 1995 2:05 p.m. MEMBERS PRESENT Representative Cynthia Toohey, Co-Chair Representative Con Bunde, Co-Chair Representative Al Vezey Representative Gary Davis Representative Norman Rokeberg Representative Caren Robinson Representative Tom Brice MEMBERS ABSENT None COMMITTEE CALENDAR PRESENTATION on the need for education and training in the field of Alaska Tourism: Dr. Jay Kandampully, University of Alaska Fairbanks. * HB 281: "An Act ratifying an agreement between the Alaska Housing Finance Corporation and the commissioner of revenue and making certain pledges to obligees of the corporation regarding that agreement; relating to the authorization for and the issuance of bonds by the Alaska Housing Finance Corporation to pay for the costs of repair and rehabilitation of student housing facilities of the University of Alaska; and providing for an effective date." HEARD AND HELD * HB 282: "An Act relating to the authorization for and the issuance of revenue bonds by the University of Alaska to pay for the costs of repair and rehabilitation of buildings and other structures, excluding student housing and dormitories, of the University of Alaska; expanding the uses of the Alaska debt retirement fund to allow financing of the repair and rehabilitation of University of Alaska facilities; and providing for an effective date." HEARD AND HELD HB 242: "An Act relating to the establishment, modification and enforcement of support orders and the determination of parentage in situations involving more than one state; amending Alaska Rule of Administration 9; amending Alaska Rules of Civil Procedure 79 and 82; and providing for an effective date." PASSED OUT OF COMMITTEE * HB 244: "An Act relating to administrative establishment of paternity and establishing paternity by affidavit; relating to child support enforcement; and providing for an effective date." PASSED OUT OF COMMITTEE * HB 205: "An Act relating to a claim based on criminal street gang activity; relating to offenses related to criminal street gang activities; relating to the crime of recruitment for, sentencing for, and forfeiture of property relating to criminal street gang activities; restricting criminal street gang offenders from obtaining a permit to carry a concealed handgun; amending Alaska Rule of Civil Procedure 82; and providing for an effective date." HEARD AND HELD * HB 280: "An Act establishing the Alaska Human Resource Investment Council and transferring certain functions of other entities to the council; establishing a planning mechanism for employment training and other human resource investment needs; and providing for an effective date." PASSED OUT OF COMMITTEE CONFIRMATION HEARINGS: Board of Dental Examiners. (* First public hearing) WITNESS REGISTER DR. JAY KANDAMPULLY, Professor School of Management University of Alaska Fairbanks Fairbanks, AK 99775 Telephone: (907) 474-5527 POSITION STATEMENT: Made a presentation on the need for education and training the field of Alaska tourism. WENDY REDMAN, Vice President Statewide University System University of Alaska P.O. Box 155000 Fairbanks, AK 99775 Telephone: (907) 474-7311 POSITION STATEMENT: Testified in support of HB 281 and HB 282. BILL HOWE, Deputy Commissioner of Revenue Treasury Division Department of Revenue P.O. Box 110405 Juneau, AK 99811-0405 Telephone: (907) 465-4880 POSITION STATEMENT: Testified in support of HB 281 and HB 282. GLENDA STRAUBE, Director Child Support Enforcement Division Department of Revenue 550 W. 7th, Suite 312 Anchorage, AK 99501 Telephone: (907) 269-6801 POSITION STATEMENT: Testified in support of HB 242 and HB 244. ART PETERSON, Attorney Dillon and Finley Law Firm 350 N. Franklin St. Juneau, AK 99801 Telephone: (907) 586-4000 POSITION STATEMENT: Testified in support of HB 242. STUART HALL, Ombudsman State of Alaska P.O. Box 113000 Juneau, AK 99811 Telephone: (907) 465-4970 POSITION STATEMENT: Testified in support of HB 242. SHANNON O'FALLON, Assistant Attorney General Human Services Section Department of Law P.O. Box 110300 Juneau, AK 99811-0300 Telephone: (907) 465-3600 POSITION STATEMENT: Testified in support of HB 242. MARGOT KNUTH, Assistant Attorney General Criminal Division Department of Law Court Building, Room 717 Juneau, AK 99801 Telephone: (907) 465-3428 POSITION STATEMENT: Testified in support of HB 205. CAPTAIN BRUCE RICHTER Anchorage Police Department 4501 S. Bragaw Anchorage, AK 99507 Telephone: (907) 786-8500 POSITION STATEMENT: Testified in support of HB 205. BOB RUBADEAU, Special Assistant to the Lieutenant Governor Lieutenant Governor's Office State Capitol, 3rd Floor Juneau, AK 99801 Telephone: (907) 465-3520 POSITION STATEMENT: Provided sponsor statement for HB 280. SARAH SCANLON, Vice President Northwest Alaska Native Association Former Chair, Alaska Job Training Council 1001 E. Benson Blvd. Anchorage, AK 99508 Telephone: (907) 265-4100 POSITION STATEMENT: Testified in support of HB 280. PREVIOUS ACTION BILL: HB 281 SHORT TITLE: AHFC TRANSFERS TO GENERAL FUND; BONDS SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 03/24/95 901 (H) READ THE FIRST TIME - REFERRAL(S) 03/24/95 901 (H) HES, FINANCE 03/24/95 901 (H) FISCAL NOTE (REV) 03/24/95 901 (H) 2 ZERO FISCAL NOTES (REV, UA) 03/24/95 901 (H) GOVERNOR'S TRANSMITTAL LETTER 04/27/95 (H) HES AT 02:00 PM CAPITOL 106 BILL: HB 282 SHORT TITLE: FINANCING REPAIR/REHAB OF U AK BLDGS SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 03/24/95 904 (H) READ THE FIRST TIME - REFERRAL(S) 03/24/95 904 (H) HES, FIN 03/24/95 904 (H) 4 ZERO FNS (2-ADM, REV, UA) 03/24/95 904 (H) GOVERNOR'S TRANSMITTAL LETTER 04/27/95 (H) HES AT 02:00 PM CAPITOL 106 BILL: HB 242 SHORT TITLE: UNIFORM INTERSTATE FAMILY SUPPORT ACT SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 03/08/95 642 (H) READ THE FIRST TIME - REFERRAL(S) 03/08/95 642 (H) HES, JUDICIARY, FINANCE 03/08/95 642 (H) 2 FISCAL NOTES (DHSS, REV) 03/08/95 642 (H) 2 ZERO FISCAL NOTES (LAW, DCRA) 03/08/95 643 (H) GOVERNOR'S TRANSMITTAL LETTER 04/25/95 (H) HES AT 02:00 PM CAPITOL 106 04/26/95 (H) JUD AT 01:00 PM CAPITOL 120 04/27/95 (H) HES AT 02:00 PM CAPITOL 106 BILL: HB 244 SHORT TITLE: PATERNITY; CHILD SUPPORT ENFORCEMENT SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 03/08/95 645 (H) READ THE FIRST TIME - REFERRAL(S) 03/08/95 645 (H) HES, JUDICIARY, FINANCE 03/08/95 645 (H) 2 FISCAL NOTES (DHSS, REV) 03/08/95 645 (H) 2 FISCAL NOTES (DHSS, LAW) 03/08/95 645 (H) GOVERNOR'S TRANSMITTAL LETTER 04/25/95 (H) HES AT 02:00 PM CAPITOL 106 04/27/95 (H) HES AT 02:00 PM CAPITOL 106 BILL: HB 205 SHORT TITLE: STREET GANG ACTIVITY SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 02/27/95 497 (H) READ THE FIRST TIME - REFERRAL(S) 02/27/95 497 (H) HES, STATE AFFAIRS, JUDICIARY 02/27/95 497 (H) 7 ZERO FNS (2-ADM,3-DHSS,CORR,LAW) 02/27/95 497 (H) ZERO FISCAL NOTES (DPS) 02/27/95 498 (H) GOVERNOR'S TRANSMITTAL LETTER 04/25/95 (H) HES AT 02:00 PM CAPITOL 106 04/27/95 (H) HES AT 02:00 PM CAPITOL 106 BILL: HB 280 SHORT TITLE: HUMAN RESOURCE INVESTMENT COUNCIL SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 03/24/95 896 (H) READ THE FIRST TIME - REFERRAL(S) 03/24/95 896 (H) HES, FINANCE 03/24/95 896 (H) FISCAL NOTE (GOV) 03/24/95 896 (H) 4 ZERO FNS (DCED,DCRA,DOE,DHSS) 03/24/95 897 (H) 2 ZERO FNS (LABOR, UA) 03/24/95 897 (H) GOVERNOR'S TRANSMITTAL LETTER 03/24/95 899 (H) SECTIONAL ANALYSIS 04/20/95 (H) HES AT 02:00 PM CAPITOL 106 04/20/95 (H) MINUTE(HES) 04/22/95 (H) HES AT 10:00 AM CAPITOL 106 04/25/95 (H) HES AT 02:00 PM CAPITOL 106 04/27/95 (H) HES AT 02:00 PM CAPITOL 106 ACTION NARRATIVE TAPE 95-43, SIDE A Number 000 CO-CHAIR CON BUNDE called the meeting of the House Health, Education and Social Services standing committee to order at 2:05 p.m. Present at the call to order were Representatives Bunde, Toohey, Robinson, Brice and Davis. A quorum was present to conduct business. Co-Chair Bunde read the calendar and announced the order of the bills. Number 061 CO-CHAIR CYNTHIA TOOHEY introduced her "surrogate" daughter for "Take your daughter to work day," Julia Johnson. She is a sixth- grade Girl Scout from Juneau. Co-Chair Toohey thanked her for being present. Number 123 REPRESENTATIVE CAREN ROBINSON introduced the "daughters" of Representative Bettye Davis, who were also present at the meeting. CO-CHAIR BUNDE announced the arrival of Representative Rokeberg at 2:07 p.m. Number 217 PRESENTATION ON THE NEED FOR TRAINING AND EDUCATION IN THE FIELD OF ALASKA TOURISM. DR. JAY KANDAMPULLY, Professor, University of Alaska Fairbanks, spoke about vocational needs in the field of tourism. University research has shown that training needs are vocationally biased, and basic skill needs in the Alaska tourism industry is needed. There is a need to provide employers with human resources. Because the state has a lack of skilled people who can fill basic positions such as waiters, bus conductors, or tour guides, employers go outside Alaska and recruit people from the Lower 48. DR. KANDAMPULLY said education is needed that is vocationally biased toward technical and skill-based jobs, and does not emphasize book-learning. Real-life and technical experience is necessary to be a part of the tourism industry. When a student graduates or ends school, he or she should ideally have experience in the industry already. DR. KANDAMPULLY noted that oftentimes, a person will be asked, "You have a degree in tourism and management. Do you have any experience?" and the answer is no. In a skills-based education, that will not be the case. Number 330 DR. KANDAMPULLY said one program he has begun in Fairbanks is the training of high school juniors and seniors in technical skills by which they will be able to go straight from high school into a service-based job. That program has internships and technical skills training for summer job placement. DR. KANDAMPULLY has also designed a program that goes beyond the school-to-work program. The school-to-work program typically is a good approach when giving students an opportunity to work. However, those students should be given more. They need the opportunity to come out of the industry and, if they want to study further, to make use of an available individual development process. DR. KANDAMPULLY felt it is important to build a bridge in between high school and college; college and post-graduate learning institutions; and in between high school, college, graduate school and the industry. A student graduating from high school with technical, skills-based knowledge may enter the industry. If the student then desires, he or she can go to college or stay in the industry two or three years until he/she is ready for college. DR. KANDAMPULLY said sometimes, students do poorly in high school. They may quit high school and go straight into a service industry, staying there for a few years. Then the student realizes that he or she needs more education in order to advance a career. He or she cannot attend college because of a lack of a high school diploma. Dr. Kandampully said a program of the sort he has started allows the person to gain credit for the time of experience she/he already has in the industry, and gain much needed training for advancement. Number 476 DR. KANDAMPULLY added that the ability to transfer credit from his program to the institute of higher education is necessary. The school program which Dr. Kandampully is running provides six college credits for children who are enrolled. Therefore, before even entering college, they have six college credits. That encourages them to continue to the university and study further in this field. DR. KANDAMPULLY said his program does not focus solely on tourism. The program applies to any field of technical knowledge. Teaching should be divided in the following way: Thirty percent should be applied theory, not pure theory; 30 percent of instruction should include technical skills, which is very important so the student learns what to do in the industry; and 40 percent of the instruction should be taught within the industry so there is no conflict between what is taught and what actually happens within the industry. When the student comes out of instruction, the student has been trained in the skills needed in the industry right now--instead of having read a textbook that could have been written ten years ago. DR. KANDAMPULLY felt a provision of that sort will allow the industry to take part in educating students. This type of teaching breakdown would be useful for those under full-time instruction, as well as those who are currently working within the industry and would like to learn more. Number 613 DR. KANDAMPULLY said the more the employees know what needs to be done in the industry, the more the customer will benefit. This is true for any industry, including tourism, construction, engineering, etc. The customer will know that when patronizing a particular organization, he/she will get the best service possible. DR. KANDAMPULLY noted that many of those employed in the service industry come from remote Alaskan villages, where the individual does not perhaps understand what is needed in the industry in the cities and towns. If education can be merged with industry placement, students coming from small towns will be able to work where they are needed, either in their own towns or around Alaska. DR. KANDAMPULLY said the Alaska Human Resource Investment Council bill will help his programs. Such a council advocates a vocational education. Number 714 CO-CHAIR TOOHEY said that Dr. Kandampully would be provided with a copy of HB 280, Human Resource Investment Council. She said he may find it interesting and perhaps helpful. REPRESENTATIVE ROBINSON asked if the university has given Dr. Kandampully any help on his projects. DR. KANDAMPULLY said yes. On the previous day, he spoke at a Alaska Visitor's Association meeting. The industry is completely in support of his approach. The industry told Mr. Kandampully it has been crying out for programs of this sort for a long time. In addition, nine different school districts wanted to adopt the same program to develop training and tourism vocational education within the school districts. Now the question is one of connection between the industry and the school districts. DR. KANDAMPULLY noted, however, that there was a problem. If, for example, a student was to drop out after two years of college, the student drops out with nothing. The only thing that student has is a high school diploma. Dr. Kandampully's program will allow that student to get a certificate in the first year of study. The second year will provide a diploma. Therefore, even if the student dropped out of Dr. Kandampully's program in the second year, he/she would already have a certificate and a diploma. At every stage, there is a gain. There is never any loss. Number 849 CO-CHAIR BUNDE asked Dr. Kandampully to list some of the technical skills that the tourism industry seeks in their employees. DR. KANDAMPULLY answered that technical skills are necessary. Technical skills can be as simple as interaction skills. Those can be very technical whether the job is driving a tour bus or answering phones. Doing anything professionally is technical. When a person calls a hotel, their first and only interaction with the hotel is with the person who answers the phone. The way the receptionist reacts to and speaks with the caller is crucial to whether or not the caller decides to stay at that hotel. The receptionist may be the least paid, and least experienced person in that entire hotel, but the receptionist would dictate whether the caller would come to the hotel or go to a competitor's. Number 923 DR. KANDAMPULLY noted that therefore, technically the receptionist must be skilled to attract customers. CO-CHAIR BUNDE and HESS Committee members thanked Dr. Kandampully for his informative presentation. HB 281 - AHFC TRANSFERS TO GENERAL FUND; BONDS HB 282 - FINANCING REPAIR/REHAB OF UA BUILDINGS CO-CHAIR BUNDE announced that since many of the bills being heard today were being heard for the first time, if it appears to be in the best interest of the committee, the bills will be held until a HESS Committee meeting on Tuesday, May 2, 1995. Number 1024 WENDY REDMAN, Vice President, Statewide University System, University of Alaska, said HB 281 and HB 282 are bills introduced by the Governor to begin to try and deal with the University of Alaska's deferred maintenance problem. HESS Committee members are well aware of the problem the university is facing in this area. Deferred maintenance is a problem that faces the entire state of Alaska. However, the university just happens to be the "biggest player." MS. REDMAN said about 50 percent of all state facilities are University of Alaska facilities. Over 80 percent of all the state facilities over 40 years old belong to the university. The university is therefore a very large part of the state's problem. The university currently has a backlog of deferred maintenance close to $157 million. MS. REDMAN asked to clarify a misperception that somehow this deferred maintenance problem has been created through gross mismanagement on the part of the university. Although there may have been mismanagement at the university over the last few decades in one area or another, this problem was clearly not created through taking money from maintenance and moving it to other problems. Number 1100 MS. REDMAN stated that in 1986, the university had a 20 percent reduction, a mid-year "recision" of 12 percent in August of that year, and the university took $1 million from maintenance at the Fairbanks campus to keep the semester going. That $1 million was then replaced the next year. MS. REDMAN said since that time the Board of Regents have mandated a program. The university has about a $12 million in underfunding for the operating maintenance budgets throughout the system. Because there has never been a formula created over the years, the board mandated all of those funds be reallocated from existing resources to bring the maintenance budgets back up over the next three years. MS. REDMAN said the university knows it cannot depend on new state money to do that, it must be done internally. The Board of Regents is absolutely committed to getting the deferred maintenance backlog fixed, and assuring the university will never get into that situation again. If that means, which it does, that the university is going to have to reallocate money by shrinking programs and campuses, then that is what it will do. That is what the university is doing over the course of the next three years to bring the budgets back up to par. Number 1174 MS. REDMAN stated the problem has been complicated for the legislature as well. Ms. Redman said this is her 18th session of working with the legislature. She noted that it is "not much fun" to appropriate money to buy paint and fix things. It is much more fun to build new buildings. Even though the university has not been building many new buildings over the last decade, it has been almost impossible to get money to fix old buildings. MS. REDMAN continued that the Governor has come up with a plan to begin addressing these problems. The plan relies on the use of the Alaska Housing Finance Corporation (AHFC). HB 281 appropriates $30 million to deal with the student housing deferred maintenance. The university has approximately $30 million worth of problems in university housing at the present time. It is within the purview of the AHFC to deal with the housing issue, and HB 281 would authorize the issuance of bonds to begin the repair and rehabilitation of those facilities. MS. REDMAN noted that everyone would prefer cash. However, it does not appear that cash is available this year or in the future. This bill therefore provides the university with an option that is probably the best one at this point to solve the problem. Number 1247 MS. REDMAN said the second bill, HB 282, goes together with HB 281. HB 282 has a delayed effective date because Governor Knowles is still trying to figure out how to get cash in the future. HB 282 says that if neither the Governor nor the legislature can come up with at least $20 million for the university for next year, the university would then authorize the AHFC, with a delayed effective date, to again let $45 million worth of deferred maintenance bonds with an effective date of July 1, 1996. MS. REDMAN said the Governor feels that would give him time. He is planning to work during the interim with a group of people to try and figure out a long-term plan for the deferred maintenance with a cash approach. That is always the university's first priority. In case that does not happen, the university needs to have a plan so it can begin laying out a bid plan to get these projects under way. The university is facing some crucial health and safety issues at this point. MS. REDMAN warned that soon, some buildings will have to be closed down, particularly on the Fairbanks campus. That is the oldest campus. However, the Anchorage campus also has a total of $35 million worth of deferred maintenance accrued on that campus alone. As HESS Committee members know from their own homes, when a problem is not taken care of, it accelerates very quickly. Therefore, within a couple of years, the newer Anchorage campus will be in as bad shape as the Fairbanks campus. MS. REDMAN concluded by saying that it is essential that these problems be addressed. These bills are the best way to approach those problems at this point in time, and the university asked the support of the HESS Committee members. Number 1340 CO-CHAIR BUNDE stipulated that although there may not have been gross mismanagement at the university, there may have been mismanagement. REPRESENTATIVE NORMAN ROKEBERG took exception, he felt that the mismanagement was gross mismanagement. He asked to summarize the two bills. He understood that HB 281 is a request for $30 million and the authority to use the AHFC for maintenance of existing residential housing. He asked if this has anything to do with the new housing for Anchorage, Ketchikan and Juneau campuses as provided for in HB 309 and HCR 18; he also asked how much money the university asked for in that legislation. MS. REDMAN answered that Representative Rokeberg was correct, the two are separate issues. HB 309 and HCR 18 would provide the university with about $30 million for new housing. REPRESENTATIVE ROKEBERG asked if that $30 million was also from AHFC, and Ms. Redman answered "yes." Number 1444 REPRESENTATIVE ROKEBERG noted that HB 281 asks for $30 million, and HB 282 asks for $45 million. Therefore, Ms. Redman was asking for $75 million. Representative Rokeberg realized there was a "tripwire" in HB 282, which made it contingent upon whether the Governor could come up with $20 million. He asked if the university knew what the money would be spent on. MS. REDMAN said the university has a detailed list of deferred maintenance needs. The "tripwire" is that if next year the Governor comes up with $20 million in cash, HB 282 would not go into effect. The bill has a delayed effective date of one year from the coming July. REPRESENTATIVE ROKEBERG asked for testimony from the AHFC. He asked about the budget for the university over the last ten years, such as in 1986, the year of the real estate and oil crash in Alaska. He also asked what percentage of the university budget has been allocated to repair and conduct operational maintenance. He specified he was referring to the maintenance portion of the physical plant. MS. REDMAN said she did not have that information handy, although she could get that information for Representative Rokeberg and would do so presently. She said it is based on a formula approach, which is a nationally recognized formula for what is done for maintenance. Number 1476 REPRESENTATIVE ROKEBERG asked if the university has been spending according to that formula over the last ten years. MS. REDMAN answered that the university has not been spending that amount over the last decade. The university is bringing its budget up to that level. The general fund of the university for the current year, 1996, is exactly the same as it was in 1986. REPRESENTATIVE ROKEBERG asked if the problem with spending money on maintenance is that the legislature has not given the university enough money. MS. REDMAN answered that was part of the problem. The university certainly could have made choices during the last decade as enrollment has gone up about 35 percent. The university could have made choices to not serve students, but that choice was not made. That perhaps is where the "mismanagement" of funds that Co-Chair Bunde spoke of occurred. The university has been trying to respond to enormous growth and need with a budget that has not kept up with that need. Number 1525 REPRESENTATIVE ROKEBERG felt it was unfortunate that the university built new structures while not looking after the existing physical plant as well as it could have. Representative Rokeberg understood that there were needs for new buildings. But it is unfortunate because state buildings other than those of the university have not been properly maintained. That is a serious situation. Number 1557 REPRESENTATIVE ROBINSON asked if it was not also true that many new facilities have been built to bring the university into compliance so other federal dollars could be gained. MS. REDMAN said in fact, the university has only built two new facilities in the recent past. Fairbanks has a new natural sciences facility, which is the first new facility on that campus in 20 years. The Anchorage campus has a new business building, built about four years ago, which is their first new building in about 12 years. The university has not been building new buildings. Ms. Redman noted that the library on the Juneau campus was the last facility built. CO-CHAIR BUNDE said the buildings have received blame for being where all the money went, however, money has been spent on programs on which reasonable people can disagree as to whether the money was well spent. Number 1603 REPRESENTATIVE GARY DAVIS assumed the university has a list of what needs to be done first, second, etc. MS. REDMAN said the university has a detailed list on file with the Office of Management and Budget. Ms. Redman offered to provide it to HESS Committee members. CO-CHAIR TOOHEY agreed that the university has probably taken in more students than it has room for. She asked if the university was going to begin levelling off enrollment and accept the fact that it can no longer keep expanding enrollment. She asked if the university was ever going to catch up to its enrollment. MS. REDMAN said that the university has hit that point, particularly in Anchorage. The Anchorage campus has simply topped out, and it topped out in the fall semester of 1994. Without additional operating funds for faculty, the university simply cannot take anymore students. Four hundred classes close out at the Anchorage campus each semester within the first day of registration. The university is overbooked. MS. REDMAN said that is a sad situation to be in, and the university must tell Alaskan residents, "Sorry, there just is no room for you." Number 1669 CO-CHAIR TOOHEY did not feel that was a sad situation. Every university has a capacity, and the university has been ignoring that capacity. The buildings are going to crumble and the university is going to close. Then the university will be spread out with little campuses here and there. The university must cut back, and begin looking at using grade schools and facilities that are already built. MS. REDMAN said the Anchorage campus uses every available classroom in the city of Anchorage. Every night, except Friday night, the university is using over 150 classrooms in schools. The university uses many classrooms. All of the community colleges use community facilities. CO-CHAIR BUNDE said the one step that has not been made is weekend classes. There are some weekend classes, but not many. A choice has to be made between no classes and weekend classes. MS. REDMAN said Co-Chair Bunde will be pleased to hear that the Anchorage campus is now moving to a Monday-Wednesday-Friday sequence. Chancellor Gorsuch is also investigating the Tuesday- Thursday-Saturday model. For some programs, that will work. However, some students just simply do not show up. MS. REDMAN also noted that the Anchorage campus is the only one that has not scheduled Friday classes. Number 1772 BILL HOWE, Deputy Commissioner, Treasury Division, Department of Revenue, noted that HB 281 references a plan to be worked out by the commissioner of revenue and the AHFC for an orderly transfer of excess capital at the AHFC to the general fund. This morning, the AHFC board met and adopted the plan that Mr. Howe distributed to HESS Committee members. MR. HOWE discussed the plan in an attempt to tie it to HB 281. He said page 2, lines 9 through 13 of HB 281 references the transfer agreement, which is now before the HESS Committee members. The agreement is supported by a financial schedule, in which Mr. Howe highlighted some key numbers that will put his remarks in context. The number he highlighted in the upper left-hand column shows that at the end of the 1995 fiscal year (FY 95), AHFC will have about $615 million in unrestricted cash on its books. MR. HOWE said the Governor's plan that has been adopted by the AHFC board is to transfer $270 million over the next five fiscal years to the general fund. Beginning in FY 96, $70 million will be transferred, with $50 million being transferred in each of the following four years. In addition to that, the AHFC will maintain its capital projects and grants at the $50 million level through this whole period of time. MR. HOWE added that of course, the capital budget is submitted to the legislature for review. There is no assumption that all $50 million will be granted. There may be some play between the unfunded in the capital grant line and what would be transferred to the general fund. MR. HOWE explained that HB 281 says that the AHFC has $1 million a year available for spending. The recommendation from the AHFC board which the HESS Committee members were just given states that after this year, $50 million of that will be transferred every year to the general fund. The balance will be used to fund housing- related capital projects such as new public housing. MR. HOWE said those capital projects will be submitted to the legislature for review. Most importantly, this schedule was reviewed by the bond rating agencies in New York. Those agencies have issued a press release saying if this bill and this program is adopted, even though it means taking (in one form or another) $100 million out of AHFC every year, the credit rating agencies will take the AHFC off its current credit watch status and will re- establish it with an "A plus" bond rating. MR. HOWE mentioned that because there are competing proposals. Some are from the university and some are from other places on how to use the AHFC cash. When SB 40 was introduced, it called for a withdrawal of $350 million in cash over the next two years, and no commitments whatsoever as to how much would be taken out in future years. The immediate result of that was the bond rating agencies put the AHFC on the credit watch list with a negative rating. MR. HOWE said if the legislature continues with proposals like SB 40, the AHFC bonds will be junk bonds. They will not be worth the rating. This is why it is so significant that the current plan was approved by the rating agencies. Number 1993 MR. HOWE was asked while giving testimony previously if this $100 million a year is some kind of magic number. He was also asked if more could be retrieved from the AHFC and still maintain the current rating. In the judgement of Mr. Howe, the reason the rating agencies agree to HB 281 is because it is equivalent to what the AHFC earns each year. Therefore, as long as the AHFC basically does not cut into the capital base that essentially secured the outstanding bonds, the credit agencies will go along with this program. Number 2030 MR. HOWE said part B of the bill is about issuing the $30 million in bonds and basically giving that money to the university to rehabilitate the student housing primarily at the Fairbanks campus, where most of the residential housing is. The AHFC will issue and service the bonds, and will basically be part of the university's capital budget. The AHFC will be subsidizing the university in that regard. MR. HOWE said when HB 309, which had to do with new student housing, was discussed in the HESS Committee, the amount asked for was $36.5 million. The AHFC would issue $36.5 million of new bonds and subsidize the interest rate. That would be in addition to the amount of money asked for in HB 281. Mr. Howe reiterated that all bills dealing with the AHFC in some manner must be looked at together and within the context of the overall program. MR. HOWE said HB 281 is the Governor's and the Commissioner of Revenue's overall program for the AHFC for an orderly transfer of assets that will maintain itself as a business entity. Number 2089 CO-CHAIR TOOHEY asked if she could summarize what Mr. Howe just said for the information of the committee. The $270 million is to do deferred maintenance, etc., in Fairbanks, and again Anchorage is being thrown to the wolves. MR. HOWE disagreed. He said the $270 million goes to the general fund, and is appropriated as the legislature sees fit. Part B of the bill says that the AHFC will issue $30 million in bonds. If this program is approved, the AHFC will still have a bond rating, and will again be able to issue A plus bonds at attractive rates, raise the $30 million, and have that $30 million to use in the Governor's highest priority program. That is to rehabilitate existing buildings that are not usable. MR. HOWE said that is the Governor's program as encompassed in HB 281. The Anchorage housing program is a separate issue. HB 309 stated that the AHFC would raise $36.5 million of additional bonds. The bond proceeds would be utilized by the university to build new student housing, as opposed to rehabilitating old housing, in Anchorage, Juneau and Ketchikan. The only further involvement that AHFC would have, in addition to raising the bonds, would be to subsidize the interest rate by a factor of about 3 percent a year. Three percent a year on $36 million in bonds is approximately a million a year. That would be a continuing subsidy on the part of the AHFC. Number 2177 REPRESENTATIVE ROKEBERG asked if the Governor has another bill before the body to implement the transfer agreement as found in Section 2 of HB 281. MR. HOWE answered that HB 281 is the only bill that the Governor has introduced in this area. REPRESENTATIVE ROKEBERG asked if Mr. Howe knew why the Governor chose to tie the bond authorization with the transfer act. CO-CHAIR BUNDE noted that companion bills have been introduced into the Senate. Senate bills 143 and 144 are the same as Hbs 281 and 282. Those bills are currently in Senate Finance. REPRESENTATIVE ROKEBERG concluded that there is not another bill that accomplishes the Alaska Housing transfer of the $270 million to the general fund. HB 281 is the only bill. CO-CHAIR BUNDE corrected him by saying that SB 143 is a companion bill, similar to HB 281. REPRESENTATIVE ROKEBERG said the reason he asked is because there are two different things going on in HB 281. Money is transferred from the equity of the AHFC to the state general fund; and there is also authorization for the AHFC to pay for and service a debt of an additional new bond issue. Those two elements are not even related. CO-CHAIR BUNDE suggested that the elements are related because they both aim to take money from the AHFC. REPRESENTATIVE ROKEBERG agreed. He said it is clear in HB 281 that the entire debt service of both the principal and interest of the $30 million is going to be paid for by the AHFC. Mr. Howe also mentioned that, regarding the $270 million transfer, that the bond rating would not be severely impacted because this was the perceived net profits throw-off of the AHFC on an annual basis. But there is another situation in which the annual debt service is about $1.8 million on this particular bond issue. This will be an additional drain on the equity and the balance sheet of the AHFC. That is in addition to anything else that may come around. MR. HOWE responded that the additional debt service, both principal and interest over a 20-year period of time, related to the $30 million worth of bonds for rehab housing is included in the capital expenditure line on the schedule passed out to HESS Committee members. The additional debt service is part of the $50 million. In fact, that is the reason the AHFC moved from $50 million a period to $53,974,000. The $3,974,000 represents the debt service on the bonds that HESS Committee members are discussing. MR. HOWE noted that he was referring to the handout and had highlighted the numbers under the Family Housing Programs. That would be considered as student housing within the concept. To the degree that all these other bills that come before the HESS Committee utilize AHFC's cash assets or debt service ability, the $53 million is being counted against. REPRESENTATIVE ROKEBERG asked to clarify. He used FY 97 as an example. Under the Family Housing Program line item, as seen in the handout, the amount is $53,974,000. He asked if that amount was in addition to the $50 million, or if that was the totality of all the housing programs and debt service. Number 2344 MR. HOWE said that was the totality of the grants. TAPE 95-43, SIDE B Number 000 MR. HOWE continued that for the 1996 capital budget, the capital request is approximately $50 million, of which $20 million is used for federal matching. Whether or not the legislature fully appropriates or allows the AHFC to use corporate receipts for that purpose is problematic at this point. Therefore, to answer Representative Rokeberg's question about where does the university housing funding come from, that is part of the $53 million on the handout schedule. MR. HOWE continued that to the degree that these amounts are appropriated by the legislature means that there is less money for other programs. REPRESENTATIVE ROKEBERG said therefore, the $50 million, using FY 97 as an example, goes into the general fund unencumbered. Then $53 million is for other programs. He asked if the programs were new programs brought forward by the Governor. He asked what makes up the $53 million. Number 094 MR. HOWE answered that approximately $20 million of the $50 million are state matching funds for federal loans such as Housing and Urban Development (HUD) programs through regional housing authorities. There is another $20 million related to the old Alaska State Housing Authority (ASHA) activities that the AHFC two years ago was asked to absorb. There are a number of projects in that area that need to be totally renovated. MR. HOWE said old age housing is also an element, taking another $20 million. The balance is comprised of various programs that are heavily supported by the Alaska Builders' Association. There are credits applied for weatherization that assist people in both urban and rural areas to improve heat efficiencies in that program. MR. HOWE said that each of those programs each year is reviewed by the legislature and either adopted or not. Number 207 REPRESENTATIVE ROKEBERG said he was not trying to hold up the discussion, he was just trying to clarify exactly what the bill was going to do. The various programs just described by Mr. Howe, along with any new legislation that may be adopted is covered under this line item, which is a cost on an annualized basis to the AHFC. Therefore, it has an impact on the AHFC balance sheet and profitability. REPRESENTATIVE ROKEBERG referred again to the example of FY 97. He asked if the cash flow requirement for the one $30 million bond issue, which is approximately $1.8 million, is in the line item. MR. HOWE answered yes. REPRESENTATIVE ROKEBERG asked if Mr. Howe was aware of any other requests of the AHFC this year of which perhaps the HESS Committee members are not aware. Number 240 MR. HOWE said his understanding of the current state of the capital budget of the AHFC as submitted totals approximately $53 million. It is highly problematic whether or not the legislature will fund all of that. He would expect that the legislature would fund something less than that. REPRESENTATIVE ROKEBERG said most of the funding is already committed money, it is already annualized. MR. HOWE said that was not correct. Other than the type of program that would be adopted in the bill, where a specific bond issue was authorized and the AHFC was directed to service that issue over a period of time, that would be a "carry-forward commitment." But the other elements in that $53 million number are subject to annual appropriations. Number 300 CO-CHAIR BUNDE asked if Representative Rokeberg could perhaps explore the AHFC further at another time. He brought up another issue that may necessitate the holding of the bills until the next week. Co-Chair Bunde said he was not trying to close the previous conversation completely, he just wanted to bring up another point to discuss. REPRESENTATIVE ROBINSON interjected that unfortunately the House State Affairs Committee was meeting presently to close out the rest of the bills for the rest of the session. She was needed for a quorum in about two minutes, and they asked her to stay for about 15 minutes. CO-CHAIR BUNDE asked her to wait until he presented an amendment, and then HB 281 and HB 282 would be held until Tuesday, May 2. Number 396 CO-CHAIR BUNDE proposed an amendment. He called Section 3 of HB 281 a "blackmail clause." It essentially says, if the provisions of the bill are followed, the AHFC's financial assets are off the table to any other legislative action. Many times in the last few days comments have been made that nothing this legislature does can bind a future legislature. HB 281, Section 3 is an attempt to bind a future legislature. Perhaps it is also making pledges and promises that future legislatures may not want to fulfill. Should oil prices crash, Co-Chair Bunde doubted that the state would want to honor that pledge. CO-CHAIR BUNDE said perhaps the state will want to cash out the AHFC in its entirety, and operate with that money instead of using the constitutional budget reserve. CO-CHAIR BUNDE said he would like HESS Committee members to peruse the proposed amendment, and hold Hbs 281 and 282 until the following Tuesday. REPRESENTATIVE ROBINSON left the meeting at 3 p.m. HB 242 - UNIFORM INTERSTATE FAMILY SUPPORT ACT GLENDA STRAUBE, Director, Child Support Enforcement Division (CSED), Department of Revenue, said HB 242 relates to all the procedures the division must go through to collect money for child support in other states. The most difficult cases for CSED to collect are interstate cases. Those types of cases comprise 44 percent of the caseload. Most noncustodial parents know the best way to get away from paying child support is to cross state lines. CO-CHAIR BUNDE had to speak as a sponsor of a bill in another committee. He turned the gavel over to Co-Chair Toohey, and said he would return promptly. It was 3:01 p.m. MS. STRAUBE said HB 242 would provide a tool to help the CSED to collect in those cases. Probably the most important thing the bill will do is eliminate the multiple order system that already exists. This is a problem. For example, one party has a support order in Colorado, and one party has a support order in Alaska. There really is no clear guidance on which support order the CSED should enforce. MS. STRAUBE stated HB 242 would eliminate that problem. It would make it very clear as to who has continuing, exclusive jurisdiction. It would promote efficiency by using the same federal forms for all interstate cases. It would also allow direct income withholding from one state to another. One of the most frequent complaints CSED receives from obligees/custodial parents is that the other state is not collecting any money, and/or not collecting it fast enough. This bill would make it easier for the CSED to withhold income, and not depend so much on whether or not another state's child support office is operating very well. Number 700 MS. STRAUBE continued that there are no expenditures forecasted for this bill. However, the bill would collect $340,000 per year for the state's share of the Aid to Families with Dependent Children (AFDC) reimbursement. There would also be another $680,000 that would go directly to children. MS. STRAUBE said when the CSED collects money, it does it in two different ways. One way is that the money is collected and it goes to reimburse the CSED for AFDC costs. Or, if the money is not an AFDC case, the money goes directly to the children. This bill is very important, and basically the federal government has mandated this type of action. There are at least 21 states that have already approved this action, and Ms. Straube felt that number had increased. Alaska is the only state left in Region X (ten) that had not passed this type of legislation. CO-CHAIR BUNDE returned to the meeting at 3:05 p.m. MS. STRAUBE said this bill was up last year, but it did not make it all the way through before the end of the session. There were no problems with the bill, and no one testified against it, but it simply got lost in the shuffle. She added that it was originally introduced in the House. Number 798 CO-CHAIR TOOHEY said she has gotten several letters on child support enforcement, and she has passed those letters on to Ms. Straube. She asked if the maximum amount the state is allowed to withhold from a delinquent father is uniform across the U.S., or does the amount vary from state to state. She asked how the amount would be kept fairly uniform, and what is the state's percentage. MS. STRAUBE answered that on arrearages, the state's percentage is up to 50 percent. That is different than what the state would be receiving if the enforcement was ongoing. If the enforcement is ongoing, a percentage of the delinquent parent's salary is taken. MS. STRAUBE said for one child, the amount of income withheld is 20 percent. Two children is 27 percent, three children is 33 percent. Number 851 CO-CHAIR BUNDE shared, for the committee's information, that he has spoken to a guardian in Anchorage who looks after the interests of a man who has sired 20 children and pays zero child support. He then reassumed the gavel, and asked for further testimony. ART PETERSON, Attorney, Dillon and Finley Law Firm, said he was testifying in his role as a uniformed law commissioner for Alaska. He said that in the uniform laws conference, his organization began working on this type of legislation in 1989, having had by that time several decades of experience with the current (now old) Uniform Reciprocal Enforcement of Support Act. Several decades of experience brought to light numerous problems. The primary problem is the one of inconsistent, multi-state court orders. MR. PETERSON said HB 242 removes that problem. That is the single most significant provision in the bill. By removing that problem, the system is made more efficient so the courts and the administrative agencies funding these issues can deal with them more expeditiously. It makes the system easier to understand and thus fairer to both parties, the obligors and the obligees. It also provides a better way to get support for these kids, which is the primary purpose of all such legislation. Number 968 MR. PETERSON noted that HESS Committee members have just received his letter of April 25, 1995, to which he attached some amendments. Those actually set out the amendments that are mentioned in a letter from Marilyn May of the Attorney General's Office. Mr. Peterson said he would be happy to answer any questions, and expressed his strong support for this bill. The sooner this bill is placed on the books, the better off the state government and the people involved in the child support system will be. Number 1002 CO-CHAIR BUNDE asked if the proposed amendments were simply conforming amendments with Title 9 at the request of the Governor. MR. PETERSON answered that was not quite true. The amendments seek to conform with Administrative Title 9 of the court system. It is essentially at the request of the courts, or at the sense of anyone reading what has happened, because the court has already made the change referred to. Therefore, the bill should not refer to those "changes" because they will not be changes. CO-CHAIR BUNDE asked if the amendments were made with the concurrence of the Governor. MR. PETERSON answered that was correct. CO-CHAIR BUNDE said he would call the amendment attached to Mr. Peterson's letter amendment one, and move amendment one. The amendment begins on page 1, line 3. There were no objections and amendment one was adopted. STUART HALL, Ombudsman, State of Alaska, said his office is in very strong support of this legislation and its companion measure in the Senate. The enactment of this legislation would assist many who have sought the help of the State Ombudsman over the last years with the CSED. In FY 94-95, to date, the ombudsman has assisted over 1,660 individuals with complaints about the CSED. Many of the complaints were filed by custodial parents who depend on the division to collect child support from the out-of-state parent. MR. HALL said a large number of those complaints came from single parents concerned about the slow pace of case establishment and child support collection. Enactment of this legislation would streamline the establishment process, which would, in turn, prompt speedier collections. Two things the Ombudsman's Office likes about the bill is the simplification of the process: The elimination of the multi-state, multi-jurisdictional orders; and the ability, under this statute, to go directly from the last order to the employer in Colorado, or wherever. MR. HALL said those elements should cut down on the frustration and confusion and the delay, which are the kinds of complaints most often heard. This legislation is endorsed heavily, and Mr. Hall urged its early and speedy enactment. Number 1187 REPRESENTATIVE BRICE moved HB 242 from the HESS Committee with individual recommendations and accompanying fiscal notes. There were no objections, and the bill was moved. HB 244 - PATERNITY; CHILD SUPPORT ENFORCEMENT Number 1216 MS. STRAUBE testified that right now, there are new federal guidelines that require that 75 percent of all child support orders be established within six months. In order to establish child support orders, paternity must be established. "Paternity," she said, "is taking an eternity." CO-CHAIR BUNDE commented that he thought it only took nine months. MS. STRAUBE said the bad news is, that despite all the work done by the CSED, the CSED then has to give their work to the courts who more or less "rubber stamp it." That is because the CSED uses the court's standards to determine paternity. Sometimes the case sits on the court's docket for six months. Therefore, with the files just sitting in the courts for six months waiting for signature, it is already clear the CSED cannot make the time constraints, because it only has six months to do all their work. MS. STRAUBE said that is why the CSED is very concerned about this issue. The CSED could shave six months off the process if it were able to administratively establish the process. The CSED already uses the court standards as set forth in AS 25.20.050. Those standards are basically either a voluntary acknowledgement, or the genetic test shows that the likelihood of a person being the father is 95 percent or more. REPRESENTATIVE ROBINSON re-joined the meeting at 3:12 p.m. MS. STRAUBE noted that due process would be assured so the decision would be open to judicial review. The CSED thinks it is a good investment for a yearly general fund investment of $72,700. For that amount, the CSED can bring in $850,000 per year in its share of AFDC reimbursements. It makes sense, therefore, for the state, for the children, and to the federal government. The federal government is moving in that direction. In fact, part of the GOP Contract with America stated it wanted to see more states doing administrative processes and cutting down the time, instead of having to go to the courts for everything. Number 1344 CO-CHAIR TOOHEY asked who would comprise the "tribunal" as referred to in the bill. MS. STRAUBE said the definition given on page 2, lines 18 through 20 of the bill, is that a tribunal means "a court, administrative agency, or quasi-judicial entity authorized by law to determine parentage." CO-CHAIR TOOHEY asked to back track. A bill was presented to the HESS Committee members last year by Representative Bettye Davis that tried to establish paternity at birth in the hospitals. She asked if that legislation has had any impact at all. MS. STRAUBE said the hospitals were kind of already doing that. The bill simply made it more likely that the hospitals would do it. It has been more successful. The state cannot force anyone to sign anything, but, Representative Bettye Davis's bill made it more likely as the father would be feeling joyous about the event. MS. STRAUBE said that legislation is working, but there is no similarity between those bills. The bills do not replace each other. Number 1422 CO-CHAIR TOOHEY asked what percentage of children born have a mother that refuses to name the father. MS. STRAUBE said she could not answer that sufficiently. She said she can tell Co-Chair Toohey how many cases there are in which the parentage is unknown. Whether the mother refuses to name the father or they don't know, the division does not know the difference. Out of about 3,200 paternity establishment in progress cases, 639 are unnamed fathers. About 2,600 fathers have been named. CO-CHAIR BUNDE assumed there are mechanisms to encourage mothers who do know the names of their child(ren)'s father to divulge that information. MS. STRAUBE answered that this is not part of her division's job. However, she does know that Public Assistance has the right to deny public assistance to those who do not have a very good reason for not naming the father. The CSED does believe, however, that there are those who really do not know the names of the father. CO-CHAIR BUNDE disagreed with her first comment. He said finding out paternity certainly is a job of the CSED. MS. STRAUBE corrected her former statement by saying that the CSED cannot enforce any punitive measures. Only the Department of Health and Social Services can enforce punitive measures. Number 1498 CO-CHAIR TOOHEY asked if there was any way of forcing DNA testing on a group of, say, three people for a child of an unknown father. MS. STRAUBE said if a person does not agree to blood testing, the CSED can default that person as the father of the child. The individual is always free to take the blood test and disprove that paternity. Number 1558 CO-CHAIR TOOHEY asked how often that default paternity is evoked. MS. STRAUBE said that provision is evoked regularly. It is the procedure of the CSED that if the proposed father will not cooperate, he is defaulted. It then takes a long time, but if the paternity is defaulted, the court has to agree to the default, then the order is placed for income withholding, and eventually the child support is hopefully gleaned. CO-CHAIR TOOHEY asked if automatic DNA tests are done if the man admits that he might be the father. She also asked who does the testing. MS. STRAUBE said there was contention in that issue. If AFDC is being received, DNA testing is automatically performed. The CSED pays for that testing. If the case is not AFDC, the CSED does not pay for the test. However, those provisions are being studied anew. Number 1584 CO-CHAIR BUNDE asked Ms. Straube to speak to the fiscal note on HB 244. MS. STRAUBE said in a full year, the majority of funds are either federal receipts matching, or they are federal incentives. The CSED did put down a general fund match of $72,700 in the funding source for 1997. She used the example of FY 97 because it is a full year and may be easier to see the figures. MS. STRAUBE said the important thing to remember is that, if one looks at the change in revenues, the bill is bringing in $850,000 to the state coffers. The gains far outweigh any expense to the state. REPRESENTATIVE AL VEZEY joined the meeting at 3:22 p.m. SHANNON O'FALLON, Assistant Attorney General, Human Service Section, Department of Law (DOL), said her area of work focuses on Child Support Enforcement. If a man has been named in a paternity complaint and the man refuses to be blood tested, one of the things the department can do is go to the court and ask for sanctions. One of the sanctions requested is that the man is defaulted on paternity. The court fairly routinely grants that default as long as the DOL shows that the man is willfully refusing to test. MS. O'FALLON said it must be shown that an appointment has been repeatedly set up for them, and they never show up. With default, the court adjudicates the individual the father of the child without blood testing. MS. STRAUBE said the state cannot test anyone without cooperation. Number 1691 MS. O'FALLON wanted to also note that if a man is excluded through blood testing, he does not pay for blood testing costs. If the case is not under AFDC, and the man is found to be the father through the genetic test, the man then pays the blood test costs. CO-CHAIR BUNDE said his question about the fiscal note was not to indicate anxiety. He simply wanted the fiscal note explained for the edification of the committee, and to put into the record that Ms. Straube anticipates this bill will generate money for the general fund. Number 1723 REPRESENTATIVE ROKEBERG asked if the 3,200 figure mentioned for the paternity establishment in progress cases was a per year figure. MS. STRAUBE answered that was the total number of pending cases right now. Those cases involve trying to get affidavits signed by the mother, or trying to get cases signed by the court. Ms. Straube said she did not know how many new cases the division gets a year. However, 3,200 is a huge backlog, and the CSED is working very hard to close that backlog. Everything that can be done is being attempted. MS. STRAUBE said the CSED is doing some collocating with Public Assistance to try and shorten the time period, it is asking for HB 244, it is working with the DOL to shorten the time period, and administrative changes are taking place to take care of that terrible backlog. There are far too many people wondering who the father is in their particular case. CO-CHAIR TOOHEY closed public testimony and asked for the wish of the committee. CO-CHAIR BUNDE moved HB 244 with accompanying "money-making" fiscal note and individual recommendations. There were no objections and the bill was moved. HB 205 - STREET GANG ACTIVITY Number 1831 MARGOT KNUTH, Assistant Attorney General, DOL, said HB 205 is the Governor's bill relating to street gang activities. Particularly in Anchorage, street gangs have become a distressing part of life. Ms. Knuth, as a citizen of Southeast Alaska, did not appreciate the problem until she listened to parents, police officers and prosecutors in Anchorage. This is a real problem and it is something that needs action right away. MS. KNUTH noted that it can be seen in the Lower 48: Once you lose ground to gangs, it is terribly difficult to reclaim it. This bill takes a multi-faceted approach to the problem. The first section creates a civil cause of action against gang members, allowing the recovery of trouble damages by someone who is injured by gang members or gang activity. If the gang member is a juvenile, the bill allows recovery against the juvenile's parent(s) as well. MS. KNUTH continued that after those provisions, all the focus is on criminal sanctions and attempts to give courts greater latitude in dealing with gangs and gang members. The first criminal provision in Section 2 is recruiting a gang member in the first and second degree. The crime of recruiting a gang member in the first degree is charged if the use of force is threatened or utilized. MS. KNUTH explained that recruiting a member in the second degree, which is a misdemeanor, occurs if force is not used or threatened. Number 1929 MS. KNUTH emphasized that this bill does not criminalize gang membership. There are a number of bills in the Lower 48 that have tried to make it a crime to simply be a member of a gang. There are first amendment difficulties with that, as well as other legal problems. Alaska has chosen not to attempt those provisions. However, HB 205 does make it a crime to recruit other people to become gang members. MS. KNUTH said that leads her to Section 3, which gives the definitions of criminal street gangs. What is being utilized is a standard definition that is in use throughout the United States: "A group of three or more persons who have in common a name or identifying sign, symbol, tatoo or other physical marking, style of dress, or use of hand signs; and who, either individually, jointly, or in combination, have committed or attempted to commit, within the preceding three years, for the benefit of, at the direction of, or any combination of...." two or more crimes that are specified within the bill. MS. KNUTH said these are specified under AS 11.41, which are crimes against a person; AS 11.46, which are property crimes; or any other felony offense. Number 1978 MS. KNUTH said misdemeanor drug offenses were specifically left out of that. Unfortunately, there is a large percentage of the juvenile population using drugs such as marijuana. Merely doing that will not constitute being a gang member. Those are two different problems that may overlap in some instances, but in Alaska juveniles are capable of using drugs without benefit of gang membership. The Governor's office did not think it would be appropriate in Alaska to use misdemeanor drug offenses as an indicator of gang membership. MS. KNUTH continued that Section 4 allows the state to forfeit property that is either used to further gang activity or is the product of crimes committed by gangs. That property will go to the general fund, but that may serve as a deterrent for the gangs. MS. KNUTH said Sections 5, 6, 7 and 8 all relate to sentencing provisions for gang activities. If the case is a felony, the fact that it was done by or for the benefit of a gang can be used as an aggravator. An aggravator will give the sentencing judge the flexibility to go about the presumptive sentence. If it is not a felony offense, then these provisions elevate the offense one level. Therefore, if the offense was a class B misdemeanor and was committed by a gang member or on behalf of a gang, the charge would be prosecuted and result in conviction as a class A misdemeanor. A class A misdemeanor would be bumped up to a class C felony offense. Number 2057 MS. KNUTH said those are the highlights of the bill. There are zero fiscal notes that have been submitted by the Department of Health and Social Services, the DOL, the Public Defender's Office, the Office of Public Advocacy, and the Department of Corrections. The fiscal notes are indicative of the fact that the state is on the cutting edge of this problem. MS. KNUTH stated it is believed that this problem is still in its infancy, and the cases are not going to represent a large percentage of the prosecution's time. Now is the time to act. The bill is supported by the Chiefs of Police, by the Association of Peace Officers, by the Department of Parole and Probation Officers, and by anti-drug groups throughout the state as well as education groups. Number 2091 CO-CHAIR TOOHEY said she was concerned with the seven zero fiscal notes. There are more than a few gangs in Anchorage. There are about 36 gangs in Anchorage. Whether or not those gangs have become destructive and powerful, she does not know. This bill is going to cost a lot of money, and if the HESS Committee members are willing to pass the bill, they should know that those fiscal notes are not necessarily honest. This bill is going to be expensive, and Co-Chair Toohey is willing to pay for it. However, she really objects to seeing zero fiscal notes on something that talks about the courts. CO-CHAIR TOOHEY expressed concern about the possibility that when a department likes a bill and wants it passed, it is given a zero fiscal note. That is not right, but it is done. Co-Chair Toohey said she could not let seven zero fiscal notes go by without saying anything. Number 2156 REPRESENTATIVE AL VEZEY asked Ms. Knuth to tell him what AS 11.41 and AS 11.46 were. MS. KNUTH repeated that AS 11.41 relates to offenses against a person. In the misdemeanor category, that would be assault in the fourth degree, and reckless endangerment. Otherwise, it relates to sexual abuse, sexual assault, felony assault, and kidnapping offenses. AS 11.46 are property offenses. At the misdemeanor level, the offenses would include theft in the fourth and fifth degree, and arson in the second degree. The felony levels referred to in that statute are values over $500 or arson in the first degree. Those are the two most common ones. REPRESENTATIVE VEZEY appreciated the difficulty of trying to define things. But when he reads the definition of street gang, he thinks of the crew he works on in construction. They all dress alike, use the same tools, etc. Fortunately, other criteria must be met because his crew is already well qualified as a gang. He was concerned that if any one of them committed a crime, such as reckless endangerment, there would be danger that the whole crew could be considered a criminal street gang. Number 2222 MS. KNUTH noted that there would need to be, within the preceding three years, two or more crimes that were committed for the benefit of, or at the direction of, or in association with the group. The example being given by Representative Vezey would not qualify because there is one member of the group who commits one offense. The DOL would need to be able to show that this was for the benefit of the group, and there was more than one offense within three years. MS. KNUTH explained that the DOL has tried to tailor the definition so it does target gangs and the types of crimes committed by gangs. Obviously, left out of the bill are drinking offenses, smoking offenses, loitering. Those are the types of things people could run into difficulties with. She noted that there are states that have specifically excluded labor organizations from their definitions of gangs because of such similar concerns. Number 2290 CAPTAIN BRUCE RICHTER, Anchorage Police Department, testified via teleconference in support of HB 205. He said the bill would be a useful tool to combat the gang problems that are currently on the rise in Anchorage. However, the gangs are still a small enough problem that, if the bill could be used in an aggressive manner, some results could be seen. Clearly, there is visible street gang activity in Anchorage. These street gangs are also clearly recruiting younger members to be part of those gangs. A bill such as HB 205 will assist in curbing gang activities. CO-CHAIR BUNDE said a few weeks ago, he went to a national conference on state schools. He learned that there are gangs, and there are gang "wanna-bes." TAPE 95-44, SIDE A Number 000 CO-CHAIR BUNDE stated those groups do not care what they are called, their behaviors are very, very similar. In addition, subsequent crimes almost always are compounded on the last. REPRESENTATIVE ROKEBERG asked Captain Richter if the "Little Rascals" are still in West Anchorage. CAPTAIN RICHTER said the Anchorage Police Department (APD) has had some experience with a gang that calls itself the Little Rascal Gang. There has also been experiences with a group of young Asians who were robbing gun stores. The APD has recovered a number of stolen guns from a house gang members were living at just last week. CO-CHAIR TOOHEY asked if Captain Richter had a chance to look at HB 205. CAPTAIN RICHTER answered yes, and he has a copy of it in front of him right now. CO-CHAIR TOOHEY asked if, in his opinion, if there is a chance that the bill will cost money to implement. CAPTAIN RICHTER replied that obviously, there is a cost any time a case goes into the court system. However, Captain Richter feels that right now there may be problems finding charges that fit an exact situation. This bill would provide one more charge for the police "tool box" that could be used to detain dangerous individuals in appropriate cases to fight back against the gang problem. He does not, therefore, see this bill as accruing additional cost over and above the cost of doing business as a police department. Number 150 CO-CHAIR TOOHEY assured Captain Richter that the legislature and the HESS Committee members were trying very hard to not pass unfunded mandates. She feared HB 205 was an unfunded mandate. She asked for Captain Richter's word that the bill was not going to cause any heartburn to the Anchorage Police Department. CAPTAIN RICHTER said the criminal activity that is taking place in Anchorage has a cost. The state is picking up that cost investigating shootings, assaults, and burglaries. Sometimes the APD gets into a situation in which it may not be able to take a person or persons to court on a burglary. However, the APD may be able to go to court to stop activity using gang ordinances. In that way, the bill is not an extra cost. REPRESENTATIVE VEZEY said he had a question on Section 1 of the bill, paragraph B. He said he is a very strong advocate of the British system, but he did not know if it was equitable to take this area of statute and apply the British system when in every other area of civil law is applied with the American system as modified by Rule 82. MS. KNUTH asked for clarification. REPRESENTATIVE VEZEY stated that in paragraph B, the bill reads that the prevailing party gets full attorney fees paid. He refers to that as the "British" system. The United States, of course, uses the "American" system in which both sides pay their own attorney fees. Alaska also uses Rule 82, in which a portion of the attorney fees are paid based on the amount of recovery received. REPRESENTATIVE VEZEY reiterated that he is a staunch advocate of the British system, but he wondered if is equitable for that portion of the civil laws to be taken out and the British system applied. He noted that all the tort and civil cases will still be tried using Rule 82. Number 318 MS. KNUTH replied that in this instance, what justifies the change is that these are criminal acts committed against a victim. Requiring that the victim absorb some of the attorney's fees necessary to make themselves whole further victimizes them. It is on that basis that the distinction has been made. There are exceptions to Rule 82, but Ms. Knuth would certainly agree with Representative Vezey that the state needs to be reasonable in its approach to this provision. She hopes the provision is fair in this case. REPRESENTATIVE VEZEY asked if she was envisioning that these cases would be subject to punitive damages. MS. KNUTH believed that would be a possibility. That is one of the elements of damages that would be recoverable. REPRESENTATIVE VEZEY asked if Ms. Knuth thought that victims should be able to retrieve damages for trouble and punitive damages. MS. KNUTH expected that the judge would look at the totality of the circumstances. REPRESENTATIVE VEZEY thought that was a jury decision. MS. KNUTH said a judge does have control over certain things. He or she may say it is unreasonable for a jury to make an award amount. If damages are awarded for "trouble," that is a form of punitive damages. One would need to be careful in that situation to make sure there is not "double" recovery. However, there could also be instances in which the actual loss is fairly minimal, and even with trouble damages, there still has not been the statement the state and the victim wants made with an award of punitive damages. Number 476 MS. KNUTH also noted that she does not expect gang members to be extremely well-off financially. Therefore, to some extent this may be a hollow victory that the state is providing to victims. There may not be any money to be had anyway. REPRESENTATIVE VEZEY agreed. He also wished to express concern that the bill is making the parent responsible if the minor is not emancipated. Representative Vezey conceded that he does not know who the street gang people are. But he envisions a lot of single parents who have lost control of their children and have not had their minor child emancipated primarily because of the legal cost involved. He noted that hope may also be a deterrent to emancipation. REPRESENTATIVE VEZEY asked if the bill was putting a parent who was probably not-so-well-off in extreme financial jeopardy. He realized that the gang members referred to were minors, but probably over the age of 12. He believes that people over the age of 12 are beyond the age of reason. Therefore, he was concerned that the bill creates a problem for parents who are already having all the difficulty they can handle. REPRESENTATIVE VEZEY asked if the bill was really being reasonable in that respect. He did not think there was any money to be had from the gang members. A law is being created with HB 205 which allows the state to go after parents who have lost control of their children. He does not know of any parents who have said they wanted their child to grow up and become a gang member. Number 615 CO-CHAIR TOOHEY said if a parent has "lost" their child, and the child has run away from home two or three times, and the parent calls the police and says she/he has a child that cannot be controlled and that statement is on record, there are Alaska laws that say that this child is no longer the responsibility of the parent. MS. KNUTH said the DOL would be amenable to an amendment that tracks such provisions. Ms. Knuth remembered that such provisions were incorporated into a bill that increased a parent's possible liability from $2,000 to $10,000. That provision says that if the child is a reported runaway, there is no liability for acts that occur after that time. The DOL would be amenable to such an amendment. MS. KNUTH also noted that victims have done nothing. She/he was simply walking in the wrong place or cannot afford to live in a better neighborhood. That person's situations and circumstances is being compared with the household that is made up of the juvenile gang members and the gang member's parent(s). She asked who, between the victim and the parent, was more able to control--not who has control, but who was in a better position to control--and who was more responsible for what the juvenile gang member has done. MS. KNUTH understood that parents can lose control of their children. But at the same time, there is a far closer connection between the parent and child than there is between the victim, who is in a hapless situation. One of the things that the legislature does is to look at that situation and find a balance. It must make a decision about who should bear the loss. She is sympathetic to the situation being described, and she would hope that the runaway amendment would address most of the concern. Number 747 REPRESENTATIVE ROBINSON said she was still concerned about the zero fiscal notes. MS. KNUTH said she would try to speak to as many fiscal notes as she could, on behalf of the Executive Branch. The conduct that the bill is trying to reach is criminal conduct. Everyone is required to deal with that conduct and the results of that conduct already under existing law. The difference between charging someone with theft and charging someone with theft and an aggravator that was done on the behalf of a gang is an incremental increase in the prosecutorial effort. The case is already present. The handling is different. MS. KNUTH explained the same thing applies for the judge. The judge is sentencing this person. The difference between sentencing for a theft charge and then also considering the aggravating factor is incremental. At times, the Public Defender's Office and the Office of Public Advocacy do not go along with everything that the DOL, Criminal Division proposes. There should be separate credibility to their zero fiscal notes because all divisions and departments are already dealing with the problem. Therefore, the entities do not believe that separate costs are going to be incurred. Number 845 MS. KNUTH said most of the reason for HB 205 is to provide something that gangs can become familiar with. The bill is as much of a publicity campaign as it is a new approach and a new fix-it. Gangs need to feel targeted. Gangs need to feel vulnerable and understand they are being focused upon. MS. KNUTH noted the focus of law enforcement is also being changed to specifically notice gang activity. However, mostly more flexibility is being created in the system, rather than bringing in new crimes and prosecuting those crimes. Number 880 MS. KNUTH asserted it is for that reason that the zero fiscal notes have integrity in HB 205. Ms. Knuth understood the concern of the HESS Committee members, however. CO-CHAIR BUNDE assured Ms. Knuth that she was not held responsible for any errors in the fiscal note process. Co-Chair Bunde said that he would like to hold the bill until Tuesday, May 2 because there are concerns about the bill. He asked for an amendment incorporating the runaway provision to protect parents who are trying to do the best they can. Number 942 REPRESENTATIVE ROKEBERG asked a question about the title. The title reads, "...restricting criminal street gang offenders from obtaining a permit to carry a concealed handgun...." He asked what sections of the bill specifically relate to that provision. MS. KNUTH answered that Sections 8 and 9 refer to those provisions. She explained that if a person has been convicted of a crime that identifies that person as a gang member, that provision would be applied. Number 968 REPRESENTATIVE VEZEY asked Ms. Knuth if she would support a change in statute which said if a person is a victim of criminal assault by a street gang, the victim is authorized to use force to protect themselves, including deadly force. MS. KNUTH said she would not. A system of justice is needed that protects people from ourselves as well as each other. CO-CHAIR TOOHEY noted that she has obtained a permit to carry a concealed weapon. If she is beset upon by a street gang, and she is in fear of her life, she is by law allowed to defend her life. CO-CHAIR BUNDE noted that Ms. Knuth had referred to a first degree crime in which force was applied to increase gang membership. Co- Chair Bunde understands that force is always involved with gang recruitment and in the initiation. People can be "jumped in" or "sexed in." He said he would leave the explanation of the sexed-in ritual to the imagination of the HESS Committee members. However, when one is jumped in, the individual is beaten brutally. The initiate asks for this beating, and participates in it. CO-CHAIR BUNDE asked if that, therefore would not move any initiation to first degree, as there is an incredible assault. Individuals are kicked, pounded and jumped on, and when it is all over, they "get a hug." MS. KNUTH felt that would fall under the felony of recruitment violation. She would charge those actions as felony actions, on top of the proper charge for that conduct within itself. MS. KNUTH thanked the committee for hearing the bill. CO-CHAIR BUNDE wanted to make it clear that his comments about being jumped in did not mean that he was discouraging the first degree charge from being applied. Number 1094 REPRESENTATIVE ROBINSON asked how this bill would affect the types of initiations that occur in schools. There has been a real push to eliminate those types of initiations. MS. KNUTH expected that many of those instances do not tie in with gang membership or the existence of a gang. She encouraged the use of other tools to try and deal with that problem. Ms. Knuth acknowledged that she did not know enough about that particular problem. If it could be shown that the behavior was gang related, then some of the charges provided for in HB 205 could be utilized. However, it sounds like there are some assaults and reckless endangerments going on that do not look beyond the initiation. HB 280 - HUMAN RESOURCE INVESTMENT COUNCIL Number 1160 CO-CHAIR BUNDE noted that he referred the bill to a subcommittee because he feared, as he was a member of one of the affected commissions, he was more sensitive to the issues. He asked for the subcommittee report on this bill from Co-Chair Toohey, as she was farther removed from this issue. CO-CHAIR TOOHEY said the subcommittee meeting was attended by Representative Robinson, Representative Rokeberg, Dr. Joe McCormick of the Alaska Commission on Postsecondary Education, and Bob Rubadeau of the Lieutenant Governor's Office. Several issues were discussed. The most contentious issue centered on Representative Rokeberg's concern about the size of the committee. CO-CHAIR TOOHEY said several attempts were made to reduce the council, unfortunately, due to the federal guidelines, those efforts were to no avail. Number 1255 REPRESENTATIVE ROKEBERG said he met with Mr. Rubadeau, and testimony was taken at the subcommittee hearing which satisfied some of Representative Rokeberg's concern as to the large size of the council. He had wished to decrease the size of the council, but he ultimately agreed that the Lt. Governor's office had done a very good job of reducing it to as few people as possible. REPRESENTATIVE ROKEBERG said his other concerns were adequately answered. He previously felt the use of the word "Investment" in the title seemed rather silly to him. However, he learned that was part of federal statute, and the state cannot toy with that. REPRESENTATIVE ROKEBERG said the subcommittee hearing was fruitful, and resulted in helpful language changes which are reflected in the Committee Substitute. Number 1356 CO-CHAIR TOOHEY said two amendments were before the HESS Committee. Amendment one referred to page 1, line 4, of HB 280. After the word "needs," the amendment proposes to insert "relating to the membership of the Alaska Commission on Postsecondary Education." BOB RUBADEAU, Special Assistant to the Lieutenant Governor, said Dr. McCormick offered a couple of suggestions at the subcommittee hearing as a representative of the Alaska Commission on Postsecondary Education (ACPE). The subcommittee members and other members of the HESS Committee studied those suggestions and deemed them to be, at first, fairly minor changes that would allow the ACPE to continue. However, as the amendments were explored further, the amendments seemed to make policy decisions that perhaps the subcommittee had not considered. MR. RUBADEAU explained that what had been proposed in the first amendment, relating to the membership of the ACPE, was that it basically changed the name from the Governor's Commission on Vocational Education (GCOVE) membership, to the Alaska Human Resource Investment Council (HRIC) membership. Only the name was being changed to have a vocational education-based, proactive representative on the ACPE. Dr. McCormick basically felt, as many people do, that a smaller commission would be better. Number 1450 MR. RUBADEAU noted that as policy implications were studied, however, it would take a vocational voice off the ACPE. The commission basically does fund an enormous amount of secondary and postsecondary education opportunities for students within the state. The Office of the Lt. Governor feels very strongly about the importance of vocational education and training to the future of Alaska. The bill reflects that. MR. RUBADEAU stated that by removing the voice from a very important tool of the legislature and the Administration has to influence vocational education and the direction it is going. This would perhaps therefore be a larger policy implication than perhaps simply shrinking a council. He was not sure HESS Committee members wanted to make such policy decisions without further exploring the membership on the ACPE. Number 1494 MR. RUBADEAU said he was not privy to the total membership of the ACPE, but he knew that the commission consisted of regents, members of the University of Alaska, and secondary educators. However, this situation begs the question: Is this a policy decision HESS Committee members want to make in this bill, when this bill is simply trying to emphasize the voice of vocational education in this state? Mr. Rubadeau did not think it was wise to therefore delete that voice from a very important commission. MR. RUBADEAU noted that Co-Chair Bunde was a member of the ACPE, and asked if he would like to speak to the voice that it brings to his commission. Number 1527 CO-CHAIR BUNDE replied that the ACPE does contain proprietary schools and representatives from vocational education, public schools, legislators, and regents. There is a mix, and the ACPE is a miniature version of perhaps what the HRIC aspires to be. Co- Chair Bunde is concerned, as a member or commissioner of the ACPE, that rolling the ACPE member into the HRIC would perhaps undermine that member's ability to provide the service to the state at the previous level. CO-CHAIR BUNDE was also still unsure of the need for the ACPE after the HRIC is established. While the ACPE certifies proprietary and vocational technology kinds of schools, they also are very involved in student loans. Therefore, the ACPE has dual responsibility. Number 1590 MR. RUBADEAU told Co-Chair Bunde that the bill's sponsors were very careful in looking only at the federal programs that were involved in the state. The Lt. Governor's office did not want to undermine the wisdom that past legislators have put into developing the ACPE. It wanted to deal specifically with the federal funding, to get the state ready for the block grant scenario it is rumored is coming out of Congress. MR. RUBADEAU noted that the HRIC has been implemented in other states. Dr. McCormick shared that the state of Texas has incorporated its Postsecondary Education Commission as a very important dual participant in the planning and long-range strategic development of vocational education and training within the state. At this point, this bill does not address the ACPE in any way except, and this was only a recision type of inclusion into HB 280, by saying that anywhere the GCOVE was mentioned, that state statute needed to be amended to reflect the changes in the name. This was because 18 months after the HRIC has been in place it will replace the GCOVE. That is the only relationship the sponsor's office saw at that point. MR. RUBADEAU said, "As far as usurping the power, trying to in any way influence, other than providing a membership to perhaps make that transfer of information more immediate, that was the only reason this was included in the bill." Number 1666 REPRESENTATIVE ROKEBERG asked who was talking to Dr. McCormick after the meetings of the subcommittee. MR. RUBADEAU indicated that he had spoken with Dr. McCormick two times since the subcommittee meeting. REPRESENTATIVE ROKEBERG asked if Dr. McCormick was still in favor of this removal of the HRIC member from his board of directors. MR. RUBADEAU said in further discussion with Dr. McCormick, the sponsor's office looked at the legal implications. Dr. McCormick felt both amendments made very little sense after the implications were studied. Number 1683 MR. RUBADEAU addressed the second amendment. He said the sponsor's office was wondering what would occur if a "meaningful outcome assessment" was added over and above the assessment procedures that are already in place with the Job Training Council (JTC), with the GCOVE, and the UI Trust Fund. If another level of assessment is added that is not in place right now, there is concern that fiscal notes would have to be sent back to the agencies due to the additional workload and possible additional cost of providing the needed data. MR. RUBADEAU said hopefully, the HRIC knows it will have to come up with some way of justifying their work. There is a need to provide some sort of outcome assessment, and Dr. McCormick felt comfortable with the assessment procedures in place. Number 1747 CO-CHAIR BUNDE stated that as a member of the ACPE, he asked Dr. McCormick to protect the interests of the commission. Dr. McCormick does not believe that he maintains the concerns that he originally had about the bill. Co-Chair Bunde noted that does not mean that he, personally, is completely at-ease with the bill. REPRESENTATIVE ROKEBERG asked if Co-Chair Bunde has had a conversation with Dr. McCormick subsequent to the meeting. CO-CHAIR BUNDE answered yes, and Dr. McCormick said he is no longer concerned about the amendments. He did not feel either amendment was now necessary. CO-CHAIR TOOHEY said that outcome assessments, unless they are in place, are crucial. The whole program is useless unless the state knows who goes to work after the training. She asked Mr. Rubadeau if he felt assessment programs were in place within the bill. MR. RUBADEAU said yes. Each of the federal mandated work programs and job training programs have outcome-based assessments. Those programs have to provide those assessments to the federal government, showing that they are indeed doing the job that is required of them. REPRESENTATIVE ROKEBERG summarized that an additional outcome assessment may cause fiscal notes to change. Number 1831 REPRESENTATIVE VEZEY told Mr. Rubadeau that he thinks the entire proposed HRIC is seriously flawed. There are only four employers on a board of over 20 people. Representative Vezey has watched training program after training program, and those programs tend to be geared toward professional trainers, and not toward employers. Employers have a better understanding than anyone of what is being sought in an employee. REPRESENTATIVE VEZEY did not think the HRIC could ever provide a meaningful job training program unless it was employer-driven. Employers are the ones that provide the jobs. Representative Vezey has had some experience with some very successful job placement programs, and those programs are employer-oriented. Employers drive the program. Representative Vezey does not think the council can get educators and people from community service who all have visions of how they think the world ought to be, to tell an employer what they want in an employee. It is the employers that know what is needed in an employee. REPRESENTATIVE VEZEY said any council that does not recognize that primacy of priorities is not going to work. Number 1889 MR. RUBADEAU asked to direct Representative Vezey's attention to the top of page 4 of the bill. One of the confusions in the bill is because of the recision language. Many people look at the composition of the proposed consolidation council, and they are actually looking at the components of the ACPE. The beginning of the membership on the new consolidated council begins at the top of page 4. There were two major drivers in this bill. One is it had to be private sector-driven. The private sector had to have a majority of the membership on this council. Number two, private sector had to have the chair or the co-chair. REPRESENTATIVE VEZEY read that there will be one to four additional members of the private sector, it does not say "private sector employers." It means people who are not employed by the government. MR. RUBADEAU directed Representative Vezey's attention to number (5). It says "four representatives of business and industry...." REPRESENTATIVE VEZEY interjected, "Four out of 24." MR. RUBADEAU offered that the bill mandates that there be a majority of private sector members, and this includes employers and organized labor as the drivers on this, and they must form a majority of this board and commission. Number 1946 REPRESENTATIVE VEZEY reiterated his point. He said unless the commission is employer-driven, and a small sector of the private sector is employers, it can not be expected to really work. The bill sets up an institution that is really more toward protecting itself than meeting the needs of employers. And that is where jobs come from. MR. RUBADEAU introduced Sarah Scanlon, Vice President of the Northwestern Alaska Native Association (NANA); Chair, School-to- work; and past chair of the JTC; and said she has worked on this legislation for the past three years. She is a private sector member of the school-to-work program. She is a former private sector member of the JTC, and is a private sector employer who feels she has done an enormous amount of work putting together this legislation. This legislation is even private sector employer- driven. CO-CHAIR BUNDE said Representative Rokeberg could ask a question, and then Ms. Scanlon could testify. Number 1995 REPRESENTATIVE ROKEBERG had reconsidered some of his earlier statements because he read a letter that arrived for him and all committee members from Janice Tatlow of the Anchorage Mat-Su Private Industry Council. The letter contained recommendations that did not add membership, but asked that the bill more clearly specify who from the private sector is represented. MR. RUBADEAU said he had seen the letter, and he had met with the private industry council. He feels their concerns have been met. Other letters of support have been written by the private industry councils around the state. Those councils feel that, as Representative Vezey has stated, the HRIC should be employer and private sector driven. However, the only partnership opportunities that are possible are between the federally mandated employee training programs and the private sector to develop a long-range, strategic plan for vocational education and job training in the state of Alaska. MR. RUBADEAU said he hopes the HRIC will be able to put together a consolidated plan, that is private sector and employer driven that will meet the needs of Alaska and remove some of the problems that the Department of Labor has found in their surveys about not having Alaskan jobs for Alaskan employees. Number 2058 REPRESENTATIVE ROKEBERG asked if Mr. Rubadeau would tell him who makes up private industry councils, and also what service delivery areas are. MR. RUBADEAU said service delivery areas are regional organizations within the state of Alaska that accept monies from the unemployment insurance trust fund. One-tenth of one percent of the money that is put up by employees goes to the unemployment insurance fund. That money is directly designated to go to service delivery areas basically for job training and retraining to keep people employable and employed. The service delivery areas are set up to administrate those grants, as well as working with the Job Training Partnership Act (JTPA) and other monies to effectively plan within their regions job training that makes sense. MR. RUBADEAU said the private industry councils are also made up completely of private sector employers within the regions who direct the programs for service delivery areas, JTPA and the jobs program for effective use within their locations. Each one has a different training plan that they have to submit to the state. Number 2106 REPRESENTATIVE ROKEBERG said the suggestion in the amendment is just to add to the language in HB 280 that would stipulate that there are at least two representatives from the private industry council rather than one under subsection (5). Additionally, on subsection (10) the bill would stipulate that there would be at least one additional member from the private industry councils. REPRESENTATIVE ROKEBERG asked if Mr. Rubadeau had considered this, and what he would think about that type of amendment. Number 2122 MR. RUBADEAU said the sponsor's office would be amenable to including the private industry councils at any stage in planning. In talking to David Stone, Chair of the Statewide Private Industry Council, the Lt. Governor's office envisions that as it develops the HRIC plan, the regional representation, like the tentacles off a major plan, and the feedback from the regions are going to be directly related to the private industry councils. The Lt. Governor's office feels they are full partners in the planning. The office hopes they will be included in each and every step of developing a long-range plan for vocational education. MR. RUBADEAU stated that in talking with David Stone, he thinks that many of the issues have been addressed. Instead of having a "feeder" from the private industry councils, the Lt. Governor's office wants to make them full partners and satellite planners from the HRIC. Number 2159 REPRESENTATIVE ROKEBERG noted that adding the two amendments to the bill does not change the total number in the HRIC membership. It just stipulates further who would be present. CO-CHAIR BUNDE said he was still not convinced, after speaking with Mr. Rubadeau and Dr. McCormick that amendment two is a bad idea. He is still in favor of amendment two. He wants to study the issue and the costs involved. Number 2195 SARAH SCANLON, Vice President, NANA; Chair, School-to-Work; appreciated the concern of Representative Vezey. She said the private sector has shared that concern for quite some time. The federal mandates under the JTPA define "private sector" as employers. It is not defined as private individuals within the state or citizens within the state. MS. SCANLON said the concerns have been addressed, and the legislation has been worked on for the last ten years. Last year, the legislature passed this bill. Unfortunately, Governor Hickel vetoed the bill due to agency interference. MS. SCANLON said the whole bill is designed to consolidate the fragmented, messy system currently in place. Everyone recognizes the need to save money. This is an attempt to do that. The efforts for the HRIC have been private sector driven. Problems have been encountered, however, with state agency people because they want to protect their "turf." MS. SCANLON encouraged HESS Committee members to pass HB 280 so the state can have a better system in place for employment and training for the citizens of this state. Number 2243 REPRESENTATIVE VEZEY said if "private sector" is defined as being private sector employers, that does help. Representative Vezey had never read that definition. Still, the bill stipulates for 5 or 8 out of 21 members of the HRIC to be employers. The HRIC should be comprised of a majority of employers. MS. SCANLON said somehow the bill is not clear, and she understood Representative Vezey's confusion. The HRIC will be comprised of, at most, 14 representatives of the private sector out of the over 21 members. REPRESENTATIVE VEZEY admitted that he strongly supports consolidation, but he advocates that the HRIC be employer driven. TAPE 95-44, SIDE B Number 000 CO-CHAIR TOOHEY read lines 16 and 17 on page 4: "...at least one representative from the organization representing the training and employment needs of Alaska Natives...." She asked Ms. Scanlon if she felt one representative was enough. MS. SCANLON answered that there are other places to plug in representatives of the Native organizations, therefore the bill is fine as it reads. In fact, the sponsors of the bill may have had in mind to include the employment training agencies from the Native communities. These are nonprofits who have been out of the picture, and those entities need to be incorporated into this whole investment policy. CO-CHAIR BUNDE asked to state for the record that the HRIC would be driven/dominated by private sector employers. He asked to go on and discuss amendment two. He has had some previous experience in public education and as a commissioner with proprietary schools. What those schools purport to do and what they actually do is sometimes different. Therefore, Co-Chair Bunde still favors amendment two. He asked Mr. Rubadeau to speak to that and the possible fiscal impact. Number 119 MR. RUBADEAU said the amendment is very tenuous. His office has worked very hard since January to get a tenuous alliance between all the agencies that were involved and all the private sector volunteers that have served on the commissions and councils that have been proposed for consolidation. If the intent of the legislature is to say that the HRIC will develop some way of reporting whether or not the HRIC is making progress towards its goals, then that can be done and the HRIC would welcome this amendment. MR. RUBADEAU continued that if the legislature envisions with amendment two that the HRIC creates an entirely new vehicle for assessment that is outside of what the federal law requires the HRIC to do anyway, then the HRIC will have to develop a new vehicle and a new data reporting and tracking system. Tracking people who still have a job 12 months out of training may cause the HRIC to go back to agencies and ask them if a new fiscal note is required. If HESS Committee members do not feel that was necessary, then Mr. Rubadeau would bow to the expertise of the HESS Committee members. He would welcome the amendment if a new vehicle is not necessary because the HRIC wants to show that it is doing a good job. Number 230 CO-CHAIR BUNDE said Mr. Rubadeau hit on his point exactly. What happens to a person 6 months or 12 months after he or she has completed a program? Rand Corporation released information that indicated that about 72 percent of those who completed training programs go back on welfare. Co-Chair Bunde was not sure of the exact percentage, but the numbers were terrible. Therefore, if the system is not working, the state needs to know that so something can be done to change it. CO-CHAIR BUNDE felt a compromise could be struck. As any state agency, it would be incumbent upon the HRIC to provide the legislature with a yearly update as to what has transpired. In that update, there should be specifics. The state should know that "X" number of people were in "X" number of programs, "X" number graduated and 12 months later, "X" number has a job. The state must know that there is continuing impact from the HRIC. Number 324 MS. SCANLON said the existing programs do have the ability, through existing Department of Labor records, to research when people go to work, how long they have been working, what their current rate of pay is, and connect that information to the training programs to see whether or not there are any measures of success. That ability to make those reports is therefore already possible through the Department of Labor. CO-CHAIR BUNDE thought a legitimate program would have that information available. He doubts the state is asking for a new vehicle. If the program does not have that information available, the HRIC should have the right to say it needs that information and get that information. That is how Co-Chair Bunde envisions amendment two. MR. RUBADEAU said the only word that threw him off in the amendment was the word "outcome." That conjures up an outcome-based assessment policy that perhaps would be ill-defined in some people's minds. It seems to raise and beg more questions than answers. He would think that all assessment is outcome-based. However, including the word "outcome" may not fit into federal legislation. Number 416 REPRESENTATIVE ROKEBERG thought that during the discussions of the subcommittee, this particular amendment came from Dr. McCormick. It was well-received by the subcommittee, particularly as it related to the idea that the "results" of the activity (as an equivalent word for "outcome") was what he was driving at. That is why Co-Chair Toohey brought this amendment forward. REPRESENTATIVE ROKEBERG felt the amendment was excellent because if in fact the HRIC is required to have these assessments anyway, it is always more reassuring to see it spelled out in the law. He said if the amendment is duplicative from a financial standpoint, the amendment should be adopted anyway. Number 479 CO-CHAIR TOOHEY said she has worked with the JTPA through the nursing assistant program. She said it does try and track progress two months out of the program. Nothing is going to work unless there is not a carrot that says the trainee has to work or he/she will have to pay for the training. Sometimes, some of the jobs proposed are not fun jobs or glamorous jobs. They are jobs that might bring in enough money to fund a person for adequate living. CO-CHAIR TOOHEY said unless employment is stressed, the person may not work. Number 540 REPRESENTATIVE DAVIS said amendment two is inherent in the whole system. He has worked in three different vocational programs. To annually reapply for funding, the program must fill out a form. You have to write down the base, the graduates, the input and the output of the program. There must be placement, and the program can be sold on that placement. However, if the amendment is added that would be fine because it does not hurt anything. Assessment is inherent in the whole operation. REPRESENTATIVE DAVIS approves of the concept. The state has been trying to condense these commissions and committees for many years. The HRIC is a very good approach. REPRESENTATIVE DAVIS said other programs, like the JTPA, have gotten "bad marks" because there has been a lot of money available. Organizations have sprung up just to get a hold of that money. Therefore, a lot of the instructional programs are useless. There is so much money for these schools, and so many schools and so many graduates, but the jobs are not there. The schools have to gear their training to the available jobs. The HRIC will help solve those problems. REPRESENTATIVE DAVIS felt the inclusion of the amendment will look good, but really assessment is inherent in the whole program. The intent of the new system is to plan for block grants anyway. Number 672 CO-CHAIR BUNDE said he has a reasonable sense of the committee's feelings. CO-CHAIR TOOHEY moved amendment two. REPRESENTATIVE DAVIS objected, due to the fact that Mr. Rubadeau's discussion on the wording is something that needs to be considered at some time in the future. CO-CHAIR TOOHEY suggested a possible amendment to the amendment. The amendment could read, "to a meaningful program of outcome assessments where needed...." CO-CHAIR BUNDE felt "where needed" provided a pretty big loophole. CO-CHAIR TOOHEY said JTPA makes assessment an absolute mandate. MS. SCANLON noted that all the federal programs mandate assessment. CO-CHAIR TOOHEY noted that therefore, "where needed" is not needed. Number 736 CO-CHAIR BUNDE said he did not want the HRIC to sponsor the meaningful program, he wanted the council to collect reports. Therefore, Co-Chair Bunde suggested that the words "to collect the results of the outcome assessments that effectively measures...." REPRESENTATIVE ROBINSON said it seems there is a consensus among HESS Committee members that they want the HRIC to collect the data on the success of these training programs. HESS Committee members also want the HRIC to report these assessments back to the legislature. The state wants to know what is and is not working. Therefore, she felt the HESS Committee members could provide that direction to the bill. CO-CHAIR BUNDE said the chair would accept a conceptual amendment based on amendment two with the understanding that the council will collect and distribute these assessments that the various participants produce. Co-Chair Bunde expressed a wish to create the verbiage that would require that these assessments be provided to the HRIC. Number 872 CO-CHAIR BUNDE asked if the objection was maintained to conceptual amendment two. The objection was not maintained, and conceptual amendment two was passed. When Co-Chair Bunde creates the wording, he will distribute it to HESS Committee members and to Mr. Rubadeau. REPRESENTATIVE ROKEBERG moved the following conceptual amendment. The amendment references page 4, Section (5), line 9. The amendment seeks to strike the word "one" after "least," and insert the word "two," on that line. Moving down on the same page to line 24, the amendment aims to delete the period after the word "council," add a comma, and add the following words: "with at least one member from private industry councils representing private sector business." REPRESENTATIVE ROKEBERG said the reason for this is the recommendation of the private industry councils themselves, as well as the concerns raised by Representative Rokeberg and Representative Vezey about the representation of the private sector. From the testimony of the subcommittees and Representative Rokeberg's inquiries about what "private sector" means, the Administration answered that labor unions and other quasi- governmental organizations were "private sector." REPRESENTATIVE ROKEBERG found that a little unusual. Therefore, the thrust of this amendment is to insure a heavier weight toward private business. Number 994 CO-CHAIR BUNDE asked Mr. Rubadeau if this amendment would then increase the size of the council by one, or would it displace someone. MR. RUBADEAU answered that it states in (10) that "at least one" was necessary. Therefore, if there were only one, the added one would be another member of private industry councils, representing private sector business. Mr. Rubadeau said he was very comfortable with the amendment, as it reflected the intent of the bill. REPRESENTATIVE ROKEBERG moved amendment three. Number 1031 REPRESENTATIVE ROBINSON asked if the amendment incorporated line 24 also. Representative Rokeberg had said "with at least one member from the private sector" down on line 24. REPRESENTATIVE ROKEBERG answered yes. REPRESENTATIVE ROBINSON wanted to hear from Mr. Rubadeau that he was comfortable with that amendment. MR. RUBADEAU agreed with the amendment. He said it spells out even more clearly the natural relationship that is envisioned with the private industry councils and the private sector. CO-CHAIR BUNDE asked if the objection had been maintained, and it was not. Conceptual amendment three passed. Amendment one was withdrawn. Number 1077 REPRESENTATIVE VEZEY moved that on page 4, line 23, after the first time the word "sector" appears, that the word "employers" be inserted. CO-CHAIR BUNDE asked for objections, and there were none. The conceptual amendment passed. REPRESENTATIVE VEZEY also moved that the section beginning on page 4, lines 2-4 be deleted. He would also amend line 9, after (5), to change the word "four" to "eight." REPRESENTATIVE ROBINSON objected. REPRESENTATIVE ROKEBERG also opposed the amendment because of the lengthy testimony which reviewed the balanced membership of the HRIC. The Administration made a fair case for the necessity of having the commissioner levels and personnel from the state Administration participate in the activity to provide the leadership that is necessary. REPRESENTATIVE ROBINSON understood that the numbers are also part of the federal mandate, and such coordination is part of the concepts and requirements in meeting the criteria. Number 1253 MR. RUBADEAU said that public sector involvement is very specifically laid out, as it includes memberships from education, labor and the private sector. The amendments offered so far have not in any way changed the relationships between the memberships and the quotas that must be met under the federal guidelines. Up to this point, the amendments have basically specified that the private industry councils will be involved, and private sector employers will be those targeted. However, once the HESS Committee members start to tinker with the total membership, then the mandated percentages are screwed up. MR. RUBADEAU said percentages are very specifically laid out in the federal law that brings $42 million to the Alaska. That money could be jeopardized by not having the proper oversight council. If the federal requirements are not met, the money will not be acquired. Number 1286 REPRESENTATIVE VEZEY asked how many elected or appointed government officials are required to be on the council. That is what he just proposed eliminating: The commissioners. The commissioners can certainly sit on the board under paragraph (b) under (10). The commissioners can be nonvoting members. Representative Vezey was deleting the appointed public officials from being voting members of the board, and replacing four of those with four people from the private sector. Number 1327 REPRESENTATIVE ROKEBERG said there is a federal requirement that at least 15 percent of the members of the council must be public members. Therefore, there must be at least 4 people of the 26. REPRESENTATIVE VEZEY said he would not consider the commissioners of the various departments as public members. MR. RUBADEAU clarified. He said the commissioners that are involved are those commissioners that are overseeing the actual delivery of the services. These are where the programs are located. The HRIC is not about the consolidation of programs. JTPA is serviced under Community and Regional Affairs (CRA). The unemployment security trust is under the Department of Labor. GCOVE is under the Department of Education. MR. RUBADEAU said his office is not proposing removing those programs from the line agencies that have been doing a good job at delivering those programs. The bill proposes an oversight committee that shrinks three duplicative oversight committees into one. Those commissioners need to be at the table in order to insure that whatever the strategic plan is that comes out of the process of the oversight committee, it is done at the line agency level. MR. RUBADEAU said his office feels it is very important for the commissioners to be there. That will help bring the partnership of public and private business together. That partnership has to be embodied at the table. The commissioners have to be there to talk about what is best for Alaskan employers and employees, and how to turn the tide and get job training that is meaningful to the state. That is why these commissioners are there. Number 1429 REPRESENTATIVE VEZEY asked if the commissioners are so important to the council, why does the bill say their designee can be present instead of the commissioner. MR. RUBADEAU said the HRIC will probably meet quarterly. If a quorum must be met, the HRIC commissioners should have that option. However, the commissioners are very committed to the proposed council. There are very important decisions that must be made in the next decade in Alaska on how to wrestle back Alaskan jobs for Alaskans. The commissioners need to be at the HRIC table to make those decisions. MR. RUBADEAU stated that Department of Labor statistics show that one-third of all employment dollars go to out-of-state employees. Those dollars need to be brought back to Alaska. The DOL can help the HRIC do that, and so can the commissioner. REPRESENTATIVE VEZEY commented that some major changes were coming down from the federal government concerning how training programs are administered. He said that to speculate that those changes will have the same strings tied to them as the programs that already exist would be extremely presumptuous and probably erroneous. He really thinks that the legislature should wait until it sees what the federal programs look like. Then the state should perform one reorganization, and do it then. REPRESENTATIVE VEZEY said last year he supported a major reorganization of those programs. But he was not anticipating that the federal government was going to propose major reorganization. He fears that the state of Alaska would just start to get a system in place, and an entirely new program would be passed down to Alaska from the federal government. Number 1497 MR. RUBADEAU said the opportunity under the HRIC, that only 21 other states have taken advantage of, is a 1993 amendment to the JTPA federal program. That is driving what the Lt. Governor's office feels are the block grant scenarios that are proposed. The Lt. Governor's office has studied the five bills that are presently in Congress. All five address the HRIC concept. The Lt. Governor's office feels that the other states are working rapidly to get on-line with this. If the block grant scenarios come down prior to the state of Alaska having an HRIC in place, Alaska will have to work quickly to catch up. MR. RUBADEAU said the state should begin planning now, and do an orderly phase-out of the existing programs to get to the HRIC, which is part of the bill. It is the sunset provision in the bill, so Alaska stands ready, as it should, to benefit not only from revenue streams now but the revenue streams to come. MR. RUBADEAU said this bill represents fore-planning, rather than trying to catch-up after the fact. CO-CHAIR TOOHEY asked Mr. Rubadeau if the amendment passes, does that make the entire bill obsolete as far as meeting the federal government guidelines in order to receive funding. MR. RUBADEAU answered that federal government requirements would not be met. CO-CHAIR BUNDE called for a vote on conceptual amendment five. Voting "yes" on the amendment was Representative Vezey. Voting "no" was Co-Chair Bunde, Co-Chair Toohey, Representative Rokeberg, Representative Robinson and Representative Davis. Number 1611 REPRESENTATIVE ROKEBERG moved HB 280 as amended with individual recommendations and accompanying fiscal notes. There were no objections, and the bill passed. CONFIRMATION HEARINGS - BOARD OF DENTAL EXAMINERS Number 1632 CO-CHAIR BUNDE read the names of the proposed appointments to the Board of Dental Examiners: Raymond Lang, Kenneth Crooks, James Clark, Phyllis Pendergrast, Carol Ross and Connie Stewart. CO-CHAIR TOOHEY said she called the Dental Society and asked for an opinion. The society said it approved of all candidates. CO-CHAIR BUNDE said he had also made some inquiries, and found no objections in the dental community. He read for the record the following statement: "This does not reflect any intent by any of the members to vote for or against these individuals during any further sessions for the purpose of confirmation." He then asked for the wish of the committee. REPRESENTATIVE VEZEY moved that the names be passed without recommendations onto the floor. There were no objections and it was so done. ADJOURNMENT CO-CHAIR BUNDE adjourned the meeting at 5:00 p.m.