Legislature(1999 - 2000)
05/05/1999 01:47 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE May 5, 1999 1:47 p.m. MEMBERS PRESENT Representative Pete Kott, Chairman Representative Joe Green Representative Norman Rokeberg Representative Jeannette James Representative Lisa Murkowski Representative Eric Croft Representative Beth Kerttula MEMBERS ABSENT All members present COMMITTEE CALENDAR HOUSE BILL NO. 192 "An Act relating to reciting the pledge of allegiance by public school students." - MOVED CSHB 192(JUD) OUT OF COMMITTEE CS FOR SENATE BILL NO. 141(L&C) "An Act relating to construction contracts and subcontractors; relating to design-build construction contracts; and providing for an effective date." - MOVED HCS CSSB 141(JUD) OUT OF COMMITTEE (* First public hearing) PREVIOUS ACTION BILL: HB 192 SHORT TITLE: PLEDGE OF ALLEGIANCE IN PUBLIC SCHOOLS SPONSOR(S): REPRESENTATIVES(S) JAMES, Dyson, Kohring, Ogan, Coghill, Rokeberg, Harris Jrn-Date Jrn-Page Action 4/13/99 795 (H) READ THE FIRST TIME - REFERRAL(S) 4/13/99 795 (H) STA, JUD 4/15/99 833 (H) COSPONSOR(S): DYSON 4/21/99 905 (H) COSPONSOR(S): KOHRING 4/22/99 (H) STA AT 8:00 AM CAPITOL 102 4/22/99 (H) <BILL POSTPONED TO 4/29> 4/23/99 964 (H) COSPONSOR(S): OGAN 4/27/99 1038 (H) COSPONSOR(S): COGHILL 4/29/99 (H) STA AT 8:00 AM CAPITOL 102 4/29/99 (H) MOVED OUT OF COMMITTEE 4/29/99 (H) MINUTE(STA) 4/30/99 1105 (H) STA RPT 5DP 2AM 4/30/99 1105 (H) DP: JAMES, COGHILL, HUDSON, WHITAKER, 4/30/99 1105 (H) OGAN; AM: SMALLEY, KERTTULA 4/30/99 1105 (H) ZERO FISCAL NOTE (DOE) 5/05/99 (H) JUD AT 1:00 PM CAPITOL 120 BILL: SB 141 SHORT TITLE: PROCUREMENT: CONTRACTS/SUBCONTRACTS SPONSOR(S): SENATOR(S) LEMAN BY REQUEST Jrn-Date Jrn-Page Action 4/12/99 879 (S) READ THE FIRST TIME - REFERRAL(S) 4/12/99 879 (S) L&C 4/20/99 (S) L&C AT 1:30 PM BELTZ 211 4/20/99 (S) MOVED CS (L&C) OUT OF COMMITTEE 4/21/99 985 (S) L&C RPT CS 4DP SAME TITLE 4/21/99 985 (S) DP: MACKIE, LEMAN, HOFFMAN, TIM KELLY 4/21/99 985 (S) ZERO FISCAL NOTE (DOT) 4/22/99 (S) RLS AT 12:05 PM FAHRENKAMP 203 4/22/99 (S) MINUTE(RLS) 4/23/99 1064 (S) RULES TO CALENDAR AND 1 OR 4/23/99 4/23/99 1064 (S) READ THE SECOND TIME 4/23/99 1064 (S) L&C CS ADOPTED UNAN CONSENT 4/23/99 1064 (S) ADVANCED TO THIRD READING UNAN CONSENT 4/23/99 1065 (S) READ THE THIRD TIME CSSB 141(L&C) 4/23/99 1065 (S) PASSED Y20 N- 4/23/99 1065 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 4/23/99 1071 (S) TRANSMITTED TO (H) 4/27/99 1020 (H) READ THE FIRST TIME - REFERRAL(S) 4/27/99 1020 (H) L&C 4/28/99 (H) L&C AT 3:15 PM CAPITOL 17 4/28/99 (H) MOVED HCS CSSB 141(L&C) OUT OF COMMITTEE 4/28/99 (H) MINUTE(L&C) 4/29/99 1071 (H) L&C RPT HCS(L&C) 2DP 2NR 1AM 4/29/99 1071 (H) DP: ROKEBERG, HARRIS; NR: CISSNA, 4/29/99 1071 (H) HALCRO; AM: MURKOWSKI 4/29/99 1071 (H) SENATE ZERO FISCAL NOTE (DOT) 4/21/99 4/30/99 1122 (H) JUD REFERRAL ADDED 5/04/99 (H) JUD AT 1:00 PM CAPITOL 120 5/04/99 (H) HEARD AND HELD 5/05/99 (H) JUD AT 1:00 PM CAPITOL 120 WITNESS REGISTER RICHARD SCHMITZ, Legislative Secretary for Representative Jeannette James Alaska State Legislature Capitol Building, Room 102 Juneau, Alaska 99801 Telephone: (907) 465-3743 POSITION STATEMENT: Presented sponsor statement for HB 192. THERESA BANNISTER, Attorney Legislative Legal Counsel Legislative Legal and Research Services Legislative Affairs Agency 130 Seward Street, Suite 409 Juneau, Alaska 99801-2105 Telephone: (907) 465-2450 POSITION STATEMENT: Testified on SB 141. DON McCLINTOCK, Attorney Ashburn and Mason 1130 West 6th Avenue Anchorage, Alaska 99501 Telephone: (907) 276-4331 POSITION STATEMENT: Testified on SB 141. ANNETTE KRIETZER, Legislative Assistant to Senator Loren Leman Alaska State Legislature Capitol Building, Room 115 Juneau, Alaska 99801 Telephone: (907) 465-2095 POSITION STATEMENT: Testified on behalf of sponsor on SB 141. ACTION NARRATIVE TAPE 99-54, SIDE A Number 0001 CHAIRMAN PETE KOTT called the House Judiciary Standing Committee meeting to order at 1:47 p.m. Members present at the call to order were Representatives Kott, Green, Rokeberg, Croft and Kerttula. Representatives Murkowski and James arrived at 1:50 p.m. and 1:55 p.m., respectively. HB 192 - PLEDGE OF ALLEGIANCE IN PUBLIC SCHOOLS CHAIRMAN KOTT announced that the first order of business is HOUSE BILL NO. 192, "An Act relating to reciting the pledge of allegiance by public school students." Number 0097 RICHARD SCHMITZ, Legislative Secretary for Representative Jeannette James, Alaska State Legislature, explained that HB 192 calls for the recitation of the pledge of allegiance in public schools. Presently, there is no standard policy in Alaska. Mr. Schmitz informed the committee that recitation of the pledge of allegiance is required in Anchorage, somewhat required in Fairbanks, and not required in Juneau. In some cases, the pledge of allegiance is recited in the elementary schools while in others it is recited through the middle schools. Mr. Schmitz stated, "The aim of HB 192 is to standardize the pledge of allegiance policies among the state's public school systems and to insure that the basic civic function is held on a regular basis at all grade levels of Alaska's public schools." Upon research, the state of Washington was found to have a basic pledge statute attached to its flag statute. Number 0242 REPRESENTATIVE ROKEBERG asked whether there is an exemption for extra-curricular activities such as sporting events. MR. SCHMITZ pointed out that at most sports events the national anthem is preformed. This would provide an opportunity for the pledge of allegiance in a classroom setting. He envisioned that at assemblies there would be a pledge, but at sporting events the national anthem is utilized which seems to take precedent over the pledge of allegiance. REPRESENTATIVE ROKEBERG noted that the bill refers to "interscholastic events" which he did not know if that was appropriate. MR. SCHMITZ pointed out that the language - "if feasible" - is also used which seems to leave room for common sense and judgement on the part of school administrators. CHAIRMAN KOTT surmised then that the governing body is required if feasible. MR. SCHMITZ said that is correct. REPRESENTATIVE ROKEBERG commented that he supported this and almost signed on as a sponsor, but he was unsure as to the appropriateness of the pledge of allegiance at all interscholastic events. He indicated that although in some instances it may be feasible, it may not be appropriate. MR. SCHMITZ stated that the bill's reference to interscholastic events could be left out of the bill without affecting its intent. Number 0464 CHAIRMAN KOTT inquired as to the who the language - "governing body" - was referring; the school districts or the local school boards or a combination thereof. MR. SCHMITZ noted that he is not an attorney. He believed that the drafter utilized the language in existing flag statute. REPRESENTATIVE CROFT indicated that he shared the chair's concern. He believed that there is confusion regarding the practicalities of feasibility and the passive ordinance. He asked what the "Bellamy Salute" is. MR. SCHMITZ noted that the "Bellamy Salute" was the original pledge which was last changed in 1954. There was discussion regarding how the hand position of the pledge was changed after World War II. REPRESENTATIVE JAMES, Sponsor of HB 192, Alaska State Legislature, illustrated the original salute. REPRESENTATIVE CROFT asked whether every child was required to recite the pledge of allegiance back then. REPRESENTATIVE JAMES replied no. Number 0690 CHAIRMAN KOTT referred to page 1, line 7 which speaks of the "governing body". To whom does that refer? REPRESENTATIVE JAMES said that there is not a definition in law, but she believed it would be the local school board which is the governing body of the schools. REPRESENTATIVE GREEN inquired as to the possibility that the language of line 8 would require the pledge of allegiance to occur in each class. MR. SCHMITZ clarified that the language - "regularly" - was chosen to preclude "daily", although that was the thought. Leaving the language open provides a bit more leeway to the governing school's administration. He indicated that as long as the pledge is done weekly, then each school could determine the specifics. The idea is to do the pledge more than never. REPRESENTATIVE MURKOWSKI referred to the language - "be held regularly in each classroom" - which she interpreted to mean in each classroom the pledge will be recited. REPRESENTATIVE JAMES clarified that the intent of that language was to recite the pledge in kindergarten, first, second, third, fourth, et cetera. She said that she did not necessarily mean each classroom that the student was in, but rather that classroom for each grade level. Perhaps, the pledge should be done in the homeroom. REPRESENTATIVE MURKOWSKI noted that many schools do not have homerooms. Number 0903 CHAIRMAN KOTT surmised then that Representative James would like for the pledge of allegiance to be recited at least once a day in a classroom. Thereafter, it could occur in a school assembly and if feasible, at an interscholastic event. Chairman Kott asked whether the pledge allegiance would be more apt to be conducted at the beginning of the school day in order to avoid reciting the pledge at the beginning of every class. REPRESENTATIVE JAMES specified that her intent was to learn the pledge and recite it regularly. There are children that do not know the pledge of allegiance which is the problem. It is important to have a flag in each classroom. REPRESENTATIVE ROKEBERG reiterated his belief that the reference to interscholastic events should be removed. He indicated that if the bill were amended to provide the local governing body more leeway to establish the specifics, some of these problems could be overcome. REPRESENTATIVE JAMES said that she did not have a problem with that. REPRESENTATIVE ROKEBERG discussed allowing the local governing body to tailor this to the specific needs and circumstances. Number 1081 REPRESENTATIVE MURKOWSKI noted that the state of Georgia used the following language: "Each student in the public schools of this state shall be afforded the opportunity to recite the pledge of allegiance to the flag of the United States of America during each school day." REPRESENTATIVE MURKOWSKI further noted that "during each school day" would not have to be utilized. As Representative Rokeberg suggested then the local governing bodies would be allowed to specify when, where, and how. REPRESENTATIVE JAMES stressed that she did not mean to insist that the pledge be recited every school day, but only as a regular program. She noted the need for the language to allow those who do not want to recite the pledge to be able to maintain silence and respect. CHAIRMAN KOTT asked whether Representative James adamantly supported the inclusion of the language, "in each classroom, at school assemblies, and, if feasible, at interscholastic events." REPRESENTATIVE JAMES replied no. She said that the language - "such as" - could be inserted. However, she indicated that she liked listing those instances where the pledge could be done, but she did not want to mandate it. CHAIRMAN KOTT suggested deleting line 8 and inserting language indicating that the governing body would determine the location, time, et cetera. REPRESENTATIVE JAMES said that she did not have a problem with that. CHAIRMAN KOTT clarified, in response to Representative Croft, that it would have to be clear that the governing body would have the authority and flexibility to determine the location, time, et cetera. Number 1295 REPRESENTATIVE CROFT commented that Chairman Kott's proposal is a good idea. He pointed out that the state of Montana's code is more detailed and specifies, "(5) If a student or teacher declines to participate in the recitation...a school district may not for evaluation purposes include any reference to the student's or teacher's not participating." REPRESENTATIVE JAMES stated that simple is better. REPRESENTATIVE GREEN referred to line 7 and suggested deleting, "require that", and inserting, "afford all students the opportunity to participate in an appropriate flag exercise to be held on a regular basis." REPRESENTATIVE JAMES objected. She did not believe that to be enough, it should be required. She emphasized that is the portion of the bill that should be kept. Number 1459 REPRESENTATIVE ROKEBERG said, "I think, if I'm not mistaken, the sponsor had in mind to the playing of The Star-Spangled Banner at interscholastic events which is more common than saying the pledge. So, I think, but that's not spoken to so I'm not sure we really need to have the pledge recited here, unless that's what the sponsor wants to make sure that's in the title and everything." REPRESENTATIVE JAMES commented that she wanted it in statute. REPRESENTATIVE ROKEBERG recommended then that the committee should consider a flag salute including the playing of the National Anthem. He indicated that could be in lieu of the pledge which he believed that to be appropriate. REPRESENTATIVE JAMES pointed out that the playing of the National Anthem would not negate the need for a regularly scheduled flag salute. The playing of the National Anthem does not teach the students the words to the pledge of allegiance. Representative James said that she is embarrassed that there are children growing up that do not know the pledge of allegiance. REPRESENTATIVE ROKEBERG agreed with Representative James. Therefore, he suggested that the language refer only to the pledge of allegiance and not "an appropriate flag exercise". REPRESENTATIVE CROFT pointed out that the current language works together or else the respectful silence language would have to be addressed in both spots. Representative Croft said that Chairman Kott's earlier suggestion was appropriate. Number 1589 CHAIRMAN KOTT offered a conceptual amendment [Amendment 1] to delete line 8 and end line 7 with a period. There being no objection, Amendment 1 was so adopted. CHAIRMAN KOTT asked whether it should be placed in statute and the governing body provided the flexibility or without any language would the governing body be provided that flexibility. REPRESENTATIVE MURKOWSKI interpreted it to mean that specific authority to the governing body is not necessary. She believed that with the directive to "require that an appropriate flag exercise be held regularly", there is an underlying assumption that someone where determine the specifics. Therefore specifying that the governing body has the authority to do certain things does not move further down the road. REPRESENTATIVE CROFT explained that originally he felt the original language was appropriate. However, do we want to allow an individual to charge that the pledge is not be held regularly enough and then the judge would determine what is "appropriate" and "regularly" or that the governing body would make that determination. REPRESENTATIVE GREEN stated with 50 different school districts, there would probably be 50 different interpretations of "regularly". He indicated that the first to be litigated would result in the determination for everyone. Representative Green said that it would be all over the map. CHAIRMAN KOTT agreed that would be the case without some direction from the Department of Education. REPRESENTATIVE GREEN inquired as to whether Representative James wanted uniformity throughout the school districts. REPRESENTATIVE JAMES replied, "Not necessarily. I think it is up to each school board to make that determination as long as it is part of--there is a regular occurrence of it, that it's part of the school education system. That's all I'm asking for." REPRESENTATIVE CROFT asked whether Representative James would want someone to have the right to go into court and say what they determined as "an appropriate flag exercise...regularly" or would it be preferred to have the school board make the determination. REPRESENTATIVE JAMES noted that people cannot be stopped from going to court, but if people do not like the choices of the school board then they can complain and elect someone else. CHAIRMAN KOTT said that he believed the litigation could be avoided if the language indicating that the governing body shall require an appropriate flag exercise to be held regularly as determined by the governing body. Such language clarifies that the governing body would make the decision. REPRESENTATIVE CROFT agreed. REPRESENTATIVE JAMES said that she did not have a problem with that. REPRESENTATIVE ROKEBERG inquired as to how Representative James would feel about adding the language - "or National Anthem" - at the end of line 12. Number 1854 REPRESENTATIVE CROFT moved that the committee adopt the following amendment [Amendment 2]: Page 1, line 7, before "." Insert, ",as determined by the governing body" There being no objection, Amendment 2 was so adopted. REPRESENTATIVE JAMES stated that she understood the pledge and The Star-Spangled Banner to be two different issues. "The language in the pledge says who we are. The Star-Spangled Banner is the flag living through war. It's a totally different issue all together. It's respect to the flag, but in a different issue. What I'm interested for children to understand is not war, but is about our daily living where we have this, 'one nation under God, indivisible, with liberty and justice for all.' Liberty and justice for all is extremely important and 'the republic for which this flag stands', those are the two important parts of the pledge of allegiance. I think they are extremely important as a civic lesson, if nothing else." Representative James did not have a problem with the playing of The Star-Spangled Banner as it is typical for interscholastic events, however, it does not take the place of the pledge of allegiance. REPRESENTATIVE ROKEBERG pointed out that he made that recommendation due to the use of the language, "an appropriate flag exercise". He stressed, "We are either talking about the pledge or not." REPRESENTATIVE JAMES commented that she wondered how long this has been working in the state of Washington and if they have had these problems. CHAIRMAN KOTT asked whether Representative Rokeberg was concerned with the language on line 7, "flag exercise" and would recommend that language be replaced with "pledge of allegiance". REPRESENTATIVE ROKEBERG agreed. He added that the current language implies that there is something besides the pledge that would qualify as "an appropriate flag exercise". CHAIRMAN KOTT suggested the language, "students recite the pledge of allegiance on a regular basis as determined by a local body." REPRESENTATIVE KERTTULA pointed out that the bill only speaks to students who wish to remain silent. Perhaps, the language "anyone" could be utilized instead of "students", with regard to reciting the pledge or remaining silent. Number 2102 CHAIRMAN KOTT clarified then that on line 7, the language would read, "The governing body shall require that 'the pledge of allegiance' be recited regularly." He asked whether that would work. REPRESENTATIVE JAMES pointed out that the beginning of the bill refers to the United States and Alaska flags. REPRESENTATIVE CROFT did not foresee a lot of frivolous suing over flag exercises. REPRESENTATIVE ROKEBERG explained that the original language referring to "interscholastic events" started his train of thought regarding what an "appropriate flag exercise" would be. CHAIRMAN KOTT asked whether there would be any situation in which the flag would be saluted without the flag. REPRESENTATIVE JAMES interjected and stated that one is not supposed to salute the flag without it being present. She further pointed out that there are rules regarding flag exercises and the handling of the flag. Representative James emphasized the importance of teaching students in public schools in America the pledge. She acknowledged that those from different countries could respect their own traditions as well as America's. CHAIRMAN KOTT agreed with the original intent for students to recite the pledge of allegiance. REPRESENTATIVE CROFT agreed that the recitation of the pledge is as important as Representative James' remembrance of Jehovah's witnesses not participating in the pledge. Both illustrate our freedom and is a good civic lesson. He reiterated the need to refer to "anyone" and eluded to the need to not hold it against those who do not participate. Number 2397 CHAIRMAN KOTT asked whether Representative Croft was suggesting the deletion of "Students" with "Any person". REPRESENTATIVE CROFT replied yes. He moved that the committee adopt Amendment 3 which reads as follows: Page 1, line 9 Delete "Students" Insert "Any person" There being no objection, Amendment 3 was so adopted. CHAIRMAN KOTT suggested at the end of line 12 inserting the following language: "If a person declines to participate in the recitation a school district may not for evaluation purposes include any reference to the student's or teacher's not participating." REPRESENTATIVE JAMES said that she did not have a problem with that. TAPE 99-54, SIDE B Number 0001 CHAIRMAN KOTT informed the committee that his suggested language would be Amendment 4. REPRESENTATIVE MURKOWSKI asked whether Amendment 4 should refer to the school district or the governing body. CHAIRMAN KOTT said if the governing body is a local entity, as is the case in Anchorage, Chairman Kott did not think it would have the responsibility. Number 0027 REPRESENTATIVE ROKEBERG asked whether an REAA [Rural Education Attendance Area] is a school district. REPRESENTATIVE JAMES replied yes. REPRESENTATIVE CROFT mentioned that an REAA is a school district under statute. REPRESENTATIVE ROKEBERG asked whether a single-site school is a school district. REPRESENTATIVE JAMES replied yes. REPRESENTATIVE KERTTULA pointed out that the language in Amendment 4 could be broadened rather than specifying "a student or teacher". She suggested that the language, "If a person declines to participate that shall not be used for any purpose." REPRESENTATIVE JAMES suggested that Chairman Kott's original language would be appropriate if "a student or teacher" is deleted and the language - "a person" - is inserted. Discussion ensued regarding the best language to be utilize in Amendment 4. The committee stood at-ease from 2:37 p.m. to 2:40 p.m. Number 155 CHAIRMAN KOTT clarified that conceptual Amendment 4 reads as follows: "A person may decline to participate. Such action shall not be used for evaluation on any other purpose." CHAIRMAN KOTT asked whether there was any objection. There being none, Amendment 4 was so adopted. REPRESENTATIVE MURKOWSKI noted that her children attend a public school which is a Spanish emersion school. Every morning the pledge is recited, however some mornings the pledge is recited in Spanish. Would that be a problem? REPRESENTATIVE ROKEBERG commented that a law addresses that. REPRESENTATIVE MURKOWSKI said that it was food for thought. She inquired as to whether it made a difference if the pledge was recited in another language. CHAIRMAN KOTT said that he believed the courts would find that the intent of HB 192 was met if the pledge is recited in Spanish. Number 0280 REPRESENTATIVE ROKEBERG moved to report HB 192, as amended, out of the committee with individual recommendations and the accompanying zero fiscal note(s). There being no objection, CSHB 192(JUD) was so moved from the House Judiciary Standing Committee. CSSB 141(L&C) - PROCUREMENT: CONTRACTS/SUBCONTRACTS CHAIRMAN KOTT announced the next order of business is CS FOR SENATE BILL NO. 141(L&C), "An Act relating to construction contracts and subcontractors; relating to design-build construction contracts; and providing for an effective date." CHAIRMAN KOTT referred to a memorandum dated May 5, 1999, from Theresa Bannister [Attorney, Legislative Legal Counsel, Legislative Legal and Research Services, Legislative Affairs Agency] to Representative Pete Kott. It discusses the intent language that has been incorporated into a new committee substitute [1-LS0827\K, Bannister, 5/5/99]. It cleans up the changes from yesterday [May 4, 1999] - the removal of the retroactive clause, the removal of Section 3, and the addition of a new Section 7, which deals with intent language that primarily comes from Chapter 15, SLA 1998. Number 0513 CHAIRMAN KOTT called for an at-ease at 2:48 p.m. and called the meeting back to order at 2:50 p.m. CHAIRMAN KOTT asked Ms. Theresa Bannister from the Legislative Affairs Agency whether a title amendment is required. Number 0534 THERESA BANNISTER, Attorney, Legislative Legal Counsel, Legislative Legal and Research Services, Legislative Affairs Agency, believed a title amendment is required. It would be better in its own bill, however. CHAIRMAN KOTT asked Ms. Bannister whether she was referring to the intent language. MS. BANNISTER clarified that she was speaking in general. The title does not quite express what is in the bill. CHAIRMAN KOTT said: "If we get into the title amendment, would we not also perhaps be crossing over the single-subject rule or are we still okay with that?" MS. BANNISTER replied: "Basically, the single-subject rule boils down right now to contracts. It may be okay still. It is getting broad, but it still seems to apply to contracts. Everything you've got in your--the intent language. But, as I said, it probably would be better to have it in its own bill. I'm just saying it." REPRESENTATIVE JAMES asked how Section 7 was placed in the committee substitute. CHAIRMAN KOTT explained that Section 7 was extracted from the letter of intent that accompanied HB 53 out of the House Rules Standing Committee. Number 0622 REPRESENTATIVE ROKEBERG said: "Mr. Chairman, counsel says (indisc.--talking) is redundant. It does recommend intent language (indisc.--talking) for what we're doing here. Is that correct? That's what is says in here." CHAIRMAN KOTT replied it's helpful. This is nothing more than confirming the original letter of intent. A letter of intent does not carry a lot of weight. Number 0660 REPRESENTATIVE ROKEBERG asked Chairman Kott whether this is creating intent language out of a letter of intent. CHAIRMAN KOTT replied it incorporates intent language into statute. CHAIRMAN KOTT said: "Well, I think I agree with counsel. If you have intent language it ought to be about what we're intending to do with the actual (indisc.)." Number 0676 REPRESENTATIVE JAMES expressed concern that Section 7 explains Section 6, which has no connection to the rest of the bill. The intent language for one section of the bill seems out of character. CHAIRMAN KOTT recognized that it may seem out of character, but believed it is within the committee's prerogative. Number 0713 REPRESENTATIVE GREEN stated that kind of language does seem self-serving; but, in looking at HB 53, it was specific to Fort Greely, which is what this is all about. REPRESENTATIVE JAMES commented that she did not disagree with that, but this is an entirely different bill. She indicated that it was not necessary to re-indicate the intention to try to prove that Section 6 is appropriate. REPRESENTATIVE ROKEBERG agreed with Representative James. Number 0756 REPRESENTATIVE MURKOWSKI inquired as to why the committee spent seven hours yesterday [May 4, 1999] on this. REPRESENTATIVE JAMES stated because it is implicit. REPRESENTATIVE ROKEBERG noted that it is already in the bill. Number 0768 CHAIRMAN KOTT explained that it is in the bill in order to satisfy those who feel that it is not clearly visible. REPRESENTATIVE JAMES stated she did not want to belabor the issue. If everyone is comfortable with the intent language, she indicated she could pass the bill out of the committee with it. But it's drawing attention to something that's implicit. Number 0850 REPRESENTATIVE ROKEBERG made a motion to adopt the House committee substitute for SB 141, 1-LS0827\K, Bannister, 5/5/99. There being no objection, it was so adopted. Number 0878 REPRESENTATIVE GREEN proposed an amendment, noting it had originally been for Version K. He stated, "In essence what it says is that if now we are going to agree that the action that's happened up there at Fort Greely is in compliance with the procurement code, I think that we should probably enshrine that - all that intent language that went into [HB] 53 originally and has been talked about subsequently. ... I've talked to the chairman of the Finance Committee, they all understand that there should be sideboard, and now that we have already decided through the legal system that we do need an amendment change [title change] which is gonna require a joint resolution, I would submit that the language ... -- I can read for conceptual acceptance and then we can get copies of it. It would be put in here under ... Chapter 15, SLA 1998, it would be: 'For the agreement to lease must provide a fixed rate per day adjusted annually during the term of the lease according to an appropriate index. The fixed rate for the first year of the lease must include all capital and operating costs and may not exceed $70 per each bed day, then renumber accordingly.'" Representative Green indicated the $70 figure resulted from all the year's prior discussion that this operation could be done for that amount per day, arrived at through both Arizona and the in-Alaska costs. This is simply removing it from the intent language and codifying it in the legislation. REPRESENTATIVE ROKEBERG and REPRESENTATIVE JAMES both objected to the conceptual amendment. REPRESENTATIVE ROKEBERG spoke to his objection. He recalled there was a great deal of discussion regarding the cost element. He believed there is a question about what is included in and what is excluded from the determination of what is the cost and the per diem cost. Representative Rokeberg indicated he has some questions about reviewing the record. Number 1015 REPRESENTATIVE GREEN questioned whether an exception was being taken to the prior dialog and the letter of intent. He asked whether it was the number or the concept of a fixed number. REPRESENTATIVE ROKEBERG responded, "I followed it (indisc.--talked over) any testimony update us on that figure. I think (indisc.) last year, is that what you're saying?" REPRESENTATIVE GREEN agreed, noting no one objected to it then. REPRESENTATIVE ROKEBERG mentioned it was the letter of intent not the (indisc.). He said that was theory, but would have to look at that. REPRESENTATIVE GREEN commented it is for that very reason he is concerned. If it is left as a letter of intent and left ambiguous, there are no sideboards. He said, "We've gone to a sole-source contract and we say, 'We don't care what it costs.'" Representative Green emphasized that is not in the best interest of the state. REPRESENTATIVE ROKEBERG pointed out there are sideboards, stating, "There's gotta be total review by the governor, the inter-governmental agreement, the military, I mean there's so many other hurdles that have to be accomplished." REPRESENTATIVE GREEN questioned, "And cost?" REPRESENTATIVE ROKEBERG responded, "(Indisc.) and cost, and then the financing of it and everything else." He indicated his impression is the contract would be between the state and the city with the third-party provider. He agreed they should have a standard, but indicated his reluctance over the proposed amendment. He noted that had been a controversial figure and would like to review it. Number 1099 REPRESENTATIVE GREEN asked whether Representative Rokeberg agreed there should be a figure. REPRESENTATIVE ROKEBERG answered no, and adding, "I agree there was a letter of intent (indisc.) in the bill last year is the problem. Now you want to codify it, then I got a problem with that." REPRESENTATIVE GREEN stated, per the chairman's recollection, that HB 53 from the previous year covered the prison as well as the jail in Anchorage. In the jail, there were specific numbers, but there was nothing referred to in the prison other than the conceptual $70 per day. However, Representative Green noted in the bill itself there was a fixed figure for the jail, and it seemed strange to him that in one case they would agree to fix the figure. REPRESENTATIVE ROKEBERG mentioned "the dollar figure." He questioned that it had sought $53 million. REPRESENTATIVE GREEN noted, "And operating costs." REPRESENTATIVE ROKEBERG indicated there was not a per diem cost in there. Number 1141 REPRESENTATIVE CROFT pointed to Chapter 15 regarding this issue, specifically Section 5, Authorization to Lease Correctional Facility Space with Municipality of Anchorage. He stated, "Section (b) The authorization given is subject to the following conditions. These provide for a maximum of 400 beds, the capital costs may not exceed [$]146,000 per bed or a total of [$]56 million. The annual lease payments may not exceed [$]16,700 per bed or a total of an additional -- I mean it's very clear on both the capital and the lease operating per bed (indisc.)." CHAIRMAN KOTT indicated all the conceptual amendment is saying is $70 per day. He indicated a total figure could be arrived at, but keeping it at $70 leaves it in simpler terms. REPRESENTATIVE ROKEBERG said his concern is that was a target number and whether it should be codified is the issue. He mentioned that was to give direction to the department, but it wasn't a "lock-in" number as he recalls. He indicated his desire to check on this. CHAIRMAN KOTT believed there had been discussion with the department during the discussion regarding the letter of intent. REPRESENTATIVE ROKEBERG spoke over, "We've had no testimony on that issue before this year is the trouble." He indicated he would just like to recall what happened and withdraw his objection. Representative Rokeberg questioned if there was anyone present from the Department of Law. CHAIRMAN KOTT said he believes it was clearly indicated by both sides that they would be satisfied with the $70 per day. REPRESENTATIVE ROKEBERG confirmed from Chairman Kott that he was referring to the previous year. Number 1247 REPRESENTATIVE JAMES noted this a whole different legislature. REPRESENTATIVE ROKEBERG agreed with Representative James. The issue, as he recalled and the reason for his concern, is that was a target to provide guidance to the Department of Corrections when entering into a contract. He noted, "If you stipulate a (indisc.) force - a cap on the price - it could be a (indisc.) and I think it came in at $70 to one cent ...." CHAIRMAN KOTT pointed out that the letter of intent from last year was for a period of five years, therefore they were entering into this agreement with the understanding that they would be able to meet the target goal for five years. After that, it would be adjusted. REPRESENTATIVE ROKEBERG said that he understood that. He emphasized that there was a target not a specific. He asked whether the intent is to insert the intent language. REPRESENTATIVE CROFT stressed that the intent language is something short of statute, but it is important to the bill. Here, the intent language was not goals, but rather that "...the agreement to lease the facility must provide a fixed rate per bed adjusted annually according to terms. The fixed rate for the first year must include all and may not exceed and will cover. These are not general goal languages, these are requirements." Representative Croft recalled that being an important portion of the debate last year when the thought was that there would be a competitive bid. Now, with sole source, it becomes even more important to have these requirements. REPRESENTATIVE JAMES said that she did not know how those numbers were arrived at and she noted that she was not present at all the meetings last year. Representative James stressed that she was being asked to support something that is not backed up in any way. She requested that she be shown the evidence. REPRESENTATIVE GREEN interjected and stated that Representative James voted in favor of it. REPRESENTATIVE JAMES emphasized that was last year and that she did not recall those numbers. The committee stood at-ease from 3:09 p.m. to 3:45 p.m. Number 1425 CHAIRMAN KOTT noted that there were questions regarding how the $70 amount was arrived at. After review of the House Finance Standing Committee minutes, Chairman Kott said that he was still unsure as to how that amount was determined. However, the minutes contained discussion from Commissioner Pugh, Department of Corrections, and from Mr. Diamond, Senior Vice President and Secretary, Management & Training Corporation in Ogden, Utah. That discussion referred to the $70. Chairman Kott indicated that the formulation involved perhaps, the number of beds and the fiscal note attached. However, the Department of Corrections seems to suggest that it may be closer to $85. Chairman Kott noted that he had inquired with the commissioner on this issue, she recommended doing a cost analysis. He noted that Representative Murkowski had pointed out that the $70 was included in the ordinance passed by Delta Junction. Number 1695 DON McCLINTOCK, Attorney, Ashburn and Mason, testified via teleconference from Anchorage. As the committee is aware, there was a legislative letter of intent that was transmitted which predicated the negotiations. The Delta Junction Ordinance 6.1 references the $70 pre day limitation. The settlement agreement basically used the $70 per day as a basis for negotiating the ground lease rent amount, Section 3B of the settlement agreement. Using an 800 bed facility the cap of ground lease rent, $1,022,000, is based on the $70 per day. Mr. McClintock pointed out that the $70 per day was projected using 1998 dollars with an appropriate cost of living index which was not specified. CHAIRMAN KOTT stated that was what the committee had also concluded. After further review of the proposed committee substitute, Chairman Kott agreed with Representative James that the new Section 7, intent language, is probably redundant and not necessary. Number 1862 REPRESENTATIVE GREEN moved that the committee adopt Amendment 1 which would remove Section 7, on page 3, lines 10-17, of the proposed committee substitute. There being no objection, it was so ordered. REPRESENTATIVE CROFT noted that when the previous hearing was adjourned he had an amendment before the committee. He inquired as to what happened with that amendment. CHAIRMAN KOTT explained that the proposed committee substitute wiped out that amendment. REPRESENTATIVE GREEN moved to adopt Amendment 2 which reads as follows: Page 3, line 10, insert a new section to read "Sec. 7. Section 4(c), ch. 15, SLA 1998 is amended by adding: (4) the agreement to lease must provide a fixed rate per each bed day, adjusted annually during the term of the lease according to an appropriate index. The fixed rate for the first year of the lease must include all capital and operating costs and may not exceed $70 per each bed day." Renumber previous Sections 7 and 8 accordingly. REPRESENTATIVE GREEN explained that Amendment 2 would codify the earlier discussion regarding fixing the base rate at $70 per day before the escalator takes off. There being no objection, Amendment 2 was so adopted. REPRESENTATIVE CROFT asked whether that had a title change. REPRESENTATIVE GREEN replied no, but noted that Amendment 2 would require a title change. Number 2090 REPRESENTATIVE KERTTULA moved that Section 6 be removed from the proposed committee substitute and to renumber accordingly. REPRESENTATIVE JAMES objected. REPRESENTATIVE KERTTULA said that she appreciated the efforts to establish a cap, however that does not resolve the underlying concerns. There is still a sole-source contract. REPRESENTATIVE JAMES understood the concern of Representative Kerttula. Representative James believed there is a sole-source contract and they have a right to do that. Although Representative James was not sure that what is specified in Section 6 is necessary, she was willing to do so if the language is better than that in HB 53. Representative James pointed out the need to worry about the state and how these prisoner facilities will be provided. She interpreted this as merely providing an explanation of what Delta Junction has done to this point. She said that she did not want to make decisions for Delta Junction nor did she want to do anything changing what has been done. CHAIRMAN KOTT stated, "It would appear to me that Section 6 somewhat substantiates the position, at least in my interpretation of what occurred during the passage of HB 53, that the legislature felt that there was an opportunity for competitive bidding, but if all the parameters were met and under certain circumstances--if the parties wanted to go to a sole source and they met those specific circumstances that fell within that parameter, in this particular case it was a time constraint, that would be allowed." He believed that rejection of Section 6 would seem to indicate that was not the legislature's intent. TAPE 99-55, SIDE A Number 0001 REPRESENTATIVE KERTTULA expressed concern with saying that this satisfies it. Although there has been lengthy testimony, it has not been enough. She reiterated her concerns for those in Delta Junction and those in overcrowded prisons. Therefore, Representative Kerttula felt that the intent of HB 53 should remain. Number 0060 REPRESENTATIVE CROFT said that it seemed that, in the area of privatization, extreme care must be taken to have it be competitive. Privatization is sold on the benefits of competition and free enterprise. He emphasized that in this area there should be concern about sole-sourcing privatization contracts. Historically, a lot of abuses have occurred in this area. Representative Croft felt that Delta Junction was placed in a difficult situation and has attempted to handle it well. He noted that there must be review of the broader public policy goal. Representative Croft stated, "I think we want to be very strict on our efforts in privatization, that it doesn't get sole-sourced." In his view, the benefit of privatization is competition. Furthermore, the worst of both worlds is achieved with a sole-source privatization contract. He noted that he expected this situation, but not that the first competitive bid would not be achieved. Doing this retroactively presents another layer of worry. Number 0331 REPRESENTATIVE JAMES agreed and understood many of Representative Croft's comments. However, she was not convinced that a competitive bid would have resulted in a better bid in this case. She said that she was not even convinced that a competitive bid would have resulted in another bid. Representative James pointed out that she was not always pleased with competitive bids because, as has been the case in Fairbanks, companies from outside Alaska bid on something that cannot be done in Alaska. At least Allvest has been doing business in Alaska, has been around since the beginning of this issue and has committed to the $70. Representative James informed the committee that her biggest concern is the time line. She did not want to do anything that will end a deal or place Delta Junction in jeopardy. Delta Junction has good council, Jim DeWitt, and she did not believe he would lead Delta Junction to the path of destruction. Therefore based on the interest of the state and the need for a prison, Representative James expressed the need to clarify what was meant. She did not believe it would change anything nor did she believe it was retroactive. REPRESENTATIVE GREEN reviewed the various points of view presented in yesterday's testimony [May 4, 1999]. He noted that he was in favor of competitive bidding and expressed the need to do privatization on a competitive basis. However, Representative Green stressed that he did not like the concept of sole-sourcing, especially on something as important as this. He indicated that some merit must be given to the testimony that Allvest was the only one coming forward. Weighing all those aspects and recognizing the sideboards that have been inserted, Representative Green feels more at ease. Therefore, Representative Green said that he would vote to move this legislation out of committee. CHAIRMAN KOTT asked whether there was any further discussion on Amendment 3. REPRESENTATIVE KERTTULA commented that she too knew Mr. DeWitt and others involved and did not question their motives. She expressed the need for them to stand on HB 53 which provides broad latitude that could conceivably allow for a sole source as long as the process was similar to the procurement code. Representative Kerttula believed this to be a step too far. Upon a roll call vote, Representatives Croft and Kerttula voted in favor of Amendment 3 and Representatives Green, Rokeberg, James, Murkowski, and Kott voted against Amendment 3. Therefore, Amendment 3 failed to be adopted. Number 0881 REPRESENTATIVE CROFT moved Amendment 4. REPRESENTATIVE ROKEBERG objected. REPRESENTATIVE CROFT offered the following amendment to Amendment 4: Delete "17" and insert "9", delete "A contractor who" and insert "An entity that". There being no objection, the amendment to Amendment 4 was so adopted. Therefore, Amendment 4, as amended, would read as follows: Page 3, line 9, following "section." Insert "An entity that brings an action in court to stop the procurement of a facility or operation on a design-build construction contract basis from being handled on a competitive basis may be awarded the contract on only on a competitive basis." REPRESENTATIVE CROFT expressed concern with the Delta Junction situation because a sole-source party threatened to sue in order to stop competitive bidding. He informed the committee that in discussion with the drafter, he has discovered there are legitimate bases to sue to object to how a competitive bid is being run. Under this, an entity could sue, win and have a bid reworked while allowing the competitive bid to be satisfied. This language would merely prevent an entity from suing against competitive bidding and then receiving the bid sole source. If this had been in the statute a month or so ago, Delta Junction could have merely pointed to the RFP [Request for Proposals] time line equation. He recognized that there is much disagreement regarding the underlying fundamental reason for going sole source in this situation. REPRESENTATIVE JAMES said that she did not have problems with the amendment, however she did have the purpose for which the amendment was offered. She took issue with Representative Croft's statement that if this had been law, Delta Junction would have done things differently. Delta Junction does not have any money. Furthermore, Delta Junction is having problems with this issue regardless of the lawsuit. From what Representative James had read, she believed that Delta Junction faired better than if the agreement did not exist. She said that she had much sympathy for the folks in Delta Junction. REPRESENTATIVE MURKOWSKI asked whether Amendment 4 would make this retroactive. Number 1245 REPRESENTATIVE CROFT clarified that to the extent Section 6 was retroactive before, so is Amendment 4. REPRESENTATIVE MURKOWSKI said that if the language was included as part of subsection (d), of Section 4 of HB 53, there would be a valid argument that it is retroactive and Allvest would not be able to be in their current position with their sole-source contract. REPRESENTATIVE CROFT pointed out that Amendment 4 says, "brings an action in court" which has not happened. Therefore, the threat of doing so would be removed, but they could not be disqualified currently since they have not met that. Number 1367 REPRESENTATIVE ROKEBERG agreed with Representative James. He indicated that this clause is probably unconstitutional. Furthermore, if this were enacted it could be used as a tool by a party to get out of a contract. He also believed that this is a deal killer due to the possibility of retroactive effects. REPRESENTATIVE CROFT surmised from Mr. DeWitt's high recommendations that he ably represented his client in this matter, although there were not many tools available. This would have made that situation somewhat easier because the threatening could not have occurred. He noted that one of the reasons competitive bidding did not occur was due to the threat of lawsuit from an entity that then received the sole-source bid. That is poor public policy. REPRESENTATIVE JAMES said that she did not think that Delta Junction received a bad deal. REPRESENTATIVE ROKEBERG said that he believed that this language was being inserted into statute with the law of general applicability. He said that if he were a client who had hired a contractor on a sole-source basis and he wanted to get rid of that contractor, this could be used as leverage to do so. This should be a tool and would frustrate privity of contract. REPRESENTATIVE CROFT commented that Representative Rokeberg is wrong on both counts. It is not a law of general application, although it should be. Furthermore, he indicated that this could not be used to push someone out of the competitive process. Representative Croft clarified that even an entity that brings a suit can be awarded on a competitive basis, but that entity cannot be awarded on a sole-source basis. REPRESENTATIVE MURKOWSKI noted that Representative Rokeberg has brought forth a couple of constitutional privity of contract issues which have not been addressed. The committee stood at-ease from 4:29 p.m. to 4:37 p.m. CHAIRMAN KOTT reminded the committee that there is objection to Amendment 4. REPRESENTATIVE MURKOWSKI moved to amend Amendment 4 to delete "line 9" and insert "line 10" and before "An entity", insert "Section 7". REPRESENTATIVE ROKEBERG objected. REPRESENTATIVE GREEN pointed out that Section 7 already exists. Is the intent to place Amendment 4 after Section 7 which would make it Section 8. REPRESENTATIVE MURKOWSKI agreed her amendment should insert "Section 8" on whatever line is appropriate. REPRESENTATIVE ROKEBERG inquired as to which statute. REPRESENTATIVE MURKOWSKI clarified that it would add a new section, 8. REPRESENTATIVE CROFT clarified that it would be AS 36.30.300 (f). CHAIRMAN KOTT asked whether there was objection to the amendment to Amendment 4. REPRESENTATIVE ROKEBERG objected. CHAIRMAN KOTT said, "Hearing no objection to the amendment to the amendment. We have the amendment as amended before us. Is there any objection to the amendment?" REPRESENTATIVE JAMES objected. REPRESENTATIVE ROKEBERG commented that, as a matter of general applicability law, this is ludicrous. He reiterated that this could be used by a business person to their benefit which would have a negative impact on the contracting business. This could be used to frustrate and get rid of a sole-source contractor. Number 1843 ANNETTE KRIETZER, Legislative Assistant to Senator Loren Leman, Alaska State Legislature, informed the committee that this amendment was reviewed by Senator Leman when it was felt to be applicable to the special section of the bill. Ms. Krietzer said that Senator Leman would prefer that the amendment not be applied to the entire bill because there are issues he would like to work on during the interim with the Association of General Contractors and the Alaska Professional Design Council with regard to design-build contracts. With regard to the amendment applied only to this section, Ms. Krietzer said Senator Leman had no comment. CHAIRMAN KOTT requested a roll call vote on the motion to adopt Amendment 4 as amended. Representatives Murkowski, Croft and Kerttula voted in favor of Amendment 4. Representatives Green, Rokeberg, James and Kott voted against Amendment 4. Therefore, Amendment 4 failed to be adopted. CHAIRMAN KOTT asked whether there were any further amendments or discussion. Number 1941 REPRESENTATIVE ROKEBERG moved to report HCS CSSB 141(JUD), Version LS0827\K, Bannister, 5/5/99, as amended, out of committee with individual recommendations and the accompanying zero fiscal notes. REPRESENTATIVE KERTTULA objected. Upon a roll call vote, Representatives Green, Rokeberg, James, Murkowski and Kott voted in favor of reporting HCS CSSB 141(JUD) out of committee. Representatives Croft and Kerttula voted against reporting HCS CSSB 141(JUD) out of committee. Therefore, HCS CSSB 141(JUD) was so moved from the House Judiciary Standing Committee. ADJOURNMENT CHAIRMAN KOTT adjourned the House Judiciary Standing Committee meeting at 4:44 p.m.