Legislature(2001 - 2002)

04/21/2001 11:24 AM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE JUDICIARY STANDING COMMITTEE                                                                             
                         April 21, 2001                                                                                         
                           11:24 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Norman Rokeberg, Chair                                                                                           
Representative Scott Ogan, Vice Chair [by teleconference]                                                                       
Representative Jeannette James                                                                                                  
Representative John Coghill                                                                                                     
Representative Kevin Meyer                                                                                                      
Representative Ethan Berkowitz                                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Albert Kookesh                                                                                                   
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 181                                                                                                              
"An  Act relating  to the  obligations of  spouses, to  insurance                                                               
policies of  spouses, to the  nonprobate transfer of  property on                                                               
death  to a  community property  trust,  to the  division of  the                                                               
community  property  of  spouses  at death,  and  to  the  Alaska                                                               
Community Property Act; and providing for an effective date."                                                                   
                                                                                                                                
     - MOVED CSHB 181(JUD) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 189                                                                                                              
"An Act  repealing statutory provisions  relating to  term limits                                                               
and term limit pledges."                                                                                                        
                                                                                                                                
     - MOVED HB 189 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 174                                                                                                              
"An Act  relating to mental  health information and  records; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED CSHB 174(JUD) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 228                                                                                                              
"An Act relating  to the offense of selling or  giving tobacco to                                                               
a  minor,  to  the  accounting  of  fees  from  business  license                                                               
endorsements for  tobacco products, to the  disclosure of certain                                                               
confidential  cigarette  and   tobacco  product  information,  to                                                               
notification regarding  a cigarette  manufacturer's noncompliance                                                               
with  the   tobacco  product  Master  Settlement   Agreement,  to                                                               
business license  endorsements for  sale of tobacco  products, to                                                               
citations and  penalties for illegal  sales of  tobacco products;                                                               
and providing for an effective date."                                                                                           
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                                
BILL: HB 181                                                                                                                  
SHORT TITLE:COMMUNITY PROPERTY                                                                                                  
SPONSOR(S): REPRESENTATIVE(S)MURKOWSKI                                                                                          
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/14/01     0585       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/14/01     0585       (H)        JUD                                                                                          
03/27/01     0747       (H)        COSPONSOR(S): MCGUIRE                                                                        
04/21/01                (H)        JUD AT 11:00 AM CAPITOL 120                                                                  
                                                                                                                                
BILL: HB 189                                                                                                                  
SHORT TITLE:REPEAL TERM LIMITS/TERM LIMITS PLEDGES                                                                              
SPONSOR(S): JUDICIARY                                                                                                           
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/16/01     0626       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/16/01     0626       (H)        STA, JUD                                                                                     
04/12/01                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
04/12/01                (H)        <Bill Postponed to 4/19>                                                                     
04/19/01     1062       (H)        STA RPT 6DP                                                                                  
04/19/01     1063       (H)        DP: STEVENS, CRAWFORD, JAMES,                                                                
                                   FATE,                                                                                        
04/19/01     1063       (H)        HAYES, COGHILL                                                                               
04/19/01     1063       (H)        FN1: ZERO(GOV)                                                                               
04/19/01                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
04/19/01                (H)        Moved Out of Committee                                                                       
04/19/01                (H)        MINUTE(STA)                                                                                  
04/21/01                (H)        JUD AT 11:00 AM CAPITOL 120                                                                  
                                                                                                                                
BILL: HB 174                                                                                                                  
SHORT TITLE:MENTAL HEALTH INFORMATION AND RECORDS                                                                               
SPONSOR(S): RLS BY REQUEST OF LEG BUDGET & AUDIT                                                                                
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/12/01     0543       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/12/01     0543       (H)        HES, JUD                                                                                     
04/17/01                (H)        HES AT 3:00 PM CAPITOL 106                                                                   
04/17/01                (H)        Moved Out of Committee                                                                       
04/17/01                (H)        MINUTE(HES)                                                                                  
04/18/01     1027       (H)        HES RPT 5NR 2AM                                                                              
04/18/01     1027       (H)        NR: COGHILL, WILSON, JOULE,                                                                  
                                   STEVENS,                                                                                     
04/18/01     1027       (H)        DYSON; AM: KOHRING, CISSNA                                                                   
04/18/01     1028       (H)        FN1: ZERO(HSS)                                                                               
04/21/01                (H)        JUD AT 11:00 AM CAPITOL 120                                                                  
                                                                                                                                
BILL: HB 228                                                                                                                  
SHORT TITLE:SALE OF TOBACCO PRODUCTS                                                                                            
SPONSOR(S): REPRESENTATIVE(S)HARRIS                                                                                             
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
04/02/01     0809       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
04/02/01     0809       (H)        L&C, JUD, FIN                                                                                
04/03/01     0831       (H)        COSPONSOR(S): HUDSON,                                                                        
                                   MURKOWSKI                                                                                    
04/17/01     1021       (H)        COSPONSOR(S): KERTTULA                                                                       
04/18/01     1053       (H)        COSPONSOR(S): CRAWFORD                                                                       
04/18/01                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
04/18/01                (H)        Moved CSHB 228(L&C) Out of                                                                   
                                   Committee                                                                                    
04/18/01                (H)        MINUTE(L&C)                                                                                  
04/20/01     1092       (H)        L&C RPT CS(L&C) NT 5DP 1AM                                                                   
04/20/01     1093       (H)        DP: CRAWFORD, HAYES, MEYER,                                                                  
04/20/01     1093       (H)        ROKEBERG, MURKOWSKI; AM: KOTT                                                                
04/20/01     1093       (H)        FN1: ZERO(REV)                                                                               
04/20/01     1093       (H)        FN2: (LAW)                                                                                   
04/20/01     1093       (H)        FN3: (HSS)                                                                                   
04/20/01     1093       (H)        FN4: (CED)                                                                                   
04/21/01                (H)        JUD AT 11:00 AM CAPITOL 120                                                                  
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE LISA MURKOWSKI                                                                                                   
Alaska State Legislature                                                                                                        
Capitol Building, Room 408                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Sponsor of HB 181.                                                                                         
                                                                                                                                
STEPHEN E. GREER, Attorney                                                                                                      
PO Box 24-2903                                                                                                                  
Anchorage, Alaska  99524-2903                                                                                                   
POSITION STATEMENT:  Assisted with  the presentation of Version L                                                               
of HB 181, and proposed Amendment 1.                                                                                            
                                                                                                                                
DAVID G. SHAFTEL, Attorney                                                                                                      
550 West 7th Avenue, Suite 705                                                                                                  
Anchorage, Alaska  99501                                                                                                        
POSITION STATEMENT:  Assisted with  the presentation of Version L                                                               
of HB 181.                                                                                                                      
                                                                                                                                
GAIL FENUMIAI, Election Program Specialist                                                                                      
Division of Elections                                                                                                           
Office of the Lieutenant Governor                                                                                               
PO Box 110017                                                                                                                   
Juneau, Alaska  99811-0017                                                                                                      
POSITION STATEMENT:   Provided the Division's position  on HB 189                                                               
and answered questions.                                                                                                         
                                                                                                                                
REPRESENTATIVE HUGH "BUD" FATE                                                                                                  
Alaska State Legislature                                                                                                        
Capitol Building, Room 416                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION  STATEMENT:   Presented HB  174 on  behalf of  the Joint                                                               
Committee on Legislative Budget and Audit.                                                                                      
                                                                                                                                
ELMER LINDSTROM, Special Assistant                                                                                              
Office of the Commissioner                                                                                                      
Department of Health & Social Services (DHSS)                                                                                   
PO Box 110601                                                                                                                   
Juneau, Alaska  99811-0601                                                                                                      
POSITION STATEMENT:   During discussion of HB  174, assisted with                                                               
the   bill's  presentation   and  answered   questions  regarding                                                               
proposed Amendment 1;  During discussion of HB  228, provided the                                                               
department's position and answered questions.                                                                                   
                                                                                                                                
ANNE HENRY, Special Projects Coordinator                                                                                        
Central Office                                                                                                                  
Division of Mental Health & Developmental Disabilities                                                                          
Department of Health and Social Services (DHSS)                                                                                 
PO Box 110620                                                                                                                   
Juneau, Alaska  99811-0620                                                                                                      
POSITION  STATEMENT:    During discussion  of  HB  174,  answered                                                               
questions related to gathering client data.                                                                                     
                                                                                                                                
PAT DAVIDSON, Legislative Auditor                                                                                               
Legislative Audit Division                                                                                                      
Legislative Agencies & Offices                                                                                                  
PO Box 113300                                                                                                                   
Juneau, Alaska  99811-3300                                                                                                      
POSITION STATEMENT:   Assisted  with the  presentation of  HB 174                                                               
and answered questions.                                                                                                         
                                                                                                                                
JOHN MANLY, Staff                                                                                                               
to Representative John Harris                                                                                                   
Alaska State Legislature                                                                                                        
Capitol Building, Room 513                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION   STATEMENT:      Presented   HB  228   on   behalf   of                                                               
Representative Harris, the sponsor.                                                                                             
                                                                                                                                
EDWIN J. SASSER, Tobacco Enforcement Coordinator                                                                                
Division of Public Health (DPH)                                                                                                 
Department of Health & Social Services (DHSS)                                                                                   
PO Box 110616                                                                                                                   
Juneau, Alaska  99811-0616                                                                                                      
POSITION  STATEMENT:    During discussion  of  HB  228,  answered                                                               
questions relating to enforcement.                                                                                              
                                                                                                                                
DWAYNE D. JONES, Anchorage Police Department (APD)                                                                              
4801 South Bragaw Street                                                                                                        
Anchorage, Alaska  99508                                                                                                        
POSITION  STATEMENT:    During discussion  of  HB  228,  provided                                                               
testimony related to enforcement procedures.                                                                                    
                                                                                                                                
DAN BRANCH, Assistant Attorney General                                                                                          
Commercial Section                                                                                                              
Civil Division (Juneau)                                                                                                         
Department of Law (DOL)                                                                                                         
PO Box 110300                                                                                                                   
Juneau, Alaska  99811-0300                                                                                                      
POSITION  STATEMENT:    During discussion  of  HB  228,  answered                                                               
questions relating to the drafting of page 7, lines 6-7.                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 01-70, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
CHAIR  NORMAN  ROKEBERG  called   the  House  Judiciary  Standing                                                               
Committee  meeting  to  order  at  11:24  a.m.    Representatives                                                               
Rokeberg,   Ogan  (via   teleconference),  Coghill,   Meyer,  and                                                               
Berkowitz  were present  at the  call to  order.   Representative                                                               
James arrived as the meeting was in progress.                                                                                   
                                                                                                                                
HB 181 - COMMUNITY PROPERTY                                                                                                   
                                                                                                                                
Number 0088                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG announced  that the first order  of business would                                                               
be HOUSE  BILL NO. 181,  "An Act  relating to the  obligations of                                                               
spouses,  to insurance  policies  of spouses,  to the  nonprobate                                                               
transfer of property  on death to a community  property trust, to                                                               
the division of  the community property of spouses  at death, and                                                               
to  the  Alaska Community  Property  Act;  and providing  for  an                                                               
effective date."                                                                                                                
                                                                                                                                
Number 0094                                                                                                                     
                                                                                                                                
REPRESENTATIVE LISA MURKOWSKI,  Alaska State Legislature, sponsor                                                               
of HB 181, noted that in  1998, the legislature passed the Alaska                                                               
Community  Property   Act,  which   allows  married   couples  to                                                               
characterize some or  all of their assets  as community property.                                                               
Since  implementation of  that Act,  those who  deal with  estate                                                               
planning  and  trusts  on  a  day-to-day  basis  have  identified                                                               
certain  statutes  requiring  improvement and  adjustment.    She                                                               
proffered HB 181  as a means of amending  and strengthening those                                                               
community property statutes.                                                                                                    
                                                                                                                                
REPRESENTATIVE MURKOWSKI explained that  the first area addressed                                                               
by HB 181 is the extent to  which a creditor can reach a couple's                                                               
community property.  Section 1  provides that a creditor can only                                                               
reach  the  separate  property  of the  debtor  spouse  and  that                                                               
spouse's  half  of  jointly  held  property.    The  second  area                                                               
addressed  by  HB 181  relates  to  transfers  of property  to  a                                                               
community  property  trust  by beneficiary  designation,  whereby                                                               
certain property  such as life insurance  policies and Individual                                                               
Retirement  Accounts (IRAs)  can  be transferred  to a  community                                                               
property trust  by designating  the trust  as the  beneficiary of                                                               
the property.                                                                                                                   
                                                                                                                                
REPRESENTATIVE MURKOWSKI said the third  area addressed by HB 181                                                               
clarifies the sources  of funds used to  purchase life insurance,                                                               
in that  it will be  presumed that the  spouse who buys  the life                                                               
insurance has  used his/her  own property  to purchase  that life                                                               
insurance.  In  addition, HB  181  will  expand the  category  of                                                               
"family  member" to  include ancestors  or descendants  of either                                                               
spouse.   Typically, community  property funds may  be used  by a                                                               
couple to  purchase their  life insurance,  and when  the primary                                                               
beneficiaries are family  members, then it is  presumed that both                                                               
spouses consented  to the  choice of  beneficiaries.   The fourth                                                               
area addressed  by HB 181  is the division of  community property                                                               
at  death.   Section 4  clarifies  that "different  items can  be                                                               
allocated to  the spouse's share  as long as each  spouse's share                                                               
receives  half of  the  total aggregate  value  of the  community                                                               
property."                                                                                                                      
                                                                                                                                
Number 0431                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES  made  a   motion  to  adopt  the  proposed                                                               
committee  substitute  (CS)  for  HB  181,  version  22-LS0567\L,                                                               
Bannister, 4/19/01, as  a work draft.  There  being no objection,                                                               
Version L was before the committee.                                                                                             
                                                                                                                                
REPRESENTATIVE  MURKOWSKI added  that Version  L clarifies  "that                                                               
these favorable  presumptions with  the trust are  only available                                                               
to the portion of the trust  that's for the benefit of the family                                                               
member."                                                                                                                        
                                                                                                                                
Number 0501                                                                                                                     
                                                                                                                                
STEPHEN  E. GREER,  Attorney,  testified  via teleconference  and                                                               
explained that Section  3 of Version L, which is  in reference to                                                               
life  insurance, provides  a safety  net provision  in the  event                                                               
that an  estate plan is  audited by the Internal  Revenue Service                                                               
(IRS).   Currently, if a  life insurance policy is  purchased for                                                               
one spouse via  a community property account, half  the policy is                                                               
considered to be  owned by the insured spouse and  the other half                                                               
by the  uninsured spouse, which  negates any  estate-tax benefits                                                               
that would  be derived  if the  policy were  owned solely  by the                                                               
insured  spouse.    He  said   Version  L  expands  the  list  of                                                               
individuals for  whom a policy can  be [made] payable to,  and is                                                               
considered to be  done with the consent of  the uninsured spouse.                                                               
He noted  that this presumption  could always be overcome  by the                                                               
testimony of the uninsured spouse.                                                                                              
                                                                                                                                
MR. GREER,  in response to  questions, reiterated that  Version L                                                               
provides a  safety net  and removes the  foibles that  can create                                                               
havoc with  an estate planner  and his/her  clients.  He  said he                                                               
did not see any downside to HB  181, or anything in it that might                                                               
be controversial.   He noted that Section 1  reflects current law                                                               
with  regard  to  what  property  is held  liable  for  a  debtor                                                               
spouse's obligation;  it simply clarifies how  community property                                                               
stands in relationship to current law  in the event of a spouse's                                                               
death.                                                                                                                          
                                                                                                                                
Number 0877                                                                                                                     
                                                                                                                                
DAVID  G. SHAFTEL,  Attorney,  testified  via teleconference  and                                                               
explained that  existing law essentially makes  Alaska a separate                                                               
property state.   By  default, a husband  and wife's  property is                                                               
owned as separate property.   Therefore, if the husband incurs an                                                               
obligation  - because  of negligence,  for example  - during  the                                                               
course of  his occupation, then  his separate property  is liable                                                               
for that obligation, but his  wife's property is not.  Similarly,                                                               
if  the couple  owned  their  property jointly  -  as tenants  in                                                               
common,  for  example -  if  one  spouse incurs  an  occupational                                                               
liability, only that  spouse's half of the  jointly held property                                                               
is  liable for  that  obligation.   By  comparison, in  community                                                               
property states, there are a  number of different rules regarding                                                               
the extent to which community property  is going to be liable for                                                               
one spouse's obligations.                                                                                                       
                                                                                                                                
MR.  SHAFTEL  offered  that  Version L  will  simply  bring  into                                                               
conformity Alaska's  optional community property system  with its                                                               
separate  property system,  so  that  if one  spouse  - not  both                                                               
spouses  -  incurs  a  liability,  then  that  spouse's  separate                                                               
property and one-half of their  community property will be liable                                                               
for that  obligation.  Consequently, the  other spouse's separate                                                               
property and his/her  half of their community  property would not                                                               
be liable  for that obligation.   He added  that there is  also a                                                               
provision in Version L that says  if the liability is incurred by                                                               
both spouses, then all the  community property is responsible for                                                               
that liability.  For example, if  a couple purchases - together -                                                               
some  investment property,  then  all of  the community  property                                                               
would be liable for any obligations.                                                                                            
                                                                                                                                
REPRESENTATIVE BERKOWITZ  asked Mr. Shaftel whether  he has heard                                                               
any criticism of HB 181.                                                                                                        
                                                                                                                                
MR. SHAFTEL  said that he has  not heard any criticism  of HB 181                                                               
from among the people who work with  "this rule".  As a matter of                                                               
fact,  he added,  the criticism  is directed  toward the  current                                                               
statute  because it  creates  an ambiguity  that  will result  in                                                               
extra litigation.   He noted that a community  property system is                                                               
a very  attractive and advantageous  way for a married  couple to                                                               
own their  property; most of his  clients, he said, want  to take                                                               
advantage of  this system  but the  cloud of  ambiguity regarding                                                               
community  property  liability prevents  them.    He opined  that                                                               
Version L  will provide a  fair way of resolving  this ambiguity,                                                               
and  is entirely  consistent with  rules governing  property held                                                               
jointly as  tenants in  common.   In response  to a  question, he                                                               
pointed out that Version L  would not affect division of property                                                               
during  a divorce  because the  "just and  equitable rule"  would                                                               
still  be used;  thus family  law attorneys  would not  object to                                                               
Version L either.                                                                                                               
                                                                                                                                
Number 1300                                                                                                                     
                                                                                                                                
CHAIR  ROKEBERG  asked  whether  HB 181  is  simply  resolving  a                                                               
creditors' rights issue.                                                                                                        
                                                                                                                                
MR. SHAFTEL said, "Yes, it is."                                                                                                 
                                                                                                                                
REPRESENTATIVE  BERKOWITZ, referring  to language  in Section  1,                                                               
subsection (k),  suggested that essentially  one spouse  could be                                                               
bankrupted without  significantly impacting  the other.   He said                                                               
that  this   raises  questions  about  the   impact  on  property                                                               
settlements pursuant  to a divorce  situation.  He said  he would                                                               
like  to  hear from  a  family  law practitioner  regarding  what                                                               
impact HB 181 might have in a divorce situation.                                                                                
                                                                                                                                
MR.  SHAFTEL asserted  that [subsection  (k)] is  not new;  it is                                                               
existing  law.    He  said   that  subsection  (j)  is  new,  but                                                               
subsection (k)  merely restates existing law  under AS 34.77.070,                                                               
which says  that an obligation  incurred during marriage  by both                                                               
spouses will be  satisfied from both their  separate property and                                                               
their community property.   He explained that one  of the changes                                                               
proposed by Version L  is to do away with the  concept - found in                                                               
AS 34.77.070(c)  - that an  obligation incurred by one  spouse in                                                               
the  interest of  the marriage  or the  family will  be satisfied                                                               
from  the community  property  as  well as  the  property of  the                                                               
spouse who  incurred that  obligation.   In its  place subsection                                                               
(j)  will provide  that  when one  spouse  incurs an  obligation,                                                               
either  before  or  during  marriage,   that  obligation  may  be                                                               
satisfied  only from  that spouse's  separate  property and  from                                                               
that spouse's interest in the community property.                                                                               
                                                                                                                                
MR. SHAFTEL  also explained that  the existing law  pertaining to                                                               
the division  of community property upon  divorce stipulates that                                                               
a just  and equitable  standard will be  used for  both community                                                               
property and  separate property; Version  L does not  change that                                                               
law.  He reiterated  that this is not a family  law issue; it is,                                                               
at most,  a creditors' rights  issue.  Version  L is fair  to the                                                               
creditor  and to  the non-negligent  spouse, he  added.   It will                                                               
result in  the same rule  being applied to community  property as                                                               
with  separate   property:    the  negligent   spouse's  separate                                                               
property and his/her  half of the community property  is all that                                                               
should be liable for an  obligation incurred only by that spouse.                                                               
If,  on  the  other  hand,   both  spouses  participated  in  the                                                               
negligence,  the legal  system  already resolves  those kinds  of                                                               
issues; Version L should in no way affect those procedures.                                                                     
                                                                                                                                
Number 1640                                                                                                                     
                                                                                                                                
CHAIR  ROKEBERG asked  whether  community  property (or  separate                                                               
property) has to  be liquidated in order to  satisfy a creditor's                                                               
claim.                                                                                                                          
                                                                                                                                
MR. SHAFTEL said  that depends; it could result in  a forced sale                                                               
if that  is the  only way  to satisfy the  obligation.   What may                                                               
happen is that the creditor  could attach the property and become                                                               
owner  of  that  half  interest,  but  what  most  likely  -  and                                                               
practically -  occurs, is that the  property is sold and  half of                                                               
the proceeds  go to the  creditor and  half go to  the non-liable                                                               
spouse.   In  response to  a further  question, he  affirmed that                                                               
when  a  person  enters  into   an  optional  community  property                                                               
agreement,  he/she  can  stipulate  what  is  held  as  community                                                               
property.  Through an agreement  or a community property trust, a                                                               
couple  can  say  what  portions  of their  property  are  to  be                                                               
considered  separate  property  and   what  portions  are  to  be                                                               
considered  community  property.    One example  he  said  he  is                                                               
familiar  with is  when  one spouse  has  inherited property  and                                                               
wishes to  keep it separate;  another example is when  one spouse                                                               
is  in business  with other  individuals and  wishes to  keep the                                                               
business holdings separate from any community property.                                                                         
                                                                                                                                
MR. SHAFTEL,  with regard to  the division of  community property                                                               
at death,  explained that Version  L fleshes out  current statute                                                               
by adding the  provision which clarifies that at  death, one half                                                               
of the property is owned by  the deceased spouse and the other by                                                               
the  surviving spouse.   It  also establishes  what is  called an                                                               
aggregate form  of ownership of property,  which allows different                                                               
items of the  community property to be allocated  to the separate                                                               
halves so that  not every item has to be  divided equally as long                                                               
as the  aggregate value is  divided equally.   He said  that this                                                               
often comes into play with pension  or IRA accounts because it is                                                               
almost  always preferable  to have  the surviving  spouse receive                                                               
these accounts  and simply fund  the deceased  spouse's "bypassed                                                               
trust" with other community property  assets.  He noted that this                                                               
provision  of  Version  L  eliminates  some  federal  income  tax                                                               
arguments that  might otherwise exist,  and is a  strong addition                                                               
to the Alaska Community Property Act.                                                                                           
                                                                                                                                
Number 1909                                                                                                                     
                                                                                                                                
MR.  SHAFTEL  explained  that  Section  2  of  Version  L  allows                                                               
transfers   to  a   community  property   trust  by   beneficiary                                                               
designation, which  means that  if a person  has an  IRA account,                                                               
he/she can  name a community  property trust as a  beneficiary of                                                               
that  account  and then  the  IRA  will be  considered  community                                                               
property.   This will facilitate  estate planning by  Alaskans as                                                               
well as  facilitate the use  of Alaska community  property trusts                                                               
by nonresidents should they chose to use an Alaskan trustee.                                                                    
                                                                                                                                
MR.  GREER   explained  that  Amendment  1   simply  conforms  AS                                                               
34.77.120(e) to  the changes incorporated by  Version L regarding                                                               
the presumptions pertaining to an insured spouse.                                                                               
                                                                                                                                
Number 2007                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  made a  motion to adopt  Amendment 1,  which read                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     AS 34.77.120(e) is amended to read:                                                                                        
                                                                                                                                
     This section does not affect  the ownership interest or                                                                    
     proceeds  of  a  policy  unless a  spouse  or  a  trust                                                                
     described in  (b)(7) of this  section is  designated as                                                                
     an owner  or on  the records of  the policy  issuer and                                                                    
     community  property is  used to  pay a  premium on  the                                                                    
     policy.                                                                                                                    
                                                                                                                                
There being no objection, Amendment 1 was adopted.                                                                              
                                                                                                                                
MR.  GREER, in  an  attempt to  allay Representative  Berkowitz's                                                               
concerns  regarding property  divisions  during  a divorce,  said                                                               
that  HB 181  does not  affect  family law  at all;  it will  not                                                               
affect the "rights  or obligations of the spouse  with respect to                                                               
each other with community property."                                                                                            
                                                                                                                                
Number 2129                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MEYER moved  to report  the committee  substitute                                                               
(CS)  for HB  181,  version 22-LS0567\L,  Bannister, 4/19/01,  as                                                               
amended,  out of  committee with  individual recommendations  and                                                               
the accompanying  fiscal note.   There  being no  objection, CSHB                                                               
181(JUD)  was   reported  from   the  House   Judiciary  Standing                                                               
Committee.                                                                                                                      
                                                                                                                                
HB 189 - REPEAL TERM LIMITS/TERM LIMITS PLEDGES                                                                               
                                                                                                                                
Number 2148                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be HOUSE  BILL NO.  189, "An  Act repealing  statutory provisions                                                               
relating to term limits and term limit pledges."                                                                                
                                                                                                                                
CHAIR  ROKEBERG,  speaking  on  behalf  of  the  House  Judiciary                                                               
Standing Committee,  sponsor of HB  189, said he is  very pleased                                                               
with the bill.  He explained  that it repeals those provisions of                                                               
Alaska's election law that relate  to what he called the "scarlet                                                               
letter"  or  the   "gold  star"  that  appears   on  the  ballots                                                               
indicating  term limit  pledges.   "Recently,  the United  States                                                               
Supreme Court  held that  the provisions as  they relate  to this                                                               
issue   are   unconstitutional   under  the   Elections   Process                                                               
provisions delegated  to the states by  the [U.S.] Constitution,"                                                               
he said.   So those provisions that apply to  members of the U.S.                                                               
House of  Representatives and the  U.S. Senate as relate  to term                                                               
limits are  unconstitutional under  the Cook v.  Gralike decision                                                             
[in committee members' packets].                                                                                                
                                                                                                                                
CHAIR  ROKEBERG further  pointed out  that half  of the  sections                                                               
from  AS  15.15.500  through  AS   15.15.535  were  found  to  be                                                               
unconstitutional according  to the attorney general's  opinion in                                                               
1998, so they  have not been enforced.  They,  too, relate to the                                                               
congressional members, he said.                                                                                                 
                                                                                                                                
Number 2239                                                                                                                     
                                                                                                                                
CHAIR  ROKEBERG said  he thinks  "the overwhelming  testimony and                                                               
logic"  is that  the Cook  v. Gralike  case also  applies to  the                                                             
state  level.  He  said  the  Alaska  law  changed  the  "scarlet                                                               
letter,"  indicating  that  a  candidate  did  not  support  term                                                               
limits, into  a "gold  star," indicating  that the  candidate had                                                               
pledged to  support term limits.   The  Idaho Supreme Court  in a                                                               
December 6, 2000,  ruling, found that "gold  star" provisions are                                                               
unconstitutional because  they infringe on the  fundamental right                                                               
to  vote and  that  there  was no  compelling  state interest  to                                                               
continue printing them on the ballot.                                                                                           
                                                                                                                                
CHAIR  ROKEBERG said  he takes  up  [term limits  and term  limit                                                               
pledges]  "with some  trepidation" because  the statutes  that HB                                                               
189  would delete  came  into state  law  through the  initiative                                                               
process and represent  the will of the majority of  the people of                                                               
Alaska that term  limits be applied statutorily.   "But what this                                                               
does is ... broadcast a particular  point of view on the election                                                               
ballot, which  I think is  sacrosanct, and  I think gives  ... an                                                               
... advantage  ... to a particular  candidate.  And I  think that                                                               
it's a  complete abridgment  of the  right of  ...   suffrage and                                                               
free  speech."    He  said  he was  very  disappointed  when  the                                                               
lieutenant governor  certified the initiative because  he felt at                                                               
the time it was not right.                                                                                                      
                                                                                                                                
CHAIR ROKEBERG continued:                                                                                                       
                                                                                                                                
     Particularly galling is the fact  that I, for my entire                                                                    
     political career, have indicated  that I believe in the                                                                    
     concept  of  term limits.    But  I've found  that  the                                                                    
     longer I stay down here  [in the legislature], the more                                                                    
     I  recognize that  it takes  a certain  amount of  time                                                                    
     even to learn  this job, but I do  believe that certain                                                                    
     people overstay  their limits.   So I  have ...  my own                                                                    
     idea:  the  concept that somebody should  serve no more                                                                    
     than  eight  years  in  one   house  and  twelve  years                                                                    
     altogether consecutively;  but that's at  variance with                                                                    
     the  term  limit  pledge  {now  in  statute].    To  be                                                                    
     consistent  under  the state  law,  you  have to  agree                                                                    
     precisely  with the  concept that  you  can only  serve                                                                    
     eight years in sixteen years.   So, therefore, I really                                                                    
     take  umbrage with  this because  even  though I  agree                                                                    
     conceptually in  the idea, if  I don't  agree precisely                                                                    
     with  the dictates  of that  initiative law,  then that                                                                    
     makes me the bad guy.                                                                                                      
                                                                                                                                
REPRESENTATIVE  ROKEBERG said  he  was very  pleased  to see  the                                                               
ruling of  the United States  Supreme Court and the  Idaho court.                                                               
He  said  that in  the  House  State Affairs  Standing  Committee                                                               
(HSTA),  there  was testimony  that  the  Alaska Civil  Liberties                                                               
Union (AkCLU) was going to bring  a case on this particular item,                                                               
and because  of this bill, they're  going to wait and  see if the                                                               
bill has success in passage.  "So  ... we can avoid a lawsuit and                                                               
cluttering our courts up with this  issue -- and the expense," he                                                               
said.                                                                                                                           
                                                                                                                                
Number 2363                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MEYER asked  if  the committee  would be  hearing                                                               
testimony from the AkCLU.                                                                                                       
                                                                                                                                
CHAIR ROKEBERG said no, and that  he seemed to have misplaced the                                                               
package given  to him the other  day by Jennifer Rudinger  of the                                                               
AkCLU.    He  said  she   had  testified  at  the  HSTA  meeting,                                                               
describing the Idaho case in relation to Alaska law.                                                                            
                                                                                                                                
Number 2397                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ  prefaced his testimony by  saying he is                                                               
not a supporter of term limits.   He said he had couple of points                                                               
he would  like to  make about  the inefficacy  of the  term limit                                                               
pledge.  He has noticed that a  lot of people take the term limit                                                               
pledge and  then violate  it, which  seems to  him to  defeat the                                                               
purpose of taking the pledge.                                                                                                   
                                                                                                                                
REPRESENTATIVE BERKOWITZ continued:                                                                                             
                                                                                                                                
     The second thing I would like  to point out, and I want                                                                    
     to  congratulate you  for making  the point,  that it's                                                                    
     ridiculous to post someone's  political position on the                                                                    
     ballot.  You know I  offered an amendment the other day                                                                    
     on  the floor  that would  strike "political  position"                                                                    
     from  the  ballot, that  is  to  say, strike  someone's                                                                    
     political affiliation from the  ballot, which is also a                                                                    
     form of  advertisement, and  if the  title [of  HB 189]                                                                    
     was slightly  larger here,  I would  move [to  fit that                                                                    
     in].   But  I appreciate  your sentiment,  and I  think                                                                    
     that consistency  would show that you  would support my                                                                    
     position that  removal of the  term limit  pledge would                                                                    
     also  support removal  of  party  affiliation from  the                                                                    
     ballots.                                                                                                                   
                                                                                                                                
Number 2445                                                                                                                     
                                                                                                                                
REPRESENTATIVE  OGAN   commented  that  it  was   an  interesting                                                               
discussion about removing  the indication of party.   "I guess if                                                               
I was  a member of certain  parties, I wouldn't want  that on the                                                               
ballot either," he said.                                                                                                        
                                                                                                                                
CHAIR ROKEBERG  asked Representative Ogan  if he had  any problem                                                               
with the constitutionality of the repeal proposed by HB 189.                                                                    
                                                                                                                                
REPRESENTATIVE OGAN said he did not.                                                                                            
                                                                                                                                
TAPE 70, SIDE B                                                                                                                 
Number 2475                                                                                                                     
                                                                                                                                
GAIL   FENUMIAI,  Election   Program   Specialist,  Division   of                                                               
Elections,  Office of  the Lieutenant  Governor, came  forward to                                                               
testify.  She said:                                                                                                             
                                                                                                                                
     The division does not have  any problem with the repeal                                                                    
     of this  law.  The  first sections of statute  that you                                                                    
     mentioned  were  already  not  being  enforced  by  the                                                                    
     division because they  had been deemed unconstitutional                                                                    
     and our  attorney general had  advised that  before the                                                                    
     Idaho  case came  out.   But  the Idaho  case said  the                                                                    
     unconstitutionality of the  first sections ... probably                                                                    
     would have  trickled down and applied  to the voluntary                                                                    
     term limits sections as well.                                                                                              
                                                                                                                                
Number 2464                                                                                                                     
                                                                                                                                
REPRESENTATIVE MEYER noted  that he has not seen  anything in the                                                               
news about this  being ruled unconstitutional.   "It does concern                                                               
me a  little bit that this  was passed by initiative  and ... now                                                               
we're going to make  it unlawful," he said.  "But  I think if the                                                               
public knew that it was  unconstitutional and what we're doing is                                                               
just  correcting   that  mistake,  it  would   probably  be  more                                                               
acceptable."                                                                                                                    
                                                                                                                                
CHAIR ROKEBERG explained that the  decision in the Idaho case was                                                               
a very recent one, handed down February 28, 2001.                                                                               
                                                                                                                                
REPRESENTATIVE MEYER asked  if a person who signed  the pledge to                                                               
run for no more than eight years is still bound by that pledge.                                                                 
                                                                                                                                
MS. FENUMIAI said she thinks that  if someone had signed a pledge                                                               
in the 2000 election, the pledge now would be null and void.                                                                    
                                                                                                                                
REPRESENTATIVE MEYER  sought further clarification:   "I guess my                                                               
point  is, if  somebody signed  a pledge  saying that  they would                                                               
only run for eight  years and then they continue for  12 or 14 or                                                               
16, there's nothing to stop that, right?"                                                                                       
                                                                                                                                
CHAIR ROKEBERG volunteered:                                                                                                     
                                                                                                                                
     As  a matter  of  fact, on  that point,  Representative                                                                    
     Meyer, I had  the occasion when this was  on the ballot                                                                    
     to talk to the author  of the initiative, Bob Bell, ...                                                                    
     and he  told me that  I shouldn't be upset  because the                                                                    
     way  the  initiative  was  drafted,  the  effectiveness                                                                    
     wasn't until the effective date  of the initiative.  So                                                                    
     therefore, even  though I  may have  spent a  few years                                                                    
     already serving,  ... the  eight-year bell  toll didn't                                                                    
     start until it became law.                                                                                                 
                                                                                                                                
CHAIR ROKEBERG  said he thinks it  is a political issue,  "Like I                                                               
say I  support term  limits and  I'm going to  have to  live with                                                               
that if I decide to run in the next election."                                                                                  
                                                                                                                                
Number 2369                                                                                                                     
                                                                                                                                
REPRESENTATIVE OGAN moved to report  HB 189 out of committee with                                                               
individual  recommendations  and  the  accompanying  zero  fiscal                                                               
note.  There  being no objection, HB 189 was  reported out of the                                                               
House Judiciary Standing Committee.                                                                                             
                                                                                                                                
HB 174 - MENTAL HEALTH INFORMATION AND RECORDS                                                                                
                                                                                                                                
[Contains discussion of  CSSB 135(HES), the companion  bill to HB                                                               
174.]                                                                                                                           
                                                                                                                                
Number 2354                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be  HOUSE  BILL  NO.  174,  "An Act  relating  to  mental  health                                                               
information and  records; and providing  for an  effective date."                                                               
[HB 174  is sponsored  by the House  Rules Standing  Committee by                                                               
request of the Legislative Budget and Audit Committee]                                                                          
                                                                                                                                
Number 2330                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HUGH   "BUD"  FATE,  Alaska   State  Legislature,                                                               
speaking on behalf  of the Joint Committee  on Legislative Budget                                                               
and Audit  (LB&A), noted that  HB 174 is  a companion bill  to SB                                                               
135.  He  explained that the state auditor and  the Department of                                                               
Health   &  Social   Services   (DHSS)   recommend  the   changes                                                               
encompassed  by HB  174 in  order to  allow the  state to  better                                                               
track  direct grant  moneys that  are given  to community  mental                                                               
heath providers.   He said HB  174 does two things:   It complies                                                               
with  the auditor's  report,  which  recommends reporting  actual                                                               
consumer data, and  it holds agencies harmless for  being sued by                                                               
the consumer  for breach of  confidentiality if such  should ever                                                               
occur.  He  added that HB 174 is really  about accountability for                                                               
state grant funds.                                                                                                              
                                                                                                                                
REPRESENTATIVE  FATE  noted  that  Amendment  1,  [22-LS0684\A.1,                                                               
Lauterbach,  4/20/02]   will  make  HB  174   identical  to  CSSB                                                               
135(HES), the  current version that  is advancing in  the Senate.                                                               
Amendment 1 reads as follows:                                                                                                   
                                                                                                                                
     Page 4, following line 26:                                                                                                 
          Insert a new bill section to read:                                                                                    
         "* Sec. 7.  The uncodified law of the State of                                                                     
     Alaska is amended by adding a new section to read:                                                                         
          DATA FROM PRIOR YEARS.  (a)  As a condition of                                                                        
     receiving state money for state  fiscal year 2002 under                                                                    
     AS 47.30.520  - 47.30.620,  47.30.660  - 47.30.915,  or                                                                    
     AS 47.31,  the  entity  eligible for  the  state  money                                                                    
     shall  agree to  furnish the  Department of  Health and                                                                    
     Social   Services    with   confidential    and   other                                                                    
     information about  recipients of services paid  for, in                                                                    
     whole  or part,  with state  money during  state fiscal                                                                    
     years  2000 and  2001 under  AS 47.30.520 -  47.30.620,                                                                    
     47.30.660  -  47.30.915,  or AS 47.31.    The  entities                                                                    
     governed   by  this   subsection   shall  comply   with                                                                    
     regulations of the  department regarding the submission                                                                    
     of the information required under this subsection.                                                                         
          (b)  The department may review, obtain, and copy                                                                      
     the information  submitted under  (a) of  this section.                                                                    
     The department may also obtain  information of the type                                                                    
     described in (a)  of this section from  the patient who                                                                    
     received the services described  in (a) of this section                                                                    
     and review or copy that information.                                                                                       
          (c)  Records and information obtained by the                                                                          
     department  under  this  section are  medical  records,                                                                    
     shall be  handled confidentially,  and are  exempt from                                                                    
     public  inspection  and  copying under  AS 40.25.110  -                                                                    
     40.25.120.   The records and information  may be copied                                                                    
     and  disclosed  under  regulations established  by  the                                                                    
     department  only   under  the  same   circumstances  as                                                                    
     provided for  confidential records  under AS 47.30.845,                                                                    
     as amended by sec. 4 of this Act.                                                                                          
          (d)  The department may review the information                                                                        
     obtained  under  this  section to  evaluate  compliance                                                                    
     with  the  applicable  statutes  and  grant  contracts.                                                                    
     However,  the department  may not  use the  information                                                                    
     furnished  under  this  section   to  impose  civil  or                                                                    
     administrative  penalties for  failure  to comply  with                                                                    
     applicable statutes and contracts.   The department may                                                                    
     use the  information to establish  a database  on which                                                                    
     to  base  future  management practices  and  to  impose                                                                    
     restrictions and  conditions on  use of state  money in                                                                    
     fiscal year 2002 and later.                                                                                                
          (e)  In this section, "department" means the                                                                          
     Department of Health and Social Services."                                                                                 
                                                                                                                                
     Renumber the following bill section accordingly.                                                                           
                                                                                                                                
Number 2252                                                                                                                     
                                                                                                                                
ELMER LINDSTROM,  Special Assistant, Office of  the Commissioner,                                                               
Department  of Health  & Social  Services (DHSS),  explained that                                                               
Amendment  1 will  allow [the  DHSS] to  collect data  for fiscal                                                               
years (FYs) 2000 and 2001 in  order to build a "baseline."  After                                                               
noting that  HB 174 will  be effective  the next fiscal  year, he                                                               
said that  [the DHSS] concurs  with the legislative  auditor that                                                               
without  Amendment 1,  it would  in fact  be two  or three  years                                                               
before  [the   DHSS]  would  have   the  kind  of   baseline  and                                                               
accountability information that the auditor recommends.                                                                         
                                                                                                                                
CHAIR ROKEBERG  asked Mr. Lindstrom  whether he was aware  of the                                                               
Health  Care  Financing   Administration's  (HCFA)  "deadline  on                                                               
confidentiality and the privacy of medical records."                                                                            
                                                                                                                                
MR. LINDSTROM,  after noting  that he  is not  an expert  on that                                                               
federal law,  assured the  committee that  [the DHSS]  is acutely                                                               
aware of  it, and that anything  [the DHSS] does via  HB 174 will                                                               
be consistent with [the HCFA]  requirements.  He explained that a                                                               
past legislative audit as well as  the most recent one have taken                                                               
[the DHSS] to task for not being  able to collect this data.  The                                                               
prior audit  was requested by  the Senate Finance  Committee when                                                               
it  noticed  that  Medicaid  expenditures  for  community  mental                                                               
health services  had grown exponentially;  prior to 1991  or 1992                                                               
there was no  Medicaid funding going into  mental health centers,                                                               
but once that  was allowed, expenditures grew from  nothing to $5                                                               
million to $10  million to $20 million, and are  now in excess of                                                               
$50 million.                                                                                                                    
                                                                                                                                
MR. LINDSTROM added that [the  DHSS] has excellent client data on                                                               
the Medicaid  program, but the  same entities that  are beginning                                                               
to aggressively bill  Medicaid are also grantees  of the Division                                                               
of  Mental  Health &  Developmental  Disabilities.   [The  DHSS],                                                               
however, does  not have the  management information -  the client                                                               
data -  that would enable  it to  monitor how those  general fund                                                               
(GF) grants  are being spent.   He concurred  with Representative                                                               
Fate that HB 174 resolves an accountability issue.                                                                              
                                                                                                                                
CHAIR ROKEBERG mentioned  that the provisions of HB  211, what he                                                               
calls the  "Alaska patients'  bill of  rights", will  take effect                                                               
July 1, 2001 for managed care  entities; [HB 211] will cover most                                                               
health insurers in Alaska, and  contains a strict confidentiality                                                               
provision, which goes  well beyond any "opt  in" requirements and                                                               
requires the  consent of the patient  in order to release  of any                                                               
information.                                                                                                                    
                                                                                                                                
MR. LINDSTROM, after noting that  he has been with the department                                                               
for  ten years,  remarked that  he  has no  recollection of  [the                                                               
DHSS]  ever breaching  patient  confidentiality;  [the DHSS]  has                                                               
patient  records, medical  records, and  confidential information                                                               
in virtually "every  bit of book of business that  we have in the                                                               
department    and   we    ...    are    acutely   sensitive    to                                                               
[confidentiality]."                                                                                                             
                                                                                                                                
Number 2036                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG said he only brings up the topic because:                                                                        
                                                                                                                                
     We  have the  HCFA privacy  regulations; we've  got the                                                                    
     Alaska patients' bill of rights;  we have the GLBA (the                                                                    
     Gramm-Leach-Bliley  Act), where  the private  sector is                                                                    
     going  to  go through  ...  mandated  "opt in"  medical                                                                    
     records  provisions for  all  medical information  from                                                                    
     insurance companies; to say nothing  of our own privacy                                                                    
     provisions of our constitution.                                                                                            
                                                                                                                                
REPRESENTATIVE  BERKOWITZ asked  for an  example of  the type  of                                                               
confidential information that [the DHSS] will be reporting.                                                                     
                                                                                                                                
Number 1992                                                                                                                     
                                                                                                                                
ANNE  HENRY,   Special  Projects  Coordinator,   Central  Office,                                                               
Division   of  Mental   Health   &  Developmental   Disabilities,                                                               
Department  of Health  and Social  Services,  explained that  the                                                               
kind  of information  that the  division is  trying to  gather is                                                               
found on what  is called the "Aurora" form -  the admission form.                                                               
A  unique identifier  (which consists  of the  client's initials,                                                               
date  of  birth, and  the  last  four  digits of  his/her  social                                                               
security number)  is created from that  information; the division                                                               
does  not use  the client's  full  name or  full social  security                                                               
number.  Attached  to the identifier will be  information such as                                                               
the client's  diagnosis, living situation data,  legal situation,                                                               
and his/her  general function level.   The identifier  will later                                                               
be used  to link that client  to what is called  the "encounter,"                                                               
which is  when the  person comes  in for  treatment on  any given                                                               
day; that information  will be matched up with  that service, the                                                               
cost of that  service, and the amount of time  that service took,                                                               
so that the division can build  a profile detailing how much each                                                               
individual  is using  certain services.    This information  will                                                               
then be used to make program decisions.                                                                                         
                                                                                                                                
MS.  HENRY  added  that  all   of  the  information  gathered  is                                                               
encrypted at the mental health center  before it is sent into the                                                               
department,   where  it   is  then   handled  by   two  different                                                               
individuals who  will be the only  people in the state  that have                                                               
the code to  decrypt and access that information.   She said that                                                               
as  far as  the division  is able  to discern  at this  time, the                                                               
deadline  established  for the  privacy  portion  of the  federal                                                               
Health Insurance Portability and  Accountability Act (HIPAA) will                                                               
be about two  years.  She said that the  division believes it has                                                               
established the  same standards as  the federal regulations.   In                                                               
response  to questions,  she said  that  HB 174  will enable  the                                                               
division to provide the legislature  as well as the Alaska Mental                                                               
Health Trust with performance measures.   In defense of Amendment                                                               
1, she explained  that it will enable the division  to gather two                                                               
years' worth  information to form  a baseline; then, via  HB 174,                                                               
the division can  require mental health providers  to continue to                                                               
submit  data,  and  thus  the  division will  be  able  to  track                                                               
expenditures and patterns of mental  health problems in different                                                               
locations.                                                                                                                      
                                                                                                                                
Number 1791                                                                                                                     
                                                                                                                                
PAT  DAVIDSON, Legislative  Auditor, Legislative  Audit Division,                                                               
Legislative Agencies  & Offices,  mentioned that the  impetus for                                                               
HB 174 was the result of  a couple of audit reports detailing the                                                               
escalating  cost of  community mental  health programs.   Between                                                               
1992 and 1997  the numbers went from zero Medicaid  dollars up to                                                               
$15  million; the  state's share  went  from $31  million to  $39                                                               
million.   The questions asked as  a result of this  growth were:                                                               
"What's going on?"  and, "Is this being well managed?"   What the                                                               
Legislative  Audit   Division  found  is  that   with  regard  to                                                               
Medicaid, sufficient information was  being collected so that the                                                               
[DHSS] could analyze its regulatory  efficiency, but when it came                                                               
to state grants,  the Legislative Audit Division ran  into a wall                                                               
because, while Medicaid  is a fee for service,  state grants were                                                               
going out without  any identification of who was  being served or                                                               
what services  were being provided.   She said she  believes that                                                               
HB 174 will  allow such information to be collected,  and that it                                                               
will enhance the  [DHSS's] ability to account  for those millions                                                               
of dollars that go out in state grants.                                                                                         
                                                                                                                                
REPRESENTATIVE FATE  mentioned that  HB 174  is accompanied  by a                                                               
zero fiscal  note from  [the DHSS].   He added  that HB  174 will                                                               
allow [the DHSS] to comply with the Legislative Audit Report.                                                                   
                                                                                                                                
CHAIR  ROKEBERG  asked whether  any  state  [grant] funds  go  to                                                               
private providers of mental health services.                                                                                    
                                                                                                                                
MS. HENRY  replied that  to her knowledge,  all of  [the entities                                                               
that  receive state  grant funds]  are  "community mental  health                                                               
nonprofits."  She pointed out  that HB 174 speaks specifically to                                                               
community mental health centers.                                                                                                
                                                                                                                                
Number 1572                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  made a  motion  to  adopt Amendment  1                                                               
[text provided previously].                                                                                                     
                                                                                                                                
Number 1570                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL objected  for  the  purpose of  reviewing                                                               
Amendment 1.  After doing so, he withdrew his objection.                                                                        
                                                                                                                                
Number 1540                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  noted that  there were  no further  objections to                                                               
Amendment 1.  Therefore, Amendment 1 was adopted.                                                                               
                                                                                                                                
Number 1532                                                                                                                     
                                                                                                                                
REPRESENTATIVE MEYER moved  to report HB 174, as  amended, out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
zero fiscal  note.  There  being no objection, CSHB  174(JUD) was                                                               
reported from the House Judiciary Standing Committee.                                                                           
                                                                                                                                
HB 228 - SALE OF TOBACCO PRODUCTS                                                                                             
                                                                                                                                
Number 1501                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be  HOUSE BILL  NO.  228,  "An Act  relating  to  the offense  of                                                               
selling or giving  tobacco to a minor, to the  accounting of fees                                                               
from business  license endorsements for tobacco  products, to the                                                               
disclosure of certain confidential  cigarette and tobacco product                                                               
information,    to    notification    regarding    a    cigarette                                                               
manufacturer's  noncompliance  with  the tobacco  product  Master                                                               
Settlement Agreement,  to business license endorsements  for sale                                                               
of  tobacco  products, to  citations  and  penalties for  illegal                                                               
sales of tobacco products; and  providing for an effective date."                                                               
[Before the committee was CSHB 228(L&C).]                                                                                       
                                                                                                                                
Number 1477                                                                                                                     
                                                                                                                                
JOHN  MANLY, Staff  to Representative  John Harris,  Alaska State                                                               
Legislature,  presented  HB  228   on  behalf  of  Representative                                                               
Harris, the  sponsor.  He  explained that  Representative Harris,                                                               
as chairman of  the House Finance Subcommittee  on the Department                                                               
of  Health  and  Social  Services  (DHSS)  budget,  became  quite                                                               
alarmed to learn  that Alaska is going to lose  $1.5 million of a                                                               
substance abuse  grant from the  federal government as  a penalty                                                               
because too many  Alaskan merchants sell cigarettes to  kids.  He                                                               
said  HB 228  attempts to  bolster  the state's  efforts to  stop                                                               
those sales.                                                                                                                    
                                                                                                                                
MR.  MANLY noted  that because  of changes  that occurred  in the                                                               
House  Labor and  Commerce Standing  Committee (HL&C),  the fines                                                               
have  been reduced  and  have been  relocated  from the  criminal                                                               
statutes to the civil statutes.   He opined that "the hammer" for                                                               
a  merchant  who  sells  tobacco  [products]  to  minors  is  the                                                               
suspension of  his/her ability to  sell tobacco products  at all.                                                               
He noted  that current law  merely provides  for a $300  fine for                                                               
the clerk  who sells a tobacco  product to a minor.   The current                                                               
version  of HB  228  includes  an additional  $300  fine for  the                                                               
endorsement  holder  and  a  20-day  suspension  of  the  tobacco                                                               
endorsement.   He confirmed that  the fine for the  clerk remains                                                               
$300 regardless of  how many repeat offenses occur,  but the fine                                                               
for  the   endorsement  holder  and   the  length  of   time  the                                                               
endorsement  is suspended  increases  with  each repeat  offense:                                                               
$300 for a  first offense, $500 for a second  offense, $1,000 for                                                               
a  third  offense,  and  $2,500  for  a  fourth  [or  subsequent]                                                               
offense.                                                                                                                        
                                                                                                                                
MR. MANLY  relayed that  the sponsor  is interested  in affecting                                                               
any  ongoing  sales  to  minors by  these  businesses;  thus  the                                                               
suspension of the endorsements is really the hammer in HB 174.                                                                  
                                                                                                                                
CHAIR  ROKEBERG mentioned  that he  is concerned  that the  fines                                                               
proposed by HB 228 are too high.                                                                                                
                                                                                                                                
REPRESENTATIVE MEYER noted that the  problem is one of preventing                                                               
kids from getting  tobacco products.  He  remarked that Anchorage                                                               
has  improved  but could  improve  more,  in addition  to  making                                                               
improvements  in  the rural  areas.    He  said putting  all  the                                                               
tobacco  products behind  the counter  is going  to help  prevent                                                               
access by minors, but more should also be done.                                                                                 
                                                                                                                                
Number 1087                                                                                                                     
                                                                                                                                
REPRESENTATIVE OGAN relayed  that some minors whom  he knows have                                                               
informed him  that they  are able  to simply  go into  stores and                                                               
purchase tobacco  products; hence, enforcement is  often lacking.                                                               
Notwithstanding this  and the fact  that $1.5 million  of federal                                                               
funds will be lost because of  these violations, he said he still                                                               
has concerns regarding the expansion  of [the DHSS's] enforcement                                                               
authority.                                                                                                                      
                                                                                                                                
Number 0992                                                                                                                     
                                                                                                                                
ELMER LINDSTROM,  Special Assistant, Office of  the Commissioner,                                                               
Department  of Health  & Social  Services (DHSS),  explained that                                                               
Section  10  gives authority  to  the  DHSS to  issue  citations.                                                               
Conceptually, what  [the DHSS]  is doing  currently and  wants to                                                               
continue to  do is contract  with local law  enforcement agencies                                                               
to undertake this activity.   Historically, local law enforcement                                                               
has not been aggressive in  enforcing the tobacco laws; they have                                                               
limited  resources  and have  had  to  set priorities,  and  this                                                               
issue, unfortunately,  has not  risen to the  top of  their list.                                                               
Part  of  the  funding  provisions  of HB  228  will  go  towards                                                               
continuing   and  increasing   the  contracts   with  local   law                                                               
enforcement  so that  they  can do  "undercover  buys" and  other                                                               
enforcement activities.   He noted,  however, that there  will be                                                               
locations  in  the state  where  either  there  is no  local  law                                                               
enforcement  or local  law enforcement  (for whatever  reason) is                                                               
unable or unwilling to participate;  yet the state is still going                                                               
to have  an obligation  under the federal  law to  do enforcement                                                               
activities in all areas of the  state.  He explained that Section                                                               
10 is  a fall back  provision that will  give [the DHSS],  in the                                                               
absence of local  law enforcement, the authority  to initiate its                                                               
own enforcement  activities.  It is  the desire of [the  DHSS] to                                                               
use persons  who have  a law enforcement  background in  order to                                                               
ensure that these activities are undertaken appropriately.                                                                      
                                                                                                                                
Number 0862                                                                                                                     
                                                                                                                                
EDWIN  J. SASSER,  Tobacco Enforcement  Coordinator, Division  of                                                               
Public  Health  (DPH), Department  of  Health  & Social  Services                                                               
(DHSS),  noted  that he  himself  is  a retired  law  enforcement                                                               
administrator.    He  said  he   is  currently  putting  together                                                               
contracts, and speaking and negotiating  with 15 different police                                                               
chiefs  across the  state.   There are  agreements and  contracts                                                               
ready to  go for this  period; he noted  that this was  also done                                                               
last year, very successfully, with  three jurisdictions.  He said                                                               
he  anticipates that  [these  contracts] will  grow,  and thus  a                                                               
majority  of  activity  for  the   enforcement  of  tobacco  laws                                                               
(especially those related  to selling to minors)  will be through                                                               
the contracts that [the DHSS] will have with local police.                                                                      
                                                                                                                                
MR. SASSER,  too, noted  that there  are a  number of  areas that                                                               
either have  no local police or,  for one reason or  another, the                                                               
local police  don't want  to get  involved personally.   However,                                                               
through the  meetings that he  is having with the  police chiefs,                                                               
he has  been assured that  if he is in  their area and  lets them                                                               
know that  he is there  and working, they'll provide  support and                                                               
backup should  he need  it.   He explained that  in areas  of the                                                               
state  that do  not  have borough  police  protection, since  the                                                               
Department of  Public Safety (DPS)  is tasked with  other things,                                                               
he could be the only person  in those areas enforcing the tobacco                                                               
laws.  He noted that he  is an experienced officer and thus feels                                                               
comfortable in  that role, and  that he has participated  in this                                                               
type of activity with the  full knowledge and support of whatever                                                               
local agencies are in those areas.                                                                                              
                                                                                                                                
REPRESENTATIVE OGAN  said he is  wondering what tactics  are used                                                               
to  enforce tobacco  laws in  rural villages  where new  faces in                                                               
town are closely scrutinized.                                                                                                   
                                                                                                                                
MR. SASSER  replied that it  may very well  be the case  that new                                                               
people  stand out,  but a  survey conducted  last year  indicated                                                               
that in  61 percent of  the cases, those  new faces were  sold to                                                               
anyway.  He said "we" don't  always use new faces; sometimes kids                                                               
who  live  in   the  communities  are  used   for  "control  buy"                                                               
activities.     Whatever  the  case,  whether   the  people  were                                                               
recognized as  local folks or  not, the  "buy" rate in  the rural                                                               
environment  is   still  nearly  two  out   of  three  successful                                                               
attempts.  The  areas with the most contract  activity with local                                                               
law enforcement  (for example, in the  Fairbanks/Northstar areas)                                                               
are down  to a 21.5  [percent] noncompliance rate, with  the goal                                                               
being a 20 percent noncompliance  rate.  Statewide, he noted, the                                                               
noncompliance rate is 33-34 percent,  which means "we" still have                                                               
a ways to go in most areas of the state.                                                                                        
                                                                                                                                
Number 0630                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MEYER asked  Mr.  Sasser whether  he checks  with                                                               
village   government    before   proceeding    with   enforcement                                                               
activities, and  whether there is  any animosity  regarding these                                                               
activities.                                                                                                                     
                                                                                                                                
MR. SASSER said he has not  run into any animosity, although most                                                               
of the activity  in the villages thus far has  merely been survey                                                               
activity.   He  added that  he  has been  working with  Volunteer                                                               
Public  Safety Officers  (VPSOs),  that he  has  a memorandum  of                                                               
[understanding]  (MOU) with  the courts  and the  DPS going  into                                                               
place, and  that he  always touches base  with the  local police.                                                               
He explained  that his goal in  this process is to  take the time                                                               
on the  front end to put  together a system that  works for years                                                               
to come.   He noted that in  the past, [the DHSS]  has "done some                                                               
hurry-up-collect-data"     to    satisfy     federal    reporting                                                               
requirements.     From  a  cost  accounting   standpoint  and  an                                                               
effectiveness standpoint,  it makes the  most sense to  merge the                                                               
compliance and data collection  process with enforcement whenever                                                               
possible; it  doesn't make any  sense to  buy two tickets  to New                                                               
Stuyahok, for example, when one will  suffice.  He said a goal is                                                               
to combine enforcement  with the data collection  that the "feds"                                                               
require and tie  all of that into the  vendor [advertisement] and                                                               
the  other pieces  of tobacco  control; enforcement  is just  one                                                               
small  piece of  tobacco  control  but it's  the  piece that  his                                                               
contracting officers and he can do something about.                                                                             
                                                                                                                                
CHAIR ROKEBERG asked  Mr. Sasser to comment on  the reluctance of                                                               
local law  enforcement officers in  small communities  to enforce                                                               
the tobacco laws because of a fear of retribution.                                                                              
                                                                                                                                
MR. SASSER,  after noting  that he  is no  expert on  this topic,                                                               
said he has spoken with many  VPSOs who have indicated that there                                                               
are  a number  of  laws  that they  are  reluctant to  administer                                                               
because of the  nature of a small community.   There are also, in                                                               
all fairness,  a number  of laws  that they  are not  equipped to                                                               
deal with; putting together an  operation that involves employing                                                               
an  underage   confidential  informant   to  participate   in  an                                                               
enforcement  activity is  one of  those.   As far  as the  larger                                                               
departments  go, he  added, the  argument that  he hears  is that                                                               
felonies take  priority over  misdemeanors and  misdemeanors take                                                               
priority  over  violations;   without  "emphasis-patrol  highway-                                                               
dollars,"  certain  types  of "minor"  violations  would  not  be                                                               
pursued.   He added that  this method  of funding is  an accepted                                                               
practice in law enforcement.                                                                                                    
                                                                                                                                
Number 0316                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG said  that he, too, has concerns  about giving the                                                               
DHSS  the  legal authority  to  issue  citations for  violations,                                                               
which are  one step  below criminal activity.   He  asked whether                                                               
the [DHSS] would  have any objections to  an amendment clarifying                                                               
that [the DHSS] is contracting  with local law enforcement and/or                                                               
using   designated  personnel   who  are   properly  trained   in                                                               
determining probable cause and other legal issues.                                                                              
                                                                                                                                
MR. SASSER opined  that neither he nor  another appropriate agent                                                               
from  the  DPH  would  necessarily   need  to  meet  the  "police                                                               
standards equivalency".  He pointed  out that in most cases, [the                                                               
DHSS} will be  contracting with local law  enforcement, and under                                                               
the authority  granted by HB  228, will  be able to  use existing                                                               
officers  outside of  their jurisdictions  once some  procurement                                                               
difficulties are overcome.   He noted that this is  a narrow band                                                               
of authority  and involves  training personnel  - similar  to the                                                               
Food and Drug Administration (FDA)  training - prior to investing                                                               
them  with the  authority  to  cite.   He  offered  to place  any                                                               
appropriate  requirements  within  the   protocols  that  he  has                                                               
established.                                                                                                                    
                                                                                                                                
CHAIR  ROKEBERG  noted  that currently  there  are  no  statutory                                                               
"sideboards" included  in HB 228.   He said he would  like to see                                                               
an  amendment that  will narrow  the list  of who  will have  the                                                               
authority to give out citations.                                                                                                
                                                                                                                                
MR.  LINDSTROM said  that conceptually  [the DHSS]  agrees; along                                                               
with the Department of Law (DOL),  [the DHSS] will try to work up                                                               
an appropriate amendment.                                                                                                       
                                                                                                                                
Number 0072                                                                                                                     
                                                                                                                                
DWAYNE  D. JONES,  Anchorage Police  Department (APD),  testified                                                               
via  teleconference and  explained  that he  is  taking over  the                                                               
tobacco enforcement section of the APD.   He noted that when they                                                               
went into rural  areas, the minors used  for enforcement purposes                                                               
did  not, unfortunately,  have  any  problems purchasing  tobacco                                                               
products from local stores.                                                                                                     
                                                                                                                                
TAPE 01-71, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
MR. JONES  noted that the  suspension of the  tobacco endorsement                                                               
is  "a pretty  big  thing for  these businesses  out  here."   He                                                               
mentioned a desire to bring  the frequency of identification (ID)                                                               
checks for the  sale of tobacco products up to  the same level as                                                               
for the sale of alcohol.                                                                                                        
                                                                                                                                
MR.  LINDSTROM,  in  response  to  questions  regarding  page  7,                                                               
pointed  out that  the language  stating, "Each  day a  violation                                                               
continues  after  a citation  for  a  violation has  been  issued                                                               
constitutes a separate violation"  refers to the requirements for                                                               
signage  -  the  sign  that  says no  one  can  purchase  tobacco                                                               
products  if they  are under  the  age of  19  - and  to the  law                                                               
relative to "loosies."                                                                                                          
                                                                                                                                
MR.  SASSER added  that this  provision  could also  apply to  an                                                               
inappropriately placed vending  machine.  He explained  that if a                                                               
business  receives   a  citation  but  does   not  respond,  each                                                               
additional day constitutes a separate violation.                                                                                
                                                                                                                                
CHAIR ROKEBERG pointed  out that the language also  refers to the                                                               
statute pertaining to the sale  of tobacco products to minors and                                                               
is redundant.                                                                                                                   
                                                                                                                                
MR. SASSER replied, "I don't  know why [AS 11.76.]100 is included                                                               
there.                                                                                                                          
                                                                                                                                
CHAIR ROKEBERG  requested that this  provision be "cleaned  up by                                                               
Monday."                                                                                                                        
                                                                                                                                
Number 0380                                                                                                                     
                                                                                                                                
DAN  BRANCH,  Assistant  Attorney  General,  Commercial  Section,                                                               
Civil Division (Juneau), Department  of Law (DOL), explained that                                                               
this language  on page 7, lines  6-7, does refer to  violation of                                                               
Title  11  that  involves  the  placement  of  vending  machines.                                                               
Current statute says  that a vending machine cannot  be placed in                                                               
a location that is generally  accessible to someone under the age                                                               
of 19.   If law  enforcement issues  a citation, and  the vending                                                               
machine is  not moved,  law enforcement can  come back  and issue                                                               
another citation.                                                                                                               
                                                                                                                                
                                                                                                                                
CHAIR  ROKEBERG suggested  that  any cumulative  effect of  those                                                               
penalties should be  clarified via an amendment.  He  said he did                                                               
not  mind  penalizing someone  for  selling  tobacco products  to                                                               
minors,  but opined  that if  it  is simply  a case  of having  a                                                               
vending machine  inadvertently placed  in the wrong  location, it                                                               
is not fair to impose the same high penalties.                                                                                  
                                                                                                                                
[HB 228 was held over.]                                                                                                         
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
Number 0536                                                                                                                     
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Judiciary Standing Committee meeting was adjourned at 1:05 p.m.                                                                 

Document Name Date/Time Subjects