Legislature(1995 - 1996)

03/11/1996 01:12 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
               HOUSE JUDICIARY STANDING COMMITTEE                              
                         March 11, 1996                                        
                           1:12 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Brian Porter, Chairman                                         
 Representative Joe Green, Vice Chairman                                       
 Representative Con Bunde                                                      
 Representative Al Vezey                                                       
 Representative Cynthia Toohey                                                 
 Representative David Finkelstein                                              
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Bettye Davis                                                   
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 HOUSE BILL NO. 341                                                            
 "An Act establishing a tax court to consider and determine certain            
 taxes and penalties due and collateral matters, and amending                  
 provisions relating to taxpayer challenges to the assessment, levy,           
 and collection of taxes by the state; and providing for an                    
 effective date."                                                              
                                                                               
      -  PASSED CSHB 341(JUD) OUT OF COMMITTEE                                 
                                                                               
 HOUSE BILL NO. 462                                                            
 "An Act relating to the offenses of driving while intoxicated and             
 refusal to submit to a chemical test of breath or blood; amending             
 Rules 6 and 32.1, Alaska Rules of Criminal Procedure; and providing           
 for an effective date."                                                       
                                                                               
      -  PASSED OUT OF COMMITTEE                                               
                                                                               
 HOUSE BILL NO. 311                                                            
 "An Act repealing the limitation on the hours a person may be                 
 employed in a mine; and making a related technical amendment to               
 avoid changing the penalties for failing to make payments into an             
 employee benefit fund."                                                       
                                                                               
      -  SCHEDULED BUT NOT HEARD                                               
                                                                               
 HOUSE BILL NO. 517                                                            
 "An Act relating to records and hearings of the Department of                 
 Public Safety; relating to a temporary permit to drive a motor                
 vehicle; relating to regulation of motor vehicles and commercial              
 motor vehicles; relating to renewal of a driver's license by mail;            
 increasing the property damage amounts for proof of financial                 
 responsibility and proof of motor vehicle eligibility in order to             
 lawfully operate a motor vehicle in the state; relating to certain            
 notifications in accidents involving property damage; relating to             
 motor vehicle registration procedures; and providing for an                   
 effective date."                                                              
                                                                               
      -  SCHEDULED BUT NOT HEARD                                               
                                                                               
 HOUSE BILL NO. 536                                                            
 "An Act relating to charitable gaming."                                       
                                                                               
      - SCHEDULED BUT NOT HEARD                                                
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 341                                                               
 SHORT TITLE: TAX APPEALS/ASSESSMENT/LEVY/COLLECTION                           
 SPONSOR(S): REPRESENTATIVE(S) GREEN                                           
                                                                               
 JRN-DATE     JRN-DATE             ACTION                                      
 05/09/95      2042    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 05/09/95      2042    (H)   RES, JUD, FINANCE                                 
 10/24/95              (H)   RES AT  9:00 AM ANCHORAGE LIO                     
 10/24/95              (H)   MINUTE(RES)                                       
 01/19/96              (H)   RES AT  9:00 AM CAPITOL 124                       
 01/19/96              (H)   MINUTE(RES)                                       
 01/24/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 01/24/96              (H)   MINUTE(RES)                                       
 01/26/96      2536    (H)   RES RPT  CS(RES) NT 1DP  4NR  3AM                 
 01/26/96      2537    (H)   DP:  GREEN                                        
 01/26/96      2537    (H)   NR:  OGAN, AUSTERMAN, KOTT, WILLIAMS              
 01/26/96      2537    (H)   AM:  NICHOLIA, DAVIES, LONG                       
 01/26/96      2537    (H)   FISCAL NOTE (COURT)                               
 01/26/96      2537    (H)   ZERO FISCAL NOTE (REV)                            
 01/26/96              (H)   RES AT  8:00 AM CAPITOL 124                       
 01/26/96              (H)   JUD AT  1:00 PM CAPITOL 120                       
 01/26/96              (H)   MINUTE(RES)                                       
 01/26/96              (H)   MINUTE(JUD)                                       
 01/29/96              (H)   JUD AT  1:00 PM CAPITOL 120                       
 01/29/96              (H)   MINUTE(JUD)                                       
 02/28/96              (H)   JUD AT  3:00 PM CAPITOL 124 (Sub.)                
 02/29/96              (H)   JUD AT  4:00 PM HOUSE FINANCE 519                 
 02/29/96              (H)   MINUTE(JUD)                                       
 03/01/96              (H)   JUD AT  8:00 AM CAPITOL 124 (Sub.)                
 03/06/96              (H)   JUD AT  1:00 PM CAPITOL 120                       
 03/06/96              (H)   MINUTE(JUD)                                       
 03/08/96              (H)   FIN AT  8:00 AM HOUSE FINANCE 519                 
 03/08/96              (H)   JUD AT  1:00 PM CAPITOL 120                       
 03/08/96              (H)   MINUTE(JUD)                                       
 03/08/96              (H)   FIN AT  1:30 PM HOUSE FINANCE 519                 
 03/11/96              (H)   JUD AT  1:00 PM CAPITOL 120                       
                                                                               
 BILL:  HB 462                                                               
 SHORT TITLE: DRUNK DRIVING: EVIDENCE & SENTENCING                             
 SPONSOR(S): REPRESENTATIVE(S) PORTER, Toohey                                  
                                                                               
                                                                               
 JRN-DATE     JRN-DATE             ACTION                                      
 02/02/96      2606    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/02/96      2606    (H)   TRANSPORTATION, JUDICIARY                         
 02/28/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 02/28/96              (H)   MINUTE(TRA)                                       
 03/06/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 03/06/96              (H)   MINUTE(TRA)                                       
 03/08/96              (H)   JUD AT  1:00 PM CAPITOL 120                       
 03/08/96              (H)   MINUTE(JUD)                                       
 03/11/96      3057    (H)   TRA RPT  1DP 4NR 2AM                              
 03/11/96      3057    (H)   DP: G.DAVIS                                       
 03/11/96      3057    (H)   NR: WILLIAMS, SANDERS, LONG, MASEK                
 03/11/96      3057    (H)   AM: BRICE, JAMES                                  
 03/11/96      3057    (H)   FISCAL NOTE (COR)                                 
 03/11/96      3057    (H)   ZERO FISCAL NOTE (2-DPS)                          
 03/11/96              (H)   JUD AT  1:00 PM CAPITOL 120                       
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 DEBORAH VOGT, Deputy Commissioner                                             
 Department of Revenue                                                         
 P.O. Box 110400                                                               
 Juneau, Alaska  99811-0400                                                    
 Telephone:  (907) 465-2300                                                    
 POSITION STATEMENT:  Provided department's and Administration's               
                      positions and answered questions on HB 341.              
                                                                               
 DAN SECKERS, Chairman                                                         
 Tax Committee of the Alaska Oil &                                             
    Gas Association (AOGA)                                                     
 Senior Tax Attorney for Exxon Co., USA                                        
 P.O. Box 196601                                                               
 Anchorage, Alaska  99519                                                      
 Telephone:  (907) 564-3776                                                    
 POSITION STATEMENT:  Testified on HB 341.                                     
                                                                               
 THOMAS K. WILLIAMS                                                            
 Tax Committee of the Alaska Oil &                                             
    Gas Association (AOGA)                                                     
 Alaska Tax Counsel                                                            
    for BP Exploration (Alaska) Inc.                                           
 P.O. Box 196612                                                               
 Anchorage, Alaska  99519-6612                                                 
 Telephone:  (907) 564-5955                                                    
 POSITION STATEMENT:  Testified on HB 341.                                     
                                                                               
 STEVE MAHONEY                                                                 
 Tax Committee of the Alaska Oil &                                             
    Gas Association                                                            
 Managing Tax Counsel for ARCO Alaska, Inc.                                    
 P.O. Box 100360                                                               
 Anchorage, Alaska  99510-0360                                                 
 Telephone:  (907) 265-6527                                                    
 POSITION STATEMENT:  Testified on HB 341.                                     
                                                                               
 ROBERT BRIGGS, Assistant Attorney General                                     
 Oil, Gas and Mining Section                                                   
 Civil Division (Juneau)                                                       
 Department of Law                                                             
 P.O. Box 110300                                                               
 Juneau, Alaska  99811-0300                                                    
 Telephone:  (907) 465-3600                                                    
 POSITION STATEMENT:  Testified on HB 341.                                     
                                                                               
 ANNE D. CARPENETI, Assistant Attorney General                                 
 Central Office                                                                
 Criminal Division                                                             
 Department of Law                                                             
 P.O. Box 110300                                                               
 Juneau, Alaska  99811-0300                                                    
 Telephone:  (907) 465-3428                                                    
 POSITION STATEMENT:  Provided department's position and answered              
                      questions regarding HB 462.                              
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 96-33, SIDE A                                                            
 Number 0001                                                                   
                                                                               
 CHAIRMAN BRIAN PORTER called the House Judiciary committee meeting            
 to order at 1:12 p.m.  Members present at the call to order were              
 Representatives Porter, Green, Bunde, Vezey and Finkelstein;                  
 Representative Toohey joined the meeting at 1:13 p.m.  Absent and             
 excused was Representative Davis.                                             
                                                                               
 HB 341 - TAX APPEALS/ASSESSMENT/LEVY/COLLECTION                              
                                                                              
 CHAIRMAN PORTER noted that discussions of the main three sticking             
 points had been completed at the previous hearing on HB 341.  He              
 stated that amendments before him were numbered 1 through 4, dated            
 March 11, 1996.                                                               
                                                                               
 Number 0230                                                                   
                                                                               
 REPRESENTATIVE JOE GREEN explained that Amendments 1-4 had been               
 omitted in the version R rewrite.  He believed these amendments               
 were "consensus types" that should have been in the current version           
 of the bill.  He offered Amendment1, which inserted the words                 
 "disciplined or" in front of the words "removed from" on page 2,              
 line 31.                                                                      
                                                                               
 CHAIRMAN PORTER noted the motion to move Amendment 1.                         
                                                                               
                                                                               
 Number 0293                                                                   
                                                                               
 REPRESENTATIVE DAVID FINKELSTEIN asked if the Administration had              
 problems with any of the four amendments.                                     
                                                                               
 DEBORAH VOGT, Deputy Commissioner, Department of Revenue, said                
 there was no problem with the first three; she had not yet reviewed           
 the fourth.                                                                   
                                                                               
 CHAIRMAN PORTER asked if there was an objection to Amendment 1.               
 Hearing none, he noted that Amendment1 was adopted.                           
                                                                               
 Number 0365                                                                   
                                                                               
 REPRESENTATIVE GREEN referred to Amendment 2 on page 4, line 15,              
 which deleted the wording "the findings of fact of the informal               
 conference decision are presumed correct unless the taxpayer rebuts           
 the findings;" after "of proof;".  Representative Green believed              
 that wording had been agreed to by both sides.                                
                                                                               
 CHAIRMAN PORTER noted the motion to move Amendment 2 and asked if             
 there was any objection.  There being none, Amendment2 passed.                
                                                                               
 Number 0396                                                                   
                                                                               
 REPRESENTATIVE GREEN referred to Amendment 3 on page 15, line 26,             
 which inserted after the phrase "and prescribed." the following:              
 "The scheduled may be subsequently modified by consent of the                 
 parties."  He explained Amendment Number 3 was a house cleaning               
 matter that got lost in the rewrite.                                          
                                                                               
 CHAIRMAN PORTER noted there was a motion to move Amendment 3 and              
 asked if there was an objection.  There being none, Amendment3                
 passed.                                                                       
                                                                               
 Number 0428                                                                   
                                                                               
 REPRESENTATIVE GREEN referred to Amendment 4, line 18, page 10,               
 which deleted "and" and inserted "or" after "of Revenue".  He                 
 explained it had to do with the definition of the word "party" and            
 added, "It seems that that should be the Department of Revenue `or            
 the taxpayer', not `and the taxpayer'."                                       
 CHAIRMAN PORTER noted there was a motion to move Amendment 4.                 
                                                                               
 MS. VOGT stated she thought it was better.                                    
                                                                               
 CHAIRMAN PORTER asked if there was an objection.  There being none,           
 Amendment 4 passed.  Chairman Porter mentioned there was an                   
 additional amendment before him that was not identified.                      
                                                                               
 REPRESENTATIVE FINKELSTEIN informed the committee that amendments             
 he would address were in the nine-page packet provided by the                 
 Administration; these amendments, dated March 8, 1996, had a                  
 Department of Revenue heading.                                                
                                                                               
 Number 0700                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN moved Amendment 5, which deleted                   
 provisions relating to the Board of Tax Appeals.  Listed as                   
 Amendment No. 1 in the Department of Revenue packet, Amendment5               
 read:                                                                         
                                                                               
 -In Section 1, page 2, lines 5-9, delete text beginning with the              
 phrase "The office of tax appeals is a quasi-judicial agency ..."             
 and ending with the phrase "... shall have at least two members."             
                                                                               
 -In Section 1, page 2, delete lines 27-29 (proposed AS                        
 43.05.410(c)).                                                                
                                                                               
 -In Section 1, page 7, line 17, delete the phrase "by the full                
 board".                                                                       
                                                                               
 -In Section 1, page 7, line 30, replace the word "board" with the             
 phrase "administrative law judge."                                            
                                                                               
 -In Section 1, page 8, at lines 1, 6, 8, 9 and 16, replace the word           
 "board" in each line with the phrase "administrative law judge".              
                                                                               
 REPRESENTATIVE FINKELSTEIN explained that Amendment 5 referred to             
 legislative confirmation and suggested the set-up, as envisioned,             
 was not analogous to a commission.  These were hearing officers who           
 were retained, disciplined or eliminated by the chief officer, who            
 was retained or eliminated by the commissioner, he said.                      
 Representative Finkelstein stated it was much more analogous to               
 hearing officers in other departments, who were not confirmed by              
 the legislature.  He said the constitution precluded that                     
 confirmation process.  "Regardless of whether it's constitutional             
 or not," he said, "I believe that we ought to be doing this in the            
 form of what is really envisioned here.  It's a judge.  It's                  
 somebody who's making a decision as an administrative officer or a            
 judge.  And if we really wanted to go this route, we ought to have            
 retention elections, if we feel there has to be some sort of review           
 other than the appointing power of the Administration.  I think the           
 main reason is that I don't think adding the legislature insulates            
 them from politics; I think it adds politics."  He cited an                   
 example.  "I think it's the last thing we want here," he concluded,           
 "and I'd suggest that we return to the approach of administrative             
 law judges."                                                                  
                                                                               
 Number 0846                                                                   
                                                                               
 REPRESENTATIVE GREEN referred to earlier subcommittee discussion              
 and said, "without this type of a board or this type of review,               
 we're not really getting as far removed as Frankel had indicated,             
 and that this would, then, come closer to assuring a fair and                 
 impartial review of a tax appeal ....  Moving it over at least one            
 department is a significant help.  But if that administrative law             
 judge in that department is not subject to any other authority                
 other than the Department of Administration, then there's still a             
 concept that they're both members of the Governor's cabinet, and as           
 such, there would be a certain amount of bias that might attach to            
 an appeal.  And this is an attempt to make sure that ... there is             
 impartiality."                                                                
                                                                               
 Number 0939                                                                   
                                                                               
 CHAIRMAN PORTER concurred, saying, "the idea of this whole endeavor           
 is to try to set up a scenario that has the best impression of                
 fairness and impartiality.  And while I think that establishing the           
 board, as is constitutionally required, presents some challenges to           
 the board in terms of setting up regulations on their procedures,             
 I think those are far more surmountable than the problems that                
 would still exist if this remained an in-house executive function."           
 He asked for a roll call vote.  Voting against Amendment 5 were               
 Representatives Bunde, Toohey, Vezey, Green and Porter.  Voting for           
 Amendment 5 was Representative Finkelstein.  Chairman Porter noted            
 that Amendment5 failed.                                                       
                                                                               
 Number 1000                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN moved Amendment 6, listed as Amendment             
 No. 2 in the Department of Revenue packet.  Amendment 6, which                
 deleted provisions relating to direct appeal to superior court,               
 read:                                                                         
                                                                               
 -Delete Section 4, at pages 11-12, lines 20-2.                                
                                                                               
 -Amend Section 5, page 12, line 19, by replacing the phrase                   
 "AS43.05.240, 43.05.241, or 43.05.242" with the phrase                      
 "AS43.05.240 or AS 43.05.241".                                              
                                                                               
 -In Section 11, page 16, delete text beginning on line 5 and ending           
 on line 18 (proposed AS 43.05.242).                                           
                                                                               
 -In Section 11, page 16, line 21, delete the phrase ", whether".              
                                                                               
 -In Section 11, page 16, line 22, delete the phrase "or under a               
 judicial appeal authorized by AS 43.05.042".                                  
                                                                               
 -In Section 12, page 17, line 9, delete the phrase "or 43.05.242".          
                                                                               
 CHAIRMAN PORTER objected to Amendment 6 for purposes of discussion.           
                                                                               
 REPRESENTATIVE FINKELSTEIN indicated they had discussed it                    
 previously.  "The key issue here is whether you can go directly to            
 superior court," he said.  "The bottom line is that we're trying to           
 figure out what's the best for the state of Alaska with this, and             
 all we're doing here is we're giving an option to the company                 
 involved to skip it.  The Administration doesn't have that                    
 opportunity."  He cited a hypothetical situation, then pointed out            
 that people were usually required to go through the administrative            
 appeal process before going to court.  He emphasized that this law            
 would apply to every taxpayer in the state.                                   
                                                                               
 Number 1165                                                                   
                                                                               
 REPRESENTATIVE GREEN referred to comments that the Administration             
 did not have the option of going directly to court.  He indicated             
 that since the taxpayer was disputing an amount that would                    
 otherwise be owed, there was no reason for the department to                  
 initiate review by the court.                                                 
                                                                               
 Number 1230                                                                   
                                                                               
 REPRESENTATIVE AL VEZEY referred to Representative Finkelstein's              
 assertion that the expertise lay in the superior court.                       
 Representative Vezey remarked that all the testimony received was             
 to the contrary.                                                              
                                                                               
 REPRESENTATIVE FINKELSTEIN clarified, "I said it lies with the                
 administrative judge."                                                        
                                                                               
 REPRESENTATIVE VEZEY believed the amendment was contrary to every             
 working system with which he was familiar, particularly the U.S.              
 tax court system.  Furthermore, giving the tax collector the right            
 to throw a case into court automatically gave them the right to               
 make taxpayers' records public information, he stated.  Currently,            
 as HB341 was written, the appeal to the tax board would also be               
 public information.  "But I hope we change that before we're done,"           
 he added.                                                                     
                                                                               
 Number 1300                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN responded, "I must not have explained it           
 properly.  This amendment doesn't allow the Administration to force           
 them to go to court.  My point was of trying to show the                      
 inconsistency within the approach embodied right now within the               
 bill.  All this says is that the taxpayer shall follow the                    
 administrative ... appeal process, that's all.  The issue is should           
 the taxpayer be able to go directly to superior court and skip this           
 new board of tax appeals."  He believed it was in the interest of             
 the particular company or entity involved, but not necessarily the            
 state.                                                                        
                                                                               
 REPRESENTATIVE VEZEY said he might have misunderstood.  He had                
 thought Representative Finkelstein was saying the purpose of the              
 amendment would be to give the state the right to avoid the tax               
 appeal board and go straight to court.                                        
                                                                               
 Number 1362                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said, "I was just making an analogy that           
 in order to make it fair, the existing bill, we ought to allow that           
 to occur.  That isn't allowed, and my suggestion to make it fair              
 and equal treatment of the parties is to require, regardless of who           
 it favors - the Administration, the state of Alaska or the taxpayer           
 - in either case, require people to go through the administrative             
 appeal process.  That's all this amendment does."                             
                                                                               
 REPRESENTATIVE VEZEY stated that given his new understanding, he              
 still opposed the amendment because it was contrary to other                  
 systems that were considered fair and equitable.  "The taxpayer               
 gives up a lot if they decide to bypass the appeals board process             
 and go straight to court, including making all their records                  
 public," he said, adding that the taxpayer had to pay their tax               
 before using that avenue.  "And so the state wins," he said.  "The            
 king has the money.  And then the king merely has to prove he's               
 entitled to keep it."                                                         
                                                                               
 Number 1435                                                                   
                                                                               
 REPRESENTATIVE GREEN suggested the record include that a bill                 
 introduced by the Governor on teacher tenure allowed for bypassing            
 the administrative process and going de novo to superior court.               
 "So, this is not precedent-setting in any manner," he said.                   
                                                                               
 CHAIRMAN PORTER asked if there was further debate and then asked              
 for a roll call vote on Amendment 6.  Voting against the amendment            
 were Representatives Toohey, Vezey, Green, Bunde and Porter.                  
 Voting for the amendment was Representative Finkelstein.  Chairman            
 Porter noted that Amendment 6 failed.                                         
                                                                               
 Number 1471                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN explained that Amendment 7, which was              
 not in the packet, was a conceptual amendment that came out of                
 testimony at the last hearing.  The direct appeal to superior court           
 included in the current bill version would apply only where the               
 issues on appeal were constitutional questions.  If they involved             
 other determinations, the administrative appeal route would be                
 required.                                                                     
                                                                               
 Number 1560                                                                   
                                                                               
 CHAIRMAN PORTER expressed concern about making that a conceptual              
 amendment.  He asked what would happen if a taxpayer had both a               
 constitutional issue and a normal regulation interpretation issue.            
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, "They'd have to go through the            
 board."                                                                       
                                                                               
 CHAIRMAN PORTER pointed out that the conceptual amendment did not             
 say that.                                                                     
                                                                               
 REPRESENTATIVE FINKELSTEIN responded, "It says that you can only              
 bypass the board when your issues are only constitutional issues."            
                                                                               
 Number 1593                                                                   
                                                                               
 REPRESENTATIVE VEZEY commented that the tax board could not rule on           
 legality of regulations.  A person would be denied the avenue of              
 going to court where that legality could be ruled on. "Again, to me           
 that defies a basic sense of justice and fairness," he added.                 
                                                                               
 REPRESENTATIVE FINKELSTEIN said that was a good question and                  
 suggested that Deborah Vogt be asked about it.                                
                                                                               
 Number 1629                                                                   
                                                                               
 REPRESENTATIVE CON BUNDE referred to testimony at the previous                
 hearing about a separate accounting issue.  He recalled someone               
 saying, "Yeah, we decided this was clearly constitutional and we              
 wanted to go directly to court and the Administration did not                 
 oppose that (indisc.)."  Representative Bunde suggested that was              
 the genesis of the current amendment.  "And then, the amendment               
 says, though, that only the issues that both sides agree are                  
 clearly constitutional takes the short cut to court," he said.                
                                                                               
 Number 1688                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN asked:  "Considering that the previous             
 amendment failed, do you think ... that this is a fertile area for            
 compromise?"  He asked what issues besides constitutional issues              
 the board could not decide.                                                   
                                                                               
 Number 1688                                                                   
                                                                               
 MS. VOGT responded, "The issue of whether an independent ALJ, or in           
 this case, an independent board, as you've now made it, could                 
 invalidate a regulation is one I don't really know the answer to.             
 The theory why a hearing officer within a department cannot                   
 invalidate a regulation is that the hearing officer stands in the             
 stead of the commissioner who has adopted the regulation, and the             
 hearing officer basically is the commissioner for the purpose of              
 the hearing."  Ms. Vogt thought it presented an interesting                   
 question as to whether a person or board set up outside the                   
 department could invalidate a regulation.  "I think it's pretty               
 clear that whoever the administrative person is, the person could             
 not invalidate a statute, as Representative Vezey has pointed out.            
 And I would certainly be amenable to amend your amendment                     
 conceptually," she added.                                                     
                                                                               
                                                                               
 Number 1755                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN withdrew the amendment and ask the                 
 department's help to work on it later.  He offered instead, as                
 Amendment 7, an amendment not included in the Department of Revenue           
 packet, which had been submitted in written form as follows:                  
                                                                               
 Amend Section 11, page 16, proposed AS 43.05.242,                             
 Delete lines 5-8.                                                             
                                                                               
 Insert:                                                                       
                                                                               
      "Sec. 43.05.242.  JUDICIAL APPEAL.  (a)  Within 60 days after            
 decision resulting from the informal conference, a person aggrieved           
 by the action of the department under AS 43.05.240 in fixing the              
 amount of a tax or in imposing a penalty may appeal to the superior           
 court.                                                                        
      (b) The superior court, sitting without a jury, shall hear all           
 questions de novo.  As used in this section, "de novo" has the same           
 meaning as in AS 43.05.400 - AS 43.05.499.  The court shall                   
           (1) resolve a question of fact by a preponderance of the            
 evidence or, if a different standard of proof has been set by law             
 for a particular question, by that standard of proof;                         
           (2) resolve a question of law in the exercise of the                
 independent judgment of the superior court judge;                             
           (3) defer to the Department of Revenue as to a matter for           
 which discretion is legally vested in the Department of Revenue,              
 unless not supported by a reasonable basis.                                   
      (c) When an appeal is taken under this section,"                         
                                                                               
 [remainder of text as it appears on page 16, lines 9-18]                      
                                                                               
 REPRESENTATIVE FINKELSTEIN indicated there had been no previous               
 discussion on Amendment 7.                                                    
                                                                               
 MS. VOGT explained, "This is language that I have typed up after              
 discussions that we had, between Friday and this afternoon, with              
 taxpayer representatives.  The department is concerned, and I                 
 testified to this Friday, that the way the work draft is currently            
 drafted, there is no standard of review articulated for the judge             
 at superior court.  As you know, we oppose the bifurcated process             
 allowing the taxpayer to go straight to superior court.  But if ...           
 the taxpayer can go straight to superior court, we would propose              
 that the same standards of review be articulated in the statute               
 that are articulated for the administrative law judge under the               
 other route.  And although I believe you'll hear from the taxpayers           
 that they haven't had a chance to get a quorum and an actual vote             
 of AOGA, I think many of the taxpayers are in agreement with this             
 language."  Ms. Vogt indicated the language also made clear that              
 the superior court would sit without a jury.  She stated that had             
 been discussed Friday without dispute.                                        
                                                                               
                                                                               
 Number 1873                                                                   
                                                                               
 DAN SECKERS, Chairman and Alaska Tax Counsel for EXXON, Tax                   
 Committee of the Alaska Oil and Gas Association (AOGA), affirmed              
 that at a meeting that morning, they had addressed the amendment              
 but had no quorum.  He said they had talked previously about not              
 having a jury trial; AOGA had no problem with that.  However, for             
 the rest of the amendment, AOGA currently had no position.                    
                                                                               
 TOM WILLIAMS, Alaska Tax Counsel for BP, Tax Committee of the                 
 Alaska Oil and Gas Association (AOGA), indicated BP would vote for            
 the amendment when it came before the AOGA tax committee; they                
 supported it now.                                                             
                                                                               
 STEVE MAHONEY, Alaska Tax Counsel for ARCO, Tax Committee of the              
 Alaska Oil and Gas Association (AOGA), said, "To the extent that              
 this amendment would come before the AOGA committee, ARCO would               
 vote for it."                                                                 
                                                                               
 Number 1918                                                                   
                                                                               
 REPRESENTATIVE VEZEY said, "if I had to go to court in the state of           
 Alaska over taxes, I'd like to have a jury."                                  
                                                                               
 REPRESENTATIVE FINKELSTEIN expressed his preference to have an                
 income tax sooner rather than later.  When that happened, he                  
 believed the appeal process would be a top consideration.  "For               
 now, though, we do rarely have those kind of individuals involved             
 in this process and I suggest that our focus be the current                   
 situation rather than the future, even though ... I wish that was             
 the case," he said.                                                           
                                                                               
 CHAIRMAN PORTER noted there had been a motion and discussion on               
 Amendment7.                                                                   
                                                                               
 Number 1958                                                                   
                                                                               
 REPRESENTATIVE VEZEY said, "I really am curious if there isn't a              
 constitutional issue here about denying somebody a right to a jury            
 trial before you deprive them of their property.  I readily admit             
 that nine times out of ten, if not more, most taxpayers would                 
 prefer to go before a professional judge to decide a complicated              
 set of facts, rather than go before a jury, which almost invariably           
 would make the wrong decision, but I don't think we                           
 constitutionally can deny people the right to a jury trial if                 
 they're going to take their property."                                        
                                                                               
 Number 1982                                                                   
                                                                               
 REPRESENTATIVE GREEN recalled discussion by the committee at the              
 previous hearing and said, "In this particular case, now, the                 
 superior court is acting as an appeals court, in which case there             
 isn't a denial of process because most appeals courts ... don't               
 have jury trial."                                                             
                                                                               
 REPRESENTATIVE VEZEY responded, "It's my understanding of the law             
 in the state of Alaska that the supreme court requires that a                 
 person exhaust their administrative remedies before they go to                
 court.  But at that point, you are entitled to a jury trial."                 
                                                                               
 Number 2025                                                                   
                                                                               
 ROBERT BRIGGS, Assistant Attorney General, Oil, Gas and Mining                
 Section, Civil Division (Juneau), Department of Law, said, "I can             
 tell you that there is a reported Alaska Supreme Court opinion in             
 which it was decided that there was not a constitutional right to             
 a jury trial to review a tax assessment.  That's the Winegardner            
 case that's already been cited to the committee."                             
                                                                               
 REPRESENTATIVE CYNTHIA TOOHEY asked why anyone in their right mind            
 would pay their tax fine and then take the case to court without a            
 jury trial.                                                                   
                                                                               
 Number 2050                                                                   
                                                                               
 CHAIRMAN PORTER responded that these issues were so complex that if           
 it involved him, he would not want a jury trial.  "I would not want           
 the jury to be influenced by pizzazz instead of substance, which              
 juries often are," he said.                                                   
                                                                               
 REPRESENTATIVE VEZEY pointed out they were not creating a statute             
 that only addressed royalty and severance tax payments.  It would             
 apply to any tax.                                                             
                                                                               
 Number 2120                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said previous testimony indicated it was           
 not in the public interest to have jury trials in these cases.  He            
 added that royalties, which were not a tax, were not included.                
 Although the bill might need amended in the future for other kinds            
 of cases, in these cases, he believed there was no doubt about the            
 public interest.                                                              
 CHAIRMAN PORTER asked if there was further discussion on                      
 Amendment7 and then asked for a roll call vote.  Voting against               
 the amendment were Representatives Vezey and Bunde; Representative            
 Bunde indicated the discussion had not been completed.  Voting for            
 the amendment were Representatives Finkelstein, Green, Toohey and             
 Porter.  Chairman Porter noted that Amendment 7 had passed.                   
                                                                               
 Number 2182                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN offered Amendment 8, listed as Amendment           
 No. 4 in the Department of Revenue packet; he specified that                  
 Amendment No. 3 of that packet was not being offered.  Amendment8             
 read:                                                                         
                                                                               
 -In Section 1, page 6, delete text on lines 19-20 (proposed AS                
 43.05.455(f)).                                                                
                                                                               
 -In Section 1, page 6, line 11, insert a new subsection (e) to read           
 as follows, and renumber remaining subsections accordingly:                   
                                                                               
      (e) Evidence on the following subjects is irrelevant and may             
 not be admitted, unless the administrative law judge grants an                
 exception in the interest of justice:                                         
                                                                               
           (1) history of legislative provisions that have not been            
 enacted;                                                                      
           (2) history of a draft regulation that has not been                 
 adopted;                                                                      
           (3) confidential information under AS 43 of a taxpayer              
 other than the taxpayer whose tax is the subject of the appeal may            
 unless the confidentiality has been waived by that other taxpayer.            
                                                                               
 REPRESENTATIVE FINKELSTEIN explained that the experience of the               
 Administration was that these kinds of requests contributed to the            
 "tons and tons of material" involved in discovery.  "I think we've            
 got to do what we can to eliminate the paper wars," he said.                  
                                                                               
 Number 2235                                                                   
                                                                               
 CHAIRMAN PORTER said, "Basically, this amendment would limit                  
 discovery to the extent that proposed-but-not-adopted regulations             
 and proposed-and-not-adopted statutes would be not admissible, in             
 any form."                                                                    
                                                                               
 REPRESENTATIVE FINKELSTEIN indicated that was incorrect.                      
                                                                               
 CHAIRMAN PORTER suggested it would be prima facie irrelevant.                 
                                                                               
 REPRESENTATIVE FINKELSTEIN asked for clarification.                           
                                                                               
 CHAIRMAN PORTER said, "They're irrelevant unless a showing can be             
 made that they are relevant."  He asked if that was what the                  
 amendment said.                                                               
                                                                               
 REPRESENTATIVE FINKELSTEIN replied that was exactly what it was.              
                                                                               
 Number 2277                                                                   
                                                                               
 REPRESENTATIVE VEZEY said that, in light of the jury being                    
 eliminated from the system, the amendment was totally uncalled for.           
 "Legislative intent, regulatory intent are concerns of the court,"            
 he said, "and that's the best way I know of to express it."                   
                                                                               
                                                                               
 CHAIRMAN PORTER clarified that the amendment dealt with regulations           
 and statutes that were not adopted.                                           
                                                                               
 REPRESENTATIVE VEZEY replied, "But it also expresses legislative              
 intent."                                                                      
                                                                               
 REPRESENTATIVE FINKELSTEIN indicated the court determination was              
 that it did not express legislative intent.  "That was the                    
 testimony at our previous hearing," he said.                                  
                                                                               
 Number 2304                                                                   
                                                                               
 REPRESENTATIVE GREEN stated, "If we say that because there isn't              
 any value in legislative intent as described in bills that are                
 introduced, perhaps, and are making their way through, that don't             
 make it clear through and become law, then I would direct your                
 attention to line 8 where it says hearsay evidence is admissible if           
 it's the kind of evidence which responsible persons are accustomed            
 to rely on.  And to me, there could well be some information                  
 included in legislation that didn't make it all the way through               
 that would certainly be elevated above hearsay."  He specified he             
 was referring to line 8, page 6, of the work draft.                           
                                                                               
 Number 2345                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said, "We do know from being here, in              
 our own experience, that the intent of the legislature is not                 
 expressed unless the legislature takes an action.  Just because a             
 bill is introduced, just because a bill makes it through a                    
 committee, legislative intent derives from the action of the body             
 as a whole, not of one committee or subcommittee or individual                
 legislator."                                                                  
                                                                               
 Number 2388                                                                   
                                                                               
 REPRESENTATIVE GREEN replied, "I submit again, though, that if                
 we're going to have the information that was submitted in a prior             
 bill, that has been incorporated in this bill by the                          
 Administration, hearsay evidence is admissible, and then we can               
 write down and say, however, that which is the history of                     
 legislative provisions, and, I would presume, including legislation           
 that's vetoed by the Governor, passed both houses and then is                 
 vetoed, would also fit in this not-admissible category.  I think              
 we're really stretching the fact that hearsay is okay but                     
 legislative passage is not.  I believe that's what you'd be                   
 saying."                                                                      
                                                                               
 REPRESENTATIVE VEZEY added, "Certainly, an amendment to a bill or             
 a proposed amendment that fails would be a very good expression of            
 legislative intent."                                                          
                                                                               
                                                                               
 Number 2425                                                                   
                                                                               
 REPRESENTATIVE BUNDE applauded the limitation of paperwork and                
 billing hours.  "But I think we're confusing legislative and                  
 legislator," he said.                                                         
                                                                               
 CHAIRMAN PORTER mentioned that information had been provided to the           
 committee the previous Friday on that point but that he could not             
 recall it.  "Right now, I'm tending to think that if a regulation             
 weren't passed and a statute weren't passed, I can't see any                  
 relevance to the discussion that went on," he said.                           
                                                                               
 MS. VOGT indicated cases had repeatedly held that nothing could be            
 concluded, as a matter of law, from the legislature's failure to              
 act, in terms of legislative intent.                                          
                                                                               
 TAPE 96-33, SIDE B                                                            
 Number 0001                                                                   
                                                                               
 MS. VOGT voiced that it would be difficult to describe the                    
 burdensomeness of the requests for documentary information from               
 taxpayer after taxpayer.  She stated, "These were simply two                  
 categories that we know, as a matter of law, can't be probative of            
 anything, that it would simply help ... save the whole state money            
 to foreclose those inquiries before they start."                              
                                                                               
 Number 0053                                                                   
                                                                               
 MR. WILLIAMS referred to page 5, lines 9 through 12, provisions for           
 people to find legislative history on their own, and suggested the            
 idea that taxpayers would ask the department to do their legal                
 research for them would end.  He believed there might be a case               
 that said history of legislation that did not pass was not                    
 probative of legislative intent.   However, he thought it was                 
 important to know whether the legislature was aware of something or           
 not at a particular time.                                                     
                                                                               
 MR. WILLIAMS cited a case in point with respect to a regulation,              
 saying "In 1981, when I was commissioner, legislation was passed              
 repealing separate accounting, that said, specifically, the                   
 windfall profit tax for the feds was a deduction against separate             
 accounting.  And the question was raised whether it would still be            
 a deduction under the new tax that was created.  And we had                   
 discussion within the department and never adopted a regulation.              
 But the decision was made at the commissioner's office that it was,           
 in fact, going to be a deduction.  Now, if a taxpayer can get the             
 evidence to show that that was a policy decision made, rather than            
 in the absence of a regulation, why shouldn't they be able to show            
 it?  If it's not relevant, it won't be admissible anyway."                    
                                                                               
 MR. WILLIAMS continued:  "But if it's relevant to show that the               
 legislature was aware of problems with the markers through Prince             
 William Sound or something like that, that could become relevant in           
 some context relating to tax and the deductions for spill response            
 costs ....  I'm not sure, also, that it's absolutely clear that               
 it's always going to be irrelevant as a matter of law.  The case              
 simply hasn't come up right."  He cited the example of SB 103,                
 which failed in the 1972 Senate ten-to-ten.  Ten weeks later, the             
 exact same words in a different bill were determined okay to go               
 forward.  He again suggested it would be good to look at a bill for           
 knowledge that the body had relevant information.                             
                                                                               
 Number 0177                                                                   
                                                                               
 CHAIRMAN PORTER said, "Considering the restrictions that already              
 exist in the bill, and reading what this amendment says, I don't              
 think there's a great deal of difference."  Basically, he                     
 suggested, it came down to the difference between a judge ruling on           
 whether information, which the taxpayer had to develop on his own,            
 was relevant and the judge saying `I'll let it in in the interest             
 of justice.'  "And I'm not sure what the interest-of-justice                  
 standard is," he said.  "I know what relevancy generally is."  He             
 added, "I don't know if I like the amendment in that context."                
                                                                               
 REPRESENTATIVE FINKELSTEIN referred to previous mention of other              
 bill history and said, "If that provision is the one provision that           
 eventually was enacted into law, then it is relevant and it would             
 be covered under this.  It says history of legislative provisions,            
 not bills that have not been enacted.  So, if it's a provision that           
 somehow came from one other place, went into another bill, then               
 that legislative history is still relevant.  In the cases where ...           
 there's some unusual issue, such as who is aware of something, ...            
 there is an exception in here, where it's in the interest of                  
 justice, they can allow it.  So, it isn't a blanket prohibition."             
 He agreed legislative intent could not be inferred from actions not           
 taken.                                                                        
                                                                               
 Number 0255                                                                   
                                                                               
 CHAIRMAN PORTER said, "I don't interpret either view of this as               
 looking for that, really."  He said it had to do with whether the             
 legislature or perhaps the Administration, in presenting                      
 information on a bill, had a relevant fact or not.                            
                                                                               
 MS. VOGT agreed with Mr. Williams that the legislation went a long            
 ways towards reducing burden in requiring a taxpayer to research              
 legislative history.  "But there still remain a lot of documents              
 within ... the Department of Law and the Department of Revenue that           
 we are repeatedly asked for," she said.  "And that's not covered by           
 the provisions requiring the taxpayer to go to the library when the           
 information's available at the library.  I certainly agree that if            
 a taxpayer does that research at the library, finds something or              
 knows something that came to the attention of the legislature, that           
 the issue is, `did the legislature know this, were they aware of              
 it,' that would be a perfect example for the administrative law               
 judge to find that an exception to this provision [was] required."            
                                                                               
 MS. VOGT concluded, "We are setting up a system whereby discovery,            
 rather than going on out of sight of the judge, and the parties               
 making up their own minds on what they'll do and what they won't do           
 and only going to the judge if they get into a dispute, here, we've           
 set up a system where the administrative law judge is supposed to             
 take an affirmative role in discovery and approve a discovery plan            
 at its inception."                                                            
                                                                               
 Number 0346                                                                   
                                                                               
 CHAIRMAN PORTER asked if that wouldn't limit a request for                    
 unnecessary research on the part of the department.                           
                                                                               
 MS. VOGT replied it was possible.                                             
                                                                               
 REPRESENTATIVE VEZEY said legislative history may or may not be in            
 the library somewhere.  "We have a statute that says that these               
 public records are public records unless you're involved in                   
 litigation with the state.  Then, they're no longer public records.           
 That would be a case where discovery was the only method available            
 to a party to get this information.  If that statute wasn't there,            
 I think I might agree with you."                                              
                                                                               
 MS. VOGT responded, "To the extent that those records are in the              
 possession of the Department of Revenue, that's right that they are           
 controlled by the statute that says ...."                                     
                                                                               
 REPRESENTATIVE VEZEY interjected that it did not matter which                 
 department of the state.                                                      
                                                                               
 MS. VOGT said, "It they're in the Legislative Affairs library, the            
 taxpayer can go down and look at them.  If they're in legislators'            
 files, they're not covered by that public disclosure provision that           
 you've just cited."                                                           
                                                                               
 Number 0356                                                                   
                                                                               
 REPRESENTATIVE VEZEY said, "It goes beyond just the Department of             
 Revenue.  It goes to other state agencies.  Now, if it's in the               
 public domain, that's different; they've already been released.               
 But I just know from experience that if you are involved in                   
 litigation with the state, you can't go down to state agencies and            
 start going through their records without getting what amounts to             
 a court order."                                                               
                                                                               
 REPRESENTATIVE FINKELSTEIN said, "This is just the legislative                
 history here.  And legislative history is available.  I've                    
 researched plenty of things and they don't even ask where you're              
 from."                                                                        
                                                                               
                                                                               
 CHAIRMAN PORTER asked if there was further discussion on                      
 Amendment8 and then asked for a roll call vote.  Voting for the               
 amendment was Representative Finkelstein.  Voting against the                 
 amendment were Representatives Green, Bunde, Toohey, Vezey and                
 Porter.  Chairman Porter noted that Amendment 8 failed.                       
                                                                               
 Number 0437                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN mentioned that he was skipping Amendment           
 No.5 of the Department of Revenue packet and going to Amendment               
 No. 6, which would now be Amendment9.  He said for the final three            
 amendments, 9, 10 and 11, they had heard from neither the taxpayers           
 nor the state.  Nor had those been covered in previous hearings.              
                                                                               
 REPRESENTATIVE FINKELSTEIN referred to Amendment 9 and said,                  
 "there's a procedural system set up that's way beyond my                      
 understanding when it comes to resolving these questions, which               
 ones are a matter of law, which ones are a matter of fact, et                 
 cetera.  The last thing we want to do is start over.  There was               
 some confusion as to exactly what this all meant.  We ought to, as            
 much as possible, try to keep that standard in place and this                 
 amendment would do just that."                                                
                                                                               
 MS. VOGT said, "This Amendment No. 6 in our package should be                 
 replaced by what you passed as Amendment 7."                                  
                                                                               
 CHAIRMAN PORTER said, "So, we should withdraw number 6, then,                 
 also."                                                                        
                                                                               
 MS. VOGT replied, "Our numbering number 6."                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN withdrew the amendment and noted that              
 Amendment 9 was now Amendment No. 7 from the Department of Revenue            
 packet.  Amendment 9 read:                                                    
                                                                               
 Amend Section 6, page 12, lines 24-27, to read as follows:                    
                                                                               
      * Sec. 6.  AS 39.25.120(c) is amended by adding a paragraph to           
 read:                                                                         
                                                                               
           (25) the chief administrative law judge and any other               
 administrative law judges appointed to the office of tax appeals of           
 the Department of Administration under AS 43.05.410.                          
                                                                               
 REPRESENTATIVE FINKELSTEIN indicated there had been a slight amount           
 of previous discussion on Amendment 9.  "It's a rather thin line              
 between the exempt service and the partially exempt service," he              
 said.                                                                         
                                                                               
 Number 0511                                                                   
                                                                               
 CHAIRMAN PORTER asked if the amendment would make ALJs partially              
 exempt.                                                                       
                                                                               
 REPRESENTATIVE FINKELSTEIN said, "Yes."                                       
                                                                               
 REPRESENTATIVE VEZEY asked where they were now.                               
                                                                               
 REPRESENTATIVE FINKELSTEIN answered, "In the bill, they're exempt             
 service."                                                                     
                                                                               
 REPRESENTATIVE VEZEY said, "In light of the fact that, to the best            
 of my knowledge, we have no statute defining what is partially                
 exempt, it's a very gray area in the law.  Lacking a statute that             
 would define what partially exempt is, I would just have to oppose            
 the amendment."                                                               
                                                                               
 REPRESENTATIVE FINKELSTEIN asked to hear briefly from the                     
 department and any taxpayers who wanted to comment.                           
                                                                               
 Number 0544                                                                   
                                                                               
 MS. VOGT explained, "Exempt normally is truly at-will.  And one of            
 the reasons we propose partially exempt is that we agree with the             
 taxpayers on the concept of `dismissible only for cause.'  I guess            
 that's not entirely inconsistent with exempt service, but partially           
 exempt seems more protected than exempt in terms of `dismissible              
 for purely political reasons.'"                                               
                                                                               
 Number 0583                                                                   
                                                                               
 CHAIRMAN PORTER asked:  "Am I correct that the provisions of the              
 bill that the requirements for dismissal only for cause and that              
 sort of thing would be the criteria, regardless of whether we                 
 called them exempt, non-exempt or employee classification xyz?"               
                                                                               
 MS. VOGT replied, "Up until the very last part of your sentence, I            
 agree with you."  She added, "As between exempt and partially                 
 exempt, the language in the statute's going to govern."                       
                                                                               
 CHAIRMAN PORTER asked:  "So, the effect of this is, basically,                
 trying to come up with a title that more fits our criteria, rather            
 than changing the criteria."                                                  
                                                                               
 Number 0606                                                                   
                                                                               
 MS. VOGT replied, "Precisely.  And we saw this amendment as part of           
 the package.  The Governor's bill proposes ALJs within the                    
 Department of Administration, appointed by the commissioners, in              
 the partially exempt service.  The legislation, in the work draft,            
 has a board of exempt people confirmable by the legislature and, in           
 a sense, they're part of a package."                                          
                                                                               
 CHAIRMAN PORTER asked what the classification would be for a Alaska           
 Public Utilities Commission (APUC) board member.                              
                                                                               
 MS. VOGT replied, "An APUC board member, I would be quite certain,            
 would be exempt.  But the hearing officer that works for the APUC             
 would probably be partially exempt."                                          
                                                                               
 Number 0650                                                                   
                                                                               
 REPRESENTATIVE GREEN said, "I think that while we do say, in the              
 first part of the bill, that they would only be dismissed because             
 of cause, there is still that tie of partially exempt to the other            
 administrative officers within a department.  But I think another             
 criteria, at least, that was considered in this is that these ALJs            
 are going to exercise a significant decision-making tribunal on               
 major, major items, certainly the large tax issues.  And it seems             
 to me that while I'm all in favor of cutting state government, it             
 might be that here is a case where we should try and attract those            
 personnel, who are astute enough, in demand enough, marketable                
 enough, to a salary that would be commensurate with the position              
 and the responsibility (indisc.)."                                            
                                                                               
 Number 0698                                                                   
                                                                               
 REPRESENTATIVE BUNDE asked if there was a salary difference between           
 exempt and partially exempt.                                                  
                                                                               
 MS. VOGT replied, "Not necessarily."                                          
                                                                               
 CHAIRMAN PORTER indicated the limits were different.                          
                                                                               
 Number 0707                                                                   
                                                                               
 MS. WILLIAMS suggested there were two reasons for putting it in the           
 exempt.  First, it was consistent with legislative confirmation.              
 And second, it was related to salary.  "There are exempt petroleum            
 geologists in the Department of Natural Resource, Division of Oil             
 and Gas," he said.  "And the reason they're in the exempt service,            
 even though they're staff persons, not in a policy-making role, is            
 so that their salaries can be competitive with the private sector."           
                                                                               
 CHAIRMAN PORTER asked if there was further discussion on                      
 Amendment9.  He then asked for a roll call vote.  Voting for the              
 amendment was Representative Finkelstein.  Voting against the                 
 amendment were Representatives Green, Bunde, Toohey, Vezey and                
 Porter.  Chairman Porter noted that Amendment 9 failed.                       
                                                                               
 Number 0777                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN indicated Amendment 10 was Amendment               
 No.8 in the Department of Revenue packet.  Amendment 10 read:                 
                                                                               
                                                                               
 -Amend Section 14, at page 17, lines 31-32, by deleting the phrase            
 "meeting with representatives of the Department of Revenue [FORMAL          
 HEARING UNDER AS 43.05.240]" and replacing with the phrase "a                 
 formal hearing under AS 43.05.241 or a judicial appeal under AS              
 43.05.242 [AS 43.05.240]".                                                   
                                                                               
 -Amend Section 14, at page 18, lines 1-2, by deleting the phrase              
 "meeting [HEARING]" and replacing with the phrase "hearing".                
                                                                               
 REPRESENTATIVE FINKELSTEIN explained, "Again, it's attempting to              
 hang on to some of the standards we've built up in the past."  As             
 the amendment had not been discussed to any degree, he expressed              
 interest in hearing from witnesses.                                           
                                                                               
 MS. VOGT explained, "The section that it amends, [AS] 43.55.013(g),           
 I believe, is a section in the severance tax statute dealing with             
 ... contesting the presumption of production at the economic limit.           
 And the language currently reads that a taxpayer who contests the             
 statutory presumption may prove, at a formal hearing in front of              
 the department, by clear and convincing evidence, that a different            
 monthly production at the economic limit is appropriate."                     
                                                                               
 MS. VOGT did not believe participants intended to change the                  
 severance tax statute.  "What happened was, the package went over             
 to the legislative drafters and there was a reference to                      
 [AS]43.05.240, which is currently the taxpayer remedies section in            
 the existing statute.  Since the work draft changed .240 and made             
 it into three sections, ... the drafter took a stab at what he                
 thought might be the best way to handle the reference, [in] which             
 it was not clear what we wanted to do, or what anybody wanted to              
 do."                                                                          
                                                                               
 MS. VOGT explained that in the new work draft, "informal                      
 conference" had been in the language, rather than "at a formal                
 hearing in front of the department".  There had been considerable             
 discussion about how to fix it.  "Finally, all agreed to simply               
 leave out the location of any hearing," she stated.  She did not              
 approve of the way the drafter had solved the problem with the                
 concept of "at a meeting with representatives of the department".             
 She said, "We believe that eviscerates the protection that the                
 department has at the trial de novo, that we should be able to rely           
 on the presumption unless the clear and cogent evidence standard              
 has been met.  And I don't think there's really any disagreement.             
 It's just a question of convincing the legislative drafter."                  
                                                                               
 Number 0954                                                                   
                                                                               
 MR. WILLIAMS said that was correct.  He referred to page 17, line             
 30, and stated, "Beginning on line 30, it would say `the taxpayer             
 may rebut this presumption', and strike the word `at', strike all             
 the next line, strike `under AS 43.05.240' in the brackets line32.            
 And I think we're in agreement on that change there.  And then, in            
 lines 1 and 2, go back to the word `hearing'."                                
                                                                               
 MS. VOGT said, "Right."                                                       
                                                                               
 MR. WILLIAMS clarified, "Use the word `hearing' again there, rather           
 than `meeting'.                                                               
                                                                               
 CHAIRMAN PORTER asked if that was what the amendment did.                     
                                                                               
 MR. WILLIAMS replied, "No.  But that's where, at our discussions              
 with the department, we ended up agreeing how to do that."                    
                                                                               
 CHAIRMAN PORTER asked Representative Finkelstein if he would                  
 consider a friendly amendment to his amendment, striking everything           
 in the body of Amendment 10 and just saying, "page 17, line 30,               
 delete `at'; line 31, delete entire; line 32, delete `under AS                
 43.05.240'."                                                                  
                                                                               
 Number 1049                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said, "I'll withdraw my amendment and              
 offer that as the amendment."                                                 
                                                                               
 CHAIRMAN PORTER referred to page 18, line 1, and indicated                    
 `meeting' should be deleted, with `hearing' reinserted in its                 
 stead, for Amendment 10.  The wording would read:  "The hearing               
 shall be held before February 15 of the year or within six months             
 after commencement of gas production for a lease or property."  He            
 asked if there was an objection to the amendment.  There being no             
 objection, Amendment 10 passed.                                               
                                                                               
 REPRESENTATIVE VEZEY indicated he had expected another amendment.             
 He referred to page 8, line 17, which provided that the department            
 may conduct hearings and compel the attendance of witnesses and the           
 production of books, records, and papers of any person.  He                   
 expressed concern that the records were public records.                       
                                                                               
 CHAIRMAN PORTER said, regardless of whether there was an appeal,              
 the making public of records under the bill occurred after the                
 final administrative decision.                                                
                                                                               
 Number 1215                                                                   
                                                                               
 MS. VOGT pointed out that under current procedure at the Department           
 of Revenue, the decisions of the hearing section become public at             
 the close of a hearing.  The taxpayer was generally given a copy of           
 the decision with the admonition to redact it in any way that would           
 preserve confidentiality.  "And this is so that the law established           
 by the hearing officers can be followed," she said, "so that the              
 public can know what it is."                                                  
                                                                               
 CHAIRMAN PORTER asked if that procedure would remain under effect             
 in this statute.                                                              
                                                                               
 MS. VOGT affirmed that.  "This section, the way I read it, means              
 that the proceedings are going to be closed," she said.  "They're             
 going to be confidential.  But they become public at the end, to              
 the extent that that process is gone through."  She asked for                 
 clarification on Representative Vezey's proposed amendment.                   
                                                                               
 Number 1340                                                                   
                                                                               
 CHAIRMAN PORTER suggested the amendment would propose that records            
 and the decision would remain confidential after the decision was             
 rendered.                                                                     
                                                                               
 REPRESENTATIVE VEZEY clarified his intent was not that the decision           
 would remain confidential, just the taxpayer's records.                       
                                                                               
 CHAIRMAN PORTER thought that could be accomplished by removing                
 records and proceedings.  He said, "Then it would be `are                     
 confidential except that the decisions become public records and              
 open to the public when the final administrative decision is                  
 issued'."  He added, "I think you'd have to include proceedings,              
 because the records are part of the proceedings."                             
                                                                               
 Number 1370                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said the provision was important and               
 came from the appropriateness of some degree of public disclosure.            
 He thought it was a reasonable compromise.  "I did not offer the              
 amendment that would have expanded this to a greater degree than              
 the bill partially in deference to the compromise that's been                 
 reached," he explained.                                                       
                                                                               
 CHAIRMAN PORTER asked if providing confidentiality until the                  
 decision was made was current policy.                                         
                                                                               
 MS. VOGT said, "Proceedings are currently confidential and                    
 decisions are published, pseudonymed.  How that practice fits in              
 with this precise language, I'm not entirely clear in terms of the            
 records, proceedings and decisions."  She indicated they had not              
 generally published motions, oppositions to motions, rulings on               
 motions, or other proceedings of the hearing, except for the final            
 decision.                                                                     
                                                                               
 Number 1424                                                                   
                                                                               
 REPRESENTATIVE TOOHEY expressed that she shared Representative                
 Vezey's concern.                                                              
                                                                               
 CHAIRMAN PORTER asked if everyone would be comfortable with a                 
 conceptual amendment.  He suggested drafters look at existing                 
 language and craft the bill so that the decision would become                 
 public, with the ability of the taxpayer to peruse it for                     
 confidential information, instead of the wording in work draft R.             
                                                                               
 REPRESENTATIVE FINKELSTEIN said, "This is, I think, just a                    
 reasonable statement of what's appropriate public policy."  He                
 suggested there might be other standards implemented if and when              
 there was an income tax.  He thought it reflected the public                  
 interest in knowing what the state was doing in its decisions with            
 billion dollar cases.                                                         
                                                                               
 REPRESENTATIVE VEZEY mentioned there was a corporate income tax in            
 Alaska, which many citizens paid.                                             
                                                                               
 Number 1584                                                                   
                                                                               
 REPRESENTATIVE BUNDE indicated he did not want to pass a law that             
 would require readjustment.  He shared Representative Finkelstein's           
 concerns about billion dollar settlements.  He said he wanted the             
 language to reflect what was currently being done.                            
                                                                               
 REPRESENTATIVE FINKELSTEIN said, "I think people are missing                  
 something here.  The section we're talking about allows the                   
 administrative law judge to issue a protective order requiring that           
 specific parts of the record remain confidential.  And when the               
 decision is released, those items shall be removed from the                   
 materials made available.  There's plenty of protection that exists           
 right now."  He clarified he was talking about page 8, lines 21-25.           
                                                                               
 Number 1471                                                                   
                                                                               
 CHAIRMAN PORTER agreed it seemed to generally reflect current                 
 policy.                                                                       
                                                                               
 REPRESENTATIVE VEZEY asked for a definition of "redacting."                   
                                                                               
 CHAIRMAN PORTER replied, "Blacking out sections that you want to              
 remain confidential."                                                         
                                                                               
 REPRESENTATIVE BUNDE moved to adopt CSHB 341, version R, as                   
 amended, as a work draft.                                                     
                                                                               
 CHAIRMAN PORTER noted there was a motion to adopt working draft R,            
 dated 3/7/96, of CSHB 341, as amended, as the working document and            
 asked if there was an objection.                                              
                                                                               
 Number 1794                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN indicated he thought more work needed to           
 be done.  He suggested the Administration, which had to sign the              
 bill, was the only real entity that played a role in these kinds of           
 things.                                                                       
                                                                               
 REPRESENTATIVE BUNDE made a motion that CSHB 341, as amended, be              
 moved from committee with individual recommendations.                         
                                                                               
 CHAIRMAN PORTER noted there was a motion to move CSHB 341,                    
 versionR, as amended, with individual recommendations and any                 
 fiscal notes, as attached.  There being no objection, it moved from           
 committee.                                                                    
                                                                               
 Number 1844                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN mentioned there were two letters of                
 intent, by Representative Green and the department.  CHAIRMAN                 
 PORTER called a short recess to read the letters.  The two letters            
 of intent were withdrawn.                                                     
                                                                               
 HB 462 - DRUNK DRIVING:  EVIDENCE AND SENTENCING                            
                                                                               
 Number 2055                                                                   
                                                                               
 CHAIRMAN PORTER noted that the next item of business was HB462.               
 As sponsor of the bill, he explained that HB 462 did three things.            
 "One, when we passed, as you remember, the DWI felony provisions,             
 one thing that we put in and did not really mean was that we                  
 restricted the court ... to being required to institute the sum               
 total of the suspended sentence if a defendant had failed to take             
 any portion of his ... or her first treatment program,"  he said.             
 He indicated that in those cases, usually some portion of the                 
 suspended sentence was put into effect to get the offender's                  
 attention, with continued attempts made at treatment.  "This bill             
 would restore the court's ability to invoke a portion of the                  
 suspended sentence in that situation but still have the opportunity           
 to take another shot at treatment if it is indicated," he added.              
                                                                               
 CHAIRMAN PORTER indicated the basis for getting into a felony-level           
 prosecution was prior convictions.  He said people frequently came            
 to Alaska with prior convictions elsewhere.  After being arrested             
 here, they were required to go to grand jury in a felony case                 
 within ten days, and it was extremely difficult to get a certified            
 copy of their record to the grand jury in time for that to be                 
 considered.  "What this bill would allow would be to use the print-           
 out, if you will, from the criminal history of that person's state            
 for that evidence at grand jury, which, of course, doesn't find               
 them guilty, it just binds them over for trial," he said, noting              
 that the best evidence of the hard copy certification would still             
 be required at trial.                                                         
                                                                               
 CHAIRMAN PORTER explained the bill would also disallow the                    
 requirement for a pre-sentence investigation in some cases.  "This            
 would require that if this were the second felony, that there would           
 be a pre-sentence investigation, as is required under the other               
 statutes now," he said.  He noted that Jerry Shriner from the                 
 Department of Corrections was present to answer questions if                  
 needed.                                                                       
                                                                               
 Number 2323                                                                   
                                                                               
 ANNE D. CARPENETI, Assistant Attorney General, Central Office,                
 Criminal Division, Department of Law, testified that the department           
 supported HB 462.                                                             
                                                                               
 REPRESENTATIVE GREEN referred to Section 7, page 3, and asked if a            
 sentence had not already been given, whether this act would apply.            
                                                                               
 MS. CARPENETI replied, "I think what this means is that for your              
 third offense within five years, for the felony offense, it has to            
 occur after the effective date of the act."  However, prior                   
 convictions could have occurred before that, she indicated.                   
                                                                               
 Number 2395                                                                   
                                                                               
 REPRESENTATIVE TOOHEY pointed out there was an amendment in her               
 packet.                                                                       
                                                                               
 CHAIRMAN PORTER explained that amendments had been offered in other           
 committees, which he, as sponsor, had been asked to entertain.  He            
 had declined.  "I would speak against them when it gets to the                
 floor, as a matter of fact," he said, "because there's been any               
 number of second thoughts in this general area that have come                 
 about."                                                                       
                                                                               
 REPRESENTATIVE TOOHEY made a motion that HB 462 move from committee           
 with individual recommendations and attached fiscal notes.  There             
 being no objection, HB 462 moved from the House Judiciary                     
 Committee.                                                                    
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 There being no further business to conduct, CHAIRMAN PORTER                   
 adjourned the House Judiciary Committee meeting at 2:45 p.m.                  
                                                                               

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