04/02/2001 01:12 PM House JUD
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
April 2, 2001
1:12 p.m.
MEMBERS PRESENT
Representative Norman Rokeberg, Chair
Representative Jeannette James
Representative John Coghill
Representative Kevin Meyer
Representative Ethan Berkowitz
Representative Albert Kookesh
MEMBERS ABSENT
Representative Scott Ogan, Vice Chair
COMMITTEE CALENDAR
HOUSE BILL NO. 3
"An Act relating to deposits to the Alaska permanent fund from
mineral lease rentals, royalties, royalty sale proceeds, net
profit shares under AS 38.05.180(f) and (g), federal mineral
revenue sharing payments received by the state from mineral
leases, and bonuses received by the state from mineral leases,
and limiting deposits from those sources to the 25 percent
required under art. IX, sec. 15, Constitution of the State of
Alaska; and providing for an effective date."
- MOVED HB 3 OUT OF COMMITTEE
HOUSE BILL NO. 132
"An Act relating to the possession or distribution of alcohol in
a local option area; requiring liquor license applicants to
submit fingerprints for the purpose of conducting a criminal
history background check, and relating to the use of criminal
justice information by the Alcoholic Beverage Control Board;
providing for a review of alcohol server education courses by
the Alcoholic Beverage Control Board every two years; and
providing for an effective date."
- MOVED CSHB 132(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 158
"An Act relating to the criteria for the adoption of regulations
and to the relationship between a regulation and its enabling
statute; and providing for an effective date."
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 3
SHORT TITLE:DEPOSITS TO THE PERMANENT FUND
SPONSOR(S): REPRESENTATIVE(S)ROKEBERG
Jrn-Date Jrn-Page Action
01/08/01 0024 (H) PREFILE RELEASED 12/29/00
01/08/01 0024 (H) READ THE FIRST TIME -
REFERRALS
01/08/01 0024 (H) STA, JUD, FIN
02/28/01 0473 (H) COSPONSOR(S): MURKOWSKI,
DAVIES,
02/28/01 0473 (H) HUDSON
03/08/01 (H) STA AT 8:00 AM CAPITOL 102
03/08/01 (H) Heard & Held
03/08/01 (H) MINUTE(STA)
03/09/01 0529 (H) COSPONSOR(S): STEVENS
03/13/01 0558 (H) STA RPT 4DP 2DNP 1NR
03/13/01 0558 (H) DP: WILSON, STEVENS, JAMES,
FATE;
03/13/01 0558 (H) DNP: CRAWFORD, COGHILL; NR:
HAYES
03/13/01 0558 (H) FN1: (REV)
03/13/01 (H) STA AT 8:00 AM CAPITOL 102
03/13/01 (H) Moved Out of Committee
03/13/01 (H) MINUTE(STA)
03/26/01 (H) JUD AT 1:00 PM CAPITOL 120
03/26/01 (H) Scheduled But Not Heard
04/02/01 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 132
SHORT TITLE:LIQUOR LICENSE APPLICANT CHECK/TRAINING
SPONSOR(S): JUDICIARY BY REQUEST
Jrn-Date Jrn-Page Action
02/19/01 0365 (H) READ THE FIRST TIME -
REFERRALS
02/19/01 0365 (H) L&C, JUD, FIN
03/16/01 (H) L&C AT 3:15 PM CAPITOL 17
03/16/01 (H) Heard & Held
MINUTE(L&C)
03/22/01 (H) L&C AT 3:15 PM CAPITOL 17
03/22/01 (H) Moved CSHB 132(L&C) Out of
Committee
MINUTE(L&C)
03/26/01 0725 (H) L&C RPT CS(L&C) 1DP 6NR
03/26/01 0726 (H) DP: ROKEBERG; NR: HALCRO,
KOTT,
03/26/01 0726 (H) CRAWFORD, HAYES, MEYER,
MURKOWSKI
03/26/01 0726 (H) FN1: ZERO(REV)
03/26/01 0726 (H) FN2: INDETERMINATE(LAW)
03/26/01 0726 (H) FN3: (COR)
03/26/01 0726 (H) FN4: (ADM)
03/30/01 (H) JUD AT 1:00 PM CAPITOL 120
03/30/01 (H) <Bill Postponed>
04/02/01 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 158
SHORT TITLE:CRITERIA FOR REGULATIONS
SPONSOR(S): REPRESENTATIVE(S)MCGUIRE
Jrn-Date Jrn-Page Action
02/28/01 0463 (H) READ THE FIRST TIME -
REFERRALS
02/28/01 0463 (H) JUD
02/28/01 0463 (H) REFERRED TO JUDICIARY
03/07/01 0501 (H) COSPONSOR(S): DYSON, FATE,
ROKEBERG
03/12/01 0553 (H) COSPONSOR(S): OGAN
03/16/01 0636 (H) COSPONSOR(S): MURKOWSKI,
WILSON
03/16/01 (H) JUD AT 1:00 PM CAPITOL 120
03/16/01 (H) <Bill Canceled>
03/22/01 0697 (H) COSPONSOR(S): LANCASTER
03/30/01 (H) JUD AT 1:00 PM CAPITOL 120
03/30/01 (H) <Bill Postponed>
04/02/01 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
HEATHER M. NOBREGA, Staff
to Representative Norman Rokeberg
House Judiciary Standing Committee
Alaska State Legislature
Capitol Building, Room 118
Juneau, Alaska 99801
POSITION STATEMENT: Presented HB 132 on behalf of the House
Judiciary Standing Committee.
DEAN J. GUANELI, Chief Assistant Attorney General
Legal Services Section-Juneau
Criminal Division
Department of Law
PO Box 110300
Juneau, Alaska 99811-0300
POSITION STATEMENT: Assisted with the presentation of HB 132
and answered questions.
DOUG GRIFFIN, Director
Alcoholic Beverage Control Board
Department of Revenue
550 West 7th Avenue, Suite 540
Anchorage, Alaska 99501-3510
POSITION STATEMENT: Assisted with the presentation of HB 132
and answered questions.
KACE McDOWELL
Cabaret Hotel Restaurant & Retailers Association (CHARR)
1111 East 80th Avenue
Anchorage, Alaska 99518
POSITION STATEMENT: Testified on Amendment 2 to CSHB 132(L&C).
ALVIA "STEVE" DUNNAGAN, Lieutenant
Division of Alaska State Troopers
Department of Public Safety
5700 East Tudor Road
Anchorage, Alaska 99507
POSITION STATEMENT: Testified in support of HB 132.
BLAIR McCUNE, Deputy Director
Public Defender Agency
Department of Administration
900 West Fifth Avenue, Suite 200
Anchorage, Alaska 99501-2090
POSITION STATEMENT: Testified on CSHB 132(L&C); urged caution
regarding Amendment 1 and answered questions.
REPRESENTATIVE LESIL McGUIRE
Alaska State Legislature
Capitol Building, Room 418
Juneau, Alaska 99801
POSITION STATEMENT: Sponsor of HB 158.
DEBORAH BEHR, Assistant Attorney General
Legislation and Regulations Section
Civil Division (Juneau)
Department of Law (DOL)
PO Box 110300
Juneau, Alaska 99811-0300
POSITION STATEMENT: During discussion of HB 158, provided
comments on the regulations process and offered assistance in
investigating ways to amend the current process.
ROBERT B. STILES, President
Resource Development Council for Alaska, Inc.
121 West Fireweed Lane, Suite 250
Anchorage, Alaska 99503
POSITION STATEMENT: During discussion of HB 158, gave examples
of problems with HB 158.
JANICE ADAIR, Director
Division of Environmental Health
Department of Environmental Conservation (DEC)
555 Cordova Street
Anchorage, Alaska 99501
POSITION STATEMENT: During discussion of HB 158, answered
questions.
ACTION NARRATIVE
TAPE 01-52, SIDE A
Number 0001
CHAIR NORMAN ROKEBERG called the House Judiciary Standing
Committee meeting to order at 1:12 p.m. Representatives
Rokeberg, James, Coghill, Meyer, and Berkowitz were present at
the call to order. Representative Kookesh arrived as the
meeting was in progress.
HB 3 - DEPOSITS TO THE PERMANENT FUND
Number 0068
CHAIR ROKEBERG announced that the first order of business would
be HOUSE BILL NO. 3, "An Act relating to deposits to the Alaska
permanent fund from mineral lease rentals, royalties, royalty
sale proceeds, net profit shares under AS 38.05.180(f) and (g),
federal mineral revenue sharing payments received by the state
from mineral leases, and bonuses received by the state from
mineral leases, and limiting deposits from those sources to the
25 percent required under art. IX, sec. 15, Constitution of the
State of Alaska; and providing for an effective date."
CHAIR ROKEBERG, as the sponsor, explained that current statute
provides that revenues from mineral leases, bonuses, and federal
leases entered into after January 1980 be deposited into the
corpus of the permanent fund at a 50 percent level versus the
constitutionally mandated level of 25 percent. He said that HB
3 simply reverts to the 25 percent constitutional mandate. He
also explained that the general fund (GF) budget in fiscal year
(FY) 1980 was in excess of $4.07 billion, which he said is
almost twice the present amount. He said that although the
current statute was appropriately enacted at the time to direct
a greater amount of mineral royalties from newer leases into the
permanent fund, it is now time to repeal that statute because of
the diminishing amount of GF revenue and the increased pressure
to draw on the Constitutional Budget Reserve (CBR) in order to
balance the budget. He added that fields such as Alpine,
Badami, Northstar, Meltwater [Participation Area], Tarn,
Liberty, and others - as well as any new future developments -
currently all fall under the 50 percent allocation scheme.
CHAIR ROKEBERG mentioned that the handouts from Legislative
Research illustrate revenue changes, and he also remarked that
based on the "fall forecast," the fiscal note from the
Department of Revenue (DOR) reflects an increase of $40 million
for FY 2002, $43.7 million for FY 2003, $40.2 million for FY
2004, $38.6 for FY 2005, $27.2 million for FY 2006, [and $24.9
million for FY 2007]. He also mentioned that the DOR has
submitted charts showing historic and projected income and
production information. He surmised from one of the charts that
although production from the older fields is declining,
production from the new fields is allowing the total production
levels to stay relatively the same through the year 2009.
CHAIR ROKEBERG mentioned again that HB 3 would replace the
current 50 percent allocation level with a 25 percent allocation
level. He also noted that the Alaska State Chamber of Commerce
has submitted a letter of support of HB 3. He offered that HB 3
is the first step in any long-range financial plan that the
state develops. He added that the impact of HB 3 on the
permanent fund dividend (PFD) is de minimis because of the
"five-year averaging," and will not be felt until 2006,
according to a analysis by the Alaska Permanent Fund
Corporation; at that time there will only be a $10 decrease. He
also pointed out that the PFD is estimated to go up in future
years [beginning in 2007], which suggests that the vagaries of
the market are more important than any potential impact of HB 3.
He estimated that with the adoption of HB 3, the state, over the
next five years, will be able refrain from drawing between $175
million and $200 million in additional funds from the CBR to
balance the budget. He also offered that HB 3 will enable [the
legislature] to avoid any future taxation for the aforementioned
amount.
Number 0632
REPRESENTATIVE BERKOWITZ offered the criticism that [the
legislature] can already do what is proposed in HB 3; the
legislature can appropriate money from the "earnings reserve"
with a 21-member vote. On the more generic question of what is
the best overall approach to managing "our" assets, he said that
money in the permanent fund "does better" than money in the GF.
He reported that money in the permanent fund has approximately
an 8 percent return, if not more, as compared to 4 percent while
in the GF. By looking at this income as fungible money, there
is a difference between whether it's "parked" in the GF or it's
parked in the earnings reserve. He said that there is a good
argument that [the legislature] could simply appropriate this
extra 25 percent from the earnings reserve of the permanent
fund, now, and that there is no need to divert that "stream"
from the permanent fund to the general fund. He added that
although the aforementioned was a good academic argument, there
are political realities to consider regarding the objective of
HB 3.
CHAIR ROKEBERG offered the rejoinder that current statute
requires that the additional monies be deposited into the
corpus, or principal, of the permanent fund, instead of the
earnings reserve. He opined that Representative Berkowitz's
theory presupposes generation of earnings, which historically
has occurred, but current market fluctuations make results more
suspect for the coming year[s]. But for the amounts from the
larger bond and real estate portfolio, [the legislature] is in
the situation of realizing substantially less growth in those
earnings. He remarked again that statute dictates additional
monies go to the principal, and that because neither the
legislature nor the people have agreed upon the expenditure of
any funds for GF purposes from the earnings reserve, on a cash-
flow basis, that money is "dead money."
REPRESENTATIVE BERKOWITZ countered that according to his
recollection, the money does not go straight to the corpus; [the
legislature] appropriates it to the corpus.
CHAIR ROKEBERG responded that the money goes straight to the
corpus.
Number 0818
REPRESENTATIVE JAMES agreed that the money goes directly into
the corpus of the permanent fund. Although she understood
Representative Berkowitz's presentation, she said that there is
a difference between having money available and having only the
interest income of the money available. She said that the same
argument could be given that [the legislature], with 21 votes,
could take the estimated $40 million and use it in the budget
now; in fact, with 21 votes, [the legislature] could take enough
money out of the earnings reserve to avoid taking any money at
all out of the CBR. The legislature has not decided to do this,
however, because it does not have a long-term plan. She added
that all of these decisions - how "we" deal with the earnings
reserve, deal with the PFD, deal with the CBR, and get enough
money to keep from having less income than is spent - is part of
a long-range plan.
REPRESENTATIVE JAMES explained that she has often said that she
would not be voting for a part [of the plan] until she sees the
whole thing; however, she added, HB 3 is the one exception
because it makes a lot of sense to her. She also said that
another item to carefully consider with regard to the long-term
plan is how government spending is tending to far exceed income,
and she voiced the concern that at the current rate of growth,
the state may not be able to maintain a PFD for its citizens nor
be able to tax its citizens enough to pay for needed services.
She said again that HB 3 makes sense, particularly now that the
state doesn't have enough money; although it was a good idea
when the state had extra money, the extra [25 percent should no
longer be placed into the corpus of the permanent fund]. She
concluded by saying that she supported HB 3.
REPRESENTATIVE COGHILL said that [excessive] government spending
is one of the reasons he voted not to report HB 3 out of the
House State Affairs Standing Committee. He did, however,
acknowledge that the money would probably gain more if it were
in the permanent fund, and that having it in the permanent fund
was perhaps a better way of making use of that money. He also
said that there is no doubt that [the GF] budget is "hungry" for
more money because of all the federal mandates and social
programs that are being created but not scrutinized. He opined
that another $40 million is not going to satisfy those needs.
He said that although he is not in favor of HB 3, he will not
vote to stop it.
Number 1025
CHAIR ROKEBERG said that although he understood some of
Representative Coghill's concerns, he did not understand all of
them, even though he considered himself to be extremely fiscally
conservative and to be a major voice for the private sector. He
said he believes that maintaining a higher balance in the CBR,
by funding over 50 percent of the $75 million increase in the FY
2002 GF budget, is responsible cash-flow management. He said
that HB 3 is a prudent and immediate step that the legislature
can take and which [could] be in effect by July 1. He added
that funds from any future fields that come online at a 50
percent level would not replace the diminution of funds from
current fields that are at the 25 percent level. He suggested
that "all we're doing, is replacing [them] on a cash-flow
basis."
REPRESENTATIVE COGHILL said that is one of the reasons why he
will not hold HB 3 up, but he added that he thinks there has to
be continuing discussion on the fact that "we are a lot bigger
than we can afford."
REPRESENTATIVE JAMES said:
In the whole scheme of economics, I think we do need a
lesson on this issue ... that the only way that we can
ever pay for our needs in this state is to have more
economic activity. And the only way we're going to
get some more economic activity is to spend some money
in the areas where you can create some. We, as a
state, own everything in this state; so that means
that it's not out there for the picking without us
spending some money to get it picked. [The Department
of Natural Resources (DNR), Department of
Environmental Conservation (DEC), and Department of
Fish and Game (ADF&G)] are some of the areas that
we're being pretty skimpy on right now, and so we're
discouraging any kind of economic activity.
The second reason why we're discouraging economic
activity is because we have a hole in our budget:
we're spending more money than we're taking in. And
until we change that, people are going to be hesitant
to bring money into this state because they know that
if we are going to tax anybody, we're going to tax the
business, because we have a society who wants to pay
nothing for anything - they just want things but don't
want to pay.
So, I agree with the representative from my
neighboring district that we certainly have to be
cautious, and I am very distressed about the amount of
money that we're spending this year because we haven't
got any overall plan as to how we're going to get
there; it doesn't even do us any good to get some new
economic activity if we don't have some way of tapping
into that with, like, a broad-based tax that will help
us to fund schools, and roads, and police, and all
those kinds of things that we'll need more of when we
have more people. So I think that we really do need
to have a lesson in economics, and maybe I could put
on a workshop one of these days on this, Mr. Chairman,
so that we can understand how we're going to get there
- to be prudent and still make enough money to survive
over the long term.
Number 1231
REPRESENTATIVE JAMES moved to report HB 3 out of committee with
individual recommendations and the accompanying fiscal note.
There being no objection, HB 3 was reported from the House
Judiciary Standing Committee.
REPRESENTATIVE JAMES further commented that the only way to
really cut the budget, with regard to the way [Representative
Coghill] wishes, is to be sure that every able-bodied person in
this state has a good-paying job, and then there will not be a
need for all of those social services that [the legislature] is
paying for.
REPRESENTATIVE BERKOWITZ noted that [the legislature] has been
cutting the budget and scrutinizing programs for a long stretch.
In response to a question, he said that he has sat through
plenty of budget debates, and he did not notice anyone coming
forward with amendments to eliminate programs in their entirety;
he did not notice those discussions as really being part of the
conversation. He said he has heard a lot of people say that
[the state] has too many programs; that there are a lot of
things going on that folks really don't want; and that if [the
legislature] looked just a little bit more closely, it would
find items in the budget it could do away with. He said,
however, that he was still waiting for people to be more
concrete with those proposals.
REPRESENTATIVE COGHILL said he appreciated those comments
because he has spent a lot of time looking in order to come up
with some proposals. He added that there are a lot of federal
dollars driving many budget items, and that it is going to take
some fortitude to deal with them.
REPRESENTATIVE BERKOWITZ remarked that "when those federal
dollars dry up ... in the next couple of years, we're going to
see what kind of hole we're really in."
CHAIR ROKEBERG commented that at the [Fiscal Policy Caucus],
Commissioner Condon gave a presentation of the fall forecast.
He said the presentation reflected a potential for a shrinkage
of the state's domestic product - or the overall economy - if
the state were to use various forms of taxation as opposed to
using money from the earnings reserve account, which is
currently in portfolios outside the state. He added that the
irony of this is that [the legislature] is much better off using
earnings reserve moneys rather than taxing, which is a fiscal
policy that has a negative impact on the economy. He said that
HB 3 avoids the issues surrounding taxation and the use of the
earnings reserve, and is one small step towards saving money.
REPRESENTATIVE JAMES added that [adopting HB 3] is the prudent
thing to do.
[HB 3 was reported from the House Judiciary Standing Committee.]
HB 132 - LIQUOR LICENSE APPLICANT CHECK/TRAINING
Number 1440
CHAIR ROKEBERG announced that the next order of business would
be HOUSE BILL NO. 132, "An Act relating to the possession or
distribution of alcohol in a local option area; requiring liquor
license applicants to submit fingerprints for the purpose of
conducting a criminal history background check, and relating to
the use of criminal justice information by the Alcoholic
Beverage Control Board; providing for a review of alcohol server
education courses by the Alcoholic Beverage Control Board every
two years; and providing for an effective date." [Before the
committee was CSHB 132(L&C).]
Number 1463
HEATHER M. NOBREGA, Staff to Representative Norman Rokeberg,
House Judiciary Standing Committee, Alaska State Legislature,
presented HB 132 on behalf of the committee. She explained that
HB 132 did three things with regard to bootlegging. For the
application of the presumption that a person possesses alcohol
with the intent to sell it, HB 132 decreases, by half, the
amount of distilled spirits that a person may possess in [an
alcohol-]restricted community. Also, HB 132 reduces, by half,
the amount of distilled spirits that a package store may send
any given person in an alcohol-restricted community during a
calendar month. Finally, HB 132 changes the penalty for the
illegal sale or transportation of alcohol to a local option
community by reducing, by half, the amount of distilled spirits
illegally sent to a community that results in a class A
misdemeanor or a class C felony.
MS. NOBREGA also explained that another provision of HB 132
applies to the Alcoholic Beverage Control (ABC) Board, and
requires fingerprinting of liquor license applicants for the
purpose of submitting the fingerprints to the Federal Bureau of
Investigation (FBI) for a national criminal history background
check. Currently, all that is allowed by law is an in-state
background check, and in order to seek background information
nationwide, the FBI requires direct statutory authority. Last,
Ms. Nobrega explained there is a provision in HB 132 that
requires the ABC Board to review the alcohol server education
course every two years, instead of every three years.
Number 1558
REPRESENTATIVE KOOKESH commented that it is not so much an issue
of the amount of alcohol that people can ship into a "dry"
community; instead, it is an issue of prosecution. He said that
he knew of people in his community who have been caught shipping
in alcohol for sale, but they never seem to be prosecuted. He
added that while he supports the concept [of HB 132] and it
looks good on paper, without the funds for the state to follow
through on prosecutions, nothing, in reality, is being done
[about the problem of bootlegging].
Number 1604
REPRESENTATIVE JAMES offered that the amounts allowed into a dry
community - less than 6 liters of distilled spirits, 24 liters
of wine, or 12 gallons of malt beverages - still seemed to her
to be a lot.
CHAIR ROKEBERG explained that it is four cases of beer and two
cases of wine, which is not a lot of alcohol for a month's
period of time.
REPRESENTATIVE JAMES countered that it is a lot; she asked if
this amount is for just one person's consumption.
CHAIR ROKEBERG explained that for the purpose of HB 132, it is
the possession [of that amount] that [results in the
presumption] of a violation. He noted that the same
conversation took place in the House Labor and Commerce Standing
Committee.
Number 1656
DEAN J. GUANELI, Chief Assistant Attorney General, Legal
Services Section-Juneau, Criminal Division, Department of Law
(DOL), noted that the DOL was in support of HB 132. He went on
to explain that the presumptive level of possession in HB 132
only applies in those municipalities that have banned the sale
of alcohol, but have not banned the importation or possession of
alcohol. Thus it is a question of how much alcohol a person can
have in those areas before the DOL starts to presume that he or
she is actually going to sell it. In areas that have banned
possession [of alcohol], the amounts listed in HB 132 do not
apply; the possession of any amount of alcohol is a violation.
He noted that the recommendation [to lower the possession
limits] was made by the Criminal Justice Assessment Commission
(CJAC), which is a multi-agency commission that has met for the
last couple of years, and of which Representatives Berkowitz and
Mulder are members.
MR. GUANELI said he tended to agree with the point made by
Representative Kookesh: the resources available for the
investigation and prosecution of these cases are limited. He
added, however, that a lot has changed in that regard in just
the last month or so. Through U.S. Senator Stevens' office, the
Department of Public Safety (DPS) was given a federal grant of
approximately $1.5 million, and this money will provide several
additional state trooper investigators, as well as additional
prosecutors. He explained that the enforcement emphasis over
the last several of years has been focused on the point when the
liquor is already in the village and a sale is taking place.
Those cases were very difficult to investigate and prosecute
because it was hard to find informants who could go into the
villages and buy the liquor once it was already there. He added
that more recently, particularly now that the state troopers
have more resources, the focus [of investigation and
prosecution] has shifted to the places where liquor is sold and
shipped into the villages, which means, largely, places in
Anchorage. He noted that [the DOL and DPS] are getting better
cooperation from the United States Postal Service (USPS) in
stopping shipments, as well as getting continued good
cooperation from the airlines and package stores.
Number 1794
MR. GUANELI said that a point relayed to him by prosecutors was
that when the USPS (or other carrier) prevents alcohol from
going to a dry village, the most the DOL can prosecute the
sender for is an "attempt" to send alcohol. Thus crimes that
would otherwise by prosecuted as felonies, had the alcohol
actually arrived at the dry village, are dropped down to a
misdemeanor level. He added that felony prosecution of
bootlegging is important in that it allows more sentencing
options to the court and provides that offenders be placed under
probation. For this reason, the DOL would find it helpful if
the laws relating to bootlegging were structured similarly to
laws relating to narcotic offenses, whereby the attempt to send
or transport alcohol to a dry village can be prosecuted at the
same level as the prosecution of someone who successfully got
alcohol to that location. To this end, Mr. Guaneli provided the
committee with proposed Amendment 1, which reads as follows
[original punctuation provided]:
*Sec. ____. AS 04.11.499 is amended to read:
Sec. 04.11.499. Prohibition of importation after
election. (a) If a majority of the voters vote to
prohibit the importation of alcoholic beverages under
AS 04.11.491(a)(4) or (5) or (b)(3) or (4), a person,
beginning on the first day of the month following
certification of the results of the election, may not
knowingly send, transport, or bring an alcoholic
beverage into the municipality or established village,
unless the alcoholic beverage is sacramental wine to
be used for bona fide religious purposes based on
tenets or teachings of a church or religious body, is
limited in quantity to the amount necessary for
religious purposes, and is dispensed only for
religious purposes by a person authorized by the
church or religious body to dispense the sacramental
wine.
(b) In this section,
(1) "bring" means to carry or convey, or to
attempt or solicit to carry or convey;
(2) "send" means to cause to be taken or
distributed, or to attempt or solicit to cause
to be taken or distributed, and includes use of
the United States Post Office;
(3) "transport" means to ship by any method, and
includes delivering or transferring or attempting
or soliciting to deliver or transfer an alcoholic
beverage to any person or entity to be shipped
to, delivered to, or left or held for pick up by,
any person or entity.
*Sec. ____. AS 04.16.125(c) is amended to read:
(c) In this section,
(1) "common carrier" means a motor vehicle,
watercraft, aircraft, or railroad car available for
public hire to transport freight or passengers;
(2) "transport" has the meaning given in AS
04.11.499.
Delete Section 4 of the bill and replace it with:
*Sec. 4. AS 04.16.200(e) is amended to read:
(e) A person who sends, transports, or brings
alcoholic beverages into a municipality or established
village in violation of AS 04.11.499 is, upon
conviction,
(1) guilty of a class A misdemeanor if the quantity
of alcoholic beverages [IMPORTED] is less than 6 [12]
liters of distilled spirits, 24 liters of wine, or 12
gallons of malt beverages; or
(2) guilty of a class C felony if the quantity of
alcoholic beverages [IMPORTED] is 6 [12] liters or
more of distilled spirits, 24 liters or more of wine,
or 12 gallons or more of malt beverages.
MR. GUANELI explained that proposed Amendment 1 would give
definition to certain words in current law in order that an
attempt to violate the law can be prosecuted at the same level
as an actual violation of the law.
Number 1884
REPRESENTATIVE JAMES, returning to the topic of amounts listed
in HB 132 as they pertain to personal consumption, called those
amounts absurd.
CHAIR ROKEBERG reminded Representative James that those amounts
are for presumption of possession and/or shipment; thus records
could be kept of someone shipping those amounts during a
calendar month. He maintained that two cases of wine and four
cases of beer is not a large amount. He used the example of a
hunting party in a rural area taking four cases of beer with
them, which he said was not at all unusual.
REPRESENTATIVE JAMES responded that she understood the concept
of presumptive possession, but she countered that people should
not take alcohol on hunting trips.
Number 1920
MR. GUANELI added that the House Labor and Commerce Standing
Committee had considerable discussion on this same topic. The
ultimate decision was that the presumptive level of "hard
liquor" (distilled spirits) needed to be cut in half.
Generally, wine and beer are not being bootlegged; the big
profit was being made selling hard liquor.
CHAIR ROKEBERG noted that he had heard that a bottle of vodka
can sell for $75-80/quart.
REPRESENTATIVE KOOKESH interjected that that price was cheap; he
had heard of a "fifth" [of hard liquor] selling for that price.
MR. GUANELI added that that was the typical price, but in some
remote locations the price is considerably higher. On a case of
hard liquor, the profit is easily several hundred dollars, or
$1,000/case.
REPRESENTATIVE JAMES asked why it is currently allowable to
bring in 6 [liters] without [reaching the presumptive level].
Number 1996
REPRESENTATIVE BERKOWITZ noted that it was a misdemeanor versus
a felony.
CHAIR ROKEBERG requested clarification.
MR. GUANELI explained that in areas that have banned sale but
not importation or possession [of alcohol], the offense is to
sell. House Bill 132 establishes the presumptive level if
someone is selling. In reality, there is no limit to the amount
a person may possess in those areas where possession is not
illegal, but at some point, if the amount a person possesses is
large enough, [DOL/DPS] is going to presume the alcohol is being
sold. He added that current law already has distinctions
regarding large/small amounts [of alcohol].
Number 2057
MR. GUANELI, returning to the topic of proposed Amendment 1,
said that the accompanying handout presented common examples of
scenarios that occur in bootlegging situations. In these
examples, under current law, if an attempt to transport large
amounts into a local option area fails, the crime drops from a
class C felony to a class A misdemeanor. He went on to explain
that proposed Amendment 1 would define terms so that bootleggers
would still face the higher charge even if their attempt to
commit the crime failed. Specifically, the terms of "send",
"transport", and "bring" would be further defined to include
"attempting" and "soliciting". He also explained that the
current definition of "attempt" means that a person with intent
to do something takes a substantial step towards its commission.
He added that [with proposed Amendment 1] the DOL has covered
the gamut of situations that arise in bootlegging scenarios.
Also, he said that proposed Amendment 1 would solve the
practical day-to-day problems noted by prosecutors, and would
help solve some of the kinds of problems broached by
Representative Kookesh with regard to prosecution.
MR. GUANELI clarified for Representative Rokeberg that the
handout pertained to current law; because current law with
regard to the terms of "send", "transport", and "bring" does not
automatically include an "attempt", it must be specified [via
proposed Amendment 1] that "attempt" is included. He added that
current definitions in both narcotics and robbery laws include
"attempt".
CHAIR ROKEBERG followed up this explanation by saying that law
enforcement officials could then pursue a conviction rather than
just settling for confiscation of the contraband. Chair
Rokeberg asked Representative Kookesh what the price of vodka
was in Angoon, which is a dry village.
Number 2285
REPRESENTATIVE KOOKESH responded that it was $60/fifth of vodka
and $60/"half-rack" of beer. He added that a joke going around
Angoon goes like this: "Do you know why you call a quart of
alcohol a fifth in Angoon? Because there are only five drinks
in it." He said this by way of explaining that in [dry
villages], if a person is going to drink from a bottle in a
group, that person tries to drink as much possible right then
because the bottle won't come back around. This practice was a
deciding factor in the decision made by residents to vote Angoon
dry, but it has not helped because bootlegging is a thriving
business in rural Alaska.
CHAIR ROKEBERG expressed the concern that as more pressure is
put on bootleggers, the procurement of drugs, as opposed to
alcohol, will become more prevalent. He said that it was his
understanding that drugs, even "harder" drugs, were becoming
more available throughout the state, even in small villages. He
said he worried that the cost of buying drugs would become
cheaper than buying bootlegged alcohol, thus shifting the
problem from alcohol to drugs.
Number 2378
MR. GUANELI said that shifting to some additional drug use was a
possibility. He noted that whenever someone is addicted to
controlled substances of any kind, that person will have the
desire to feed that addiction with something else [if the
person's drug of choice becomes unavailable]. He added that he
did not know the extent to which people addicted to alcohol will
resort to another type of drug, but an increase in drug use in
rural villages is occurring, although drugs are not as readily
available. Mr. Guaneli mentioned that there might be an
increase in the manufacture of homebrew, but he said the focus
should be on trying to cut down both the easy access of
bootlegged alcohol as well as the profits bootleggers make,
while increasing the penalties that bootleggers are subject to.
CHAIR ROKEBERG commented that he thought interdiction would
raise prices and profits [of bootlegged alcohol].
Number 2441
REPRESENTATIVE KOOKESH added that he had close friends who had
quit drinking but had substituted marijuana use in its place.
REPRESENTATIVE BERKOWITZ asked if [the penalty] of forfeiture
had been used much in the area [of bootlegging]; under AS
04.16.220, aircraft, vehicles, or vessels used to transport or
facilitate transportation [of bootlegged alcohol] are subject to
forfeiture.
MR. GUANELI responded that there are a lot of appropriate uses
for forfeiture and this is one of them. He added that
forfeiture in this instance would be distinct from forfeiture of
a vehicle under the DWI laws. He also added, however, that it
was his belief that most [bootlegged] liquor comes in through
Alaska Airlines or some other commercial carrier.
TAPE 01-52, SIDE B
Number 2484
MR. GUANELI continued by saying that when people use the USPS or
Alaska Airlines to transport contraband, the DOL does not take
action against those entities or other commercial carriers.
CHAIR ROKEBERG announced that proposed Amendment 1 would be set
aside until the rest of the testimony was heard.
Number 2420
DOUG GRIFFIN, Director, Alcoholic Beverage Control (ABC) Board,
Department of Revenue, testified via teleconference and said
that Section 3 of HB 132 is an expansion of the ABC Board's
current practice of conducting criminal background checks on
liquor license applicants. He noted that currently [background
checks] are done just as a "pass though" from the ABC Board to
the DPS; the checks are conducted, as required by state law,
based on fingerprints, which gives a greater certainty that
applicants are who they say they are. He said, however, that
the ABC Board feels it would be in the public's best interest to
expand and take into account today's more mobile society. He
likened a more thorough background check to an ounce of
prevention, so that when the ABC Board makes its determination
on an applicant, it will have a nationwide criminal history
[databank] at its disposal. To this end, federal law requires
statutory authorization of the ABC Board to conduct nationwide
background checks using the FBI databank. Mr. Griffin added
that the cost of going after a "bad licensee" is in the tens of
thousands of dollars, whereas not licensing that person to begin
with would be more fiscally prudent. He noted that Linda
Kesterson and Bill Roche were available at his office for
questions.
REPRESENTATIVE JAMES said she assumed that there was a charge
for getting the FBI report, and she asked if the application fee
would be increased to include that cost.
Number 2293
MR. GRIFFIN answered that the additional cost of $20-25 would be
borne by the applicant, and that the report would take perhaps
an additional ten business days to arrive. And while he
acknowledged that "time is money" and is a point of concern with
some applicants, he said that the ABC Board feels that extra
time spent is well worth it in order to have the more thorough
background check conducted.
Number 2270
CHAIR ROKEBERG commented that Mr. Griffin's testimony in the
House Labor and Commerce Standing Committee indicated that some
of the more thorough investigations conducted by the ABC Board
have revealed applicants with stateside criminal records, and
this information would not have shown up under the current
background check procedures.
MR. GRIFFIN confirmed that that was an anecdotal example of why
the ABC Board wanted to begin doing the more thorough background
checks as a matter of course. He added that the ABC Board has
no way of knowing how many current licensees would not have been
issued licenses to begin with, because a more thorough
background check would have revealed a criminal history. He
also said, however, that the ABC Board, when considering an
applicant's criminal history, treats every licensing question on
a case-by-case basis; just because an applicant has a criminal
history does not mean an automatic veto [of the application].
He said that in the case he was familiar with, a person from
California was convicted of selling alcohol without a license,
kidnapping for profit, and a couple of other serious charges.
He said that that information came to the ABC Board
serendipitously because that individual was employed by the
Anchorage Police Department as an informant.
Number 2188
REPRESENTATIVE COGHILL asked what kind of response is given to
the applicant once the background check is completed.
MR. GRIFFIN explained that if something comes up during the
background check, the ABC Board meets with the applicant in
executive session to discuss the incidents surrounding the
conviction(s), and every possible step is taken to ensure the
applicant's privacy. He added that based on the applicants
criminal background, the ABC Board can deny the license
transfer, put conditions on the transfer, or require additional
background checks on a frequent basis. The ABC Board is not
limited to just denying the license.
REPRESENTATIVE COGHILL noted that he'd asked the question
because he wanted to know that the applicant could take part in
the discussion with the ABC Board if a criminal history check
warranted further scrutiny.
Number 2102
CHAIR ROKEBERG asked if the ABC Board had any objections to
proposed Amendment 2, which removes Section 5 of HB 132 and
reads as follows [original punctuation provided]:
Page 1, Line 4, after "Board;"
Delete:
providing for a review of alcohol server
education courses by the Alcoholic Beverage
Control Board every two years;
Page 3
Delete lines 4 through 6
Renumber remaining section accordingly.
CHAIR ROKEBERG further explained that proposed Amendment 2 would
remove from HB 132 language that instructs the ABC Board to
review the TAM [Techniques of Alcohol Management] course every
two years instead of every three years.
REPRESENTATIVE BERKOWITZ asked why that language was in HB 132
to begin with.
CHAIR ROKEBERG responded that he thought inclusion of that
language was a mistake.
Number 2079
REPRESENTATIVE JAMES asked if the language in Section 5 meant
that the TAM course would be redesigned every two years instead
of every three, or if it meant that the TAM course would be
given every two years instead of every three years. She was
concerned that if the latter, there might be people wanting to
take the course sooner than once every three years.
MR. GRIFFIN explained that the ABC Board simply certifies any
alcohol server training courses offered to ensure that they
include the list of items required by Alaska law. Many of the
courses are offered nationwide by associations in the
hospitality industry, and the list of items that must be
included in those courses is customized to fit Alaska law.
Thus, Section 5 simply said that the ABC Board would review
those courses every two years instead of every three years. The
purpose of the review was to ensure that the courses that are
offered stay current with Alaska law. With regard to the
question of how often alcohol server training courses are
offered, he said that some courses in the Anchorage area are
offered on a weekly basis, and perhaps a little less frequently
in other urban areas. He added that a challenge has been to
offer training in more remote areas of Alaska, although the
courses are not a responsibility of the state but are provided
by different organizations. Again, he said Section 5 would
simply require that the courses offered would be reviewed more
frequently than they presently are. He added that the ABC Board
did not have any strong feelings, one way or the other, about
that change. Doing the review every two years would require
more work on the part of the ABC Board, but anything that can be
done in the area of prevention is considered time well spent.
Number 1962
CHAIR ROKEBERG said that he had put Section 5 in HB 132 to
ensure that the alcohol server training courses are updated by a
review of the ABC Board to include changes made by HB 132, but
upon further reflection he'd determined that perhaps the
statutory change would not really be worth the effort that the
ABC Board would expend to enact Section 5.
REPRESENTATIVE BERKOWITZ referred to a recommendation by the
Criminal Justice Assessment Commission (CJAC) to remove a
statutory cap and increase wholesale license fees in order to
fund increased enforcement of Title 4 actions. He asked Mr.
Griffin for his thoughts on that recommendation.
MR. GRIFFIN said that the ABC Board did not have a position on
that recommendation. He added that he thought the topic was
somewhat along the lines of other discussions regarding alcohol
taxes, which could be used to generate additional revenue so
that additional alcohol-specific enforcement could be funded.
He acknowledged that the ABC Board did have limited resources;
there were three investigators and supervisors servicing the
entire state, and the ABC Board is spread very thin. He said
that he thought that the ABC Board could do more to assist law
enforcement, both local and statewide, if more resources were
available. He also said that he thought CJAC was approaching
the issue from the point of trying to provide a funding source,
rather than just demanding more enforcement; to that end, CJAC
had recommended an increase in the wholesale license fees.
Number 1832
KACE McDOWELL, Cabaret Hotel Restaurant & Retailers Association
(CHARR), testified via teleconference, first affirming for Chair
Rokeberg that she had heard his comments about the proposed
amendment [Amendment 2] to remove the "TAM [Techniques in
Alcohol Management] stuff." She then reported that CHARR, like
the ABC board, has no strong feelings either way about this.
She added, "If the ABC board wants to review our product every
two years, we'll certainly have it available for them." Noting
that it would be more work for the ABC Board than for CHARR, she
deferred to the board in that regard. In response to a further
question from Chair Rokeberg, she indicated CHARR had just come
up with a new program, with the TAM program, and therefore
already had submitted its information during the three-year
process.
Number 1800
CHAIR ROKEBERG asked Mr. Griffin whether, if there is a change
in the curriculum, there is a requirement to submit it to the
board anyway.
MR. GRIFFIN answered yes, if it is a substantial enough change.
In the case of the TAM course that CHARR offers, it was a "stem-
to-stern" revision; although the information was the same,
[CHARR] took an approach that was different enough that [CHARR]
wanted to make sure it also would meet the requirements set
forth in regulations.
CHAIR ROKEBERG suggested the provision is a bit redundant, then.
Number 1731
ALVIA "STEVE" DUNNAGAN, Lieutenant, Division of Alaska State
Troopers, Department of Public Safety (DPS), testified via
teleconference. He specified that DPS supports the bill in an
effort to give the department some better devices in order to
try to control bootlegging and alcohol-related problems in
Alaska. He said he hadn't seen Mr. Guaneli's amendment, but
just listening to it, he believed it to be extremely positive
from an enforcement aspect; he agreed that many times there are
cases in which only a misdemeanor can be charged, although the
offense is really a felony offense.
LIEUTENANT DUNNAGAN called attention to Chair Rokeberg's
question regarding whether another market is being created for
illegal substances. Lieutenant Dunnagan explained that illegal
substances are being used more in rural Alaska than before,
which he surmised to be generational. Furthermore, it is
expensive. In Fairbanks or Anchorage, a person can buy an ounce
of marijuana for about $280; to get it out to the villages,
however, it is made into joints that contain one-eighth of a
gram, and the price rises to $2,000 for the person who sells
marijuana in the Bush. He questioned the concept that an
increased emphasis on alcohol will increase the use of
marijuana.
Number 1634
CHAIR ROKEBERG said this is so ironic: The areas that [the
legislature] wants to protect, where there is little cash, have
the biggest crises in this regard. He then noted that an e-mail
received from Lieutenant Dunnagan on March 24 indicated 585.7
gallons of illegal alcohol were seized in the year 2000, and
that with five new troopers, the hope is to increase that by 20-
30 percent. He commented, "I hope you do better than that."
LIEUTENANT DUNNAGAN replied that he believes 25-30 [percent] is
very conservative; he expressed the hope of doing far better.
Number 1570
BLAIR McCUNE, Deputy Director, Public Defender Agency,
Department of Administration, testified via teleconference,
noting that he hadn't seen Mr. Guaneli's proposed amendment
[Amendment 1] either. He suggested the committee may want to
consider that local-option laws making the importation of
alcohol illegal are done by elections; what is in the mind of
the voters at the time of the election, with regard to what is
legal or illegal relating to importation of alcohol, is a pretty
important point. He asked: If the definition is changed, how
does that affect the election that resulted in the illegality?
CHAIR ROKEBERG responded that the substance of the amendment
"makes attempting to do so the criminal equivalent." He said
that is the only substantive difference, and he believes the
rest is just clarifying language.
MR. McCUNE replied that the law that makes it illegal, [AS]
04.11.499, says following certification of the results of the
election, "may not knowingly send, transport, or bring an
alcoholic beverage into the municipality or established
village", followed by some exceptions regarding sacramental wine
and so forth. He said that issue should be looked at carefully,
as far as the amendment is concerned. He urged caution because
of possible unintended consequences.
MR. McCUNE addressed Representative James' point that this is a
lot of alcohol. He noted that people who come into Anchorage
perhaps twice a year may use that opportunity to bring back
alcohol [to a village], where it lasts for several months. He
pointed out how expensive it is to ship alcohol by air freight,
and suggested that if people cannot bring much in, they may
rethink the wisdom or propriety of having their villages ban
importation. He noted that the elections often are decided by
just a few votes; in Barrow, for example, the community went
"dry," but at a later election decided the opposite by a little
more than half [the votes]. He suggested that villages
shouldn't be pushed out of the more restrictive situation by
making the laws too harsh.
Number 1350
CHAIR ROKEBERG commented that there is still a "more modest
fiscal note."
MR. McCUNE responded that as Mr. Guaneli and Lieutenant Dunnagan
had expressed, the Public Defender Agency, without any part of
this funding, is "standing on the tracks looking at a train
coming at us." He said he had tried to moderate the fiscal note
to the policy of this bill. He commented:
Mr. Chairman, you asked us to check on whether we
could get some of those funds, and I've talked to
David Koivuniemi ... and Dan Spencer in the Department
of Administration, and they were checking with the
Department of Public Safety and OMB [Office of
Management and Budget] about that. But I don't think
we've got the final word, but I think that this is
all, as of now, in the governor's amended budget. And
I don't know what could be changed here, right now,
but we're looking into that as well.
Number 1286
REPRESENTATIVE JAMES noted that the Public Defender Agency
represents people without any money to speak of, and that Mr.
McCune is talking about "not wanting to push the envelope back
so that people would change their mind and decide that it would
be okay to have the sale of liquor in the community." Noting
that she'd just heard how much money can be made [bootlegging],
she asked who the typical person is that the Public Defender
Agency would be representing in such a case.
MR. McCUNE said that is a good question. In his experience,
there aren't "kingpins" in the bootlegging area generally;
rather, it will be someone who makes some extra cash by fishing
or firefighting, for example. Often it is young people who may
pool resources and send someone to obtain alcohol for a party,
for instance. That money tends to run out quickly, he remarked,
and it really needs to be used for the rest of the year, to buy
subsistence supplies and so forth. As far as the Public
Defender Agency is concerned, Mr. McCune said alcohol in rural
Alaska causes an untold amount of misery; he cited the Barrow
example as one of the most striking, noting that when the
community went dry, his agency's caseload dropped considerably,
as did admissions to the hospital, for example. He said on the
one hand, his agency sees the problems from substance abuse, but
they do represent people who are charged with these crimes.
Number 1118
LIEUTENANT DUNNAGAN said he agrees with Mr. McCune that probably
the lion's share of bootleggers in the villages do it when they
can, when they have the money. However, there are sophisticated
networks of marketers, working out of urban areas with family
members to send money, alcohol, and narcotics back and forth on
a regular basis. He noted that he used to be in the drug-
enforcement unit in Fairbanks, which he supervised for two
years; there were several substantial key players within the
villages who used a fairly sophisticated network of family and
suppliers to do that.
CHAIR ROKEBERG asked whether the interdiction will focus on
these "organized crime families of bootleggers" who will not be
hiring public defenders.
Number 1040
LIEUTENANT DUNNAGAN replied that he has nothing to do with whom
they hire; when somebody is charged with a crime, that person
goes into court, fills out a report of indigence, and swears to
that; regarding what sort of investigation goes into that, he
couldn't say, but if the court sees that the documentation
supports the assertion that the person doesn't make a lot of
money, the court will appoint a public defender. He added that
a lot of the money from bootleggers and drug dealers is hidden
money and not necessarily claimable - or else a person won't
claim it.
CHAIR ROKEBERG suggested that wealthy individuals get free
attorneys in that instance, although it isn't always the case.
LIEUTENANT DUNNAGAN agreed it probably happens once in a while.
Number 0981
CHAIR ROKEBERG, noting that there were no further testifiers,
closed the public hearing.
Number 0972
CHAIR ROKEBERG made a motion to adopt Amendment 1 [text and
discussion provided previously].
REPRESENTATIVE COGHILL objected for discussion purposes. He
asked if the change encompassed by Amendment 1 would affect
other imported items.
MR. GUANELI responded that Amendment 1 would not affect anything
else. He also explained that the last portion of Amendment 1,
regarding Section 4 of HB 132, pertained to the penalty of both
importing and attempting to import alcoholic beverages. He said
that using the language in Amendment 1 was the simplest way to
effect that change.
REPRESENTATIVE COGHILL removed his objection.
Number 0878
CHAIR ROKEBERG noted that there were no further objections to
Amendment 1. Therefore, Amendment 1 was adopted.
Number 0868
CHAIR ROKEBERG made a motion to adopt Amendment 2 [text and
discussion provided previously]. There being no objection,
Amendment 2 was adopted.
Number 0833
REPRESENTATIVE JAMES moved to report CSHB 132(L&C), as amended,
out of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, CSHB
132(JUD) was reported from the House Judiciary Standing
Committee.
CHAIR ROKEBERG called an at-ease from 2:29 p.m. to 2:31 p.m.
HB 158 - CRITERIA FOR REGULATIONS
Number 0807
CHAIR ROKEBERG announced that the next order of business would
be HOUSE BILL NO. 158, "An Act relating to the criteria for the
adoption of regulations and to the relationship between a
regulation and its enabling statute; and providing for an
effective date."
Number 0791
REPRESENTATIVE LESIL McGUIRE, Alaska State Legislature, sponsor,
suggested that the committee hear testimony on HB 158 and then
hold it over the interim so that various concerns regarding
unintended results could be addressed. She explained that
nationwide review of rules and regulations began back in the
1930s and reached a peak in the 1970s when government at both
the federal and state levels began to grow astronomically.
Alaska was a territory, and thus the powers among the executive,
legislative, and judicial branches were conceived a little
differently; at that point in time, folks wanted to make sure
that the governor had the ability to represent the state's views
in a high-powered fashion, so the executive branch was vested
with stronger powers than the average state executive branch
would have been. At that point in time, there was skepticism of
the legislature. Later down the line, Alaska followed a trend
evidenced in a lot of other states of putting a couple of
different safeguards into its statutory framework. One was the
creation of a regulation review committee, and the second was a
statute that would allow the legislature, through a concurrent
resolution, to repeal any regulations that it found to be
inconsistent with legislative intent.
REPRESENTATIVE McGUIRE went on to explain that in 1980, the
Alaska Supreme Court - in the A.L.I.V.E. Voluntary decision -
ruled that [this statute] was unconstitutional on the basis that
it did not comply with the presentment requirement because it
essentially allowed other statutes to be amended without the
changes first being presented to the governor in the regular
fashion. She added that there were 11 other states at that time
with similar provisions, and therefore Alaska was not alone in
its feelings of frustration over the issue.
REPRESENTATIVE McGUIRE also explained that the U.S. Supreme
Court - in INS v. Chadha - ruled that the veto power was a
violation of powers on the federal level; although that case
didn't have a direct impact on Alaska, she added, the result was
clear, and in the years that followed INS v. Chadha, nine other
states with a similar provision had it ruled unconstitutional.
In two states - Idaho and New Hampshire - their supreme courts
upheld the power to veto by resolution; their basic reasoning
was that the separation of powers in those states charges only
the legislative branch with the power to make laws, while their
executive branches have only the power to execute those laws,
and that these two branches of government were distinct and
different. A further aspect of their rulings is that they
determined that rules from administrative agencies actually had
a lesser power - a lesser effect - than the laws made by the
legislatures. Therefore, in Idaho and New Hampshire the ability
to repeal by resolution is alive and well, and was ruled
perfectly constitutional by their courts.
Number 0521
REPRESENTATIVE McGUIRE said that in the nine other states that
had their laws regarding veto by resolution overturned, all of
them, with the exception of Kansas, have taken some other
remedial step in response. In a brief overview of the remedial
steps the other states took, she explained that in Connecticut,
the voters - via the state constitution - gave the legislature
the ability to veto by regulation (in Alaska, this option has
been twice rejected by the voters). In West Virginia, they
created a system whereby state agencies don't have the power to
promulgate rules without first submitting them to the
legislature (she noted that this is similar to the concept in HB
158 in that the burden of proof comes through the legislature).
She also explained that in West Virginia, after submitting the
proposed regulations to the legislature, the legislature in turn
must enact a statute that authorizes the regulations to go into
law. She recounted that Michigan is doing something similar to
what is proposed in HB 158 in that if the regulation review
committee - which Alaska already has - disapproves of a rule, it
cannot go into effect unless there is a two-thirds vote by the
legislature. She added that Michigan, via the regulation review
committee, has powers to suspend any rule during the interim,
and the rule/regulation would then have to come up for full
review during the regular legislative session. She explained
that in Kentucky, any regulation that comes before the
regulation review committee and is found to be deficient will go
into effect, but only until the start of the next legislative
session, and thus has a "shelf-life" of one year.
REPRESENTATIVE McGUIRE remarked that Alaska is one of the very
few states that has done nothing to put some sort of check on
the [administrative] agencies' ability to interpret state laws
and make additional laws via regulation. And although she
acknowledged that the agencies have done a good job, she said
she thinks that the situation in Alaska borders on being
unconstitutional. The legislature is the body charged with
making laws, and although that authority can be delegated, she
added that she thinks it was anticipated that this authority
would be narrowly delegated, and that there would be some
overview, or check, on the agencies' power.
REPRESENTATIVE McGUIRE noted that other states are experimenting
with the concept of "sunsetting" whereby regulations go into
effect without any input from the legislature but they expire
every two years. Some states require "pre-submission," she
added, with a vote of the legislature before adoption. She also
noted that many other states have a regulation review committee,
as Alaska does, but the difference is that the committees in
these other states actually have the power to do something.
Alaska's Joint Committee on Administrative Regulation Review
[which she chairs] "has no power to do anything," she explained,
and according to a legal opinion, "for all intents and purposes
is nonexistent." Alaska's regulation review committee can
comment on regulations and review them, but "it really means
nothing," she said.
REPRESENTATIVE McGUIRE, with regard to the other states that
have regulation review committees that do have the power to do
something, noted that in some states, the committee has the
ability to void a regulation; in many states, the committee has
the ability to block adoption pending review; in other states,
the committee sends the regulation over to the actual committee
that has subject-matter jurisdiction in order that it may review
the regulation; and in a lot of states there is the ability to
object formally to a regulation and thus transfer the burden
back to the agency.
REPRESENTATIVE McGUIRE, in sum, said that Alaska has done
nothing since the A.L.I.V.E. Voluntary decision; in fact,
existing statute makes reference to an annulment power that
Alaska no longer has. Alaska has made attempts, throughout the
years, she explained, to get a constitutional power on the
ballot, but those attempts have failed. She added that there
have been attempts on the part of some legislators to get pilot
programs into place that would allow for more public comment and
response, but those attempts also have failed. Sunsetting has
failed, as has any attempt to create a real power in the
regulation review committee.
Number 0166
REPRESENTATIVE McGUIRE, with regard to the question of "where do
we go from here," suggested that "we need to go somewhere." She
said that she has had numerous people come to her office -
ranging from administrative folks to people in industry - who
have expressed likes for certain aspects of HB 158 and dislikes
for other aspects of it. She opined that no one she has talked
with disagrees with the fact that something probably needs to be
done. She expressed a willingness to work on the issue of
restoring a balance with regard to regulations, whether
something can be accomplished over the interim or over the next
couple of years. She said, for the record:
The reason why I introduced this, and the reason why I
think it's important that we have something in place,
is for the public; the public has the right and the
ability to elect their legislative officials - the
people who make laws - and what we have done is (in my
opinion) negligently allowed administrative agencies
to make laws, proliferate ... [regulations] that the
public feels they have no control over. They might be
a small businessman or [business]woman who [dislikes]
the [regulation]; they can comment during the public
process. But what happens if the agency doesn't like
their public comment? Well, really, nothing. So,
they come to us, as their elected officials, and they
ask for us to do something; but the political will is
very strong.
REPRESENTATIVE McGUIRE recounted the following case in point.
Just this year, the regulation review committee had a case that
dealt with "on-bottom mariculture." The committee received a
lot of public comment from folks who felt as if their views, in
many cases, were not even listened to by the Alaska Department
of Fish and Game (ADF&G). The very next morning the lieutenant
governor signed the proposed regulations into law.
TAPE 01-53, SIDE A
Number 0001
REPRESENTATIVE McGUIRE continued by saying that regardless of
whether she disagreed with the regulations, what she had wanted
to do was give the public an opportunity to comment on the
proposed regulations. Currently, the public is left with being
required to present their views "to the very governor who hires
the very commissioners who promulgate the very regulations that
they disagree with"; she opined that this doesn't make very much
sense. She offered that HB 158 may have some unanticipated
consequences, and that she certainly didn't wish to create
further problems. She said that her goal is to help the
hardworking men and women of Alaska, not to hurt them, and that
she hopes to get something in place that will allow the public
to have a greater say and that will restore the law-making power
to the legislature, at least somewhat more so.
REPRESENTATIVE JAMES commented that she understood the sponsor's
frustration, and she pointed out that a simple solution would be
that when the legislature creates a statute, if it wants an
agency to write regulations, it must specifically state so in
that particular statute. In this way, the onus is placed on
[the legislature] to make statutes specific with regard to
regulations.
CHAIR ROKEBERG suggested that the regulation review committee
review the Administrative Procedure Act (APA) itself, and
possibly look at making changes within it to ensure more public
input. He also suggested that if private industry will support
it, [the legislature] could again introduce a constitutional
amendment that would nullify the A.L.I.V.E. Voluntary case. He
noted, however, that money would have to be spent to educate the
public on the separation of powers issue and that [the
legislature] has lost power and is not simply "trying to grab it
back, if you will."
Number 0220
DEBORAH BEHR, Assistant Attorney General, Legislation and
Regulations Section, Civil Division (Juneau), Department of Law
(DOL), explained that she has been providing this function for
DOL for about ten years, and that she would be delighted to work
with the sponsor and any committee that wants to go forward and
look at the regulations process; it is a very complex area of
law that can result in a lot of unintended consequences and a
lot of fiscal notes. She noted that there were some aspects of
the APA that would be very interesting to look at, such as how
to deal with the Internet and how it interfaces with getting the
information across to the public; she offered that the statutes
currently don't really cover that issue well.
MS. BEHR noted that a couple of years ago she and Representative
James had worked on the issue of negotiated rule making, and
although there have been some responses back on that subject,
it, too, "could use some fine-tuning." She said she agrees with
the sponsor that HB 158 has unintended consequences, but she
offered to hold those comments at this time since HB 158 will be
reviewed during the interim. She said if the committee wished,
she would be willing to provide a "101" on regulations at the
committee's pleasure. She again noted that although the
administration does not care for HB 158, she would be delighted
to work on issues to improve the administrative process.
Number 0357
REPRESENTATIVE COGHILL made a motion to adopt the proposed
committee substitute (CS) for HB 158, version 22-LS0578\F,
Bannister, 3/26/01, as a work draft. There being no objection,
Version F was before the committee.
CHAIR ROKEBERG noted that the committee has received written
testimony from Stanley T. Foo of the Alaska Miners Association,
Inc.; Tadd Owens of the Resource Development Council for Alaska,
Inc.; [and Judith Brady of the Alaska Oil and Gas Association].
He also noted that Charlotte McCabe had concerns regarding HB
158 but wished to hold her comments for the time being.
Number 0518
ROBERT B. STILES, President, Resource Development Council (RDC)
for Alaska, Inc., testified via teleconference and gave two
examples of problems with HB 158. First, it certainly throws
into doubt the ability of the agency to use things such as site-
specific criteria, particularly if it is not allowed within the
individual statutes authorizing the program where that's
applied. And for a second example, he said that it certainly
throws into question the state's primacy regarding federally
mandated programs such as the surface coal mining program - a
program that is changing constantly. He offered that it is not
unusual to have to change the regulations within that program
once or twice a year, and under HB 158 as drafted, all of those
regulations - some 200 pages of them - would have to be in
statute in order to be in compliance with HB 158; additionally,
any changes to those regulations would have to occur at the
legislative level. He said he suspected that the legislature is
not terribly interested in writing regulations, which HB 158
would require.
Number 0681
JANICE ADAIR, Director, Division of Environmental Health,
Department of Environmental Conservation (DEC), testified via
teleconference and said in response to questions that if HB 158
were to pass, the DEC would not be able to use site-specific
criteria would not be allowed in the promulgation of
regulations. She acknowledged that currently, for example, the
DEC could make a regulation that allowed for the discharge water
to be no dirtier or cleaner than the receiving water.
Number 0704
CHAIR ROKEBERG announced that the public hearing on HB 158 was
closed, and that HB 158 would be held over.
ADJOURNMENT
Number 0784
CHAIR ROKEBERG [recessed] the House Judiciary Standing Committee
meeting at 3 p.m. to a call of the chair on 4/3/01 for the
purpose of again hearing HB 4.
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