Legislature(2001 - 2002)

04/02/2001 01:12 PM JUD

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

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