Legislature(1999 - 2000)

04/19/1999 01:15 PM House JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
         HOUSE JUDICIARY STANDING COMMITTEE                                                                                     
                   April 19, 1999                                                                                               
                     1:15 p.m.                                                                                                  
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                                 
                                                                                                                                
Representative Pete Kott, Chairman                                                                                              
Representative Joe Green                                                                                                        
Representative Norman Rokeberg                                                                                                  
Representative Jeannette James                                                                                                  
Representative Lisa Murkowski                                                                                                   
Representative Eric Croft                                                                                                       
Representative Beth Kerttula                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                  
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
HOUSE JOINT RESOLUTION NO. 30                                                                                                   
Proposing amendments to the Constitution of the State of Alaska                                                                 
repealing provisions relating to the constitutional budget reserve                                                              
fund and providing that the balance in the fund be deposited into                                                               
the budget reserve fund established by statute.                                                                                 
                                                                                                                                
     - MOVED CSHJR 30(JUD) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 146                                                                                                              
"An Act relating to civil liability for commercial recreational                                                                 
activities; and providing for an effective date."                                                                               
                                                                                                                                
     - MOVED CSHB 146(JUD) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 85                                                                                                               
"An Act relating to licensure and professional discipline of                                                                    
members of the teaching profession and providing for related                                                                    
penalties; relating to grounds for dismissal of a teacher; relating                                                             
to the Professional Teaching Practices Commission; relating to                                                                  
limited immunity for procedures under the Educator Ethics Act;                                                                  
making conforming amendments; and providing for an effective date."                                                             
                                                                                                                                
     - MOVED CSHB 85(JUD) OUT OF COMMITTEE                                                                                      
                                                                                                                                
HOUSE BILL NO. 158                                                                                                              
"An Act relating to the annual report of the director of the                                                                    
division of insurance and to notice of cancellation of personal                                                                 
insurance."                                                                                                                     
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
(* First public hearing)                                                                                                        
                                                                                                                                
PREVIOUS ACTION                                                                                                                 
                                                                                                                                
BILL: HJR 30                                                                                                                    
SHORT TITLE: CONST. AM: REPEAL BUDGET RESERVE FUND                                                                              
SPONSOR(S): REPRESENTATIVES(S) JAMES                                                                                            
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 3/19/99       513     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 3/19/99       513     (H)  JUDICIARY, FINANCE                                                                                  
 4/12/99               (H)  JUD AT  1:00 PM CAPITOL 120                                                                         
 4/12/99               (H)  SCHEDULED BUT NOT HEARD                                                                             
 4/15/99               (H)  JUD AT  1:00 PM CAPITOL 120                                                                         
 4/15/99               (H)  HEARD AND HELD                                                                                      
 4/15/99               (H)  MINUTE(JUD)                                                                                         
 4/19/99               (H)  JUD AT  1:00 PM CAPITOL 120                                                                         
                                                                                                                                
BILL: HB 146                                                                                                                    
SHORT TITLE: LIABILITY FOR COMMERCIAL REC ACTIVITIES                                                                            
SPONSOR(S): REPRESENTATIVES(S) KOTT, Dyson                                                                                      
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 3/19/99       515     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 3/19/99       515     (H)  L&C, JUD                                                                                            
 3/31/99       642     (H)  COSPONSOR(S): DYSON                                                                                 
 4/12/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
 4/12/99               (H)  MOVED CSHB 146(L&C) OUT OF COMMITTEE                                                                
 4/12/99               (H)  MINUTE(L&C)                                                                                         
 4/14/99       810     (H)  L&C RPT  CS(L&C) 2DP 5NR                                                                            
 4/14/99       810     (H)  DP: HARRIS, ROKEBERG; NR: MURKOWSKI,                                                                
 4/14/99       810     (H)  CISSNA, SANDERS, BRICE, HALCRO                                                                      
 4/14/99       810     (H)  ZERO FISCAL NOTE (COURT)                                                                            
 4/19/99               (H)  JUD AT  1:00 PM CAPITOL 120                                                                         
                                                                                                                                
BILL: HB  85                                                                                                                    
SHORT TITLE: TEACHERS' LICENSES, DISCIPLINE & ETHICS                                                                            
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 2/10/99       186     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 2/10/99       186     (H)  HES, JUDICIARY, FINANCE                                                                             
 2/10/99       186     (H)  ZERO FISCAL NOTE (DOE)                                                                              
 2/10/99       186     (H)  GOVERNOR'S TRANSMITTAL LETTER                                                                       
 3/04/99               (H)  HES AT  3:00 PM CAPITOL 106                                                                         
 3/04/99               (H)  <BILL CANCELED>                                                                                     
 3/27/99               (H)  HES AT 10:00 AM CAPITOL 106                                                                         
 3/27/99               (H)  MOVED OUT OF COMMITTEE                                                                              
 3/27/99               (H)  MINUTE(HES)                                                                                         
 3/29/99       598     (H)  HES RPT  2DP 3NR                                                                                    
 3/29/99       599     (H)  DP: DYSON, WHITAKER; NR: GREEN,                                                                     
                            MORGAN,                                                                                             
 3/29/99       599     (H)  COGHILL                                                                                             
 3/29/99       599     (H)  ZERO FISCAL NOTE (DOE) 2/10/99                                                                      
 3/29/99       599     (H)  REFERRED TO JUD                                                                                     
 4/19/99               (H)  JUD AT  1:00 PM CAPITOL 120                                                                         
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
TAMARA COOK, Director                                                                                                           
Legislative Legal and Research Services                                                                                         
Legislative Affairs Agency                                                                                                      
130 Seward Street, Suite 409                                                                                                    
Juneau, Alaska 99801-2105                                                                                                       
Telephone:  (907) 465-2450                                                                                                      
POSITION STATEMENT: Answered questions of the committee members on                                                              
                    HJR 30.                                                                                                     
                                                                                                                                
KELLY SULLIVAN, Legislative Secretary                                                                                           
   for Representative Pete Kott                                                                                                 
Alaska State Legislature                                                                                                        
Capitol Building, Room 118                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-3777                                                                                                      
POSITION STATEMENT: Presented sponsor statement on HB 146.                                                                      
                                                                                                                                
MIKE WINDRED, Vice President                                                                                                    
Marketing and Sales                                                                                                             
Alaska Travel Adventures                                                                                                        
9085 Glacier Highway, Suite 301                                                                                                 
Juneau, Alaska 99801                                                                                                            
Telephone:  (907) 789-0052                                                                                                      
POSITION STATEMENT:  Testified in support of HB 146.                                                                            
                                                                                                                                
BOB ENGELBRECHT, Owner                                                                                                          
North Star Trekking                                                                                                             
1602 Laurie Lane                                                                                                                
Juneau, Alaska 99801                                                                                                            
Telephone:  (907) 790-4530                                                                                                      
POSITION STATEMENT: Testified in support of HB 146.                                                                             
                                                                                                                                
MIKE FORD, Attorney                                                                                                             
Legislative Legal Counsel                                                                                                       
Legislative Legal and Research Services                                                                                         
Legislative Affairs Agency                                                                                                      
130 Seward Street, Suite 409                                                                                                    
Juneau, Alaska 99801-2105                                                                                                       
Telephone:  (907) 465-2450                                                                                                      
POSITION STATEMENT: Answered questions of the committee members on                                                              
                    HB 146.                                                                                                     
                                                                                                                                
RUSSELL L. WINNER                                                                                                               
Alaska Academy of Trial Lawyers                                                                                                 
900 West 5th Avenue, Suite 700                                                                                                  
Anchorage, Alaska 99501                                                                                                         
Telephone:  (907) 277-9522                                                                                                      
POSITION STATEMENT: Testified in opposition to HB 146.                                                                          
                                                                                                                                
SANNA GREEN, Executive Director                                                                                                 
Professional Teaching Practices Commission                                                                                      
Department of Education                                                                                                         
344 West 3rd Avenue, Suite 127                                                                                                  
Anchorage, Alaska 99501                                                                                                         
Telephone:  (907) 269-6579                                                                                                      
POSITION STATEMENT: Testified in support of HB 85.                                                                              
                                                                                                                                
TERESA WILLIAMS, Assistant Attorney General                                                                                     
Fair Business Practices Section                                                                                                 
Civil Division                                                                                                                  
Department of Law                                                                                                               
1031 West 4th Avenue, Suite 200                                                                                                 
Anchorage, Alaska 99501-1994                                                                                                    
Telephone:  (907) 269-5100                                                                                                      
POSITION STATEMENT: Testified on HB 85.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 99-34, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
CHAIRMAN PETE KOTT called the House Judiciary Standing Committee                                                                
meeting to order at 1:15 p.m.  Members present at the call to order                                                             
were Representatives Kott, Rokeberg, James and Murkowski.                                                                       
Representatives Kerttula, Croft and Green arrived at 1:20 p.m.,                                                                 
1:22 p.m. and 2:06 p.m., respectively.                                                                                          
                                                                                                                                
                                                                                                                                
HJR 30 - CONST. AM:  REPEAL BUDGET RESERVE FUND                                                                                 
                                                                                                                                
CHAIRMAN KOTT announced the first order of business is HJR 30,                                                                  
Proposing amendments to the Constitution of the State of Alaska                                                                 
repealing provisions relating to the constitutional budget reserve                                                              
fund and providing that the balance in the fund be deposited into                                                               
the budget reserve fund established by statute.                                                                                 
                                                                                                                                
CHAIRMAN KOTT called on Representative Jeannette James, sponsor of                                                              
the resolution.                                                                                                                 
                                                                                                                                
Number 0060                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES stated that ever since she has been in the                                                                 
legislature she has been aware of the constitutional budget reserve                                                             
fund and the problems that it has created for legislators.  It                                                                  
didn't turn out like it was intended.  It was there to collect                                                                  
taxes.  It has done that, but testimony from the Administration has                                                             
indicated that the state can only expect back $1.6 million per year                                                             
from back taxes.  She thinks it has outlived its usefulness and                                                                 
should go away and in its place there should be a long-term plan.                                                               
Where the money should go she doesn't know, however.  When she                                                                  
wrote the resolution, she suggested that it should go into the                                                                  
statutory budget reserve.  That's where funds were building before.                                                             
It has been empty for a long time and has quite a few restrictions                                                              
on it, so maybe, that's not a good place.  She suggested putting it                                                             
in the earnings reserve of the permanent fund or the general fund.                                                              
Wherever it is put, the deposit needs to get the highest rate of                                                                
return as possible.                                                                                                             
                                                                                                                                
REPRESENTATIVE JAMES further stated the constitutional budget                                                                   
reserve fund has been a burden between the majority and the                                                                     
minority with the three-fourth vote requirement.  It has caused a                                                               
lot of distress over the years, and it is time to put that behind.                                                              
The biggest problem is that any money borrowed has to be paid back,                                                             
and as long as it is there even if it's empty every year the                                                                    
legislature has to "scarf off" everything at the end of the year                                                                
that's available for appropriation and pay it back creating a sweep                                                             
provision in the budget.  That is a problem and as long as it's on                                                              
the books the legislature will continue to have to deal with it.                                                                
                                                                                                                                
Number 0263                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT asked Representative James what would happen to the                                                               
monies that the legislature owes to the fund.  Does it go away?  Is                                                             
the legislature no longer obligated to repay it?  Does that                                                                     
obligation revert to where ever the legislature decides to deposit                                                              
the remaining monies from the constitutional budget reserve?                                                                    
                                                                                                                                
Number 0315                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES replied, she assumes, if the fund goes away                                                                
that any debt to it would go away.  Maybe the constitutional                                                                    
amendment needs to be clearer to indicate that any debt would be                                                                
extinguished.  She suggested getting a legal opinion.                                                                           
                                                                                                                                
Number 0355                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT said the constitutional amendment would need to be                                                                
clear to the voters.  "I'm sure there'd be some motivation out                                                                  
there within the public that would decry that we borrowed money                                                                 
from this fund and now this is a roundabout way to at least prevent                                                             
us from paying it back."                                                                                                        
                                                                                                                                
REPRESENTATIVE JAMES stated, it is her personal opinion, the people                                                             
do not understand that it has to be paid back.  It's not even an                                                                
issue.  They just think it's a place to put money.                                                                              
                                                                                                                                
Number 0393                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT stated he completely agrees with Representative                                                                   
James.  He's not sure that he would want to put that in language in                                                             
the constitutional amendment, unless it was not clear from a legal                                                              
standpoint of the legislature's obligation.  If a legal opinion                                                                 
says that the obligation goes away with the fund and that the money                                                             
is transferred to another account that would be fine.  The more                                                                 
included in a constitutional amendment, the more confused the voter                                                             
would be.                                                                                                                       
                                                                                                                                
Number 0435                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES stated, if the constitutional budget reserve                                                               
fund is repealed, everything that is currently in it would go away.                                                             
The payback is in the existing language in the constitution.                                                                    
                                                                                                                                
Number 0455                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked Representative James whether she                                                                 
thinks that the money deposited from the closure of the fund should                                                             
be defined in the constitutional amendment, so that people know                                                                 
where it will go, or whether there is something that can be done                                                                
afterwards.                                                                                                                     
                                                                                                                                
Number 0513                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES replied it seems that part of repealing a                                                                  
constitutional fund would include what would be done to the money                                                               
in there.  There could be language that says, "at the will of the                                                               
legislature" or "subject to legislative appropriation" or "put it                                                               
in the earnings of the permanent fund to be managed with the rest                                                               
of it" or "the statutory budget reserve fund."                                                                                  
                                                                                                                                
Number 0580                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI noted that much of the public debate is                                                                
emotional in regards to the funds that the legislature has access                                                               
to, which is why the constitutional budget reserve came about in                                                                
the first place.  The legislature, therefore, has to be cautious in                                                             
terms of how this is presented, so that it's not perceived as one                                                               
more way that the legislature want's to take a person's money and                                                               
spend it "willy-nilly."                                                                                                         
                                                                                                                                
Number 0630                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES suggested informing the newer legislators of                                                               
the history of the constitutional budget reserve fund.  She                                                                     
explained it was passed in 1990.  At that time, there was a dispute                                                             
between the legislature and former-Governor Hickel of what                                                                      
constituted a back-tax settlement.  Where did the process start?                                                                
Were administrative appeals included or did it mean going to court                                                              
for a settlement?   Money came in 1991 and 1992, and the governor                                                               
and the administration took the position that the money did not                                                                 
have to go into the constitutional budget reserve fund.  Another                                                                
issue was, when can it be used with a majority vote?  The                                                                       
constitution says that if the incoming money is less than the                                                                   
amount used in the previous year's budget, then it can be accessed                                                              
with a majority vote.  But, for any other time or reason money is                                                               
taken out of the constitutional budget reserve fund, a                                                                          
three-fourths vote is needed.  Beyond that, any money used out of                                                               
the constitutional budget reserve fund has to be paid back.  Thus,                                                              
at June 30 of every year, any money that has not been appropriated                                                              
is "scarfed off" to pay back the money that has been borrowed.                                                                  
Consequently, the little funds like the marine highway fund gets                                                                
swept in and eventually swept out under the "sweep provision."  She                                                             
noted the sweep provision says that any money swept in to pay back                                                              
the constitutional budget reserve fund gets swept back to where it                                                              
was because the sate can't afford to short the money.  The court                                                                
said, in 1993, that the money available for appropriations, when                                                                
comparing it to last year's budget, includes the permanent fund                                                                 
earnings, but it doesn't count when it comes to the sweep                                                                       
provision.  The court also said that once money was collected from                                                              
a tax appeal it needs to go into the constitutional budget reserve                                                              
fund.  She noted that there has been over $7 billion collected and                                                              
put into the fund, and over one-half has been used.  The state has                                                              
never had the ability to pay it back, and she doesn't see any real                                                              
ability to pay it back in the future.  She reiterated the                                                                       
constitutional budget reserve fund is not working, like the                                                                     
election pamphlet said it would work, when she voted for it.                                                                    
                                                                                                                                
Number 0933                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT stated it doesn't work because the state never                                                             
gets to the point where appropriations are greater than the amount                                                              
available for appropriations.  There is always an amount left over                                                              
after paying for dividends and providing for inflation-proofing,                                                                
which he thinks are appropriations.  There is always an amount left                                                             
standing in the earnings reserve of the permanent fund.  That                                                                   
amount clearly means that there isn't a deficit in terms of                                                                     
accounting.  The court decision was correct.  The state has never                                                               
spent more than what was available for appropriations.  It's not so                                                             
much of a weird court decision, but weird accounting.  But, because                                                             
the state has never been in a position of deficit, the state has                                                                
not had the constitutional authority to truly get into the                                                                      
constitutional budget reserve fund.  The state has only had                                                                     
three-fourth authority to borrow from it creating an oddity.                                                                    
                                                                                                                                
Number 1020                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT asked Representative James why she is ending                                                               
the constitutional budget reserve fund rather than amending it, and                                                             
whether she means to deposit the money into the earnings reserve of                                                             
the permanent fund or some other statutory fund that would need to                                                              
be created.                                                                                                                     
                                                                                                                                
Number 1040                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES replied it is up to the committee.  She                                                                    
reiterated she selected the statutory budget reserve account                                                                    
because it is already on the books and is empty.                                                                                
                                                                                                                                
REPRESENTATIVE JAMES further stated she agrees with not counting                                                                
the earnings reserve money that's available for appropriation, but                                                              
it is counted in the beginning, so why isn't it counted in the                                                                  
payback.  That's the problem.  As long as the state is short of                                                                 
funds, it will never get paid back.                                                                                             
                                                                                                                                
Number 1086                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT stated it counts in both places because money                                                              
available for appropriation is everything that the state has coming                                                             
in.                                                                                                                             
                                                                                                                                
REPRESENTATIVE JAMES said, according to the court decision, it                                                                  
doesn't count in the sweep provision.                                                                                           
                                                                                                                                
Number 1102                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT said the state is forced to sweep it back                                                                  
because it has always had more money available for appropriation                                                                
than what has been appropriated.                                                                                                
                                                                                                                                
REPRESENTATIVE JAMES noted that the money doesn't sweep out of the                                                              
earnings reserve of the permanent fund, only the other funds.                                                                   
                                                                                                                                
Number 1116                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT noted that that money was never appropriated.                                                              
He cited, as an example, if the state earns $1.5 billion, it will                                                               
need another $900 million for dividends and $300 million for                                                                    
inflation-proofing resulting in $300 million left.  If the                                                                      
legislature acts like it has for the past five years, it will leave                                                             
that sit in the earnings reserve of the permanent fund, and proper                                                              
accounting would say that there was never more appropriated than                                                                
available.                                                                                                                      
                                                                                                                                
Number 1165                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES stated that is true.  If it made sense, the                                                                
$300 million would be swept back into the fund to pay back what has                                                             
been borrowed at June 30 of every year, but that's not the way it                                                               
works.                                                                                                                          
                                                                                                                                
Number 1176                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT replied, "Because it doesn't sit in the                                                                    
general fund."                                                                                                                  
                                                                                                                                
REPRESENTATIVE JAMES said she understands that.                                                                                 
                                                                                                                                
REPRESENTATIVE CROFT said his point is, the court's decision is a                                                               
rationale interpretation of a quickly drafted constitutional                                                                    
amendment that may not accomplish all that it was intended to.                                                                  
                                                                                                                                
REPRESENTATIVE JAMES said she agrees with the court's decision.                                                                 
The constitutional amendment to create the constitutional budget                                                                
reserve fund was poorly written.                                                                                                
                                                                                                                                
Number 1193                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES stated, whatever is done for the long-term                                                                 
planning, the legislature needs to be sure that all of the money is                                                             
earning as much as it can.  The proper place, it seems, would be to                                                             
put the balance in the earnings reserve of the permanent fund, or                                                               
under the pile of money that is being managed by the Alaska                                                                     
Permanent Fund Corporation.  Small amounts of money in different                                                                
places limits the types of investments that can be made compared to                                                             
a larger fund and a larger rate of return.  It seems that the state                                                             
should "put all its eggs in one basket" in this case.                                                                           
                                                                                                                                
Number 1258                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT said "we" certainly want to get the best return for                                                               
our investments.                                                                                                                
                                                                                                                                
Number 1262                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT suggested a bill to deposit the balance into                                                               
the earnings reserve of the permanent fund with a three-quarters                                                                
vote.  The advantage of that approach is because the constitutional                                                             
budget reserve fund would still be alive for money from                                                                         
settlements.  The approach of the constitutional amendment is for                                                               
the settlements to go to the general fund because "we" don't expect                                                             
the "big whopper settlements"...                                                                                                
                                                                                                                                
Number 1294                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES interjected and stated:  "Just the ordinary                                                                
course of doing business like a hundred...They're estimating $106                                                               
million a year just a--a small percentage of the taxes that we                                                                  
collect will be administratively appealed.  You know, it's just a                                                               
part of doing business."                                                                                                        
                                                                                                                                
Number 1306                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT asked what would happen to the debt of $3.4 or                                                             
$3.8.                                                                                                                           
                                                                                                                                
CHAIRMAN KOTT replied it would go away.  According to Tamara Cook                                                               
[Director, Legislative Legal and Research Services, Legislative                                                                 
Affairs Agency], by creating a new area for this money to be                                                                    
deposited, the prior debt terminates with the end of the fund.                                                                  
                                                                                                                                
Number 1331                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT asked whether there is a problem with changing                                                             
something that requires a three-quarters vote with a two-thirds                                                                 
vote.  He wondered whether there is a principal based on modifying                                                              
a rule with what it takes to effectuate it.                                                                                     
                                                                                                                                
Number 1355                                                                                                                     
                                                                                                                                
                                                                                                                                
REPRESENTATIVE JAMES replied she doesn't have the answer to that                                                                
question.  She declared that she hopes to get unanimous                                                                         
consideration, however.                                                                                                         
                                                                                                                                
CHAIRMAN KOTT stated if this went before the voters it would just                                                               
require a simple majority of the voters to repeal it.                                                                           
                                                                                                                                
REPRESENTATIVE MURKOWSKI suggested calling Tamara Cook for an                                                                   
answer.                                                                                                                         
                                                                                                                                
Number 1381                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG suggested getting a written legal opinion                                                               
for a record to travel with the bill.  He thinks the other members                                                              
will have the same questions.  He declared he intends to be a                                                                   
cosponsor.  He agrees that the use of the constitutional budget                                                                 
reserve fund is problematic, and this committee needs to look at                                                                
where the balance in the fund should be deposited.  He shares the                                                               
concern regarding the sweep language, which is why the                                                                          
constitutional amendment needs to be absolutely clear.  He also                                                                 
shares the concern of a greater return on a stand-alone fund, a                                                                 
smaller corpus, and a shorter time horizon for the utilization of                                                               
those funds.  Testimony from the Department of Revenue has                                                                      
indicated that it is much less than expected.                                                                                   
                                                                                                                                
CHAIRMAN KOTT announced that Tamara Cook is online now.  He asked                                                               
her to comment on the trailing debt that the legislature owes to                                                                
the constitutional budget reserve fund.                                                                                         
                                                                                                                                
Number 1465                                                                                                                     
                                                                                                                                
TAMARA COOK, Director, Legislative Legal and Research Services,                                                                 
Legislative Affairs Agency, testified via a telephone.  She stated                                                              
that there is no debt.                                                                                                          
                                                                                                                                
CHAIRMAN KOTT stated, so under the termination of the                                                                           
constitutional budget reserve fund there would be no debt.                                                                      
                                                                                                                                
MS. COOK replied Article IX, Section 17(d) of the constitution says                                                             
that if there is money left in certain places at the end of each                                                                
fiscal year, it has to go into the constitutional budget reserve                                                                
fund automatically to pay off the debt.  But, that subsection would                                                             
be repealed.                                                                                                                    
                                                                                                                                
Number 1490                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT asked Ms. Cook whether repealing the sweep                                                                 
provision repeals the debt.                                                                                                     
                                                                                                                                
MS. COOK replied there is no obligation to repay because subsection                                                             
(d) would be repealed.                                                                                                          
                                                                                                                                
REPRESENTATIVE CROFT wondered whether there would be a theoretical                                                              
debt.                                                                                                                           
                                                                                                                                
Number 1501                                                                                                                     
                                                                                                                                
MS. COOK stated it's not even a theoretical debt.  The obligation                                                               
to repay only exists in subsection (d), and once that is gone there                                                             
is no obligation or sweep.                                                                                                      
                                                                                                                                
Number 1518                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT asked Ms. Cook whether there is a problem with                                                             
the fact that this has a three-quarters vote requirement and with                                                               
what is needed to change it.  Some rules that establish super                                                                   
majorities can only be changed by that super majority.                                                                          
                                                                                                                                
MS. COOK replied no because it amends the constitution.  If the                                                                 
people choose to repeal Section 17, all of it is repealed.  It's                                                                
the people voting, not a super majority or majority of the                                                                      
legislature.  The only thing the legislature can do is propose the                                                              
amendment.                                                                                                                      
                                                                                                                                
Number 1557                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT asked Ms. Cook whether there is a reason that                                                              
this would have to stay in the constitution, or can it drop out                                                                 
once it does what it was intended to do.                                                                                        
                                                                                                                                
MS. COOK replied it won't drop out on its own.  The way it is                                                                   
written now, it would continue to operate indefinitely.                                                                         
                                                                                                                                
REPRESENTATIVE CROFT said it would operate as one action.  He asked                                                             
Ms. Cook whether sunsets are ever placed in the constitution.                                                                   
                                                                                                                                
MS. COOK replied she can't think of anything like that in the                                                                   
constitution.  There have been provisions that ask for a question                                                               
to be placed before the voters on a certain date again, but those                                                               
are in the transitional sections.                                                                                               
                                                                                                                                
Number 1599                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT said:  "The transitional sections didn't pop                                                               
out.  There were--are stuff at the end talking about how it's going                                                             
to be..."                                                                                                                       
                                                                                                                                
MS. COOK stated there are a few odd provisional sections that exist                                                             
with respect to other constitutional amendments.                                                                                
                                                                                                                                
Number 1623                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT asked Ms. Cook to forward a written opinion on the                                                                
trailing debt to the committee.                                                                                                 
                                                                                                                                
Number 1678                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG stated there are two ways to go - wait and                                                              
see if something new results from this legislature, or let the                                                                  
legislature deposit it at its direction back in the earnings                                                                    
reserve of the permanent fund.  This doesn't have to pass until the                                                             
next session because it is a constitutional amendment.  He is                                                                   
concerned that letting the balance in the fund be deposited at the                                                              
direction of the legislature the people wouldn't have quite the                                                                 
faith in it otherwise if they knew exactly where it was going.                                                                  
                                                                                                                                
Number 1730                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT stated he realizes that there are other things                                                                    
occurring outside this room and legislature, but whether or not any                                                             
of that comes to fruition remains to be seen.  This has a House                                                                 
Finance Standing Committee referral.  He is sure that everything                                                                
would be married there, if there is conflict with other issues.                                                                 
                                                                                                                                
Number 1748                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES said that the public would support putting the                                                             
balance in the earnings reserve of the permanent fund.  It would                                                                
probably be the favorite place.                                                                                                 
                                                                                                                                
Number 1766                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG said, by leaving the constitutional budget                                                              
reserve fund in place now, that might tend to be looked upon as                                                                 
favoring one proposal over another.  He knows that there is one                                                                 
proposal that talks about bringing life back into the statutory                                                                 
budget reserve fund.  He also cited the All-Alaskan Plan as an                                                                  
example.                                                                                                                        
                                                                                                                                
Number 1806                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT stated the other place that might be the most                                                              
popular, from a public perspective, is the principal of the                                                                     
permanent fund.                                                                                                                 
                                                                                                                                
Number 1826                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES stated that certainly would encourage the                                                                  
legislature to make a decision on where to fill the budget gap this                                                             
year.  She noted, however, that this wouldn't be effective until                                                                
after next year's election.                                                                                                     
                                                                                                                                
Number 1846                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI stated, in listening to this discussion,                                                               
it seems that this would be more appropriately resolved at the                                                                  
House Finance Standing Committee level.  The House Judiciary                                                                    
Standing Committee is charged with getting a legal opinion                                                                      
regarding the deposit of the money.  Perhaps, it doesn't need to be                                                             
specified where the money would be deposited.                                                                                   
                                                                                                                                
Number 1870                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES said she has had a lot of phone calls                                                                      
regarding depositing the balance into the statutory budget reserve                                                              
fund.  It is a term that hasn't been around for a very long time.                                                               
She reiterated she choose that fund because it is empty and there                                                               
are restrictions, but she would prefer putting it somewhere else                                                                
that the people understand a little bit better.                                                                                 
                                                                                                                                
Number 1894                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT said he is trying to decide which is better - the                                                                 
earnings reserve of the permanent fund or the corpus of the                                                                     
permanent fund.  There are pros and cons for both.  The bill should                                                             
leave this committee going into either one.  The House Finance                                                                  
Standing Committee can sort it out based on whatever else it needs                                                              
to be married up with it.  Nevertheless, it is inappropriate to                                                                 
leave it go to the statutory budget reserve fund.                                                                               
                                                                                                                                
REPRESENTATIVE JAMES noted she does not have any objection to that.                                                             
                                                                                                                                
Number 1914                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG suggested the committee members consider                                                                
the discretion of the legislature at this juncture.  That's not                                                                 
entirely inappropriate, but it's not the most popular politically.                                                              
                                                                                                                                
Number 1980                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT said, if this is the only vehicle that goes forward,                                                              
he would like to have some comfort in having set a policy that                                                                  
would go to the entire House.  "We don't know what's going to                                                                   
happen up in Finance, and you know we got one crack at this.  And,                                                              
they can undue it up there, untie the knot.  But, I'd rather I                                                                  
think forward something on that's a little more definitive."                                                                    
                                                                                                                                
Number 2029                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT made a motion to delete the language, "budget                                                              
reserve fund established by statute", on page 1, line 11, and to                                                                
insert the language, "principal of the permanent fund (art. IX,                                                                 
sec. 15)".  [Amendment 1]                                                                                                       
                                                                                                                                
REPRESENTATIVE JAMES AND REPRESENTATIVE ROKEBERG objected.                                                                      
                                                                                                                                
Number 2080                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES said she's not a financial whiz like some                                                                  
people, but after thirty years of accounting work she can calculate                                                             
figures in her head.  She believes, no matter what plan is put on                                                               
the table, short of getting more oil down the pipeline or some                                                                  
other method of meeting the needs of the people that taxes won't                                                                
even fill the gap.  There is a minimal amount of money available                                                                
outside the corpus of the permanent fund for the next...She is                                                                  
comfortable with putting it into the earnings reserve of the                                                                    
permanent fund for its maximum return, but she is not comfortable                                                               
with putting it off-limits.  She didn't support dumping more money                                                              
back into the permanent fund last year because of emergencies.  She                                                             
said, "If we have any kinds of emergencies in our state, which                                                                  
we're prone to do, we could be in 'deep doo doo' if we don't have                                                               
enough money available to make those decisions."                                                                                
                                                                                                                                
Number 2186                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES further noted that the legislature still plans                                                             
to downsize the amount of money being spent.  The All-Alaska Plan                                                               
suggests reducing spending for another five years.  Representative                                                              
Rokeberg has a piece of legislation that reduces the percentage of                                                              
oil revenues that are put into the corpus of the permanent fund                                                                 
from 25 percent to what is demanded in the constitution.  She                                                                   
thinks that is wise.  The state ought not to put all of the money                                                               
out of touch, but there needs to be some kind of control on how to                                                              
do the budget, which is a whole different issue.  She reiterated                                                                
she would like to see some money sitting in the earnings reserve of                                                             
the permanent fund for emergencies.                                                                                             
                                                                                                                                
Number 2229                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG suggested the language, "the general funds'                                                             
earnings reserve of the permanent fund".  It is not an amendment.                                                               
He noted that the earnings reserve of the permanent fund are                                                                    
general funds, except by statute.                                                                                               
                                                                                                                                
Number 2275                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT said this resolution has puzzled him because                                                               
the effect of it can be done just by talking and getting                                                                        
three-quarters votes.  Given the dynamics of the makeup of the                                                                  
legislature, this resolution is a way of not talking to the                                                                     
minority.  The difference is only three votes.  It takes 27 votes                                                               
to put this on the ballot and 30 votes to just do it.  He doesn't                                                               
see the point of going around the minority.  This could be a                                                                    
component of a long-range plan.  It would probably be the component                                                             
that follows almost any plan to get rid of the constitutional                                                                   
budget reserve fund.  Representative Davies has said that some                                                                  
reformation of this constitutional provision needs to happen, but                                                               
this is a way to go around the minority.  There has been talk about                                                             
changing the vote from a three-quarters to a simple majority.  The                                                              
minority has been very open and willing to discuss that, but it                                                                 
hasn't happened.  It surprises him because he has worked well with                                                              
the sponsor of the resolution on a lot of other issues.  If that is                                                             
the approach, then let's just put it in the principal where                                                                     
everybody feels safe.                                                                                                           
                                                                                                                                
Number 2397                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES stated she agrees with Representative Croft.                                                               
She has never seen the working relationship between the majority                                                                
and the minority as good as it is this year.  She doesn't blame                                                                 
that on the majority; it has been the minority who is more willing                                                              
to work.  The intent of the resolution, however, has nothing to do                                                              
with the three-quarters vote; it has to do with the payback.  The                                                               
payback is a burden on the legislature, and to get a three-quarters                                                             
vote to un-sweep the money is absurd.  It is important to work                                                                  
together, but the legislators in the majority and minority might                                                                
not be the same next year.  The minority might be the majority, and                                                             
the majority might be the minority.                                                                                             
                                                                                                                                
TAPE 99-34, SIDE B                                                                                                              
Number 0003                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG stated Representative James is right.  It                                                               
is the payback.  In his life, a business agreement/contract is put                                                              
together to service the parties to that agreement/contract.  The                                                                
current system might be considered idyllic, but it has been his                                                                 
experience to the contrary.  He has resented it greatly.  There has                                                             
been a substantial amount of spending and log rolling.  In                                                                      
understanding the political history of why the two-thirds vote                                                                  
became three-quarters, this constitutional amendment has been a                                                                 
disservice to the people.  They don't understand it.  It's hard                                                                 
enough for experienced people to understand it.  It needs to be                                                                 
changed.  He hopes that something can be done along these lines.                                                                
He is confident that there will be a plan to satisfy everybody, and                                                             
that this resolution could be part of it.  He agrees, with the                                                                  
sponsor, that clearly the earnings reserve of the permanent fund                                                                
would be the most ideal location at this juncture.                                                                              
                                                                                                                                
Number 0097                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked Representative Croft whether he said                                                             
that he could support this if it is part of a bigger plan.                                                                      
                                                                                                                                
REPRESENTATIVE CROFT replied absolutely.  This resolution, however,                                                             
is the "cart before the horse."  What plan would be implemented by                                                              
ending the constitutional budget reserve fund?  It seems that the                                                               
only change is from a three-quarters vote to a simple majority,                                                                 
which is only a power deal.  He is also worried that the opposite                                                               
is true.  In other words, it would become an obligation to keep a                                                               
balance of that $3 billion.  It would be disingenuous to pass the                                                               
resolution then spend it down twice.                                                                                            
                                                                                                                                
Number 0193                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT further stated, in response to Representative                                                              
Rokeberg's last comment, he doesn't think that the constitutional                                                               
budget reserve fund has been negative for the people.  It is the                                                                
time when legislators are consulted.  "Obviously, it depends on                                                                 
whose ox is being gored whether it's good government or log rolling                                                             
or some combination.  But, this can and probably has to be an                                                                   
important component of what we do, but asking us to vote to do it                                                               
before we know what we're doing is too much."                                                                                   
                                                                                                                                
Number 0232                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT announced for the record that all the committee                                                                   
members are present.                                                                                                            
                                                                                                                                
CHAIRMAN KOTT called for a roll call vote.  Representatives Green,                                                              
James, Rokeberg, Murkowski and Kott voted against the motion.                                                                   
Representatives Croft and Kerttula voted in favor of the motion.                                                                
The motion failed by a vote of 5 to 2.                                                                                          
                                                                                                                                
Number 0289                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG asked Representative James whether she                                                                  
prefers an amendment including the words "general fund" or                                                                      
"earnings reserve of the permanent fund."                                                                                       
                                                                                                                                
Number 0302                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES replied she would like to have the money                                                                   
deposited into the permanent fund.  She would like to change it                                                                 
before going to the House Finance Standing Committee, even though                                                               
it might change as part of an overall plan.  It might not even pass                                                             
this year, but she has the entire interim to talk to folks about                                                                
it.  She would prefer that it didn't go into the statutory budget                                                               
reserve fund.  She reiterated any place else is fine with her,                                                                  
except for putting it into the corpus of the permanent fund or                                                                  
leaving it to the discretion of the legislature.                                                                                
                                                                                                                                
Number 0349                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG made a conceptual amendment to read,                                                                    
"general funds' earnings reserve of the permanent fund", after the                                                              
word "the" on page 1, line 11.  The idea is to tell the public that                                                             
the earnings reserve of the permanent fund is part of the general                                                               
fund.                                                                                                                           
                                                                                                                                
Number 0380                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA noted it would be better to leave that for                                                              
the language in the explanation.  The earnings reserve of the                                                                   
permanent fund really isn't part of the general fund.                                                                           
                                                                                                                                
REPRESENTATIVE ROKEBERG said it is part of the general fund.  It                                                                
says so in the constitution.  It has just been statutorily                                                                      
redefined.  That's what has caused so much confusion.  The people                                                               
do not understand that the earnings reserve of the permanent fund                                                               
is part of the general fund.  As long as it is going into the                                                                   
earnings reserve, the people need to understand that it is                                                                      
available for appropriation.                                                                                                    
                                                                                                                                
CHAIRMAN KOTT noted it is available for appropriation.                                                                          
                                                                                                                                
Number 0418                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked whether that should be included in                                                               
the constitutional amendment or as part of the explanation.                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG stated the only trouble is the people don't                                                             
know that...                                                                                                                    
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked whether it's the job of the                                                                      
legislature to educate them.                                                                                                    
                                                                                                                                
REPRESENTATIVE ROKEBERG replied it is the job of the legislature to                                                             
educate them, but maybe not in this constitutional amendment.  He                                                               
reiterated it was just a suggestion and deferred to the sponsor on                                                              
whether or not she wants to use the language, "general fund."                                                                   
                                                                                                                                
Number 0444                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES said, she thinks, it opens the door for                                                                    
confusion.  It would be better to simply have the language,                                                                     
"earnings reserve of the permanent fund."  She agrees that the                                                                  
money is available for appropriations and the people ought to know                                                              
that, but technically it's not general fund money because it has                                                                
been statutorily changed to include money that is available for                                                                 
appropriation within the permanent fund.                                                                                        
                                                                                                                                
Number 0464                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG withdrew his conceptual amendment.                                                                      
                                                                                                                                
Number 0473                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG made a motion to insert the language,                                                                   
"earnings reserve of the permanent fund", after the word "the" on                                                               
page 1, line 11.                                                                                                                
                                                                                                                                
REPRESENTATIVE CROFT asked whether, "earnings reserve of the                                                                    
permanent fund", is defined anywhere.                                                                                           
                                                                                                                                
REPRESENTATIVE ROKEBERG replied it is in statute.                                                                               
                                                                                                                                
REPRESENTATIVE JAMES noted that a change would have to be made to                                                               
the title too.                                                                                                                  
                                                                                                                                
REPRESENTATIVE CROFT asked where is it in statute.                                                                              
                                                                                                                                
REPRESENTATIVE ROKEBERG noted that he has been reading the                                                                      
constitution lately and it doesn't mention the earnings reserve of                                                              
the permanent fund.                                                                                                             
                                                                                                                                
REPRESENTATIVE CROFT said he has looked at the permanent fund                                                                   
corporation section and he can't find any mention to the earnings                                                               
reserve.                                                                                                                        
                                                                                                                                
Number 0526                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT called for a brief at-ease at 2:15 p.m. and called                                                                
the meeting back to order at 2:18 p.m.                                                                                          
                                                                                                                                
Number 0531                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG made a motion to include the language,                                                                  
"earnings reserve account as established by statute in the                                                                      
permanent fund", after the word "the" on page 1, line 11; as well                                                               
as the technical change to the title.  There being no objection, it                                                             
was so moved.                                                                                                                   
                                                                                                                                
Number 0565                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG made a motion to move HJR 30, as amended,                                                               
from the committee with individual recommendations and the attached                                                             
fiscal note(s).  There being no objection, CSHJR 30(JUD) was so                                                                 
moved from the House Judiciary Standing Committee.                                                                              
                                                                                                                                
                                                                                                                                
HB 146 - LIABILITY FOR COMMERCIAL REC ACTIVITIES                                                                                
                                                                                                                                
CHAIRMAN KOTT announced the next order of business is HB 146, "An                                                               
Act relating to civil liability for commercial recreational                                                                     
activities; and providing for an effective date."                                                                               
                                                                                                                                
CHAIRMAN KOTT indicated that CSHB 146(L&C) [1-LS0701\D] is before                                                               
the committee and called on Ms. Kelly Sullivan to present the                                                                   
sponsor statement.                                                                                                              
                                                                                                                                
Number 0618                                                                                                                     
                                                                                                                                
KELLY SULLIVAN, Legislative Secretary for Representative Pete Kott,                                                             
Alaska State Legislature, came before the committee and presented                                                               
the sponsor statement.  In Alaska, a lot of recreational activities                                                             
are offered for tourists as well as locals.  She cited sport                                                                    
fishing, hunting, and hiking as examples.  The bill establishes the                                                             
responsibilities of the commercial recreational businesses, as well                                                             
as the responsibilities of those who choose to participate in such                                                              
activities.  The bill addresses the specific guidelines that                                                                    
operators and participants need to follow to minimize the                                                                       
possibilities of accidents, and should an accident occur it helps                                                               
to define who is to be held liable.  The bill helps to avoid the                                                                
unfair and unreasonable claims hurting the small operators in                                                                   
Alaska which are making it difficult for them to stay in business.                                                              
                                                                                                                                
Number 0720                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT stated this is the third time a bill like this has                                                                
tried to make it through the legislature.  A similar bill has                                                                   
passed the House before, but met its fate in the Senate Judiciary                                                               
Standing Committee.  He noted that this bill has been worked over.                                                              
It clearly defines responsibilities for both the operators and                                                                  
those who seek to participate in various commercial recreational                                                                
activities.                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT opened the meeting up to public testimony.                                                                        
                                                                                                                                
Number 0760                                                                                                                     
                                                                                                                                
MIKE WINDRED, Vice President, Marketing and Sales, Alaska Travel                                                                
Adventures, came before the committee to testify in support of HB
146.  This bill has come up three different times in recent years                                                               
because of the support from the recreational providers.  At                                                                     
present, there is industry-wide support.  He cited the Alaska                                                                   
Visitors Association and the Alaska Wilderness Recreation and                                                                   
Tourism Association as examples of organizations that support this                                                              
bill, which totals 95 percent of the recreational providers.  There                                                             
is very good backing behind the bill, and it is well written.                                                                   
                                                                                                                                
MR. WINDRED further stated that the basic premise is for the                                                                    
participants to assume some inherent risks and for the operators to                                                             
perform a better standard that is not required today.  In other                                                                 
words, an operator would have to explain to the participants the                                                                
inherent risks for a particular activity.  In addition, the                                                                     
operator would also need to train its employees in CPR                                                                          
[cardiopulmonary resuscitation] and first aid, use maintained                                                                   
equipment only, and act in a reasonably safe and competent manner.                                                              
This has been decided in litigation, but setting it forth in                                                                    
legislation makes it more defined and simple.  He believes the bill                                                             
would help his company and many other businesses like it by                                                                     
reducing nuisance suits that are presently settled out of court.                                                                
Alaska Travel Adventures has a fairly large deductible that seems                                                               
to rise as there are more and more small suits.  He explained a                                                                 
small suit is typically a customer who trips or falls out of a raft                                                             
or does something that could have been completely caused by their                                                               
own actions and not by fault of the operator.  An attorney will                                                                 
typically determine the deductible, which usually ends up being the                                                             
amount that the case is settled for.  This bill would definitely                                                                
put money back into his pocket for those types of "frivolous"                                                                   
lawsuits.  It would also ultimately reduce the insurance rates.                                                                 
                                                                                                                                
MR. WINDRED further stated, in response to the position paper from                                                              
the Alaska Action Trust [dated April 12, 1999], it doesn't surprise                                                             
him that they have come out against this legislation because it                                                                 
would take money out of trial lawyers' pockets.  It would not                                                                   
inhibit litigation if a consumer wants to sue.  The large cases                                                                 
would go to court.  In further response, the purpose of the bill is                                                             
covered in statute, but not enough.  It would help fight the                                                                    
nuisance claims before going to litigation thereby reducing claims.                                                             
In further response, this legislation would not be contradictory to                                                             
ski areas already in statute.  In further response, several small                                                               
businesses have been closed because of these claims.  He cited a                                                                
small rafting operation in the North and Southeast that have been                                                               
closed because the profits  were lower than the risks - the                                                                     
deductible.  In further response, no operator would market                                                                      
contributory negligence.  It wouldn't be a stigma for Alaska.  It                                                               
hasn't stopped anybody from traveling to Mexico or Europe where a                                                               
person wouldn't even think of entering into a lawsuit if that                                                                   
person was hurt there.  In further response, the responsibilities                                                               
of participants need to be in the bill to make it strong.  In                                                                   
further response, if an operated used faulty equipment or failed to                                                             
explain the inherent risks, that operator would be apt to lose in                                                               
a litigation at that point.                                                                                                     
                                                                                                                                
Number 1203                                                                                                                     
                                                                                                                                
REPRESENTATIVE GREEN asked Mr. Windred whether this would be any                                                                
kind of hardship for an operator.                                                                                               
                                                                                                                                
MR. WINDRED replied he doesn't think so.  If anything, it would be                                                              
good for the industry.  It would hold it to a higher standard,                                                                  
which could be used to make tourists feel safer.                                                                                
                                                                                                                                
Number 1241                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT stated the ski liability statute sets the                                                                  
consequences for both operators and participants.  This bill                                                                    
doesn't say what would happen if an operator doesn't "do it."  In                                                               
comparison to the ski statute, a ski operator or other person who                                                               
violates a requirement of the chapter is negligent and civilly                                                                  
liable to the extend a violation causes injury to a person or                                                                   
damage to property.  He asked Mr. Windred whether he has any                                                                    
objection to including that language.                                                                                           
                                                                                                                                
MR. WINDRED replied he is not familiar with the ski area statute,                                                               
other than it is specific to an activity.  The idea is to bring all                                                             
the different types of commercial recreational activities under one                                                             
bill.                                                                                                                           
                                                                                                                                
Number 1349                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT said it is a legitimate concern.  The language                                                             
in the bill is more broad.  The responsibilities of operators of                                                                
commercial recreational activities are broad as well.  He asked Mr.                                                             
Windred whether there can be duties and consequences for both                                                                   
parties.                                                                                                                        
                                                                                                                                
MR. WINDRED replied, as an operator, he doesn't see why not.                                                                    
                                                                                                                                
Number 1431                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked Mr. Windred what his company has                                                                 
paid on average for nuisance suits.                                                                                             
                                                                                                                                
MR. WINDRED replied Alaska Outdoor Adventures sees between $10,000                                                              
and $25,000 a year in nuisance suits.  That can be from either one                                                              
case or several small cases.  He cited the suits are from                                                                       
stumbling, falling off a chair, or something that an operator could                                                             
not have prevented.  In most of those cases, his company ends up                                                                
paying the bills.  He doesn't have a problem with that; he has a                                                                
problem with the "pain and suffering" suits.                                                                                    
                                                                                                                                
Number 1544                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked Mr. Windred whether the majority of                                                              
the frivolous suits are settled prior to litigation within the                                                                  
courts.                                                                                                                         
                                                                                                                                
MR. WINDRED replied correct.                                                                                                    
                                                                                                                                
Number 1564                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA asked Mr. Windred whether he actually has                                                               
had somebody sue his company for stumbling over a rock.                                                                         
                                                                                                                                
MR. WINDRED replied yes.                                                                                                        
                                                                                                                                
REPRESENTATIVE KERTTULA asked Mr. Windred what happened with the                                                                
case.                                                                                                                           
                                                                                                                                
MR. WINDRED replied the process is either the attorney or client                                                                
will contact his company directly and ask for the insurance                                                                     
company.  He usually responds to them directly.  At the point the                                                               
dollar figure is determined, his company either decides to turn it                                                              
over to the insurance company or decides to fight it.                                                                           
                                                                                                                                
Number 1608                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA asked Mr. Windred whether his company                                                                   
settled that case or just moved to dismiss it.                                                                                  
                                                                                                                                
MR. WINDRED replied in most of those types of cases his company                                                                 
ends up paying for the hospital fees, transportation fees and                                                                   
damages to any equipment, such as a camera.  The case is usually                                                                
settled for a couple hundred dollars or so more, which is well                                                                  
worth it compared to going to litigation.  Nevertheless, it is                                                                  
generous considering that they stumbled over their own feet.                                                                    
                                                                                                                                
Number 1680                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG asked whether anybody knows who is the                                                                  
Alaska Action Trust.                                                                                                            
                                                                                                                                
REPRESENTATIVE MURKOWSKI replied Jan Bouch is the executive                                                                     
director of the Academy of Trial Lawyers Association.  Her guess is                                                             
that Alaska Action Trust is a lobbying arm of that association.                                                                 
                                                                                                                                
Number 1780                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG said he is concerned about who is defining                                                              
the "inherent risk of commercial recreational activity."  In other                                                              
words, how would an operator explain to a participant the inherent                                                              
risks of a particular activity?  Every activity has a different                                                                 
type of risk.                                                                                                                   
                                                                                                                                
Number 1798                                                                                                                     
                                                                                                                                
MR. WINDRED replied his staff is trained in the safety requirements                                                             
for each activity.  They are different for each activity, but it                                                                
falls upon an operator to determine what are the standard inherent                                                              
risks.  That is pretty standard for the industry as it sits now.                                                                
                                                                                                                                
Number 1869                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG said if a person is going bungee jumping                                                                
that person should probably sign a release.  He asked Mr. Windred                                                               
whether that is the direction the bill is going.                                                                                
                                                                                                                                
MR. WINDRED replied if an operator doesn't have a signed release                                                                
for bungee jumping that operator is looking for trouble.  There are                                                             
some areas where signed releases work well.  There are some areas                                                               
where requiring a signed release does not work well.  He cited his                                                              
salmon bake where several hundred people attend a day and Binkley's                                                             
river tour in Fairbanks as examples.  The tour in Fairbanks still                                                               
has to follow coast guard protocol in terms of orienting                                                                        
passengers to the safety aids.                                                                                                  
                                                                                                                                
Number 1949                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG noted that the bill is restricted to                                                                    
commercial outdoor activities when there are two new ice rinks                                                                  
being developed in Anchorage that probably will have some sort of                                                               
outdoor rink adjacent to them.  He is concerned about the rink                                                                  
rats.                                                                                                                           
                                                                                                                                
Number 2004                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA asked Mr. Windred whether he would include                                                              
his salmon bake in the definition of "recreational activity."                                                                   
                                                                                                                                
MR. WINDRED replied he would include it because it is sold as a                                                                 
tour; it is not sold as a restaurant.                                                                                           
                                                                                                                                
Number 2041                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES stated she is pleased to see this type of                                                                  
legislation.  In her lifetime, she can remember when there wasn't                                                               
insurance, there weren't so many trial lawyers, and when a person                                                               
fell down and hurt himself it was his own fault.  She is not saying                                                             
that, if somebody gets hurt at somebody else's expense, that person                                                             
should get off free.  She doesn't care if other legislation comes                                                               
around for each type of commercial activity because the litigious                                                               
side of this issue is chilling for people willing to invest money                                                               
for recreational activities, even when it creates jobs because the                                                              
inherent liability is so overwhelming.                                                                                          
                                                                                                                                
Number 2248                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT stated that the inherent risk in downhill skiing is                                                               
different than other outdoor recreational activities such as bird                                                               
watching.  He mentioned the types of risks associated with downhill                                                             
skiing such as a broken bone.                                                                                                   
                                                                                                                                
Number 2340                                                                                                                     
                                                                                                                                
BOB ENGELBRECHT, Owner, North Star Trekking, came before the                                                                    
committee to testify in favor of HB 146.  He is also on the board                                                               
of directors for the Alaska Visitors Association.  He has been in                                                               
the tourism industry in Alaska for about 16 years, primarily in the                                                             
adventure side of it.  Tourism in Alaska has been evolving and                                                                  
changing over the past few years.  It's not just tourists arriving                                                              
on cruise ships, but more and more people are wanting to experience                                                             
Alaska in the back country.  In most cases, they don't have an                                                                  
appreciation of what they are getting into.                                                                                     
                                                                                                                                
TAPE 99-35, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
MR. ENGELBRECHT continued.  He runs a tour of taking people on the                                                              
Mendenhall Glacier.  The inherent risk of that tour is walking on                                                               
the ice.  There is no way around it.  His insurance broker wanted                                                               
to put AstroTurf on the glacier where the people walk around.  The                                                              
point of the bill is to not absolve operators of negligence or to                                                               
put the participants in an activity in an unrealistic position so                                                               
that they aren't covered by insurance.  The point of the bill is to                                                             
make sure that the participants are aware of what they are getting                                                              
into, and to make sure the operators are using good equipment, etc.                                                             
And, if there is a health or physical ability issue, to find out                                                                
about it before hand and to decide to opt out of a particular                                                                   
physical activity.  At least people would go into an activity with                                                              
their eyes open and knowing what they are doing.                                                                                
                                                                                                                                
MR. ENGELBRECHT further stated, in reference to the ski area                                                                    
statute, it is a very specific activity in a confined area.  This                                                               
bill talks about a variety of activities in large areas where all                                                               
different kinds of conditions exist.  He has a permit for the                                                                   
Juneau Ice Field which is 1,500 square miles.  He runs into all                                                                 
kinds of different conditions.  While the idea is similar in terms                                                              
of taking on an inherent risk, the other recreational activities                                                                
are more diverse and the infrastructure is not in place, just the                                                               
natural environment.                                                                                                            
                                                                                                                                
MR. ENGELBRECHT further stated that he informs clients in a number                                                              
of ways about the risks.  They are given a briefing to make sure                                                                
that they understand what they are getting into.  A surprising                                                                  
number of people do not have a clue about what they are getting                                                                 
into.  Most say, "Well, it's not what I thought I was going , but                                                               
I want  it anyway."  They make that choice to go ahead.  Once on                                                                
the glacier, the guides will give a thorough briefing on the                                                                    
equipment, the area, and the inherent risks involved, and what they                                                             
need  to cooperate based on the conditions.                                                                                     
                                                                                                                                
Number 0379                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT asked Mr. Engelbrecht to comment on the concern of a                                                              
lack of consequence of an operator that does not provide the                                                                    
requirements of the bill.                                                                                                       
                                                                                                                                
MR. ENGELBRECHT replied for the most part this bill is aimed at the                                                             
more frivolous suits or claims.  The bill says the inherent risks                                                               
are those that are apparent to an ordinarily prudent person.  There                                                             
is nothing in the bill that would prevent litigation or an operator                                                             
being taken to court.  If an operator has done an inadequate job,                                                               
it would come out in court.                                                                                                     
                                                                                                                                
Number 0482                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI referred to page 2, line 2, of the bill -                                                              
"Contributory negligence" - and commented on getting hit in the                                                                 
head with a paddle while white water rafting causing a concussion.                                                              
The other inherent risks had been discussed, such as falling out of                                                             
the raft, hypothermia, etc.  She is concerned because all of the                                                                
inherent risks cannot be defined.  She wondered how the bill can be                                                             
as broad by accepting the inherent risks of all these types of                                                                  
commercial outdoor activities.                                                                                                  
                                                                                                                                
Number 0621                                                                                                                     
                                                                                                                                
MR. ENGELBRECHT stated, not being an attorney, he doesn't have a                                                                
great response.  The general point is, it is difficult to define                                                                
all the inherent risks.  If a person is hiking and a limb falls                                                                 
from a tree and hits that person, was that an inherent risk the                                                                 
person was made aware of?  It was an act of God.  Was there                                                                     
anything that the operator could have done?  Was the operator                                                                   
responsible?  It's a gray area, and if it's a significant issue it                                                              
probably would go to court.                                                                                                     
                                                                                                                                
Number 0714                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked Mr. Engelbrecht how many nuisance                                                                
claims does his business average annually.                                                                                      
                                                                                                                                
MR. ENGELBRECHT replied he just started his company last year.  He                                                              
has one season under his belt.  He had one minor injury from a                                                                  
person tripping over his crampons and fell.  Prior to starting his                                                              
company, he worked for 18 years with a larger company that carried                                                              
between 30,000 to 40,000 people onto the glacier.  Out of that                                                                  
number, there might have been a dozen slips, falls, and bruises.                                                                
The most serious injury would have been a broken wrist from                                                                     
tripping and breaking a fall.  He can only think of one that went                                                               
to litigation.  The rest were settled by the insurance companies.                                                               
It's easier to give away a deductible than to spend tens of                                                                     
thousands of dollars in litigation.  He knows of one case that                                                                  
settled for a couple hundred thousand dollars for tripping over his                                                             
own two feet.  These claims come back to the operator.  Very few go                                                             
to trial, but a lot of them happen and a lot of them get settled by                                                             
insurance companies every year.                                                                                                 
                                                                                                                                
Number 0848                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT asked Mr. Engelbrecht whether it's true that there                                                                
are industry standards that are accepted and considered inherent                                                                
risks, and anything beyond that is in the gray area.                                                                            
                                                                                                                                
MR. ENGELBRECHT replied, for the most part, it is fairly obvious if                                                             
somebody is not following prudent industry standards for the type                                                               
of activity going on.  He doesn't see this bill as having any                                                                   
effect on the other things that could happen such as negligence.                                                                
That's a whole different realm.                                                                                                 
                                                                                                                                
Number 0956                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA said Mr. Engelbrecht's company is not part                                                              
of the problem; it's willing to live up to the standards.  She                                                                  
asked Mr. Engelbrecht whether he has a problem with an operator                                                                 
facing regular court liability for not living up to the standards                                                               
and not being able to claim the shield that the bill provides.                                                                  
                                                                                                                                
MR. ENGELBRECHT replied, not being an attorney, he's not sure how                                                               
he can technically answer the question.  Practically, if somebody                                                               
gets hurt on a trail and bleeds to death and the guide didn't have                                                              
basic first aid training, it's obvious that there is some                                                                       
negligence.  At that point, the operator is not shielded by this                                                                
bill.  The bill actually provides an extra tool for somebody who                                                                
has been hurt if an operator doesn't follow good prudent standards.                                                             
But, if an operator is doing everything reasonable that it can, and                                                             
the experience is inherently in a natural environment that hasn't                                                               
been sanitized and safety-proofed...He continued by stating that he                                                             
could put a guard railing and AstroTurf on the glacier and no one                                                               
would slip and fall, but it would be a pretty lousy experience.                                                                 
                                                                                                                                
REPRESENTATIVE CROFT asked Mr. Engelbrecht for a brochure.                                                                      
                                                                                                                                
MR. ENGELBRECHT gave Representative Croft a brochure.  He noted                                                                 
that in the brochure there is a list of equipment given for safety.                                                             
He cited ice axes, crampons, and safety harnesses as examples.                                                                  
                                                                                                                                
Number 1136                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT closed the meeting to public testimony.                                                                           
                                                                                                                                
Number 1146                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT stated it is appropriate in ski areas and in                                                               
general to define the inherent risks of the participants and the                                                                
fundamental responsibilities of the operators.  The bill says                                                                   
clearly, that if a participant doesn't meet his or her                                                                          
responsibilities, it "is" a contributory negligence.  He has an                                                                 
amendment using the exact language from the ski area statute that                                                               
puts everything on an even keel for both the operator and                                                                       
participant.                                                                                                                    
                                                                                                                                
Number 1227                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT made a motion to adopt Amendment 1.  It reads                                                              
as follows:                                                                                                                     
                                                                                                                                
     Page 3, line 9                                                                                                             
                                                                                                                                
          Insert                                                                                                                
                                                                                                                                
          Sec. 05.50.060.  "A person who operates a business that                                                               
          offers a commercial recreational activity and violates a                                                              
          requirement of this chapter is negligent and civilly                                                                  
          liable to the extent the violation causes injury to a                                                                 
          person or damage to property."                                                                                        
                                                                                                                                
CHAIRMAN KOTT objected.  He called on Mr. Mike Ford, drafter of the                                                             
bill, and asked him whether there are others in statute that are                                                                
narrowly constructed like the ski statute.                                                                                      
                                                                                                                                
Number 1265                                                                                                                     
                                                                                                                                
MIKE FORD, Attorney, Legislative Legal Counsel, Legislative Legal                                                               
and Research Services, Legislative Affairs Agency, came before the                                                              
committee to answer questions.  The ski area statute is the only                                                                
one of its kind.  There are other statutes that deal with                                                                       
recreational activities, but they mostly refer to licensing and                                                                 
safety requirements.  He cited boating as an example.  The ski area                                                             
statute deals with a very specific activity, while this bill deals                                                              
with commercial recreational activities that could include a number                                                             
of different things.                                                                                                            
                                                                                                                                
Number 1318                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG said he is concerned about aviation                                                                     
activities.  He asked Mr. Ford whether the bill includes the use of                                                             
aircrafts.                                                                                                                      
                                                                                                                                
MR. FORD replied it would cover an aviation club that took people                                                               
up as a business.  It meets the definitions of "commercial                                                                      
recreational activity" and "recreational activity" in the bill.                                                                 
                                                                                                                                
Number 1360                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG said he finds that troubling.                                                                           
                                                                                                                                
REPRESENTATIVE CROFT asked Representative Rokeberg whether he wants                                                             
to exempt them.                                                                                                                 
                                                                                                                                
REPRESENTATIVE ROKEBERG replied, "I think so."                                                                                  
                                                                                                                                
REPRESENTATIVE CROFT suggested that Representative Rokeberg write                                                               
up some language.                                                                                                               
                                                                                                                                
REPRESENTATIVE ROKEBERG further stated he is also concerned about                                                               
the outdoor rink rats.                                                                                                          
                                                                                                                                
REPRESENTATIVE MURKOWSKI stated, "Don't forget those rock climbing                                                              
walls."  Most of them are indoor.                                                                                               
                                                                                                                                
Number 1388                                                                                                                     
                                                                                                                                
MR. FORD pointed out there was legislation that dealt with                                                                      
skateboarding rinks and municipalities that operate them last year                                                              
as an example of another activity that was thought to need                                                                      
protection.                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG asked Mr. Ford whether the bill passed.                                                                 
                                                                                                                                
MR. FORD replied, he believes, it passed the House.                                                                             
                                                                                                                                
REPRESENTATIVE ROKEBERG asked Mr. Ford whether this bill would deal                                                             
with skateboarding as well.                                                                                                     
                                                                                                                                
MR. FORD replied only if it's an outdoor activity.                                                                              
                                                                                                                                
CHAIRMAN KOTT noted only if it's a commercial outdoor activity.                                                                 
                                                                                                                                
MR. FORD noted that the bill last year targeted indoor facilities.                                                              
But, an outdoor facility might fit the definitions, if it's                                                                     
commercial.                                                                                                                     
                                                                                                                                
Number 1446                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked Mr. Ford whether he has seen                                                                     
Representative Croft's amendment.                                                                                               
                                                                                                                                
MR. FORD replied no.                                                                                                            
                                                                                                                                
Number 1470                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT called for an at-ease at 3:15 p.m. and called the                                                                 
meeting back to order at 3:20 p.m.                                                                                              
                                                                                                                                
Number 1476                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT withdrew his objection.  There being no further                                                                   
objection, Amendment 1 was so adopted.                                                                                          
                                                                                                                                
Number 1487                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT said, in regards to aviation activities, an                                                                
argument could go either way.  There should be a standard care for                                                              
persons jumping out of an aircraft.  There could be advantages to                                                               
the operators being in, but all of the implications haven't been                                                                
thought through since it wasn't foremost on everybody's mind when                                                               
drafting the bill.                                                                                                              
                                                                                                                                
Number 1549                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT asked Mr. Ford whether flight seeing is part of the                                                               
bill.                                                                                                                           
                                                                                                                                
MR. FORD replied he doesn't see a reason to exclude flight seeing                                                               
from the application of the bill.  He doesn't see how it could be                                                               
argued that they are not included because everyone understands that                                                             
people fly for recreation.  He can go to the Juneau International                                                               
Airport where there is a flight service to learn how to fly which                                                               
costs money.  It certainly is a commercial and recreational                                                                     
activity, and somebody who suffers harm would be included.                                                                      
                                                                                                                                
Number 1591                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT asked Mr. Ford whether there is a difference between                                                              
the inherent risks and negligence for aviation activities.                                                                      
                                                                                                                                
MR. FORD replied the inherent risks change for each activity.                                                                   
Certainly, getting into an airplane is different than getting into                                                              
a raft or going to a salmon bake.                                                                                               
                                                                                                                                
Number 1621                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT stated the only other issue is the definition of the                                                              
term "recreational activity."  He asked Mr. Engelbrecht, as a                                                                   
representative of the industry, whether there is any merit in                                                                   
including indoor activities.  He cited indoor ice skating rinks and                                                             
climbing walls as examples.                                                                                                     
                                                                                                                                
Number 1655                                                                                                                     
                                                                                                                                
MR. ENGELBRECHT replied the climbing wall is the immediate thing                                                                
that comes to his mind.  He noted that the environment is                                                                       
controlled more for indoor activities compared to the unimproved                                                                
outdoor type of activities.                                                                                                     
                                                                                                                                
Number 1690                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT said he was thinking along those lines as well.  The                                                              
definition provides for a hobby which could be a whole host of                                                                  
things such as painting.  It's a whole new "ball of wax" that he's                                                              
not willing to get into.                                                                                                        
                                                                                                                                
Number 1729                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT made a motion to move CSHB 146(L&C), as                                                                    
amended, from the committee with individual recommendations and the                                                             
attached fiscal note(s).  There being no objection, CSHB 146(JUD)                                                               
was so moved from the House Judiciary Standing Committee.                                                                       
                                                                                                                                
CHAIRMAN KOTT opened the meeting to public testimony again to                                                                   
accommodate a witness he overlooked.                                                                                            
                                                                                                                                
Number 1822                                                                                                                     
                                                                                                                                
RUSSELL L. WINNER, Alaska Academy of Trial Lawyers, testified via                                                               
teleconference from Anchorage.  The academy is the lobbying arm of                                                              
the Alaska Action Trust.  He wrote the position paper for the                                                                   
trust.  In his twenty years of practice, he hasn't had one case                                                                 
that dealt with this issue.  It's an area that is not heavily                                                                   
litigated.  The trial lawyers are not interested in this bill to                                                                
line their pockets, but instead to ensure that people who are                                                                   
insurable are (indisc.).  And, if they are, then they should                                                                    
receive a fair compensation.  The bill raises more legal questions                                                              
than answers.  Who defines inherent risk?  He replied, the                                                                      
operators or the courts.  How is it defined?  If it's defined                                                                   
specifically, what if an injury is different?  If it's defined in                                                               
general terms, is it feasible and valid?  If the inherent risk of                                                               
white water rafting is drowning, then just about anybody who falls                                                              
in the water and drowns without cause would be subject to (indisc.)                                                             
inherent risk.  He's not sure that is the intent, but a general                                                                 
definition might fall into that category.  The same is true for air                                                             
taxis.  An inherent risk of flying in an air taxi is crashing.  Is                                                              
the net effect of the legislation to exempt air taxis from                                                                      
liability when a pilot flies into a mountain or is negligent for                                                                
not avoiding bad weather, for example.  The bill says that                                                                      
participating in a commercial recreational activity a person is                                                                 
contributorily negligent.  He wonders whether that is a wise way to                                                             
promote outdoor recreational activities for the state.  He also                                                                 
wonders whether any other state has enacted a bill like this.                                                                   
Information like this can be widely spread to the public.  It might                                                             
be counterproductive to the industry.  If a bill was placed before                                                              
the committee exempting law suits in other areas, the testimony                                                                 
would be similar.  He cited car rental agencies as an example.  The                                                             
common law in Alaska has been developed by the courts and juries                                                                
articulating liability and responsibilities.  It has worked well                                                                
and if the legislature starts to enact this type of reform there                                                                
will be a piecemeal and confusing process.  It is better to trust                                                               
juries with these matters based on general principles of the common                                                             
law than to try to articulate the specific rules for each industry                                                              
in the state.                                                                                                                   
                                                                                                                                
Number 2088                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT asked Mr. Winner whether, even with the                                                                    
amendment, he thinks that the bill should not pass.                                                                             
                                                                                                                                
MR. WINNER replied he hasn't seen the amendment, but from what he                                                               
gathered listening to the conversation it is an improvement.  He                                                                
still thinks that this is (indisc.) legislation.  It opens the door                                                             
to other groups to come forward and ask for immunity.  He                                                                       
reiterated that the common law system and juries are better able to                                                             
decide on a case-by-case basis.  This legislation asks whether or                                                               
not to stay with a common law system or to move towards a common                                                                
(indisc.) of the laws of tort.  He thinks that the state should                                                                 
stay on the common law side of that line.                                                                                       
                                                                                                                                
                                                                                                                                
HB 85 - TEACHERS' LICENSES, DISCIPLINE & ETHICS                                                                                 
                                                                                                                                
CHAIRMAN KOTT announced the next order of business is HB 85, "An                                                                
Act relating to licensure and professional discipline of members of                                                             
the teaching profession and providing for related penalties;                                                                    
relating to grounds for dismissal of a teacher; relating to the                                                                 
Professional Teaching Practices Commission; relating to limited                                                                 
immunity for procedures under the Educator Ethics Act; making                                                                   
conforming amendments; and providing for an effective date."                                                                    
                                                                                                                                
Number 2166                                                                                                                     
                                                                                                                                
SANNA GREEN, Executive Director, Professional Teaching Practices                                                                
Commission, Department of Education, testified via teleconference                                                               
from Anchorage in support of the bill.  The bill was proposed                                                                   
because the procedures, regulations and statutes need to be                                                                     
upgraded.  She announced there is an amendment to clarify the                                                                   
language more.  She also announced that Teresa Williams from the                                                                
Department of Law is here to explain the bill.                                                                                  
                                                                                                                                
Number 2220                                                                                                                     
                                                                                                                                
TERESA WILLIAMS, Assistant Attorney General, Fair Business                                                                      
Practices Section, Civil Division, Department of Law, testified via                                                             
teleconference from Anchorage.  She referred to a side-by-side                                                                  
analysis of the bill dated April 16, 1999 with two attachments -                                                                
Version "A" and "B".  She explained Version "B".  She referred to                                                               
Section 1 and noted that the term "teacher certificate" is being                                                                
changed throughout the bill.  She referred to Section 2 and noted                                                               
that it alternatively provides an opportunity to take an                                                                        
examination in lieu of taking classes on cross-cultural                                                                         
communication.  It was pointed out that many applicants have                                                                    
sufficient enough knowledge to teach a course on cross-cultural                                                                 
communication and they shouldn't be required to take one.  She                                                                  
referred to Section 3 and noted that it is new requiring a criminal                                                             
history background check.  It strengthens the existing law and                                                                  
allows for information from a background check to be disclosed if                                                               
a person has been found not guilty by reason of insanity.  The                                                                  
purpose of a background check is for that information to go to the                                                              
Professional Teaching Practices Commission so that it can inquire                                                               
further as to whether or not such a conviction is grounds for                                                                   
denial.  The amendment spells out the  circumstances for checking                                                               
a license renewal based on (indisc.) from the Alaska Association of                                                             
School Administrators.  There is a feeling that this would be                                                                   
helpful in knowing that all staff has had a criminal background                                                                 
check.  Alaska used to be a dumping ground for teachers who were                                                                
fleeing from other jurisdictions or who had problems in other                                                                   
jurisdictions.  Once the finger printing requirement went into                                                                  
place that stopped.  She referred to Section 4 and noted that,                                                                  
currently, there are no grounds for denial of a license.  The                                                                   
section pulls together the...                                                                                                   
                                                                                                                                
TAPE 99-35, SIDE B                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
MS. WILLIAMS continued.  She referred to subsection (b) and noted                                                               
that it sets the preventative grounds for denying a license.  The                                                               
department can suspend processing an application if the applicant                                                               
has an unresolved criminal or discipline proceeding related to                                                                  
licensing.                                                                                                                      
                                                                                                                                
Number 0063                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT said he is concerned that Alaska used to be a                                                              
dumping ground for teachers who have committed crimes elsewhere.                                                                
He asked Ms. Williams whether the finger printing part has been                                                                 
tightened up.                                                                                                                   
                                                                                                                                
MS. WILLIAMS replied the finger printing requirement was put in                                                                 
regulation by the Department of Education, but it was only for new                                                              
applicants.  This bill makes it stronger in the event of a                                                                      
challenge.  It requires people coming in for renewal to be finger                                                               
printed at which time a criminal background check is done.                                                                      
                                                                                                                                
Number 0126                                                                                                                     
                                                                                                                                
MS. WILLIAMS further explained Version "B."  It allows for the                                                                  
Department of Education to issue a conditional license and requires                                                             
steps to be taken appropriate for those circumstances.  She cited                                                               
a person with a drinking problem as an example.  Currently, if a                                                                
person is denied a license there are no provisions to deal with the                                                             
next step.  This provision spells out the process after a denial                                                                
and provides for an appeal to the Educators Ethics Commission and                                                               
on to superior court from there.  This provision also codifies the                                                              
current reporting to any national clearinghouse that maintains                                                                  
records of professional discipline.  She referred to Section 5 and                                                              
noted that it makes the Administrative Procedure Act applicable to                                                              
the tribunal's denial decision.  She referred to Section 6 and                                                                  
noted that it amends the basis for disciplining employees to mirror                                                             
the reasons for discipline by the commission.  It simply                                                                        
cross-references them, which is important because sometimes one                                                                 
changes and the other doesn't.  It's important to keep them                                                                     
mirrored.                                                                                                                       
                                                                                                                                
Number 0265                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT asked Ms. Williams whether she is referring to AS                                                                 
14.20.375.                                                                                                                      
                                                                                                                                
MS. WILLIAMS replied she is referring to AS 14.20.170 which                                                                     
cross-references AS 14.20.372 - "Grounds for discipline."                                                                       
                                                                                                                                
Number 0425                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT asked Ms. Williams what would be a reason why the                                                                 
Educators Ethics Commission would not take disciplinary action for                                                              
the reasons numerically listed in the bill.  They seem to be                                                                    
serious issues, but the language reads "may."                                                                                   
                                                                                                                                
Number 0447                                                                                                                     
                                                                                                                                
MS. WILLIAMS replied it might be a "may" rather than a "shall" when                                                             
the commission's resources are such that the most important cases                                                               
have to be picked.  In addition, competency requires a level of                                                                 
discretion for the commission to step in and begin a proceeding.                                                                
                                                                                                                                
Number 0494                                                                                                                     
                                                                                                                                
MS. GREEN referred to number (5) and noted that there have been                                                                 
many cases on the omission of material when applying for                                                                        
employment.  This is a way to apply judgement on the provisions in                                                              
the bill, especially (5), (6) and (7).                                                                                          
                                                                                                                                
Number 0518                                                                                                                     
                                                                                                                                
MS. WILLIAMS noted, in reference to competency, the department                                                                  
likes for the school district to take the lead.  They generally                                                                 
tend to be fact-specific cases requiring a lot of foot work.                                                                    
                                                                                                                                
Number 0535                                                                                                                     
                                                                                                                                
MS. WILLIAMS continued explaining Version "B."  She referred to                                                                 
Section 14.20.375 and noted that it expands and compiles the                                                                    
disciplinary actions imposed by the Department of Education.  She                                                               
noted that many of the changes come from the licensing statute.                                                                 
Subsection (c) says a person may not surrender a license without                                                                
approval of the commission.  A lot of people who are facing serious                                                             
discipline think that surrendering a license avoids a record on the                                                             
basis of that action.  Subsection (d) says that the commission may                                                              
suspend a license on grounds of immediate danger to public health.                                                              
Subsection (e) says that the commission is not bound by a school                                                                
district's decision.  It benefits a teacher by not having to defend                                                             
himself in two proceedings.  It benefits the commission by having                                                               
school districts do their homework.                                                                                             
                                                                                                                                
Number 0655                                                                                                                     
                                                                                                                                
MS. GREEN noted that this is the current practice now.  It is just                                                              
being put in statute.                                                                                                           
                                                                                                                                
MS. WILLIAMS continued explaining Version "B."  She referred to                                                                 
subsection (f) and noted that it has been moved from a different                                                                
section.  Subsection (g) has been moved and allows for a civil fine                                                             
to be assessed against a member of the teaching profession who is                                                               
not required to be licensed for ethical violations.  Subsection (h)                                                             
codifies the reporting requirements to any national clearinghouse.                                                              
Subsection (i) is new and precludes a person from employment in the                                                             
teaching profession, even if a license is not required, if that                                                                 
person's license has been suspended or revoked.                                                                                 
                                                                                                                                
Number 0706                                                                                                                     
                                                                                                                                
REPRESENTATIVE CROFT stated the original version of the bill was                                                                
noncontroversial.  In the interest of time, he asked Ms. Williams                                                               
whether the Department of Law and the Professional Teaching                                                                     
Practices Commission like the amendment.                                                                                        
                                                                                                                                
MS. WILLIAMS replied the Professional Teaching Practices Commission                                                             
has gone over the changes and has approved them.  The Department of                                                             
Law made some of the changes in the amendment.                                                                                  
                                                                                                                                
REPRESENTATIVE CROFT said he appreciates the side-by-side analysis                                                              
that she has provided.  It's not necessary to go through the rest                                                               
of it, except for the fundamental changes.                                                                                      
                                                                                                                                
MS. WILLIAMS noted that there are changes to the limitations on                                                                 
reinstatement after a suspension or revocation.  Currently, a                                                                   
person can reapply after one year.  This places a procedure for                                                                 
reinstatement.  Another change is the penalty for fraudulently                                                                  
teaching under a forged certificate.  Currently, there is no                                                                    
specific provision on how to deal with that, and remarkably there                                                               
have been two cases in the last year.                                                                                           
                                                                                                                                
Number 0820                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT noted his appreciation of the side-by-side analysis                                                               
that she provided to the committee members.                                                                                     
                                                                                                                                
Number 0839                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA made a motion to adopt Amendment 1.  There                                                              
being no objection, it was so adopted.  It reads as follows:                                                                    
                                                                                                                                
     Page 2, line 9:                                                                                                            
                                                                                                                                
          Delete "the reports"                                                                                                  
          Insert "a report that indicates grounds for denial of a                                                               
          license under AS 14.20.029"                                                                                           
                                                                                                                                
     Page 2, lines 9-10:                                                                                                        
                                                                                                                                
          Delete "this chapter"                                                                                                 
          Insert "AS 14.20.029"                                                                                                 
                                                                                                                                
     Page 2, line 12, following "has":                                                                                          
                                                                                                                                
          Insert "received and"                                                                                                 
                                                                                                                                
     Page 2, lines 12-13:                                                                                                       
                                                                                                                                
          Delete "received under this section and has determined                                                                
          the applicant's suitability for licensing under this                                                                  
          chapter"                                                                                                              
          Insert "under this subsection"                                                                                        
                                                                                                                                
     Page 2, lines 17-18:                                                                                                       
                                                                                                                                
          Delete "the department, by regulation, requires a                                                                     
          criminal history background check before a license may be                                                             
          renewed"                                                                                                              
          Insert:                                                                                                               
               (1) a criminal history background check has not been                                                             
               previously conducted on the licensee:                                                                            
               (2) the licensee was not employed in a position                                                                  
               requiring a license for the entire duration of the                                                               
               previous license period; or                                                                                      
               (3) the licensee has resided out of state for a                                                                  
               portion of the previous license period                                                                           
                                                                                                                                
     Page 2, line 27:                                                                                                           
                                                                                                                                
          Delete "has been"                                                                                                     
          Insert "is"                                                                                                           
                                                                                                                                
     Page 3, line 2, following "investigation"                                                                                  
                                                                                                                                
          Insert "for an allegation suggesting  unfitness to teach"                                                             
                                                                                                                                
     Page 3, line 6, following "jurisdiction":                                                                                  
                                                                                                                                
          Insert "for reasons that would be grounds for denial                                                                  
          under AS 14.20.029"                                                                                                   
                                                                                                                                
     Page 3, lines 15-16:                                                                                                       
                                                                                                                                
          Delete "this chapter"                                                                                                 
          Insert "AS 14.20.029"                                                                                                 
                                                                                                                                
     Page 3, line 17:                                                                                                           
                                                                                                                                
          Delete "complaint, review procedure, or"                                                                              
                                                                                                                                
     Page 3, line 18, following "agency"                                                                                        
                                                                                                                                
          Insert "on grounds that relate to suitability for                                                                     
          licensing under AS 14.20.029"                                                                                         
                                                                                                                                
     Page 3, lines 29-30:                                                                                                       
                                                                                                                                
          Delete "are otherwise in the best interests of the                                                                    
          public"                                                                                                               
          Insert "will otherwise protect the physical and mental                                                                
          well-being of students"                                                                                               
                                                                                                                                
     Page 5, lines 17-18:                                                                                                       
                                                                                                                                
          Delete "as defined by the commission in regulation"                                                                   
                                                                                                                                
     Page 7, line 6, following "chapter":                                                                                       
                                                                                                                                
          Insert "and the commission finds grounds for discipline                                                               
          under AS 14.20.372"                                                                                                   
                                                                                                                                
     Page 7, line 7:                                                                                                            
                                                                                                                                
          Delete "if the commission finds grounds for discipline                                                                
          under AS 14.20.372"                                                                                                   
          Insert "as appropriate to the finding of grounds for                                                                  
          discipline"                                                                                                           
                                                                                                                                
     Page 8, line 18:                                                                                                           
                                                                                                                                
          Insert a new subsection to read:                                                                                      
               (e) The commission shall stay a hearing on an                                                                    
     accusation under this section if the teacher has requested a                                                               
     hearing before the school board or invoked grievance                                                                       
     procedures.                                                                                                                
                                                                                                                                
Number 0849                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES made a motion to move HB 85, as amended, from                                                              
the committee with individual recommendations and the attached                                                                  
fiscal note(s).  There being no objection, CSHB 85(JUD) was so                                                                  
moved from the House Judiciary Standing Committee.                                                                              
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
CHAIRMAN KOTT adjourned the House Judiciary Standing Committee                                                                  
meeting at 4:05 p.m.                                                                                                            

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