Legislature(1999 - 2000)
04/13/2000 01:15 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
April 13, 2000
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 BILL NO. 273
"An Act relating to the disclosure of subscriber information by
Internet service providers."
- HEARD AND HELD
HOUSE BILL NO. 311
"An Act eliminating a requirement that a social security number
be provided by an applicant for a hunting or sport fishing
license or tag."
- MOVED CSHB 311(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 425
"An Act relating to misrepresentation and false claims made
against the state or a municipality; and providing for an
effective date."
- HEARD AND HELD
HOUSE JOINT RESOLUTION NO. 49
Proposing an amendment to the Constitution of the State of Alaska
to guarantee the permanent fund dividend, to provide for
inflation proofing, and to require a vote of the people before
changing the statutory formula for distribution that existed on
January 1, 2000.
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 273
SHORT TITLE: INTERNET SERVICE PROVIDERS
Jrn-Date Jrn-Page Action
1/10/00 1891 (H) PREFILE RELEASED 1/7/00
1/10/00 1891 (H) READ THE FIRST TIME - REFERRALS
1/10/00 1891 (H) L&C, JUD
3/24/00 (H) L&C AT 3:15 PM CAPITOL 17
3/24/00 (H) Moved CSHB 273(L&C) Out of Committee
3/24/00 (H) MINUTE(L&C)
3/27/00 2709 (H) L&C RPT CS(L&C) 2DP 4NR
3/27/00 2709 (H) DP: MURKOWSKI, CISSNA; NR: HARRIS,
3/27/00 2709 (H) BRICE, HALCRO, ROKEBERG
3/27/00 2709 (H) ZERO FISCAL NOTE (LAW)
3/27/00 2710 (H) REFERRED TO JUDICIARY
3/27/00 2717 (H) COSPONSOR(S): DYSON
4/13/00 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 311
SHORT TITLE: NO SOC SEC. NUMBER REQ'D ON HUNT/FISH LICENSE
Jrn-Date Jrn-Page Action
1/24/00 1986 (H) READ THE FIRST TIME - REFERRALS
1/24/00 1986 (H) RES, JUD
1/26/00 2019 (H) COSPONSOR(S): THERRIAULT
4/10/00 (H) RES AT 1:00 PM CAPITOL 124
4/10/00 (H) Moved Out of Committee
4/10/00 (H) MINUTE(RES)
4/10/00 2980 (H) RES RPT 1DP 6NR
4/10/00 2980 (H) DP: COWDERY; NR: BARNES, MORGAN,
4/10/00 2980 (H) HARRIS, WHITAKER, KAPSNER, MASEK
4/10/00 2980 (H) FISCAL NOTE (REV)
4/13/00 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 425
SHORT TITLE: FALSE CLAIMS AGAINST STATE OR MUNI.
Jrn-Date Jrn-Page Action
2/28/00 2334 (H) READ THE FIRST TIME - REFERRALS
2/28/00 2335 (H) CRA, JUD, FIN
2/28/00 2335 (H) INDETERMINATE FISCAL NOTE (LAW)
2/28/00 2335 (H) ZERO FISCAL NOTE (ADM/ALL DEPTS)
2/28/00 2335 (H) GOVERNOR'S TRANSMITTAL LETTER
3/07/00 (H) CRA AT 8:00 AM CAPITOL 124
3/07/00 (H) Moved CSHB 425(CRA) Out of Committee
3/07/00 (H) MINUTE(CRA)
3/15/00 2493 (H) CRA RPT CS(CRA) 1DP 5NR
3/15/00 2493 (H) DP: KOOKESH; NR: DYSON, HALCRO,
HARRIS,
3/15/00 2493 (H) MORGAN, JOULE
3/15/00 2493 (H) INDETERMINATE FISCAL NOTE (LAW)
2/28/00
3/15/00 2493 (H) ZERO FISCAL NOTE (ADM/ALL DEPTS)
2/28/00
4/05/00 (H) JUD AT 1:00 PM CAPITOL 120
4/05/00 (H) Scheduled But Not Heard
4/13/00 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HJR 49
SHORT TITLE: CONST AM: PERM FUND INCOME DISTRIBUTION
Jrn-Date Jrn-Page Action
1/31/00 2044 (H) READ THE FIRST TIME - REFERRALS
1/31/00 2044 (H) STA, JUD, FIN
2/02/00 2075 (H) COSPONSOR(S): DYSON
2/11/00 2188 (H) COSPONSOR(S): MASEK
2/21/00 2259 (H) COSPONSOR(S): KOTT
4/04/00 (H) STA AT 8:00 AM CAPITOL 102
4/04/00 (H) Scheduled But Not Heard
4/06/00 (H) STA AT 8:00 AM CAPITOL 102
4/06/00 (H) Moved CSHJR 49(STA) Out of Committee
4/06/00 (H) MINUTE(STA)
4/07/00 2913 (H) STA RPT CS(STA) NT 1DP 4DNP 2NR
4/07/00 2913 (H) DP: OGAN; DNP: JAMES, SMALLEY,
KERTTULA
4/07/00 2913 (H) HUDSON; NR: GREEN, WHITAKER
4/07/00 2913 (H) FISCAL NOTE (GOV)
4/07/00 2913 (H) REFERRED TO JUDICIARY
4/13/00 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
DAVID J. PORTE, Vice President &
General Manager
Internet Services, GCI
2550 Denali Street, Suite 1000
Anchorage, Alaska 99503-2781
POSITION STATEMENT: Testified on HB 273, Version K; supports
maintaining confidentiality of consumers' private information but
has concerns regarding the mechanisms; suggested deleting
subparagraph (g)(7)(B).
PETER GOLL
(No address provided)
Haines, Alaska
POSITION STATEMENT: Testified on HB 273, Version K; suggested
tightening the scope of what can be released and giving special
attention to the rights of administrative agencies in accessing
information without the same restrictions that apply to personal,
private, privileged information.
JOHN BARNHARDT
GCI
2550 Denali Street, Suite 1000
Anchorage, Alaska 99503-2781
POSITION STATEMENT: Testified on HB 273, Version K; answered
questions and agreed no information should be divulged without a
customer's consent.
PETER TORKELSON, Staff
to Representative Fred Dyson
Alaska State Legislature
Capitol Building, Room 104
Juneau, Alaska 99801
POSITION STATEMENT: As staff to cosponsor of HB 273, asked
question of Mr. Barnhardt (GCI) with regard to "spidering."
REPRESENTATIVE JOHN COGHILL, JR.
Alaska State Legislature
Capitol Building, Room 416
Juneau, Alaska 99801
POSITION STATEMENT: Testified as sponsor of HB 311.
REPRESENTATIVE SCOTT OGAN
Alaska State Legislature
Capitol Building, Room 432
Juneau, Alaska 99801
POSITION STATEMENT: Testified as cosponsor of HB 311 and as
sponsor of HJR 49.
AL WEATHERS
(Address not provided)
Cordova, Alaska 99574
POSITION STATEMENT: Testified in support of HB 311.
ERIC WEATHERS, JR., Commercial Fisherman
(Address not provided)
Cordova, Alaska 99574
POSITION STATEMENT: Testified in support of HB 311; requested
that commercial fishing permits and drivers' licenses be added.
DENNY KAY WEATHERS
(Address not provided)
Cordova, Alaska 99574
POSITION STATEMENT: Testified in support of HB 311; requested
that it be amended to include non-commercial drivers' licenses,
commercial fishing permits, and crew licenses.
MARK CHRYSON, Chairman
Alaskan Independence Party
2140 Wolverine Circle
Wasilla, Alaska 99654
POSITION STATEMENT: Testified in support of HB 311; suggested
that passage of HB 273 will also require passage of HB 311.
JAMES GARHART
2480 Green Forest Drive
Wasilla, Alaska 99654
POSITION STATEMENT: Testified in support of HB 311.
BARBARA MIKLOS, Director
Central Office
Child Support Enforcement Division
Department of Revenue
550 West 7th Avenue, Suite 310
Anchorage, Alaska 99501
POSITION STATEMENT: Testified on HB 311.
RYNNIEVA MOSS, Staff
to Representative John Coghill, Jr.
Alaska State Legislature
Capitol Building, Room 416
Juneau, Alaska 99801
POSITION STATEMENT: Testified on HB 311 on behalf of the
sponsor.
JAMES BALDWIN, Assistant Attorney General
Governmental Affairs Section
Civil Division (Juneau)
Department of Law
P.O. Box 110300
Juneau, Alaska 99811-0300
POSITION STATEMENT: Presented HB 425 and a proposed amendment.
ACTION NARRATIVE
TAPE 00-59, 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, Croft and Kerttula.
Representatives Murkowski, Green and James arrived as the meeting
was in progress.
HB 273 - INTERNET SERVICE PROVIDERS
CHAIRMAN KOTT announced that the first order of business would be
HOUSE BILL NO. 273, "An Act relating to the disclosure of
subscriber information by Internet service providers." [Before
the committee was CSHB 273(L&C). However, there was a draft
committee substitute (CS), Version K, dated 4/11/00.]
Number 0090
REPRESENTATIVE KERTTULA, speaking as the sponsor of HB 273, noted
that Bill McCauley, Acting Manager, Data Processing, Legislative
Affairs Agency, was at the hearing to answer technical questions.
Acknowledging that she isn't a computer expert, Representative
Kerttula explained that the bill was born out of concern from
constituents about the privacy of their information. Drafted
"under our right to privacy" to be able to protect people, the
bill essentially does four things. First, it adds disclosure of
subscribers' information by an Internet service provider (ISP) to
the list of unlawful practices under the consumer protection
laws. Second, it prohibits ISPs from disclosing a subscriber's
personal information except in certain situations - such as those
involving law enforcement, Internet hacker attacks or internal
network maintenance - unless the subscriber gives consent;
Representative Kerttula emphasized that it is an opt-in
situation.
REPRESENTATIVE KERTTULA said that third, the bill will require
ISPs to notify subscribers about what subscriber information
would be disclosed, and how. She commended Representative
Dyson's office for their work on this legislation, pointing out
that one of Representative Dyson's bills had been rolled into HB
273 in the House Labor & Commerce Standing Committee; therefore,
the bill now is both hers and Representative Dyson's. Finally,
the bill provides for penalties when an ISP discloses the
subscriber's information if that subscriber has not opted in.
Number 0246
REPRESENTATIVE KERTTULA pointed out that there have been some
changes made in the bill since it came out of the House Labor &
Commerce Standing Committee. She explained:
We've tried to be responsive to some of the Internet
service providers' concerns, in terms of allowing them
to get information to protect on hackers. We've
broadened the definition of ["affirmative] consent,"
the opt-in, so you can give it by Internet. We've also
defined "subscriber information." And we've also heard
information that might lead to an amendment, if the
committee wants to consider it, about allowing billing
information, in a delinquent account referred to a
collection agency, to be allowed to be given out.
REPRESENTATIVE KERTTULA concluded by saying this is a broad area
and has been a learning experience for her. Concerns have been
raised on both sides: by ISPs concerned about their ability to
deal with their affiliates appropriately, and by those concerned
that the bill may not go far enough in protecting people.
Number 0385
REPRESENTATIVE ROKEBERG made a motion to adopt as a work draft
Version K [1-LS1156\K, Bannister, 4/11/00]. There being no
objection, it was so ordered.
Number 0420
DAVID J. PORTE, Vice President & General Manager, Internet
Services, GCI, testified via teleconference from an off-net site
in Anchorage. He stated:
We at GCI really support this effort to maintain the
confidentiality of consumers' private information. ...
Our concerns are not over the goal that this is trying
to achieve. However, we just have a few concerns over
the mechanisms, one which has been addressed with
[Version] K, which we appreciate.
However, there [are] a few other items that we have
concerns about. One is that ... we understand that the
legislature doesn't want to place a burden on Alaskan
businesses that national providers can just ignore; and
there's a good chance that the national Internet
service providers will ignore this effort because ...
it's a very difficult enforcement, on the back end,
regarding the privacy of information.
However, one concern that we do have is that ... if the
notification provisions don't have (indisc.), the local
Internet services providers like GCI or Internet Alaska
or Chugach Electric would comply with these; however,
the national Internet service providers would not
because there is no penalty for [their] not complying
with the notification procedures. So we urge the
legislature to revisit this, and look and see ... if
there should be penalties for ... non-notification. We
feel that unless this provision does have monetary
penalties associated with a lack of notification, ...
the national providers ... could very easily ignore the
law ....
Number 0547
One of the other difficulties is that the Internet has
a consumer product. A lot of the interaction in
setting up an account takes place over the telephone.
In the course of business, many wholesale ISPs or ISPs
that are using the facilities of another carrier, such
as using (indisc.) system to provide Internet ...
across the other providers' facilities, you need to
communicate - with that other company - the person's
address and telephone number, so that the underlying
service can be provisioned. It's very difficult to
obtain a written consent from the individual to
provision these services because they would have to
visit your office. Likewise, it would be difficult to
obtain ... electronic permission because many times
they're just getting signed up for the Internet.
We feel that with some minor changes in language, this
could be taken care of very easily. Once again, this
could be covered by either obtaining the customer's
assent telephonically to share this information or with
a change in the language defining "third party" ....
Currently it says a definition of "third party" to mean
a person who is not the ISP, an employee of the ISP or
the subscriber. By adding that the ISP can share this
information with a provider of business or (indisc.)
services to the ISP, that would then allow an ISP to
share the necessary information with that company to
get that person service.
Finally, we feel that the text in section (g)(7)(B),
which defines a third party as "an entity that
controls, is controlled by, or [is] under common
control" with the ISP, ... should probably be deleted.
The reason why is because ... it makes it difficult
within the definition - not so much for GCI because GCI
is a single company, but if strictly applied, we would
not be able to tell the cable or entertainment
departments of GCI the address of the customer that
wants a cable modem to be provisioned for them without
getting their written or electronic consent. And this
would just delay the consumers' ability to get these
services.
Once again, we very much support the legislature
protecting the privacy of the individual. However,
that needs to be balanced against the ability for the
companies to deliver service in a manner that people
now running on "Internet time" are used to dealing
with. And, really, the work we did with Representative
Kerttula's office ... in some of the other areas were
covered in [Version] K.
Number 0793
CHAIRMAN KOTT asked Mr. Porte to restate the section that he
thought should be deleted.
MR. PORTE specified that it is subparagraph (g)(7)(B) [page 4,
lines 27-28], which defines a third party as an entity that
controls, is controlled by, or is under common control with the
ISP. As an example, he said that many times the local exchange
carrier, because of regulations, has to maintain certain assets
in a different company; usually they maintain a common database.
Under this provision, however, it would be difficult to maintain
a common database of customers because there would be information
shared across departmental lines.
Number 0867
REPRESENTATIVE KERTTULA thanked Mr. Porte for working with [her
and Representative Dyson]. Referring to the last issue raised by
him, she asked if he could provide an example of the kinds of
information transmitted right now. For example, when she calls
GCI and requests only Internet service, what happens at that
point? Is information transmitted to other areas of the company
or not?
MR. PORTE answered:
In most multi-service companies, we maintain a single
customer billing system. So, when you sign up with GCI
for Internet, you get a GCI bill, and that bill comes
out of the same billing system as your local service or
long distance. And so, there's only one database for
your name, telephone number and address. ... GCI's just
one company, so we're not really sharing it with
another company because it's all one company. ... But
in other cases, for example, ... we do our cable and
entertainment billing out of a different system.
So let's say you signed up for a cable modem. We would
have to enter your name, telephone number and address
in the cable billing system, because that's how we
track the inventory of the cable modems, because that's
tied to your ... cable subscriber ID [identification].
And then we would also add it ... into our integrated
billing system, so we would bill your Internet on the
integrated billing system. ... That's really the
sharing that goes on, is that ... businesses are
trying, more and more, to consolidate to single
systems, especially integrated companies. And I can't
speak for any of the other companies that are out
there.
Another example of it is that ... a wholesaler -
someone who provides wholesale ... Internet access
through GCI - enters the person's billing information
on our system, because we allow them to bill through
us, ... and as your bill allows for. With informed
consent, and currently with either written or
electronic consent, ... we can continue to do this
without a problem.
What I'm concerned about is that that would dilute the
power of this bill because, basically, all the Internet
service providers would have to have all their
customers consent to all sharing of information. ...
That would kind of defeat the purpose, I believe,
behind this, in that you would want to be able to keep
... people's personal information from being sold to
other companies or provided to marketing firms or just
... used without those people's consent for something
other than the purpose of providing ... Internet
access.
Number 1119
PETER GOLL testified via teleconference from an off-net site in
Haines. He noted that he had discussed this legislation before
the House Labor & Commerce Standing Committee, testifying on
behalf of the Alaska Civil Liberties Union and himself, as an
interested business person who utilizes Internet commerce, as a
citizen concerned with privacy, and as a former legislator and
former chair of this very committee.
MR. GOLL told members that he strongly supports the comments made
by the previous witness. He believes it is in the common
interest of all people to guarantee the privacy of Internet
communication, whether it is Internet traffic to websites, e-mail
or subscriber information that should not be disclosed to
marketers without the subscriber's consent, for example. He said
he is grateful that the legislature, in a bipartisan fashion, is
supporting that concept.
MR. GOLL offered specific recommendations and volunteered to work
with the committee's staff or the sponsor to deal with the
specific language. First, he recommended looking at disclosure
of privileged information as a whole, with the goal of
simplifying the language in the bill. For example, the issues
defining a third party might best be treated as exceptions rather
than by stating who third parties might be. The Division of
Family & Youth Service, when there is an investigation of a child
abuse case, is prohibited from disclosing information to anyone,
he pointed out, but there are specific exceptions to that.
Similarly, the use of "third party" on page 1, line 12, and in
the definitions might be replaced by simply saying that "no
disclosure may take place except under the following
circumstances," with a list of those. In a sense, it is
clerical, he said, but he believes it would be useful for the
bill to begin by simply stating that the information defined as
subscriber information is simply prohibited from disclosure.
Number 1290
MR. GOLL next addressed the standards for disclosure. He
referred to page 4, beginning at line 21, which defines
"subscriber information" under paragraph (6). That language
read:
(B) does not include the subscriber's name,
the subscriber's electronic mail address, and
aggregated date that cannot be used to identify a
subscriber;
MR. GOLL said this is an important point: to him, it suggests
that the subscriber's name and e-mail address may be disclosed to
telemarketers the moment the person signs up with a given ISP.
Some people have suggested to him that this information is
available anyway. However, he does not believe that to be the
case anymore than with a person's telephone number, which someone
can request to have listed or unlisted. Keeping it in the
control of the subscriber is very important, and it should not be
an exception. Signing up with an ISP should not mean that the
person's e-mail address is suddenly public domain. He
respectfully suggested that the committee look at that issue.
Number 1351
MR. GOLL drew attention to what he suggested are more important
issues on page [3], noting that the language at the top half of
the page describes circumstances [under which the network
administrator or network contractor of the ISP is permitted to
review the contents of the subscriber's e-mail or website
traffic]. He proposed that the contents of e-mail should be
included, as should be anything electronically noted or available
due to one's activities on the Internet. All of this is
privileged, private information, he emphasized, and should be
treated with great care.
MR. GOLL offered examples. If a person has an arrangement with a
telephone company and makes telephone calls, those specific
telephone numbers that have been called are not generally
available; there are restrictions on government agencies and
private entities with regard to accessing that information. Mr.
Goll said he believes that those same restrictions should apply
here. Likewise, if someone goes to a library and asks what a
patron has been reading, the library will not disclose that; laws
and court decisions protect one's privacy in that regard.
Number 1430
MR. GOLL discussed further examples. If British Petroleum is
engaging in Internet commerce, this bill, on line 9 [page 2],
suggests that if a government agency is involved in some sort of
inquiry for statistical purposes, that agency could demand or
request from an ISP all of that oil company's correspondence -
or, at least, Internet traffic - that has been used through that
ISP. Likewise, if a legislator is engaged in research or
communication on the Internet, Mr. Goll said this suggests to him
that the Office of the Governor has 100 percent access to that
legislator's Internet traffic with constituents, with government
agencies and with any other private activity that occurs on the
Internet, "violating not only your privacy as legislators but the
privacy and integrity of communication to constituents." He
explained:
This is tremendously different from your letters or
your phone calls. If the Department of Administration
decides it wants to know whom you're writing to, they
have to come and ask you. But here, it would suggest
that they can simply invade your Internet records by
making a request, under this bill, to your Internet
service provider, and basically have access to
everything you've been doing on the Internet ....
MR. GOLL proposed that there should be a court order prior to an
ISP giving personal information about a client, subject to both
legal and clerical research. If there are circumstances where
one wishes there to be less than a court order, such as when a
crime has been committed and a police officer comes to one's
home, the law and regulations provide legal protections all
around. He suggested having that same standard provided to
Internet commerce. "We don't have to reinvent the wheel," Mr.
Goll added, noting that the same standard applies to library
activity. What is needed is to determine that all of this
information is privileged except upon an order of the court. And
where information can be released without a court order, it
should be very specifically stated.
MR. GOLL specified that regarding criminal investigations, that
language could be determined through existing laws dealing with
criminal investigation and access to privileged correspondence
like letters. Mr. Goll added, "When can a police officer read my
mail, and when not? And that same standard should be applied
here to your activities on the Internet." With regard to civil
or administrative proceedings, he suggested taking a very
stringent look at that, "because there you basically are saying
'any government agency that has a proceeding in place, whatever
that means, has a right to invade ... the privacy of your
Internet activity.'" He reiterated the suggestion that no
information should be disclosed without a court order except
under specific exceptions, to be developed along lines similar to
those that exist for invading one's mail, library records or the
privacy of one's personal life in general. Mr. Goll explained:
Right now, I see too many loopholes in the language,
and I think that if the legislature wishes ... to have
privacy in Internet commerce and private communication,
it needs to use the existing standards and not create
language that implies that there is a lesser standard
here just because it happens to be on that Internet,
that ... that happens to be the utility that is being
utilized.
MR. GOLL suggested that omitting the name and e-mail address from
the bill was an oversight. "Knowing you have a phone number is
one thing," he said. "But requiring a phone company to divulge
the phone number is another." He likened that to allowing an ISP
to reveal a person's e-mail address to telemarketers; he said
that is something over which he, as a subscriber, should have
control.
Number 1697
MR. GOLL concluded by saying the scope of what can be released
should be tightened, and special attention should be given to the
rights of administrative agencies in accessing this information
without the same restrictions that apply to accessing one's
personal, private, privileged information, whether it involves a
person's doctor, correspondence, or discussions with one's
legislator. Mr. Goll informed members that he has a lot of
information on specific language issues that he could offer to
the committee's staff. He emphasized the importance of acting
promptly because everyone right now is subject to almost 100
percent invasion of the privacy of correspondence without some
sort of protective statute in place. He again thanked members
for taking a bipartisan approach.
Number 1792
JOHN BARNHARDT, GCI, testified from an off-net site in Anchorage,
noting that he was there in case Mr. Porte had had to leave prior
to giving testimony. Mr. Barnhardt said he would reinforce what
Mr. Porte had stated, and he commended legislators for taking up
this necessary matter.
REPRESENTATIVE KERTTULA asked Mr. Barnhardt how the system works
now regarding a person's name and address.
MR. BARNHARDT responded:
I would tend to agree with ... the previous speaker, as
well, in that that information should certainly be ...
a decision that the consumer can make as to whether
they want to make that information publicly available
or not. Currently - I can speak specifically for GCI -
we don't divulge customer e-mail addresses or names to
anyone outside of our company, for any reason
whatsoever, ... unless we're subpoenaed by ... the
legal authorities or anybody like that.
But it is quite possible, given the way that the
Internet works, for people to determine -- once you
start to interact with public servers and services on
the Internet, it gets much grayer in terms of people
being able to determine your e-mail address, for
example, without anybody explicitly giving it out. So
while I think most Internet service providers would
keep that type of information close to the vest and
would not, in fact, divulge it on any type of publicly
available forum, or ... divulge it, by request, to
anybody who ... didn't have a subpoena for it, it is
rather simple for external third parties to determine
that information. ...
Many of our customers have an e-mail address that ends
in "gci.net," and then their particular user name is
pre-appended to that portion of it. Some people will
go through and just blanket-send e-mails to every
three-letter combination of initials at gci.net. ...
And they can accomplish some fairly effective bulk
mailings or what we call "spamming" customers in this
fashion because the computers that they use to generate
the messages are capable of processing hundreds of
thousands or millions of messages .... It's an easy
task for them to accomplish. So there are ... some
sort of work-arounds that make it difficult to always
determine whether an e-mail address has been divulged
by someone or whether it's just been determined out of
luck or brute force on the Internet. ...
I would tend to agree that it is appropriate to require
that that information not be divulged in any manner by
the Internet service provider, and, in fact, can't see
... any good reason to make that publicly available,
certainly without the consent of the subscriber.
Number 1942
[Julia Coster of the Department of Law informed the committee
that she was online to answer questions.]
REPRESENTATIVE KERTTULA requested that Mr. Torkelson come forward
to clarify a point.
Number 1980
PETER TORKELSON, Staff to Representative Fred Dyson, Alaska State
Legislature, directed a question to [Mr. Barnhardt] of GCI in
order to clarify the e-mail issue:
Do you have external services "spidering" your server
... to build up ... their web search databases? And,
if so, couldn't you ascertain someone's e-mail address
just based on their website address? For instance, ...
the way that your website is laid out is ...
home.gci.net\tilde and then your user name, but that
user name is really your e-mail address at gci.net. Is
that something that you can control? Or is that just
something that's done?
Number 2006
MR. BARNHARDT responded:
That's a good question. I can give you two answers to
that. The first is, the actual address of a person's
website - and, again, I should make it clear that what
I'm talking about here is the very specific way that
we've chosen to configure our Internet services; it
could vary significantly from provider to provider, but
the fundamental plumbing is the same - in any case, the
user name that people on our web service use is not
necessarily the same as their e-mail address. So you
can choose to have ... exactly the same one as your e-
mail address and your dial-in user name, or you can
choose a unique ... identifier for that. Either way is
fine; it doesn't really matter to us. So ... if that
was a concern, there is certainly a way that's within
the customer's control to not have publicly available
any portion of a user name that would make it easy to
guess their e-mail address.
Having said that, I believe that most customers do tend
to make their e-mail address, their website name, and
their dial-in authentication user name the same. And
in that scenario, yes, it is definitely possible for
third-party "spiders" - or "robots," they call them -
that actually comb through publicly available websites,
searching for e-mail address references .... It gets a
little tricky there because the very nature of the
World Wide Web is as a public entity ....
If it is the choice of the user, the customer, to
publish information on that public forum, ... we could
control who accesses that, but then you're limiting its
functionality, and ... that's really up to the user;
they can say, "I don't want these services to be
available" ... or they could have to log in before you
could use them. That's totally up to the user. But,
in general, most of the content on the web is just
available publicly. As soon as it's available
publicly, and assuming ... the reference has your e-
mail name as part of the URL that you use to reference
the site, then it is certainly quite possible for
somebody to comb through that information, make some
fairly easy guesses as to what your e-mail address may
be, and then utilize that information ... in whatever
fashion they would choose to.
Now, we can take steps. ... Right now, we do have a
page that provides links to all of our customers'
websites, which we establish at the request of our
customers. So it lists everybody who has a website
hosted on GCI's server and says ... "click here to go
to this one, click here to go to this one, click here
to go to this one." So, ... it's one compact location
where somebody could go and get a list of all these
websites that may or may not translate directly into an
e-mail address.
We could certainly eliminate that piece. However, the
websites are still available. ... As soon as there's a
link anywhere on the Internet, essentially, to that
information, then it becomes possible for somebody else
to try to dig through that information and determine
their e-mail address from it. ... That's [going to] be
one that it's virtually impossible ... to completely
eliminate.
We could certainly take measures to make it slightly
more difficult. ... If we were to do that, it would be
something we'd want to get input from our customers
[about], if that was at all possible, to see what their
preferences were .... I guess, actually, the other way
to do it would be we could say, "We will be happy to
list your website up on this page as available; if you
don't want us to, no problem." And then we would have
absolutely no problem with that type of scenario
either.
Number 2164
MR. TORKELSON offered his summary of the foregoing testimony:
We need to be very careful in holding an ISP
responsible for disclosing an e-mail address when that
person may have unknowingly just put up a web page and
thereby divulged the essential contents of the e-mail
address on the World Wide Web without meaning to.
Maybe they don't know that, but it did occur. We
really can't hold the ISP responsible for that, so it's
just a touchy, touchy area.
MR. BARNHARDT responded:
I think that's a good clarification. We've tried to be
as forthright with our notification process, when
somebody initially gets signed up - that, ... "Here's
the context you operate in; this is the type of
information that is out there; if you publish your
website, this is how it'll show up" - and certainly
have no problem taking that even further, if that was
appropriate.
Number 2206
MR. GOLL pointed out that the problem just discussed goes beyond
that, too. So many commercial entities are selling lists of
people with whom they do business, and if that business happens
to be an Internet business, then logically that business is
selling e-mail addresses as well as telephone numbers and mailing
addresses. Clearly, he said, the ISP cannot be held responsible
for the wide range of possible disclosures that could take place.
However, this legislation has a very specific point, "which is
that when you sign up with your Internet service provider, just
as the gentleman from GCI made so clear with the phone companies,
you retain control as to the linking of your e-mail address and
your actual name and who you are." Mr. Goll added:
I believe that the point here - and I'm hoping that it
might narrow some of the concerns a little bit - is
that in the process of engaging the utility, if you
will, to handle your e-mail traffic and your Internet
traffic, that signing up with that utility does not
automatically lead to the disclosure and linkage of
your e-mail address and your personal name and
information, my point being that these inadvertent
disclosures, of course, need to be understood, and one
cannot hold an ISP responsible for those. But the
specific disclosure of not only the e-mail (indisc.--
coughing) but the association of the address with the
name of the subscriber, I think, is the issue here.
And it would be my hope the bill could be narrow enough
to make that clear.
Number 2284
CHAIRMAN KOTT asked whether anyone else wished to testify, then
closed public testimony. He commented that one sees
advertisements, especially in Anchorage newspapers, that offer a
computer at a drastically reduced rate if one signs up and
subscribes through an ISP for a period of two or three years. He
surmised that the company makes money from selling advertisement
space to someone advertising a product, which the purchaser of
the computer will see whenever the machine is turned on. He
asked Representative Kerttula how the bill addresses that, if it
does.
REPRESENTATIVE KERTTULA answered:
The bill only goes to when someone's actually signing
up for Internet service. So if they were signing up
for the Internet service, ... the provider wouldn't be
able to disclose subscriber information without the
affirmative consent. So you'd have to be asked, "Do
you want us to provide that information?" And if you
said "yes," like I do when I get on the Internet and
want to be able to get a broad bunch of information
back, then your information would go. But if you said
"no," you probably won't get the computer.
Number 2376
CHAIRMAN KOTT responded, "I'm not sure ... they even acknowledge
that, in order to get that computer at this rate, this is what's
going to happen. But I heard that, but, again, I can't confirm
that."
REPRESENTATIVE KERTTULA indicated that for her private Internet
sign-up at home, the providers gave a lot of information and
warnings. However, she didn't read it or understand it, which is
why she had thought it would be better to do it up-front, and to
have people opt in to this system. In some ways, it is just a
right to know, so that people recognize what they're doing and
what will happen. The second part of this - and Representative
Dyson's [first] concern - was that information would be provided
about where the information goes; his bill, a little broader, was
therefore incorporated. Representative Kerttula said she
appreciates the hearing and believes that the issues raised by
the witnesses are substantive and difficult. She proposed
working on it and hammering out some compromises.
Number 2442
CHAIRMAN KOTT commented that this is what e-commerce has brought
about. He agreed that the issues appear to be workable. He
inquired whether it is Representative Kerttula's intent to
consult with Mr. Goll, for example.
REPRESENTATIVE KERTTULA specified that she would like to consult
with the witnesses, put out some proposed language, and see
whether they can come up with a proposal for the committee's
consideration. She thanked the witnesses for their input.
CHAIRMAN KOTT announced that HB 273 should be held over. He
indicated it would be brought up again if a solution were found.
CHAIRMAN KOTT called an at-ease at 2:03 p.m. He called the
meeting back to order at 2:07 p.m.
HB 311 - NO SOC SEC. NUMBER REQ'D ON HUNT/FISH LICENSE
TAPE 00-59, SIDE B
Number 0001
CHAIRMAN KOTT announced that the next order of business would be
HOUSE BILL NO. 311, "An Act eliminating a requirement that a
social security number be provided by an applicant for a hunting
or sport fishing license or tag."
Number 0011
REPRESENTATIVE JOHN COGHILL, JR., Alaska State Legislature,
sponsor of HB 311, explained that the bill simply repeals the
social security [number] requirement in relation to hunting and
sport fishing licenses or tags. The federal Personal
Responsibility and Work Opportunity Reconciliation Act of 1996
requires the state to supply social security numbers for a
variety of different licenses: drivers' licenses, occupational
licenses, professional licenses, recreational licenses, marriage
licenses, divorce decrees, paternity orders, support orders and
death certificates. However, many people in his district had
complained to him about the requirement for a social security
number on hunting and fishing licenses; his subsequent search
resulted in this bill. There is a federal mandate to "chase down
deadbeat dads," Representative Coghill noted. The reason for the
bill is related somewhat to privacy because many people are
concerned about giving their social security number to a [hunting
or fishing license] vendor - such as a gun shop or mom-and-pop
grocery store - that doesn't know the parameters in relation to
security.
REPRESENTATIVE COGHILL pointed out that the larger issue is that
many people don't like social security numbers being used for
identification purposes at all. However, he had introduced the
bill to take on just the hunting and fishing license issue
because that is the only area in Alaska now "vendored out" to
collect social security numbers, and there is probably less
professional security involved. A social security number could
be lying around and accessible; even though there is a blackened-
out spot on the [application], the impression is still there and
the information is still accessible. New Mexico had removed a
similar requirement for hunting and fishing licenses a year ago,
he noted, without any significant challenge to that action, under
the same [federal] law. This current bill simply repeals AS
16.05.330(e).
Number 0164
CHAIRMAN KOTT asked Representative Coghill whether any money is
tied to the federal mandate.
REPRESENTATIVE COGHILL said it is debatable. The whole Personal
Responsibility and Work Opportunity Reconciliation Act has money
attached to it, but it has been challenged in court in other
states, especially in relation to providing a social security
number as identification for a driver's license. That number is
not supposed to be used for identification, he noted, but he
doesn't want to take on the whole system at this point. He
believes that the best place to start is hunting and fishing
[licenses] because of the security issue.
REPRESENTATIVE COGHILL noted that other types of licenses that
require a social security number "are under pretty good
professional care," with no direct access to those numbers. The
drafter of the bill [Terri Lauterbach, Legislative Legal Counsel]
has indicated that the bill could result in a challenge with
regard to the federal money. However, he believes that doesn't
necessarily have to occur. "I think just having those hunting
and fishing licenses in these various different vendors is cause
enough," he added.
Number 0257
REPRESENTATIVE KERTTULA asked how much money [the bill] would put
at risk and why there would not be a problem.
REPRESENTATIVE COGHILL replied that 42 U.S.C. 666(a)(13) is the
law that requires a state to comply. According to Ms.
Lauterbach, noncompliance could possibly jeopardize [funding
because of] that code.
Number 0280
REPRESENTATIVE CROFT asked Representative Coghill whether he had
an opinion from Ms. Lauterbach.
REPRESENTATIVE COGHILL offered to provide it to members. [The
memorandum from Ms. Lauterbach to Representative Ogan, dated
March 23, 1999, was provided soon afterwards. The bottom
paragraph read:
The state may choose to be out of compliance with 42
U.S.C. 666(a)(13). Such an action would jeopardize not
only the federal funds received for child support
enforcement efforts but also federal funds received as
block grant money for the TANF/ATAP program under AS
47.27. The Department of Revenue and the Department of
Health and Social Services could provide more
information about these amounts and/or the likelihood
of federal sanctions, or you could authorize me to
contact them on your behalf in regard to these
matters.]
REPRESENTATIVE COGHILL said he thinks that it is "worthy of some
significant challenge" because of the privacy issue and because
of the way that Alaska has chosen to have hunting and fishing
licenses vended.
Number 0297
REPRESENTATIVE KERTTULA asked whether a person's social security
number is actually on a license or is blacked out.
REPRESENTATIVE COGHILL indicated that, according to Alaska
Department of Fish and Game (ADF&G) personnel, the top copy of
the application contains the person's social security number, and
there is a blacked-out section on the carbon copy. [This
statement was corrected a short while later; see Number 0347.]
Testimony has indicated, however, that a social security number
can still be read very easily from that.
Number 0324
REPRESENTATIVE KERTTULA asked whether the person and the ADF&G
are the only ones who are actually supposed to have a copy of the
application with the social security number on it.
REPRESENTATIVE COGHILL affirmed that.
REPRESENTATIVE KERTTULA suggested that the forms could be changed
so that a social security number isn't readable on a duplicate
copy.
REPRESENTATIVE COGHILL asserted that requiring a social security
number as identification for a hunting and fishing license is a
misuse of the number.
Number 0347
CHAIRMAN KOTT asked whether that social security number is used
primarily for child support issues and cases.
REPRESENTATIVE COGHILL replied, "Yes." He corrected his earlier
statement by saying, "To answer Representative Kerttula's
question, it has to be that the agency would retain a copy of
that number, if that's the intended purpose. ... It must be that
the vendor's copy is the only one blacked out." Representative
Coghill said it had been almost a year since he had talked to
ADF&G personnel about this. He restated that it [the social
security number] is primarily used for identification to track
down those who haven't paid their child support.
Number 0390
REPRESENTATIVE MURKOWSKI asked whether there have been any
financial repercussions to New Mexico in terms of [the federal
government's] withholding of child support, Temporary Assistance
to Needy Families (TANF) monies or anything like that.
REPRESENTATIVE COGHILL replied, "No, they haven't had any
repercussions from removing it."
Number 0413
REPRESENTATIVE MURKOWSKI noted that the committee recently had
heard a bill relating to the issuance of hunting and fishing
licenses electronically, with perhaps a "kiosk-type of concept."
She wondered whether that type of a system would alleviate some
of Representative Coghill's concerns because it would be more
centralized.
Number 0445
REPRESENTATIVE COGHILL surmised that it would be that much more
secure, but, logistically and practically, the state is a long
way from that. Furthermore, it would not alleviate his objection
to using a social security number for identification purposes.
When he first began this journey, Representative Coghill told
members, he did not realize the degree to which it was required
by the U.S. code. However, he finds that this bill is
appropriate because [social security numbers provided for hunting
and fishing licenses] are probably less secure than other uses.
REPRESENTATIVE CROFT said he doesn't want to risk the money, but
it does irritate him that [the federal government] is requiring
this. He inquired whether an effective date would be possible so
that the legislature can watch what happens to New Mexico.
REPRESENTATIVE COGHILL at first said he would resist that.
However, because the forms for hunting and fishing licenses have
already been printed [for the current year], it may cost less to
have a later effective date. "So, I would be open to that," he
concluded.
Number 0565
REPRESENTATIVE CROFT said he had heard the opposite argument in
relation to a bill that would require a change in a form for
voter information; in other words, it would be cheaper to delay
the effective date in order to use up the old forms before
switching to the new ones.
REPRESENTATIVE COGHILL responded that it would be agreeable to
the ADF&G. When he had talked to ADF&G personnel, they said that
providing a social security number is a "hot button" for the
department, and they would rather not deal with it or have to
print other forms. He added, "My reply was, 'Simply just don't
ask them to put it on there; it's not required anymore.'"
Number 0603
CHAIRMAN KOTT replied that Representative Coghill's suggestion is
possible if the clerk who sells the license advises the purchaser
of that. He pointed out, however, that these clerks may be 16
years old. Chairman Kott noted that a positive aspect of
including an effective date of 2001 would be preventing the
establishment of two classes of individuals: 1) those who
already had applied for and received licenses, providing their
social security numbers in doing so; and 2) future applicants who
would discover somehow that there is no need to provide that
number. It would be more beneficial, he thinks, to keep
everybody under the same scheme.
Number 0644
REPRESENTATIVE COGHILL conveyed concern that his constituents
would say he "wimped out" for extending [the current system] for
another year, even though it makes more sense practically. He
wondered how much money it would take to print a circular
indicating that, as of a certain date, a person does not need to
provide a social security number to apply for a hunting and
fishing license. Furthermore, maybe the state should act
proactively instead of watching to see what happens to the state
of New Mexico. Other states are watching this issue, Michigan is
going through the process right now, and there are several court
cases going. He concluded that being proactive is probably
better than waiting to see [what happens elsewhere].
Number 0717
CHAIRMAN KOTT suggested that even with an immediate effective
date, if this were to pass both houses quickly, most Alaskans
would have already purchased a fishing licenses.
REPRESENTATIVE COGHILL acknowledged that as a practical reason
for extending the effective date. He said he could take the
political "heat" for that, although this was no "small stir" in
his district.
Number 0790
REPRESENTATIVE SCOTT OGAN, Alaska State Legislature, came before
the committee to testify in support of HB 311 as a cosponsor. He
told members that sometimes it is not worth capitulating to
federal demands placed upon a state's sovereignty. He explained
that he had taken action the previous year that was
misinterpreted; he had voted to concur with the Senate's changes
to [HB 344], which required a person to provide a social security
number. Although not in support of the bill itself, he had heard
about it from constituents - many of whom are adamant hunters and
fishermen - when he got home.
REPRESENTATIVE OGAN said this is an issue of privacy. The state
constitution has a strong privacy clause that gives the
legislature the authority to implement it, although they haven't
done so but have left it up to the courts for interpretation. He
again suggested that sometimes it is worth walking away from
federal money, although he hopes that isn't necessary. The Child
Support Enforcement Division [Department of Revenue] is, in his
opinion, the most out-of-control state agency; his office fields
many complaints about them. Representative Ogan pointed out that
there are some "deadbeat mothers" as well, and it is more a
matter of parents who don't support their children, regardless of
what sex they are. He asked that members pass the bill out of
the committee.
Number 0935
CHAIRMAN KOTT recalled that most of the concerns he had heard
regarding [HB 344] had related to providing a social security
number for a driver's license. He suggested that the request to
provide a social security number is a circular problem because in
order to get a hunting and fishing license, a person has to
provide identification, which most often is a driver's license
that includes the social security number.
Number 0962
AL WEATHERS testified via teleconference from Cordova in support
of HB 311. He told members that he won't allow himself to be
identified by a number. A law requiring that would make him a
criminal, and probably would overwhelm the criminal system. He
urged members to pass the bill.
Number 1043
ERIC WEATHERS, JR., Commercial Fisherman, testified via
teleconference from Cordova in full support of HB 311. A fourth-
generation Alaskan, he asked that commercial fishing permits and
drivers' licenses be added to the bill. He noted that he hasn't
been able to find in federal law a requirement to provide a
social security number for identification purposes other than for
a commercial drivers' license or a welfare program. In that
regard, he is not a commercial driver or a welfare recipient and
will not become one. Taking money from the government, he said,
makes a person a servant. He cannot and will not give his social
security number to anyone; at the same time, without one he
cannot purchase a driver's license, fishing license or hunting
license. Referring to testimony of Al Weathers, his brother, he
urged members to keep those who choose to support themselves out
of jail.
Number 1099
REPRESENTATIVE CROFT asked Mr. [Eric] Weathers whether he applies
for and receives the Alaska permanent fund dividend (PFD).
MR. WEATHERS replied that he hasn't in the past. However, he
applied for one this year and is having problems with it because
the [Internal Revenue Service (IRS)] withholds about 30 percent
if a person does not have a social security number.
Number 1130
DENNY KAY WEATHERS, testifying via teleconference from Cordova,
explained that 31 percent is withheld from the PFD if a person
does not have a social security number. That person then has to
apply to the IRS to have it returned.
MR. [ERIC] WEATHERS added that he had just opted out of the
social security system and the PFD [program] about two to three
years ago. He has since reapplied for it [a PFD] but hasn't
received it yet.
Number 1179
MS. [DENNY] WEATHERS testified that HB 311 is a great piece of
legislation. She requested that it be amended, however, to
include non-commercial drivers' licenses, commercial fishing
permits, and crew licenses. She pointed out that a commercial
fishing permit includes a person's social security number, birth
date and name. A commercial fishing permit must also go through
a series of people for processing, some of whom are not even part
of the state. In that regard, there is no security. She
suggested that HB 344 was passed under duress from the federal
government, which leads her to believe that legislators were
opposed to it from the beginning and felt that they were being
blackmailed.
MS. WEATHERS referred to her written testimony and a copy of the
"CRF" report from Congress, which she said illustrates a
chronological development of the use of the social security
number from 1935 to 1986. She noted that the 1986 requirement is
the only one that she could find in relation to the Commercial
Motor Vehicle Safety Act of 1986, which gives the Secretary of
Transportation authority to require the state to include a social
security number on commercial vehicle licenses. She further
indicated that the state is only required to get a social
security number from those who receive federal benefits, are
blood donors, or are seeking a commercial vehicle license.
MS. WEATHERS noted that Michigan and New Mexico do not require a
social security number for identification; from what she has been
told, [those states] have not lost any of their federal money.
Furthermore, the people of Montana currently are working on an
initiative to repeal their state social security number
[requirement], as well as a lawsuit against the state for taking
away their privacy and forcing them "into a number." Ms.
Weathers said the reason that the federal government cannot
mandate a state to collect a social security number from everyone
is because the federal constitution will not allow it under the
Tenth Amendment. The person handling social security number
issues in North Carolina has indicated that state isn't requiring
a person's social security number for identification to obtain a
learner's permit or driver's license, she reported.
MS. WEATHERS told members that many [Alaskans] do not have a
social security number; therefore, when they apply for something,
they are told that they cannot have it. When she went to reapply
for her driver's license, for example, she was handed a
memorandum that said a person must provide a social security
number. As a result, she had to turn her driver's license over,
which she said makes her a criminal. Ms. Weathers challenged
members to look for a federal law that requires a state to ask
for a social security number. She can understand that a person
would need a social security number to apply for a federally
issued "thing," she said; however, someone applying only for a
state-issued "thing" should not be forced into providing a social
security number.
Number 1677
MARK CHRYSON, Chairman, Alaskan Independence Party (AIP),
testified via teleconference from the Mat-Su Legislative
Information Office (LIO), noting that the AIP is the number-one
third party in the United States. Regarding Representative
Murkowski's comment about electronically obtaining a hunting and
fishing license and HB 273, Mr. Cryson cautioned that as an
Internet service provider he can affirmatively say that there
would not be any security. Any information put on a website is
public domain and can be accessed by a third party; in that
regard, if the committee passes HB 273, he believes that they
will have no choice but to pass HB 311.
MR. CRYSON told members that the Privacy Act of 1974 indicates a
social security number cannot be required unless it was done so
prior to 1974. His driver's license reads 000-00-0000, he noted,
and he has until 2003 before he has to worry about whether to
continue to have a state-issued driver's license or to go to a
Native group and have a driver's licensed issued by them; Native
groups, he explained, don't require a social security number. He
emphasized that people need their privacy. Alaska is the only
state that has the right to privacy spelled out in its
constitution; he encouraged committee members to live up to their
oath in that regard.
Number 1922
JAMES GARHART testified via teleconference from the Mat-Su LIO as
a private citizen. The issue of providing a social security
number to obtain a driver's license has been in court, he said.
The biggest problem is that magistrates are reluctant to make a
decision because they will have to decide in favor of privacy.
Section 7 of Public Law 93-579, known as the Privacy Act,
basically says that anybody can ask a person for a social
security number, but a federal, state or local agency cannot deny
a person a right, benefit or privilege for refusal to disclose
his/her number.
MR. GARHART pointed out that Article VIII, Section 3, of the
state constitution says, "Wherever occurring in their natural
state, fish, wildlife, and waters are reserved to the people for
common use." It doesn't say to provide a social security number.
The agents of the state refuse to issue him a fishing license
because he will not violate the terms of his contract with the
Social Security Administration and provide his social security
number, Mr. Garhart said. When he goes fishing, he could be
cited and possibly suffer penalties. However, when he signed up
for a social security number, it was clearly spelled out in the
contract that it was not to be used for purposes of
identification; it stated so, in big, bold, blue letters on the
back of the card.
MR. GARHART said he has never changed the terms of the contract
with the Social Security Administration, and they have never sent
him anything indicating the terms of the contract have changed.
Therefore, he feels that using a social security number for
identification purposes is an improper use of that number,
punishable with a fine, imprisonment or both. He doesn't want to
commit a crime in order to get a privileged-status fishing
license, he said. Furthermore, when he went to apply for a
fishing license, he noticed that there were three copies, but
only one was blacked out - the copy that the vendor retains. One
copy would go to him and the other would go to the ADF&G, but
typically their copies aren't transferred to [the department]
daily. In that way, a social security number is available for
the clerks and anyone else.
MR. GARHART offered his opinion that this whole issue started
with the federal government's attempt to blackmail the state by
threatening to withhold funds. He recalled that when the federal
government did something similar in relation to a helmet law, the
Hickel-Coghill Administration told [the federal government] to
"take their helmet law and stick it"; as a result, the federal
government did not pull any funds. Mr. Garhart likened it to
standing up to the school yard bully.
MR. GARHART turned attention to the state's constitutional right
to privacy, suggesting that legislators have taken an oath to
uphold the constitution; he believes that passing HB 311 would be
in line with upholding that oath. He further stated that a
fishing license is the same as a driver's license if it has a
person's social security number and name on it: anyone could use
it for identification and apply for credit cards, and so forth.
Mr. Garhart said he has heard many stories of people who have
tens of thousands of dollars in credit card bills because they
had lost their drivers' licenses with their social security
numbers on them.
Number 2260
MR. GARHART noted that this is the judicial committee, and
proposed that the only comprehensible judicial action is to move
HB 311 out with a unanimous recommendation for approval.
Regarding an effective date, federal regulations indicate that
individuals who are asked to provide their social security
numbers must be informed of whether providing the number is
mandatory or voluntary, he added. In that regard, an agent would
only have to advise a person that requiring a social security
number has been repealed, and that it is now a voluntary act.
[The rest of Mr. Garhart's testimony is almost indiscernible
because of a fire alarm that went off while he was testifying and
subsequent discussion. Because of the fire alarm, the committee
was at ease from 2:52 p.m. to 3:01 p.m.]
TAPE 00-60, SIDE A
Number 0061
BARBARA MIKLOS, Director, Central Office, Child Support
Enforcement Division (CSED), Department of Revenue, testified via
teleconference from Anchorage. She told members that welfare
reform legislation, passed by Congress in 1996, is part of the
Social Security Act. Section 466(a)(13) of the Social Security
Act indicates that each state must have in effect laws requiring
the procedure for the use of a person's social security number
for any recreational license to be recorded on the application.
In that regard, the legislature had passed HB 344 about two years
ago to meet the requirement.
MS. MIKLOS reported that as far as the division can tell, there
is no definition of "recreational license" in statute. However,
in consulting with the federal government, they said it means
recreational hunting and fishing licenses. For that reason,
subsistence and personal use licenses are excluded. Ms. Miklos
noted that when HB 344 was passed, there was a great deal of
deliberation and concern, but the federal government told the
state it would lose approximately $77 million - $14 million for
child support and $63 million for public assistance. Ms. Miklos
said that is why HB 344 was ultimately passed.
MS. MIKLOS explained that when Congress passed welfare reform, it
was their intent to help give more tools for child support
enforcement because they wanted those who "got off welfare" to
have resources. Those tools have been very helpful to the
division in collecting additional money. She reported, however,
that the data from a hunting or fishing license is not that
useful because by the time the division obtains a copy of the
license, the data has probably already changed. The division has
many better ways of getting data about those who owe child
support. In her mind, she said, it is important that the
requirement be maintained so that there isn't a loss of funding.
MS. MIKLOS offered to work with the committee in trying to
determine a way to delete the requirement of a person's social
security number for a recreational license so that it doesn't
hurt the funding. However, the requirement of a person's social
security number for other licenses is really helpful in
collecting child support. In closing, Ms. Miklos noted that a
congressman has introduced legislation to delete the requirement
to provide a social security number for recreational licensing
from the Social Security Act. That is the best proposal, she
said, because then the state wouldn't have to worry about a loss
of funds.
Number 0355
REPRESENTATIVE MURKOWSKI asked Ms. Miklos whether Idaho had lost
its funding in relation to social security numbers and
recreational licenses.
MS. MIKLOS replied that there were many provisions of the federal
welfare reform Act with which Idaho indicated it would not
comply. As a result, Idaho had received a letter from the
federal government threatening to pull its funding; the Idaho
legislature, in response, passed necessary legislation to
preclude that. Meanwhile, Alaska was deliberating on its bill.
After consulting with Idaho, Alaska passed a bill that only met
the minimum requirements of the federal government.
Number 0488
CHAIRMAN KOTT asked Ms. Miklos to reiterate what the monetary
loss would be.
MS. MIKLOS replied that it would be about $14 million for child
support and $63 million for public assistance.
Number 0517
REPRESENTATIVE JAMES asked Ms. Miklos whether she is aware of the
two states that have passed legislation in relation to social
security numbers and recreational licenses.
MS. MIKLOS replied, "No." She said she didn't know that New
Mexico had actually repealed its law, but she would look into it.
She wondered whether Michigan was one of the states that fell
behind in its time line, when the federal law was passed, in
relation to when its legislature meets. She restated that the
division is not really using the information provided from the
recreational licenses, and she is aware that it is creating a
great deal of problems and controversy in the state. Wisconsin
and Minnesota are having trouble with the issue as well.
Number 0611
RYNNIEVA MOSS, Staff to Representative John Coghill, Jr., Alaska
State Legislature, came before the committee on behalf of the
sponsor. She handed out a document from New Mexico titled
"Minutes of the State Game Commission Meeting, April 8, 1999";
she indicated it related to the philosophy behind the decision to
repeal the collection of social security numbers for recreational
licenses. She noted that it had been a situation in which prison
inmates were tabulating the collected data.
Number 0716
CHAIRMAN KOTT, indicating there were no further testifiers,
closed the meeting to public testimony.
Number 0722
REPRESENTATIVE CROFT told fellow members that he would like to
have an effective date to allow the legislature to fully see what
is happening in other states, and to allow the finance committees
to plan for a potential $77 million gap in funding. An effective
date of 90 days from now would be when the legislature is not in
session, he noted. An effective date of July 1, 2001, doesn't
meet the concern of starting on the first of January so that all
licenses have the same requirement, but he thinks that the main
concern is related to the potential monetary loss.
REPRESENTATIVE CROFT proposed an effective date of July 1, 2001,
as an amendment [Amendment 1].
Number 0822
MS. MOSS pointed out that Representative Coghill had more in mind
the calendar year because of the way hunting and fishing licenses
are issued. The state has also admitted that there is no
compelling interest in collecting social security numbers [from
recreational licenses]. She requested, on behalf of
Representative Coghill, that the effective date be January 1,
2001.
Number 0858
REPRESENTATIVE CROFT responded that he is not stuck on July 1,
2001, but it makes more sense. An effective date of January 1,
2001, doesn't seem to help the legislature because it is before
session. Most people agree that this is an onerous requirement.
Even Ms. Miklos has indicated that the CSED does not use the data
from the recreational licenses that much, and there are a lot of
people in the state, including himself, who are angry about
having to provide a social security number. The main reason the
legislature had passed HB 344 under duress was because of the
money. It boils down to a money issue, which is why he wants to
tie the effective date to the fiscal year, not the calendar year.
Number 0913
MS. MOSS responded that New Mexico and Michigan, which have
"called the feds' bluff," have not had any repercussions or
threats from the federal government in relation to funding, and a
whole year has passed for New Mexico.
REPRESENTATIVE CROFT replied that the federal government
sometimes works slowly and could be preparing a "hammer." In
that regard, it would be prudent to have a somewhat-delayed
effective date that fell on a "calendar year," so that the
legislature would have an idea on what might happen.
Number 0991
CHAIRMAN KOTT offered a friendly amendment to Amendment 1 of an
effective date of January 1, 2001, which he believes would avoid
any protection issues and would give the legislature some time.
REPRESENTATIVE CROFT agreed that an effective date of January 1,
2001, would give time, but it wouldn't give the legislature the
ability to do anything about it without a special session.
Number 1029
CHAIRMAN KOTT replied that an effective date should not impact
those who issue the licenses. It is unfair and inequitable to
require only half of the citizens to provide a social security
number [during the changeover year].
Number 1055
REPRESENTATIVE CROFT pointed out that there already is a group
who won't provide a social security number, and who will continue
to not provide it. Furthermore, an effective date of July 1,
2001, would work well for hunting season, but it would not work
as well for fishing season.
Number 1076
REPRESENTATIVE JAMES told fellow members that she doesn't think
the state will lose any money.
Number 1108
REPRESENTATIVE CROFT indicated an effective date of January 1,
2001, is fine. If the "hammer falls," he said, the legislature
would be in session shortly thereafter "to do a quick fix."
Number 1124
REPRESENTATIVE KERTTULA asked: Why not make the effective date
January 1, 2002? In that way, more time would have elapsed so
that there would be more security about what might happen to the
$77 million.
Number 1140
CHAIRMAN KOTT responded that he had heard from the sponsor that a
January 1, 2002, date would not be acceptable. Furthermore, he
thinks that an effective date is making a statement to the
federal government that the state is no longer going to be
blackmailed. He suspects that the legislation introduced in
Congress to eliminate this requirement will happen this year; he
believes the issue is that important.
Number 1191
REPRESENTATIVE KERTTULA objected to the amendment to Amendment 1.
She specified that she wants to keep the effective date as July
1, 2001.
CHAIRMAN KOTT requested a roll call vote. Representatives James,
Croft, Green and Kott voted "yea." Representatives Murkowski and
Kerttula voted "nay." Therefore, by a vote of 4-2, the amendment
to Amendment 1 was adopted.
Number 1241
CHAIRMAN KOTT asked whether there was any objection to Amendment
1, as amended. There being no objection, Amendment 1 was
adopted.
Number 1254
REPRESENTATIVE CROFT made a motion to move HB 311, as amended,
from the committee with individual recommendations and the
attached negative fiscal note.
CHAIRMAN KOTT stated, for the record, that it is his
understanding that the committee does not want to delve any
further into eliminating the requirement of a social security
number for any other license.
REPRESENTATIVE CROFT indicated that the sponsor has theoretical
troubles with providing a social security number for other
licenses, but those are slightly different in that there are
federal requirements involved. This issue is a different type of
duress in that it is related to funding.
Number 1317
REPRESENTATIVE MURKOWSKI expressed concern that HB 311 does not
have a House Finance Standing Committee referral, especially
given that there is a potential for the state to lose $77
million. At the same time, she doesn't want to hold the bill up.
Number 1352
CHAIRMAN KOTT agreed with Representative Murkowski. He said he
is sure that the last committee of referral will see that it
belongs in the House Finance Standing Committee.
Number 1367
REPRESENTATIVE JAMES commented that she sees no reason to have a
person's social security number on a recreational license. As a
tax preparer, she has come into contact with individuals who
don't want to use their social security numbers for anything, but
she thinks that they don't have a clue as to what would happen if
they didn't use their social security numbers and birth dates to
identify themselves. In fact, even while using a social security
number, a person can get "mixed up" with others; there are people
born with the same name on the same date, for example, which can
cause unsolvable problems. In that regard, she is not in favor
of removing a person's social security number from a driver's
license, unless she can be convinced otherwise.
Number 1441
REPRESENTATIVE KERTTULA said she thinks this is a concern with
regard to the social security number per se, not really a concern
in relation to privacy. The committee has heard testimony that
the data provided from the recreational licenses is not that
helpful. She also thinks that the legislature should not behave
too cavalierly about the threat of a loss of $77 million in
funding. She spoke in support of having a House Finance Standing
Committee referral.
Number 1468
CHAIRMAN KOTT asked whether there was any objection to the motion
to move HB 311, as amended, from the committee. There being no
objection, CSHB 311(JUD) was moved from the House Judiciary
Standing Committee.
HB 425 - FALSE CLAIMS AGAINST STATE OR MUNI.
CHAIRMAN KOTT announced that the next order of business would be
HOUSE BILL NO. 425, "An Act relating to misrepresentation and
false claims made against the state or a municipality; and
providing for an effective date." [The bill was sponsored by the
House Rules Committee by request of the Governor. Before the
committee was CSHB 425(CRA).]
Number 1541
JAMES BALDWIN, Assistant Attorney General, Governmental Affairs
Section, Civil Division (Juneau), Department of Law, explained to
members that the bill would enact a false claims statute for
Alaska. Although there is the skeletal form of a false claims
statute now, it doesn't have some of the provisions that would be
particularly helpful in at least one current case involving the
Bank of America. The allegations in that case are that the bank
retained a substantial amount of bond funds which were placed in
their hands by state and municipal governments. Alaska's lack of
a false claims statute was brought to [the department's]
attention by the State of California, which recently used its
false claims statute to bring to a successful conclusion the
claims that it had against the bank, thereby receiving a
settlement of $188 million.
MR. BALDWIN specified that Alaska's skeletal statute is in AS
37.10.090, which basically makes it unlawful for a person to
illegally pay or divert state or municipal funds. The version of
the bill before the committee [CSHB 425(CRA)] was copied closely
from the California false claims statute. It provides for treble
damages if someone files a false administrative claim with a
public officer. There are various forms of that, Mr. Baldwin
explained. The claim has to be in excess of $500, and certain
types of claims are excluded, such as claims for welfare-type
benefits or unemployment. Also, the tax code and permanent fund
dividends are excluded because those have established statutes
that provide for penalties for filing false claims under those
particular statutory schemes.
MR. BALDWIN illustrated the magnitude of the Bank of America case
by noting that in Alaska, state and municipal issuers had placed
in the hands of the bank about $22 billion in bond proceeds. It
was determined, by using a sampling technique in California, that
of the bearer bond proceeds - which anyone can show up and claim
who is holding the bearer paper, because they aren't issued in
anyone's name and the bank doesn't really has this paper - 0.392
percent of that money remained unclaimed in the hands of the
bank; that figure times the $7 billion of unclaimed bearer paper
is a large number. [The State of Alaska] would like to have this
kind of enforcement tool, Mr. Baldwin explained, to be able to
successfully prosecute the Bank of America case and other
potential cases against other custodians of large amounts of
state and municipal money.
Number 1715
MR. BALDWIN noted that when he had spoken with Chairman Kott's
staff about this, he was shown a memorandum from the Legislative
Affairs Agency [from Theresa Bannister, Legislative Counsel,
dated March 8, 2000] about the bill. Mr. Baldwin pointed out
that the memorandum contained comments about the bill's title and
some other provisions that might involve court rules. Thus he
was offering a written amendment for a title that would tighten
it up and be more descriptive about the contents; the amendment
also would alter provisions relating to service of and by
municipal and state attorneys, which would avoid a change in the
civil rules. That draft amendment read [original punctuation
provided]:
Page 1, lines 1 and 2: delete all material (the title)
and insert the following new material to read:
"An act creating a right for the state or a
municipality to recover civil damages against
a person who makes a false administrative
claim for payment or approval from a state or
municipal officer for payment of money or
property or who knowingly receives the
benefit of a false administrative claim
presented to a state or municipal officer;
and providing for an effective date."
Page 4, line 25: delete "serve" insert "provide" in
its place
line 26: delete "on" and insert "to" in its place
Page 5, line 2: delete "serve" insert "provide" in its
place
line 3: delete "on" and insert "to" in its place
MR. BALDWIN provided a copy of that amendment and offered to
answer questions.
Number 1765
CHAIRMAN KOTT asked whether there were questions; none were
offered. He then asked whether anyone else wished to testify;
there was no response. He announced that HB 425 would be held
over. He indicated there would be a new committee substitute
(CS) drafted, which would incorporate the concerns that had been
identified. [HB 425 was held over.]
HJR 49 - CONST AM: PERM FUND INCOME DISTRIBUTION
Number 1799
CHAIRMAN KOTT announced that the final order of business would be
HOUSE JOINT RESOLUTION NO. 49, proposing an amendment to the
Constitution of the State of Alaska to guarantee the permanent
fund dividend, to provide for inflation proofing, and to require
a vote of the people before changing the statutory formula for
distribution that existed on January 1, 2000. [Before the
committee was CSHJR 49(STA).]
Number 1838
REPRESENTATIVE SCOTT OGAN, Alaska State Legislature, prime
sponsor, came forward to present HJR 49, noting that it is a
companion measure to a Senate resolution [SJR 35]. He suggested
that constitutionally protecting the permanent fund dividend
(PFD) program is the only way that Alaskans will be comfortable
with allowing the legislature, without serious repercussions, to
use any earnings from the dividend program. Representative Ogan
noted that he was around when the permanent fund was put into
place, and he remembers well the Zobel case regarding equal
protection; he believes that history has proven the Zobels right.
REPRESENTATIVE OGAN emphasized that the permanent fund is a
"rainy day" account. Referring to discussion in the legislative
halls and the September 14 [advisory] vote, Representative Ogan
said he got a message loud and clear, in his district, that the
legislature should keep its hands off of the PFD. This
resolution accomplishes that, he pointed out. It
constitutionally protects the existing [PFD] program, inflation-
proofing and the formula. Mentioning discussion about whether
the formula is good at this point, he informed members that most
of the naysayers with regard to this resolution have said it
could cause the Internal Revenue Service (IRS) to rule that [the
fund] is no longer for a public purpose, thereby making the
permanent fund itself taxable. Therefore, to alleviate that
concern, the effective date for the resolution is whenever the
IRS issues a final decision that the corpus of the permanent fund
is, indeed, not taxable.
REPRESENTATIVE OGAN urged members to pass the resolution out and
keep the discussion going. He conveyed his belief that this
resolution will instill trust in people that their dividend
program will be protected. He also suggested that it is
pessimistic to assume that the existing program will go away in a
few years. He said he believes in the State of Alaska. Pointing
out how young the state is, he suggested there is no need to act
like teenagers with a trust account or to think that the state
has reached its senior years and, therefore, must use its
retirement account. For example, he believes that the
possibilities of developing [petroleum reserves] in the Arctic
National Wildlife Refuge (ANWR) are greater than ever before;
furthermore, there is still a lot of natural gas on the North
Slope. Therefore, he doesn't share the fatalistic view that
Alaska is in financial dire straits.
REPRESENTATIVE OGAN concluded by noting that there have been
calls to use the earnings of the permanent fund for a number of
years. Because that has been delayed, there is almost $30
billion in the permanent fund now. He expressed the belief that
it is in the state's best interest to not be hasty about using
the earnings or to depreciate the potential of that account,
"because the longer we wait, the more that's [going to] build
up."
Number 2082
REPRESENTATIVE CROFT referred to Section 30 [the proposed section
of Article XV of the constitution to be added by Section 3 of the
resolution]. He said he does have a concern that the IRS might
decide this [the Alaska Permanent Fund Corporation] should be
taxed, as a corporation. He read in part from the first sentence
of proposed Section 30, which said:
Section 30. Effective Date of Permanent fund
Amendment. The 2000 amendment to the Alaska permanent
fund (art. IX, Sec. 15) takes effect on the day after
the date of a final decision by the Internal Revenue
Service deciding that, under the language of the 2000
amendment, the income of the permanent fund will not be
subject to federal taxation while it is under the
control of the State or an entity of the State.
REPRESENTATIVE CROFT asked whether the IRS makes these final
decisions. He said he thought it was more that the IRS hadn't
taxed the State yet but could at any time. He asked whether
there is a decision now that it is not to be taxed, or if the IRS
has just not done so.
REPRESENTATIVE OGAN answered:
All we're doing is enshrining the existing program in
place. ... I'm not a tax attorney, and I'm certainly
... not an IRS person, and don't think like them. But
it would seem to me if the existing program ... was
taxable, they would have done it by now. The reason I
put this in is because of the gas pipeline situation,
with the pipeline mayors' port authority situation. If
I'm not mistaken, they requested a ruling from the IRS
[as to] whether or not that would be taxable, and the
IRS said that would be tax-free. So, if we can do it
with that, we can do it with this.
Number 2143
REPRESENTATIVE CROFT said it was important to "the gas group" to
know one way or the other. However, he isn't sure that the state
wants to ask the IRS.
REPRESENTATIVE OGAN replied:
I think it will be asked of the IRS, frankly. The
people that are opposed to doing this will have raised
the issue, and I think it will come to a head. So, I'm
not afraid of the decision. ... If they say ... that if
we passed this constitutional amendment and made this
as a constitutional right that people get this
dividend, that that would make it a taxable situation,
then I wouldn't want the amendment to take effect. And
I'm not afraid of that. That's why, I guess, we do
this, as a way to address that question.
REPRESENTATIVE CROFT requested confirmation that those
determinations can be appealed to superior court and the supreme
court eventually.
REPRESENTATIVE OGAN said the law and regulations can change as
well. Nothing is set in concrete. He suggested that if it were
appealed, certainly the legislature would want to take it up and
repeal the constitutional amendment, which he doesn't believe
would be a problem because people would probably go along with
it.
Number 2208
REPRESENTATIVE CROFT remarked that if there were an adverse IRS
ruling, the state would certainly want to appeal it to the
courts. He read from the second sentence of proposed Section 30,
regarding the effective date, which said:
In this section, "final decision" means a ruling,
order, or decision that cannot be appealed to the
Internal Revenue Service because the ruling, order, or
decision may not be appealed to the agency, all
possible appeals to the agency have been taken, or the
time for taking an appeal to the agency has expired
without appeal.
He asked, "What if it can be appealed somewhere else?"
REPRESENTATIVE OGAN replied that it could be, feasibly. Someone
could appeal it to the circuit courts, or to the district court
and then the circuit court and all the way to the supreme court.
REPRESENTATIVE CROFT said that isn't what "final decision" means
here, however. It means that it cannot be appealed to the IRS.
REPRESENTATIVE OGAN explained that it was a policy call he made
after discussion with Tamara Cook [Director, Legislative Legal
and Research Services, Legislative Affairs Agency]. His choice
had been whether to go with a supreme court ruling or the IRS
decision. He believes that there probably won't be a lot of
opposition if the IRS rules that it is tax-free. Furthermore,
going to the supreme court takes an indefinite amount of time.
He mentioned not wanting to wait a long time for this to take
effect, then said that if the state's financial needs are such
that the earnings of the permanent fund need to be used, this is
the bottom line. People won't sanction use of the permanent fund
earnings until they know that the PFD program is taken care of,
and off the table.
REPRESENTATIVE OGAN noted that former Governor Hammond, who had
emphasized the need to take the PFD question off of the table,
hadn't specifically supported this measure but had said this
appears to do that. Although perhaps the approach in [HB] 411
might be better, Representative Ogan said he honestly hasn't been
able to make that judgment call. Whatever approach the
legislature takes, having the PFD program off the table will open
up the possibility of using the earnings; he isn't advocating
doing that, but it is already in the constitution that those
earnings can be used [with a simple majority vote] rather than
needing [a two-thirds' majority vote].
REPRESENTATIVE OGAN said that for all practical purposes, the
legislature hasn't touched a penny other than to recapitalize the
permanent fund; that is because when people hear "earnings of the
permanent fund," they equate it with the PFD check.
Representative Ogan reiterated the desire to take that PFD check
off the table in order to open the possibility, when it is
appropriate, for the legislature to utilize those funds.
Number 2395
REPRESENTATIVE CROFT remarked that he would like to see a "MOMA
run" on some of this. When talking about this the previous year,
he noted, there were scenarios under which the current dividend
structure would crash because of how it is calculated and how the
stock market has been performing. Seeing whether the risk is
significant or insignificant would be appropriate. To that end,
he proposed having testimony from the [Alaska Permanent Fund
Corporation] with regard to the effects of setting in stone the
current PFD program, under a variety of circumstances. He stated
his assumption that nobody from the Alaska Permanent Fund
Corporation was at the hearing to testify.
Number 2421
REPRESENTATIVE MURKOWSKI suggested that the average voter, when
reading [the language regarding the effective date] at the ballot
box, would ask why the state hadn't checked with the IRS first.
She conveyed her understanding that one can get a preliminary
ruling from the IRS, although it isn't final. She surmised that
perhaps a preliminary ruling hasn't been requested for the reason
suggested by Representative Croft: maybe the state doesn't want
to know what the answer is.
TAPE 00-60, SIDE B
Number 0023
REPRESENTATIVE MURKOWSKI indicated she has heard conjecture that
the IRS will look at this and rule that there are tax
consequences. She asked whether Representative Ogan had received
advice from legislative legal counsel about getting a preliminary
ruling.
REPRESENTATIVE OGAN answered that he had received a legal opinion
from Tamara Cook, who said she wasn't the right person to ask
because she isn't a tax attorney. In this case, the only opinion
that really matters will be from the IRS. He added:
The urgency that I keep hearing about the permanent
fund and our state finances and whatnot - time simply
doesn't allow for us to ask for a ruling and get it
back in time for this to go on a ballot, this November,
and for the people to decide. And so I realized that
without some kind of a circuit breaker on here, this
legislation was probably as good [as] dead over the
speculation of a tax liability. So we tried to build
something in there that would ... [pop the circuit
breaker] if the IRS said, "Nope, we're after you."
Number 0085
REPRESENTATIVE MURKOWSKI asked, "If this were to pass, would you
propose to try to ... get a preliminary ruling, even before the
vote, so that you could at least tell people that we've requested
one and it's in the process?"
REPRESENTATIVE OGAN replied yes, he believes that would be very
prudent. He cautioned about carefully framing the question to
the IRS, but noted that the IRS is no doubt aware of Alaska's
permanent fund and the [PFDs]. He suggested that if the IRS were
interested, they probably would have already [taxed it].
Number 0130
CHAIRMAN KOTT reported that Ms. Mary Griswold of Homer [the only
person signed up to testify] was no longer on teleconference but
had provided a copy of her written testimony.
REPRESENTATIVE OGAN noted that Ms. Griswold doesn't support the
resolution.
REPRESENTATIVE CROFT asked to hear from the Alaska Permanent Fund
Corporation at some point, even if other public testimony is
closed.
Number 0173
REPRESENTATIVE KERTTULA informed members that she had received an
opinion from [attorney] Ron Lorensen, who was working with the
permanent fund and had testified in one of the finance committees
about this issue. She suggested it would be worthwhile for Mr.
Lorensen to appear before the committee as well.
CHAIRMAN KOTT concurred with keeping the hearing open for both
the Alaska Permanent Fund Corporation and Mr. Lorensen. He
thanked participants. [HJR 49 was held over.]
ADJOURNMENT
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 3:50 p.m.
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