Legislature(2005 - 2006)CAPITOL 120

04/13/2005 01:00 PM JUDICIARY


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 257 STATE PROCUREMENT ELECTRONIC TOOLS TELECONFERENCED
Heard & Held
+= HB 183 CAMPAIGN FINANCE: SHARED EXPENSES TELECONFERENCED
Moved CSHB 183(JUD) Out of Committee
*+ HB 260 TOBACCO: BONDS; TAX; POSSESSION BY MINORS TELECONFERENCED
Moved CSHB 260(JUD) Out of Committee
+ HB 133 LOCAL BOUNDARY COMMISSION REGS & POWERS TELECONFERENCED
<Bill Hearing Postponed to 4/18>
Bills Previously Heard/Scheduled
= HB 53 CHILDREN IN NEED OF AID/REVIEW PANELS
Moved CSSSHB 53(JUD) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE JUDICIARY STANDING COMMITTEE                                                                             
                         April 13, 2005                                                                                         
                           1:11 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Lesil McGuire, Chair                                                                                             
Representative Tom Anderson                                                                                                     
Representative John Coghill                                                                                                     
Representative Nancy Dahlstrom                                                                                                  
Representative Pete Kott                                                                                                        
Representative Les Gara                                                                                                         
Representative Max Gruenberg                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 183                                                                                                              
"An Act relating to the  use of campaign contributions for shared                                                               
campaign  activity   expenses  and  to  reimbursement   of  those                                                               
expenses."                                                                                                                      
                                                                                                                                
     - MOVED CSHB 183(JUD) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 260                                                                                                              
"An  Act relating  to purchase  and possession  of cigarettes  or                                                               
tobacco products by  a person under 19 years of  age, to licenses                                                               
for persons engaged in activities  involving tobacco products, to                                                               
taxes on  cigarettes and tobacco  products, and to the  amount of                                                               
the  bond required  to  stay  execution of  a  judgment in  civil                                                               
litigation involving a signatory, a  successor of a signatory, or                                                               
an  affiliate  of  a  signatory to  the  tobacco  product  Master                                                               
Settlement Agreement  during an appeal; amending  Rules 204, 205,                                                               
and 603, Alaska  Rules of Appellate Procedure;  and providing for                                                               
an effective date."                                                                                                             
                                                                                                                                
     - MOVED CSHB 260(JUD) OUT OF COMMITTEE                                                                                     
                                                                                                                                
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 53                                                                                        
"An  Act relating  to child-in-need-of-aid  proceedings; amending                                                               
the construction  of statutes pertaining  to children in  need of                                                               
aid; relating  to a  duty and  standard of  care for  services to                                                               
children and families, to  the confidentiality of investigations,                                                               
court  hearings, and  public agency  records  and information  in                                                               
child-in-need-of-aid   matters  and   certain  child   protection                                                               
matters,  to  immunity  regarding disclosure  of  information  in                                                               
child-in-  need-of-aid  matters   and  certain  child  protection                                                               
matters, to the retention of certain  privileges of a parent in a                                                               
relinquishment   and   termination   of  a   parent   and   child                                                               
relationship  proceeding,  to   eligibility  for  permanent  fund                                                               
dividends for certain  children in the custody of  the state, and                                                               
to juvenile delinquency  proceedings and placements; establishing                                                               
a right  to a  trial by  jury in  termination of  parental rights                                                               
proceedings;  reestablishing  and  relating  to  state  citizens'                                                               
review panels  for certain child protection  and custody matters;                                                               
amending the duty  to disclose information pertaining  to a child                                                               
in need of aid; authorizing  additional family members to consent                                                               
to  disclosure of  confidential or  privileged information  about                                                               
children and  families involved  with children's  services within                                                               
the Department  of Health  and Social  Services to  officials for                                                               
review  or use  in official  capacities; relating  to reports  of                                                               
harm and  to adoptions  and foster  care; mandating  reporting of                                                               
the  medication of  children in  state  custody; prescribing  the                                                               
rights of grandparents related  to child-in-need-of-aid cases and                                                               
establishing  a  grandparent  priority for  adoption  in  certain                                                               
child-in-need-of-aid  cases;  modifying  adoption  and  placement                                                               
procedures  in   certain  child-in-need-of-aid   cases;  amending                                                               
treatment service requirements for  parents involved in child-in-                                                               
need-of-aid  proceedings;   amending  Rules  9  and   13,  Alaska                                                               
Adoption Rules;  amending Rules  3, 18, and  22, Alaska  Child in                                                               
Need of  Aid Rules of  Procedure; and providing for  an effective                                                               
date."                                                                                                                          
                                                                                                                                
     - MOVED CSSSHB 53(JUD) OUT OF COMMITTEE                                                                                    
                                                                                                                                
HOUSE BILL NO. 257                                                                                                              
"An Act relating  to a procurement and  electronic commerce tools                                                               
program  for  state  departments  and  instrumentalities  of  the                                                               
state; and providing for an effective date."                                                                                    
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 133                                                                                       
"An Act relating to incorporation  of boroughs and to regulations                                                               
of  the  Local  Boundary  Commission  to  provide  standards  and                                                               
procedures   for   municipal   incorporation,   reclassification,                                                               
dissolution,   and  certain   municipal  boundary   changes;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - BILL HEARING POSTPONED TO 4/18/05                                                                                        
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 183                                                                                                                  
SHORT TITLE: CAMPAIGN FINANCE: SHARED EXPENSES                                                                                  
SPONSOR(S): REPRESENTATIVE(S) HAWKER                                                                                            
                                                                                                                                
02/28/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/28/05       (H)       STA, JUD                                                                                               
03/29/05       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
03/29/05       (H)       Moved CSHB 183(STA) Out of Committee                                                                   
03/29/05       (H)       MINUTE(STA)                                                                                            
03/30/05       (H)       STA RPT CS(STA) 2DP 2NR                                                                                
03/30/05       (H)       DP: ELKINS, SEATON;                                                                                    
03/30/05       (H)       NR: GARDNER, RAMRAS                                                                                    
04/06/05       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
04/06/05       (H)       <Bill Hearing Postponed>                                                                               
04/13/05       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
                                                                                                                                
BILL: HB 260                                                                                                                  
SHORT TITLE: TOBACCO: BONDS; TAX; POSSESSION BY MINORS                                                                          
SPONSOR(S): FINANCE                                                                                                             
                                                                                                                                
04/07/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/07/05       (H)       JUD, FIN                                                                                               
04/13/05       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
                                                                                                                                
BILL: HB  53                                                                                                                  
SHORT TITLE: CHILDREN IN NEED OF AID/REVIEW PANELS                                                                              
SPONSOR(S): REPRESENTATIVE(S) COGHILL                                                                                           
                                                                                                                                
01/10/05       (H)       PREFILE RELEASED 1/7/05                                                                                
01/10/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/10/05       (H)       HES, JUD, FIN                                                                                          
03/02/05       (H)       SPONSOR SUBSTITUTE INTRODUCED                                                                          
03/02/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/02/05       (H)       HES, JUD, FIN                                                                                          
03/15/05       (H)       HES AT 3:00 PM CAPITOL 106                                                                             
03/15/05       (H)       Heard & Held                                                                                           
03/15/05       (H)       MINUTE(HES)                                                                                            
03/22/05       (H)       HES AT 3:00 PM CAPITOL 106                                                                             
03/22/05       (H)       <subcommittee meeting>                                                                                 
03/31/05       (H)       HES AT 3:00 PM CAPITOL 106                                                                             
03/31/05       (H)       Moved CSSSHB 53(HES) Out of Committee                                                                  
03/31/05       (H)       MINUTE(HES)                                                                                            
04/04/05       (H)       HES RPT CS(HES) NT 5DP                                                                                 
04/04/05       (H)       DP: ANDERSON, KOHRING, MCGUIRE, SEATON,                                                                
                         WILSON                                                                                                 
04/11/05       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
04/11/05       (H)       <Bill Hearing Rescheduled to 4/12>                                                                     
04/12/05       (H)       JUD AT 8:00 AM CAPITOL 120                                                                             
04/12/05       (H)       Heard & Held                                                                                           
04/12/05       (H)       MINUTE(JUD)                                                                                            
04/13/05       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
                                                                                                                                
BILL: HB 257                                                                                                                  
SHORT TITLE: STATE PROCUREMENT ELECTRONIC TOOLS                                                                                 
SPONSOR(S): JUDICIARY                                                                                                           
                                                                                                                                
04/06/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/06/05       (H)       JUD, FIN                                                                                               
04/11/05       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
04/11/05       (H)       <Bill Hearing Rescheduled to 4/13>                                                                     
04/13/05       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE MIKE HAWKER                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Sponsor of HB 183.                                                                                         
                                                                                                                                
BROOKE MILES, Executive Director                                                                                                
Alaska Public Offices Commission (APOC)                                                                                         
Department of Administration (DOA)                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided comments and responded to                                                                         
questions during discussion of HB 183.                                                                                          
                                                                                                                                
REPRESENTATIVE KEVIN MEYER                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As chair of the House Finance Committee,                                                                   
sponsor of HB 260, presented the bill and responded to                                                                          
questions.                                                                                                                      
                                                                                                                                
MICHAEL PATTERSON, President                                                                                                    
Lucky Raven, Inc.                                                                                                               
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:  Provided comments during discussion of                                                                     
HB 260.                                                                                                                         
                                                                                                                                
DALE FOX, Executive Director                                                                                                    
Alaska Cabaret Hotel Restaurant  & Retailer's Association (Alaska                                                               
CHARR)                                                                                                                          
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:    Provided comments  during  discussion  of                                                               
HB 260.                                                                                                                         
                                                                                                                                
PETE ROBERTS                                                                                                                    
Homer, Alaska                                                                                                                   
POSITION  STATEMENT:    Provided comments  during  discussion  of                                                               
HB 260.                                                                                                                         
                                                                                                                                
JAMES N. GARDNER, Attorney at Law                                                                                               
Gardner & Gardner, P.C.                                                                                                         
Portland, Oregon                                                                                                                
POSITION  STATEMENT:    During discussion  of  HB  260,  provided                                                               
comments  on  behalf  of  Philip  Morris  USA  and  responded  to                                                               
questions.                                                                                                                      
                                                                                                                                
JOHANNA BALES, Excise Audit Manager                                                                                             
Central office                                                                                                                  
Tax Division                                                                                                                    
Department of Revenue (DOR)                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:    Testified  in  support  of  HB  260,  and                                                               
responded to a question regarding a proposed amendment.                                                                         
                                                                                                                                
DAVID PARISH, Lobbyist                                                                                                          
for the American Heart Association (AHA)                                                                                        
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:    Provided comments  during  discussion  of                                                               
HB 260, and responded to a question.                                                                                            
                                                                                                                                
MIKE ELERDING, President                                                                                                        
Northern Sales Company of Alaska, Inc.                                                                                          
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  During discussion  of HB 260, responded to a                                                               
question  and  suggested, via  written  remarks  provided to  the                                                               
committee, a change to current statute.                                                                                         
                                                                                                                                
CHRISTOPHER C. POAG, Assistant Attorney General                                                                                 
Commercial/Fair Business Section                                                                                                
Civil Division (Juneau)                                                                                                         
Department of Law (DOL)                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   During discussion  of HB 260,  responded to                                                               
questions regarding proposed amendments.                                                                                        
                                                                                                                                
SUZANNE CUNNINGHAM, Staff                                                                                                       
to Representative Kevin Meyer                                                                                                   
House Finance Committee                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   During  discussion of  HB 260,  provided an                                                               
explanation  of  proposed Amendment  5  on  behalf of  the  House                                                               
Finance Committee, sponsor.                                                                                                     
                                                                                                                                
RYNNIEVA MOSS, Staff                                                                                                            
to Representative Coghill                                                                                                       
Alaska State Legislature                                                                                                        
POSITION  STATEMENT:   Presented  the proposed  CS  for SSHB  53,                                                               
Version P, on behalf of Representative Coghill, sponsor.                                                                        
                                                                                                                                
JOHN McKAY                                                                                                                      
Anchorage Daily News                                                                                                            
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:    Provided comments  during  discussion  of                                                               
SSHB 53 and suggested a change.                                                                                                 
                                                                                                                                
CHERYL TRAIL                                                                                                                    
Lincoln, Nebraska                                                                                                               
POSITION STATEMENT:   During  discussion of  SSHB 53,  shared her                                                               
personal experiences with adoption  procedures and the Department                                                               
of Health and Social Services (DHSS).                                                                                           
                                                                                                                                
JAN RUTHERDALE, Assistant Attorney General                                                                                      
Human Services Section                                                                                                          
Civil Division (Juneau)                                                                                                         
Department of Law (DOL)                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Provided comments  during  discussion  of                                                               
SSHB 53.                                                                                                                        
                                                                                                                                
TAMMY SANDOVAL, Acting Deputy Commissioner                                                                                      
Office of Children's Services (OCS)                                                                                             
Department of Health and Social Services (DHSS)                                                                                 
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   During  discussion  of  SSHB 53,  provided                                                               
comments and responded to questions.                                                                                            
                                                                                                                                
VERN JONES, Chief Procurement Officer                                                                                           
Central Office                                                                                                                  
Division of General Services (DGS)                                                                                              
Department of Administration (DOA)                                                                                              
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    During discussion  of  HB  257,  provided                                                               
comments, recommended changes, and responded to questions.                                                                      
                                                                                                                                
BRUCE LUDWIG, Business Manager                                                                                                  
Alaska  Public   Employees  Association/American   Federation  of                                                               
Teachers (APEA/AFT);                                                                                                            
Secretary/Treasurer                                                                                                             
Alaska State                                                                                                                    
American  Federation   of  Labor   and  Congress   of  Industrial                                                               
Organizations (AFL-CIO)                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    During discussion  of  HB  257,  provided                                                               
comments and asked that the bill be held over.                                                                                  
                                                                                                                                
JIM DUNCAN, Business Manager                                                                                                    
Alaska State Employees Association (ASEA)                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in  opposition to HB 257 and asked                                                               
that the bill be held over.                                                                                                     
                                                                                                                                
BEN MILAM                                                                                                                       
Palmer, Alaska                                                                                                                  
POSITION STATEMENT:   His testimony regarding HB 257  was read by                                                               
Ken Brown.                                                                                                                      
                                                                                                                                
BARRY JACKSON,  Procurement Analyst; Project  Manager; Programmer                                                               
Analyst                                                                                                                         
Resource Data, Inc. (RDI)                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Provided comments  during discussion  of HB                                                               
257.                                                                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  LESIL   McGUIRE  called   the  House   Judiciary  Standing                                                             
Committee  meeting  to  order at  1:11:56  PM.    Representatives                                                             
McGuire, Dahlstrom, Gruenberg, and Gara  were present at the call                                                               
to order.   Representatives Anderson,  Coghill, and  Kott arrived                                                               
as the meeting was in progress.                                                                                                 
                                                                                                                                
HB 183 - CAMPAIGN FINANCE: SHARED EXPENSES                                                                                    
                                                                                                                                
1:12:47 PM                                                                                                                    
                                                                                                                                
CHAIR McGUIRE  announced that the  first order of  business would                                                               
be HOUSE  BILL NO. 183, "An  Act relating to the  use of campaign                                                               
contributions  for  shared  campaign  activity  expenses  and  to                                                               
reimbursement  of those  expenses."   [Before  the committee  was                                                               
CSHB 183(STA).]                                                                                                                 
                                                                                                                                
REPRESENTATIVE  MIKE HAWKER,  Alaska State  Legislature, sponsor,                                                               
relayed  that while  Alaska has  some of  the strongest  campaign                                                               
finance laws in the nation,  there is an ambiguity regarding, for                                                               
example, two candidates participating  in the same activity, such                                                               
as a fundraiser, in which one  candidate writes the check for the                                                               
caterer  and  the  other  candidate  reimburses  him/her.    This                                                               
legislation inserts  language specifying  that one  candidate may                                                               
reimburse  another candidate  for  shared  campaign expenses,  as                                                               
long as the reimbursement occurs  within three working days after                                                               
the  original expense  is paid.    He highlighted  that the  main                                                               
intent is to  shift the burden for compliance  with campaign laws                                                               
from vendors to candidates.                                                                                                     
                                                                                                                                
CHAIR  McGUIRE inquired  as to  the rationale  for the  three-day                                                               
requirement.                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER relayed that he  wanted there to be a tight                                                               
window,  and  after  extensive  discussion  in  the  House  State                                                               
Affairs  Standing Committee,  reimbursement within  three working                                                               
days was deemed a reasonable length of time.                                                                                    
                                                                                                                                
1:15:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA said  that he would like  to include language                                                               
in  HB   183  to  allow   one  [candidate]  to   provide  another                                                               
[candidate] with his/her fundraising list.                                                                                      
                                                                                                                                
REPRESENTATIVE HAWKER  indicated that  his only  reservation with                                                               
regard to  adding such language is  that he is not  familiar with                                                               
[current law] on that issue.                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARA suggested  that the  committee could  either                                                               
address  this now  with a  conceptual amendment  or [a  committee                                                               
substitute] could be  drafted before the legislation  gets to the                                                               
House floor.                                                                                                                    
                                                                                                                                
CHAIR McGUIRE  suggested instead that  the committee move  HB 183                                                               
out of committee  today and then draft  appropriate language with                                                               
help from the Alaska Public  Offices Commission (APOC).  She said                                                               
that she would  agree to help obtain  support for [Representative                                                               
Gara's] suggested change.                                                                                                       
                                                                                                                                
REPRESENTATIVE  HAWKER said  he  would be  willing to  co-sponsor                                                               
[such an  amendment] on  the House  floor or  in the  House Rules                                                               
Standing Committee.                                                                                                             
                                                                                                                                
1:18:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  opined that the requirement  to repay a                                                               
candidate  within  three working  days  could  be too  short  for                                                               
candidates  from the  Bush who  have a  fundraiser in  Anchorage.                                                               
Therefore, he asked whether the  sponsor would view changing that                                                               
requirement to a week as a friendly amendment.                                                                                  
                                                                                                                                
REPRESENTATIVE  HAWKER indicated  his preference  for having  the                                                               
shortest, tightest time period possible.                                                                                        
                                                                                                                                
REPRESENTATIVE GRUENBERG reiterated  the potential problems those                                                               
in the Bush could face with the three-day requirement.                                                                          
                                                                                                                                
REPRESENTATIVE GRUENBERG made  a motion to adopt  Amendment 1, to                                                               
delete  "three working  days" from  page 2,  line 18,  and insert                                                           
"five working days".   There being no objection,  Amendment 1 was                                                           
adopted.                                                                                                                        
                                                                                                                                
1:20:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER,  in response  to comments,  specified that                                                               
the intent of  HB 183 is to merely cleanup  areas of the campaign                                                               
finance laws  that are universally supported  by both Republicans                                                               
and Democrats.                                                                                                                  
                                                                                                                                
1:22:17 PM                                                                                                                    
                                                                                                                                
BROOKE   MILES,  Executive   Director,   Alaska  Public   Offices                                                               
Commission (APOC),  Department of Administration  (DOA), informed                                                               
the  committee that  the  APOC  has reviewed  HB  183 and  didn't                                                               
believe there  would [be an  issue] with the  repayment happening                                                               
within three working days.   However, changing it to five working                                                               
days or  one working day  might be  cause concern because  of the                                                               
possibility  of the  well-funded  candidate virtually  supporting                                                               
the   non-funded  [candidate]   pending   the   outcome  of   the                                                               
fundraising event.   Furthermore, there may be  some confusion if                                                               
the repayment crosses  reporting periods.  Ms.  Miles opined that                                                               
the APOC  would favor the shorter  time period.  However,  if the                                                               
committee believes  additional time  is necessary, the  APOC will                                                               
administer whatever the law specifies.                                                                                          
                                                                                                                                
MS. MILES,  in response to  earlier comments, noted that  the law                                                               
does permit  candidates to  make contributions  to the  party for                                                               
events.   With regard to Representative  Gara's request regarding                                                               
the  sharing of  fundraising lists,  Ms. Miles  pointed out  that                                                               
there is some value to  those lists, but characterized that value                                                               
as  de  minimis.    Ms.  Miles concluded  by  saying  that  these                                                               
aforementioned issues  are matters  of policy  and thus  the APOC                                                               
will support whatever laws the legislature.                                                                                     
                                                                                                                                
1:25:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG said he doesn't  see that there would be                                                               
a problem changing  the repayment time period from  three days to                                                               
five days.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  DAHLSTROM, noting  Ms.  Miles's  comments on  the                                                               
issue, moved  that the committee  rescind its action  in adopting                                                               
Amendment 1.                                                                                                                    
                                                                                                                                
REPRESENTATIVE   GRUENBERG   offered   changing   the   three-day                                                               
requirement to a five-day requirement  within a reporting period.                                                               
He  relayed his  understanding that  Ms. Miles's  concern was  in                                                               
regard  to  the  disclosures  being   reported  within  the  same                                                               
[reporting] period.                                                                                                             
                                                                                                                                
MS.  MILES  said such  [language]  would  completely address  her                                                               
concern.                                                                                                                        
                                                                                                                                
CHAIR  McGUIRE  inquired as  to  how  the individual  [candidate]                                                               
would know [when a reporting period change].                                                                                    
                                                                                                                                
REPRESENTATIVE   GRUENBERG   offered   his   belief   that   that                                                               
information  would be  shared between  candidates who  know their                                                               
reporting periods.                                                                                                              
                                                                                                                                
REPRESENTATIVE  HAWKER   opined  that  there  is   little  to  no                                                               
difference between three days overlapping  the end of a reporting                                                               
period and five  days overlapping the end of  a reporting period.                                                               
He  relayed  his  understanding   that  the  current  statute  is                                                               
intended to prevent one candidate  from making a loan to another,                                                               
and  so  if statute  authorizes  the  reimbursement of  a  shared                                                               
campaign   expense,  the   [date]  specified   on  the   campaign                                                               
disclosure form would apply.                                                                                                    
                                                                                                                                
1:27:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG   offered  his  understanding   that  a                                                               
candidate  who has  been  reimbursed would  show  receipt of  the                                                               
check, otherwise  it would  appear to  be a loan  and need  to be                                                               
reported.                                                                                                                       
                                                                                                                                
REPRESENTATIVE GARA  explained that  technically, if  a candidate                                                               
receives  something  and  pays  for  it  three  days  later,  the                                                               
candidate's books would have to refer  to those [funds] as a loan                                                               
or a  contribution during that  period.  Therefore,  he suggested                                                               
that  the legislation  specify that  as long  as [the  candidate]                                                               
pays  for [the  shared  expenses] within  [a  certain period  of]                                                               
days, then  it doesn't have to  be reported as something  else in                                                               
the meantime.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  HAWKER specified  that the  trigger mechanism  is                                                               
when  one candidate  writes a  check and  gives cash  [to another                                                               
candidate].   He opined  that [Representative  Gara's suggestion]                                                               
adds  an unnecessary  level of  complication.   Until a  check is                                                               
actually  written,  both candidates  could  decide  to split  the                                                               
payment.                                                                                                                        
                                                                                                                                
CHAIR McGUIRE clarified  that there is no intention  for there to                                                               
be  any additional  reporting  than there  [currently  is].   She                                                               
indicated  her agreement  that the  three-day requirement  may be                                                               
difficult for  those in the Bush  and thus the change  to a five-                                                               
day requirement makes sense.                                                                                                    
                                                                                                                                
REPRESENTATIVE DAHLSTROM withdrew her motion.                                                                                   
                                                                                                                                
MS.  MILES, in  response to  a question,  reiterated that  if the                                                               
[compensation is  received] during the same  reporting period, it                                                               
would be fine;  however, if one candidate owes  another for costs                                                               
paid in advance  of a shared fundraising event  and the reporting                                                               
period is closed, then the other  candidate would need to show it                                                               
as a debt.                                                                                                                      
                                                                                                                                
CHAIR McGUIRE  surmised that what  Ms. Miles is describing  is no                                                               
different than if  the candidate owed it to the  vendor and there                                                               
were no shared expenses.                                                                                                        
                                                                                                                                
MS. MILES agreed.                                                                                                               
                                                                                                                                
1:31:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DAHLSTROM  moved  to  report  CSHB  183(STA),  as                                                               
amended,  out of  committee with  individual recommendations  and                                                               
the accompanying  fiscal notes.   There being no  objection, CSHB                                                               
183(JUD)  was   reported  from   the  House   Judiciary  Standing                                                               
Committee.                                                                                                                      
                                                                                                                                
HB 260 - TOBACCO: BONDS; TAX; POSSESSION BY MINORS                                                                            
                                                                                                                                
1:31:51 PM                                                                                                                    
                                                                                                                                
CHAIR McGUIRE announced that the  next order of business would be                                                               
HOUSE BILL NO.  260, "An Act relating to  purchase and possession                                                               
of cigarettes or  tobacco products by a person under  19 years of                                                               
age,  to licenses  for persons  engaged  in activities  involving                                                               
tobacco products,  to taxes on  cigarettes and  tobacco products,                                                               
and to  the amount of  the bond required  to stay execution  of a                                                               
judgment in  civil litigation involving a  signatory, a successor                                                               
of a  signatory, or an  affiliate of  a signatory to  the tobacco                                                               
product Master  Settlement Agreement  during an  appeal; amending                                                               
Rules 204,  205, and  603, Alaska  Rules of  Appellate Procedure;                                                               
and providing for an effective date."                                                                                           
                                                                                                                                
REPRESENTATIVE KEVIN  MEYER, Alaska  State Legislature,  as chair                                                               
of the  House Finance Committee,  sponsor, presented HB 260.   He                                                               
said  that  HB 260  addresses  the  issues of  tobacco  taxation,                                                               
possession  and  purchase  of tobacco  products  by  minors,  and                                                               
limits on  the supersedeas  bond that  signatories of  the Master                                                               
Settlement  Agreement (MSA)  must post  to stay  an execution  of                                                               
judgment in civil  tobacco-related litigation.  He  said his main                                                               
goal in  carrying the bill is  to further the efforts  being made                                                               
to prevent  children from starting  to smoke in the  first place.                                                               
Studies indicate  that if a  person doesn't start  smoking before                                                               
the age  of 19,  there is  a 90 percent  chance that  he/she will                                                               
never start smoking.   The bill increases the  tax on "smokeless"                                                               
tobacco products from 75 percent  to 100 percent of the wholesale                                                               
cost,  and  accelerates  the  currently  instituted  increase  on                                                               
cigarettes.                                                                                                                     
                                                                                                                                
REPRESENTATIVE MEYER  relayed that under HB  260, individuals who                                                               
import tobacco  products for their own  personal consumption will                                                               
be required to purchase a  buyer's license from the Department of                                                               
Revenue (DOR)  for a fee of  $25; such licensure will  enable the                                                               
DOR to collect the required taxes  from the buyer.  The bill also                                                               
proposes to set  the supersedeas bond limit at $100  million.  He                                                               
offered his  understanding that this  bond limit will  not change                                                               
any other aspect  of the law, will not change  the rules by which                                                               
a trial  is conducted,  will not affect  who ultimately  wins the                                                               
lawsuit, and  will not affect  the rights of plaintiffs  to fully                                                               
recover damages.  Placing a limit  on such bonds will ensure that                                                               
the state will continue to  receive its MSA payments, he posited,                                                               
and predicted  that because Alaska is  such a small state,  it is                                                               
doubtful  that the  proposed  bond limit  would  ever be  reached                                                               
anyway.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  MEYER  said  it  is important  to  keep  the  MSA                                                               
payments coming  into the state,  because that money  goes toward                                                               
the  state's education/cessation  programs.   Currently 26  other                                                               
states have established supersedeas bond  limits, and it would be                                                               
appropriate for Alaska to do the same, he concluded.                                                                            
                                                                                                                                
1:37:30 PM                                                                                                                    
                                                                                                                                
MICHAEL PATTERSON,  President, Lucky  Raven, Inc., said  he would                                                               
like to  see improvements made  to the enforcement  provisions of                                                               
the bill.   Currently, for a first offense, a  business will lose                                                               
its license.   So for some businesses, such as  his, that type of                                                               
penalty  would in  essence shut  the business  down, whereas  for                                                               
other businesses,  such as  those that are  not primarily  in the                                                               
business of selling  tobacco, that type of  penalty wouldn't have                                                               
that great  an impact.   He suggested that  substantial financial                                                               
penalties  - both  on the  individual that  performs the  illegal                                                               
sale, and on the business itself  - would be a greater deterrent;                                                               
for example,  a financial penalty  of $5000 for a  first offense,                                                               
and $10,000  for a  second offense.   "I  believe ...  making the                                                               
clerk also liable for the offense  ... will help clear up part of                                                               
the difficulties," he remarked.                                                                                                 
                                                                                                                                
MR. PATTERSON  said he would  also like to  see more done  in the                                                               
way of education regarding tobacco  sales; for example, currently                                                               
the  alcohol  industry  is benefiting  from  the  "techniques  in                                                               
alcohol  management" (TAM)  program,  and he  would  like to  see                                                               
similar educational efforts  made in the tobacco  industry.  Also                                                               
of concern to him is the  enforcement of the tax on other tobacco                                                               
products.   Currently  there isn't  any state-to-state  reporting                                                               
and it is  very difficult to track Internet sales  of cigars, for                                                               
example, and  so trying  to collect  the tax  on such  sales will                                                               
also be  very difficult,  he concluded,  and predicted  that this                                                               
gap  in  enforcement will  leave  the  door  wide open  for  most                                                               
consumers  to look  out of  state when  purchasing their  tobacco                                                               
products,  and  could  actually   discourage  people  from  doing                                                               
business in Alaska.                                                                                                             
                                                                                                                                
CHAIR  McGUIRE next  ascertained that  a representative  from the                                                               
Department  of   Health  and  Social  Services   (DHSS),  Tobacco                                                               
Prevention and Control Unit, was available to answer questions.                                                                 
                                                                                                                                
1:41:14 PM                                                                                                                    
                                                                                                                                
DALE FOX,  Executive Director, Alaska Cabaret  Hotel Restaurant &                                                               
Retailer's Association  (Alaska CHARR),  relayed that  because of                                                               
the bill's recent introduction, CHARR  has not yet formally taken                                                               
the issue up.  Notwithstanding this, he offered:                                                                                
                                                                                                                                
     It's a  mixed bag.   We think there's some  really good                                                                    
     provisions in  this bill, and some  that probably would                                                                    
     not be supported by our  group.  First let's talk about                                                                    
     the positives.   Obviously,  as the  folks who  run the                                                                    
     TAM program  in the  alcohol industry, we  believe that                                                                    
     strengthening the  efforts to  make sure  that everyone                                                                    
     ... who is  trying to get tobacco [is  carded] and that                                                                    
     there's adequate education  for the frontline employees                                                                    
     is critically important.  The  "We Card" program, which                                                                    
     is  in the  state now  and  [is] something  we hope  to                                                                    
     expand,  we  think   is  a  good  step   in  the  right                                                                    
     direction.  And  so, yes, we should  do everything that                                                                    
     we can to prevent youth  from getting access to tobacco                                                                    
     prior to reaching the age [of 19].                                                                                         
                                                                                                                                
     The  second provision  we  think is  a  very good  pro-                                                                    
     business  stance  is  the bond  cap.  ...  The  tobacco                                                                    
     companies [have]  ... shown good faith  with the Master                                                                    
     Settlement  Agreement, they're  making their  payments,                                                                    
     and we  think that anything  that has the  potential of                                                                    
     putting somebody  out of  business is  bad legislation,                                                                    
     and so a bond cap  provision that allows people to move                                                                    
     forward  through   the  courts  equitably  is   a  very                                                                    
     positive effort.                                                                                                           
                                                                                                                                
     In  terms  of  the  taxes, accelerating  the  taxes  on                                                                    
     tobacco  and  on  smokeless  tobacco,  in  general  the                                                                    
     Alaska CHARR  group has come  out against  singling out                                                                    
     specific  products  in   the  marketplace  for  special                                                                    
     taxes, and I  would suspect that they would  do that on                                                                    
     this as  well. ...  Those are  general comments  that I                                                                    
     think are reflective  or our industry.   Thank you very                                                                    
     much.                                                                                                                      
                                                                                                                                
1:44:05 PM                                                                                                                    
                                                                                                                                
PETE ROBERTS opined that the bond limitation being proposed in                                                                  
the bill is a good idea, but that the rest of the bill should be                                                                
tossed.  He elaborated:                                                                                                         
                                                                                                                                
     We just  raised our  taxes on tobacco  products; [they]                                                                    
     were to be  phased in.  We haven't  even gotten through                                                                    
     that  period and  here somebody  wants to  do good  and                                                                    
     raise them some more.  I  think that the idea of trying                                                                    
     to keep  teens from  smoking is  a good  idea.   On the                                                                    
     other hand, I think that  most of the tobacco is bought                                                                    
     by  adults,  and  this  is  punitive  and  it's  social                                                                    
     engineering.   And I  think it's  bad state  policy and                                                                    
     not very consistent with the  republican ideals, so I'm                                                                    
     against it.  Thanks.                                                                                                       
                                                                                                                                
1:45:21 PM                                                                                                                    
                                                                                                                                
JAMES N. GARDNER, Attorney at  Law, Gardner & Gardner, P.C., said                                                               
he would  be speaking  on behalf  of Philip  Morris USA  (PA USA)                                                               
regarding the  bond provisions in  HB 260.  He  characterized the                                                               
MSA  as  being  very  important to  Alaska  because  it  delivers                                                               
millions of dollars  in revenues to the  state annually; however,                                                               
the continued  receipt of these  funds is threatened by  the huge                                                               
judgments that  have been awarded  against the  tobacco companies                                                               
that are  funding the  settlement.   Although defendants  in such                                                               
cases almost  always have  the right to  appeal, and  although in                                                               
many  instances such  appeals have  been successful  - either  in                                                               
reducing the judgment  or in overturning the  judgment entirely -                                                               
in order to stay the  execution of judgment on appeal, defendants                                                               
must post a supersedeas bond.                                                                                                   
                                                                                                                                
MR. GARDNER  said that in the  states that do not  already have a                                                               
limit  on that  type  of bond,  the amount  of  the bond  usually                                                               
equals the amount  of the judgment itself, and if  a company that                                                               
is a  defendant in such  a case cannot afford  to post a  bond in                                                               
the amount  set by the court,  the company may be  forced to file                                                               
for bankruptcy  in order  to stop the  plaintiff from  taking the                                                               
companies assets during the appeal process.   That kind of a stay                                                               
could  disrupt payments  by the  company  to Alaska  and all  the                                                               
other states that  receive MSA payments.  He used  a Florida case                                                               
as an  example wherein  if there hadn't  been a  supersedeas bond                                                               
limit, the  company - the  defendant - would have  gone bankrupt,                                                               
adding that  33 states thus  far have recognized  the possibility                                                               
of  risk  from  large  supersedeas  bond  requirements  and  that                                                               
another 5  states do not require  supersedeas bonds at all.   He,                                                               
too, offered his  belief that passage of HB 260  would not affect                                                               
either the  substantive rights of  the litigants or  the ultimate                                                               
right  of  recovery  if  the  plaintiff  prevails  following  the                                                               
appeal.                                                                                                                         
                                                                                                                                
1:48:57 PM                                                                                                                    
                                                                                                                                
MR. GARDNER, in response to questions,  said that he is not aware                                                               
of any  cases in Alaska in  which a required bond  has threatened                                                               
to put  a company out  of business;  opined that either  paying a                                                               
huge  judgment outright  or  putting  up the  same  amount for  a                                                               
supersedeas   bond  would   be  impossible,   from  a   financial                                                               
standpoint, and  therefore the  company would  be forced  to file                                                               
bankruptcy, which would  in turn impede the flow of  MSA funds to                                                               
the states; and offered his  belief that although the trial court                                                               
in  Alaska does  have some  degree of  discretion regarding  what                                                               
amount an  appeal bond should be  set at, as a  practical matter,                                                               
that  kind  of discretion  simply  can't  cope with  the  massive                                                               
reduction  that would  be necessary  to avoid  disruption of  MSA                                                               
payments should a "mega verdict" ever be awarded in Alaska.                                                                     
                                                                                                                                
REPRESENTATIVE  GARA  asked  Mr.  Gardner  whether  he  would  be                                                               
amenable to  a provision that would  make it a class  C felony to                                                               
dissipate assets in order to avoid a judgment.                                                                                  
                                                                                                                                
MR.  GARDNER said  he wouldn't  agree to  such a  provision.   He                                                               
noted,  though,  that  Section  12, subsection  (b),  of  HB  260                                                               
contains  language which  says that  if an  appellee proves  by a                                                               
preponderance of  the evidence that  an appellant  is dissipating                                                               
assets to  avoid the payment of  a judgment, a court  may require                                                               
the appellant to post  a bond in an amount up  to the full amount                                                               
of  the  judgment.    He  opined  that  such  language  addresses                                                               
Representative Gara's concern.                                                                                                  
                                                                                                                                
REPRESENTATIVE GARA  pointed out, however, that  that language is                                                               
merely saying  that if  a company dissipates  assets in  order to                                                               
avoid payment of the judgment,  the company then really does have                                                               
to  post the  bond,  the bond  that's  automatically required  up                                                               
front in all  other cases.  His suggestion, he  reiterated, is to                                                               
make it a  crime, a class C felony, to  dissipate assets in order                                                               
to  avoid  paying  a  judgment;   he  characterized  this  as  an                                                               
appropriate penalty  particularly if  the proposed bond  limit is                                                               
adopted.                                                                                                                        
                                                                                                                                
MR.  GARDNER   reiterated  his  belief   that  the   language  in                                                               
subsection  (b)   of  Section   12,  specifically   the  language                                                               
requiring that a  preponderance of the evidence  be shown, offers                                                               
full protection to an appellee.                                                                                                 
                                                                                                                                
1:54:01 PM                                                                                                                    
                                                                                                                                
JOHANNA  BALES,   Excise  Audit  Manager,  Central   office,  Tax                                                               
Division, Department  of Revenue  (DOR), after relaying  that she                                                               
is  also  the  program  manager of  the  division's  Tobacco  Tax                                                               
Program,  noted  that retailers  support  the  proposed taxes  on                                                               
"other  tobacco products"  that are  being purchased  through the                                                               
mail by individuals  for personal consumption.  With  regard to a                                                               
comment  made  by Mr.  Patterson,  she  explained that  currently                                                               
there  are state-to-state  reporting requirements  in place,  but                                                               
acknowledged that  currently no tax  is levied when  products are                                                               
imported  by individuals  for personal  consumption; so  although                                                               
the  division   is  able  to  identify   some  such  individuals,                                                               
enforcement of Internet purchases is somewhat problematic.                                                                      
                                                                                                                                
MS. BALES offered  her belief that if this  provision is adopted,                                                               
most people will comply with the  law, and that its adoption will                                                               
help protect  instate retailers;  this is  particularly important                                                               
for  the DOR  and instate  retailers  given that  an increase  in                                                               
taxes might entice  people to buy their  tobacco products through                                                               
the Internet.  She concluded by  saying that both the DOR and the                                                               
governor's office supports HB 260.                                                                                              
                                                                                                                                
1:56:56 PM                                                                                                                    
                                                                                                                                
DAVID PARISH, Lobbyist for the  American Heart Association (AHA),                                                               
mentioned that the AHA is an  active member of the Alaska Tobacco                                                               
Control  Alliance (ATCA),  which is  a coalition  working closely                                                               
with the national  Campaign For Tobacco-Free Kids.   He said that                                                               
the AHA  is still looking at  the individual sections of  HB 260,                                                               
especially  the "criteria  of what  is the  maximum public-health                                                               
benefit  particularly relative  to  reducing tobacco  consumption                                                               
among Alaska's  youth," and that  although the AHA  currently has                                                               
no official position  on HB 260, in general  the organizations he                                                               
represents do not support the  provision pertaining to a limit on                                                               
supersedeas bonds,  but they do support  the provisions regarding                                                               
the taxation  of other tobacco  products and the  acceleration of                                                               
the current cigarette tax.                                                                                                      
                                                                                                                                
2:00:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KOTT   surmised  that  everyone  there   has  the                                                               
children's  best  interest at  heart  and  wants to  ensure  that                                                               
tobacco does not fall into their  hands.  He asked whether enough                                                               
time has elapsed to allow an  evaluation of whether either of the                                                               
most  recent  cigarette tax  increases  have  decreased usage  by                                                               
those who are underage.                                                                                                         
                                                                                                                                
MR.  PARISH said  that most  of the  data that  the AHA  has only                                                               
reflects what  has occurred since  1997, adding that he  would be                                                               
willing to  research the issue  further and get  that information                                                               
to the committee.   In response to another  question, he provided                                                               
the committee with a copy  of the Campaign For Tobacco-Free Kids'                                                               
position statement.                                                                                                             
                                                                                                                                
CHAIR  McGUIRE, after  ascertaining that  no one  else wished  to                                                               
testify, closed public testimony on HB 260.                                                                                     
                                                                                                                                
2:03:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARA  made a  motion  to  adopt Amendment  1,  to                                                               
delete Section 12  of the bill, the section that  proposes to set                                                               
a  limit  of $100  million  on  supersedeas bonds  pertaining  to                                                               
tobacco litigation.                                                                                                             
                                                                                                                                
REPRESENTATIVE ANDERSON objected.                                                                                               
                                                                                                                                
REPRESENTATIVE  GARA  predicted  that  the  moment  that  tobacco                                                               
companies  get a  special bond  amount, [ExxonMobil  Corporation]                                                               
will want  a special  bond amount.   He opined  that there  is no                                                               
need to  remove the  bond amount,  particularly given  that there                                                               
has never been  a case in Alaska where "the  bond amount has been                                                               
abused by  a court" and given  that the court has  the discretion                                                               
to lower the  bond amount if the amount  originally set threatens                                                               
to  put  a  company  out  of business  or  force  it  to  declare                                                               
bankruptcy.   He concluded his  argument in favor of  Amendment 1                                                               
by  stating that  he did  not think  the proposed  bond limit  is                                                               
needed.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  ANDERSON disagreed,  and  urged  members to  keep                                                               
Section 12 in the bill.                                                                                                         
                                                                                                                                
REPRESENTATIVE KOTT  noted other  sections of  the bill  would be                                                               
affected by the adoption of Amendment 1.                                                                                        
                                                                                                                                
2:06:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARA  withdrew Amendment  1  for  the purpose  of                                                               
restating it.                                                                                                                   
                                                                                                                                
REPRESENTATIVE GARA  made a motion to  adopt Conceptual Amendment                                                               
1, "to delete all provisions that  change any of the bond laws or                                                               
bond  rules, either  in statutes  or  in court  rules; so  delete                                                               
Section 12 and then all related sections."                                                                                      
                                                                                                                                
CHAIR McGUIRE added, "And including in the title."                                                                              
                                                                                                                                
REPRESENTATIVE GARA said, "Yep."                                                                                                
                                                                                                                                
2:07:25 PM                                                                                                                    
                                                                                                                                
A roll  call vote  was taken.   Representatives  Kott, Dahlstrom,                                                               
and   Gara   voted   in  favor   of   Conceptual   Amendment   1.                                                               
Representatives McGuire,  Anderson, Coghill, and  Gruenberg voted                                                               
against it.   Therefore, Conceptual Amendment 1 failed  by a vote                                                               
of 3-4.                                                                                                                         
                                                                                                                                
2:07:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA,  referring to page  4 [lines 16-18],  made a                                                               
motion to  adopt Conceptual  Amendment 2,  to make  it a  class C                                                               
felony to  intentionally dissipate assets  to avoid payment  of a                                                               
judgment.                                                                                                                       
                                                                                                                                
REPRESENTATIVE ANDERSON objected.                                                                                               
                                                                                                                                
REPRESENTATIVE  GARA offered  his belief  that any  attempt by  a                                                               
tobacco  company  to  dissipate  assets to  avoid  payment  of  a                                                               
judgment should  be considered  fraud and  such a  company should                                                               
therefore be  charged with  a class C  felony, especially  if the                                                               
proposed bond limit is adopted.                                                                                                 
                                                                                                                                
REPRESENTATIVE  GRUENBERG suggested  that Conceptual  Amendment 2                                                               
merely needs to  add language specifying that  violation of "this                                                               
subsection" is also a class C felony.                                                                                           
                                                                                                                                
REPRESENTATIVE GARA  noted that the amendment  is conceptual, and                                                               
said that  as long as the  drafters specify that the  conduct has                                                               
to be  intentional, he will  be satisfied with  whatever language                                                               
the drafters choose.                                                                                                            
                                                                                                                                
2:10:33 PM                                                                                                                    
                                                                                                                                
A  roll   call  vote  was  taken.     Representatives  Dahlstrom,                                                               
Gruenberg, and  Gara voted  in favor  of Conceptual  Amendment 2.                                                               
Representatives  McGuire,  Anderson,   Coghill,  and  Kott  voted                                                               
against it.   Therefore, Conceptual Amendment 2 failed  by a vote                                                               
of 3-4.                                                                                                                         
                                                                                                                                
REPRESENTATIVE GRUENBERG asked members to  look at an e-mail sent                                                               
by Mike Elerding  - President, Northern Sales  Company of Alaska,                                                               
Inc.  -  specifically  at the  language  referring  to  statutory                                                               
language signed into law in 2003:                                                                                               
                                                                                                                                
     Section 43.50.510 of [Senate  Bill 168] stipulated that                                                                    
     "for purposes  of this section,  a stamp  is considered                                                                    
     affixed only if more than  80 [percent] of the stamp is                                                                    
     attached   to   the   individual   package"   ...   "in                                                                    
     accordance" with regulations  adopted by the Department                                                                    
     of Revenue.  Subsequent to  the passage of this measure                                                                    
     it has been demonstrated that  the current state of tax                                                                    
     stamping technology has not been  able to produce an 80                                                                    
     [percent]  affixment standard.    Based  on our  actual                                                                    
     experience  the  best   estimate  for  the  performance                                                                    
     standard of  affixing a tobacco  stamp on each  pack of                                                                    
     cigarettes  is somewhere  in  the  55 [percent]  range.                                                                    
     Only  through the  collaborative efforts  of the  state                                                                    
     Department of  Revenue and industry have  we avoided an                                                                    
     unmitigated disaster  regarding the enforcement  of the                                                                    
     80   [percent]   performance  requirement.      Section                                                                    
     43.50.510 needs  to be amended to  reduce the affixment                                                                    
     standard from 80 [percent] down to 55 [percent].                                                                           
                                                                                                                                
MIKE  ELERDING,  President,  Northern Sales  Company  of  Alaska,                                                               
Inc.,  confirmed that  his letter  referenced statutory  language                                                               
currently in effect.                                                                                                            
                                                                                                                                
CHRISTOPHER C. POAG,  Assistant Attorney General, Commercial/Fair                                                               
Business  Section, Civil  Division  (Juneau),  Department of  Law                                                               
(DOL),   relayed  that   the  regulations   referred  to   in  AS                                                               
43.50.510(d) have not yet been adopted.                                                                                         
                                                                                                                                
                                                                                                                                
REPRESENTATIVE GRUENBERG  said he  would be  willing to  offer an                                                               
amendment to  reduce the affixment standard  currently stipulated                                                               
in AS 43.50.510(d) down to 55 percent.                                                                                          
                                                                                                                                
MS.  BALES  said  that  Mr.  Elerding  is  correct  in  that  the                                                               
cigarette  tax stamping  machines  are incapable  of affixing  80                                                               
percent of the  stamp 100 percent of the time.   Because of this,                                                               
the DOR has  drafted an amendment that would  lower the affixment                                                               
standard to 55  percent while also requiring that  either four of                                                               
the letters of  the state name or three of  the serial numbers be                                                               
legible.    She offered  her  belief  that this  amendment  would                                                               
address the  problems encountered  by the "stampers"  and protect                                                               
state  revenues.   She  mentioned that  this  amendment has  been                                                               
given to sponsor.                                                                                                               
                                                                                                                                
REPRESENTATIVE  GRUENBERG  made  a  motion  to  adopt  the  DOR's                                                               
suggested  amendment  as  Conceptual   Amendment  3,  which  read                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     * Section ?.  AS 43.50.510(d) is amended to read:                                                                      
                                                                                                                                
          (d) For purposes of this section, a stamp is                                                                          
     considered affixed  only if more  than 55  [80] percent                                                                
     of the stamp  is attached to the  individual package in                                                                    
     accordance  with (c)  of this  section and  regulations                                                                    
     adopted by the department, and                                                                                         
                                                                                                                              
           (1) four of the letters of the state name                                                                        
     printed on the stamp are legible; or                                                                                   
                                                                                                                              
           (2) three of the serial numbers printed on                                                                       
     the stamp are legible.                                                                                                 
                                                                                                                                
REPRESENTATIVE MEYER  said that  although he'd intended  to offer                                                               
that  amendment  in the  House  Finance  Committee, it  would  be                                                               
acceptable to  him to  adopt it in  the House  Judiciary Standing                                                               
Committee instead.                                                                                                              
                                                                                                                                
CHAIR  McGUIRE  asked  whether   there  were  any  objections  to                                                               
Conceptual Amendment  3.  There being  none, Conceptual Amendment                                                               
3 was adopted.                                                                                                                  
                                                                                                                                
2:17:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG asked whether  the issue of training and                                                               
licensing, perhaps via a program  similar to the TAM program, has                                                               
been addressed.                                                                                                                 
                                                                                                                                
REPRESENTATIVE MEYER  indicated a preference for  addressing that                                                               
issue via a separate bill.                                                                                                      
                                                                                                                                
REPRESENTATIVE  KOTT   made  a   motion  to   adopt  [Conceptual]                                                               
Amendment  4,  to  delete  Section  2;  to  delete  the  proposed                                                               
language change  in Section  3, page  2, line  17; and  to delete                                                               
Section 14.   He offered  his belief that adoption  of Conceptual                                                               
Amendment  4 "essentially  takes us  back  to the  bill that  was                                                               
passed by the  house last year," and  went on to say:   "It seems                                                               
to  me, to  have  this  particular issue  before  us is  somewhat                                                               
disingenuous, since  a group of members  came to me and  asked me                                                               
to work  out a compromise  with industry; the compromise  that we                                                               
worked  out was  in fact  the  one that  passed the  House."   He                                                               
offered  his belief  that adopting  the language  that Conceptual                                                               
Amendment 4 proposes to delete would be premature.                                                                              
                                                                                                                                
CHAIR   McGUIRE,  in   response  to   a  question,   offered  her                                                               
understanding  that  Conceptual  Amendment  4  would  delete  the                                                               
language that deals with acceleration of the tax rate.                                                                          
                                                                                                                                
2:20:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MEYER  said that the  bill seeks a  balance, since                                                               
in  order to  garner  enough  votes to  pass  a supersedeas  bond                                                               
limit, the other provisions were necessary.                                                                                     
                                                                                                                                
REPRESENTATIVE  KOTT,  in response  to  a  question, offered  his                                                               
belief that  Conceptual Amendment 4  also addresses the  issue of                                                               
smokeless tobacco.                                                                                                              
                                                                                                                                
REPRESENTATIVE  GARA  said  he agrees  with  Representative  Kott                                                               
regarding the  compromise reached  last year.   He  asked whether                                                               
members  would be  amenable to  amending Conceptual  Amendment 4,                                                               
"to add the  bond part," thereby also deleting  the proposed bond                                                               
limit.                                                                                                                          
                                                                                                                                
2:24:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ANDERSON  indicated  that he  supports  the  bond                                                               
limit.                                                                                                                          
                                                                                                                                
REPRESENTATIVE MEYER opined that  the provisions being deleted by                                                               
Conceptual Amendment 4 ought to remain in the bill.                                                                             
                                                                                                                                
REPRESENTATIVE GARA objected to [Conceptual] Amendment 4.                                                                       
                                                                                                                                
CHAIR   McGUIRE  said   she  understands   Representative  Kott's                                                               
position, but mentioned  that she'd already made  a commitment to                                                               
try to keep all of the provisions in the bill.                                                                                  
                                                                                                                                
2:26:14 PM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.   Representatives Anderson, Coghill,                                                               
Kott, and  Dahlstrom voted  in favor  of Conceptual  Amendment 4.                                                               
Representatives McGuire,  Gruenberg, and  Gara voted  against it.                                                               
Therefore, Conceptual Amendment 4 was adopted by a vote of 4-3.                                                                 
                                                                                                                                
CHAIR  McGUIRE made  a motion  to adopt  Amendment 5,  which read                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     Page 2, line 2:                                                                                                            
          Following "facility":                                                                                                 
               Insert ","                                                                                                   
                                                                                                                                
          Following "assisting":                                                                                            
              Insert "an agent or employee of the                                                                           
         Department of Health and Social Services under                                                                     
     AS 44.29.092 or"                                                                                                       
                                                                                                                                
     Page 2, line 3:                                                                                                            
          Delete "this section"                                                                                             
          Insert "AS 11.76.100, 11.76.106, or 11.76.107"                                                                    
                                                                                                                                
SUZANNE CUNNINGHAM,  Staff to  Representative Kevin  Meyer, House                                                               
Finance  Committee,   Alaska  State  Legislature,   relayed  that                                                               
Amendment   5,   which   she   characterized   as   a   technical                                                               
clarification amendment,  was brought to the  sponsor's attention                                                               
by  the DOL.    Amendment 5  addresses the  issue  of minors  who                                                               
participate  with   law  enforcement  or  the   DHSS  in  "sting"                                                               
operations.                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG objected for  the purpose of discussion.                                                               
He  asked why  Amendment 5  proposes to  delete the  words, "this                                                               
section" from AS 11.76.105.                                                                                                     
                                                                                                                                
MR. POAG explained  that "this section" refers  to the possession                                                               
statute, and  the DOL is not  trying to enforce that  statute via                                                               
sting  operations;  it  makes  more  sense  to  simply  list  the                                                               
provisions  of   law  that  are  being   enforced  through  sting                                                               
operations, those provisions pertaining to youth access.                                                                        
                                                                                                                                
REPRESENTATIVE  GRUENBERG  suggested  that perhaps  the  specific                                                               
sections  listed  in  Amendment  5  should  simply  be  added  to                                                               
proposed  AS 11.76.105  rather than  using them  in place  of the                                                               
words, "this section".                                                                                                          
                                                                                                                                
MR.  POAG suggested  that  the Department  of  Health and  Social                                                               
Services could better  address that issue, but added  that he did                                                               
not  think  that  the possession  provision  of  current  statute                                                               
needed  the  exemption  pertaining  to those  involved  in  sting                                                               
operations.                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG made  a motion to amend  Amendment 5, to                                                               
strike  the  words, "Delete  'this  section'".   There  being  no                                                           
objection, Amendment 5 was amended.                                                                                             
                                                                                                                                
CHAIR  McGUIRE  asked  whether   there  were  any  objections  to                                                               
Amendment  5, as  amended.   There  being none,  Amendment 5,  as                                                               
amended, was adopted.                                                                                                           
                                                                                                                                
2:31:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ANDERSON moved  to report HB 260,  as amended, out                                                               
of   committee   with    individual   recommendations   and   the                                                               
accompanying fiscal notes.                                                                                                      
                                                                                                                                
REPRESENTATIVE GARA objected.                                                                                                   
                                                                                                                                
2:31:48 PM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.   Representatives McGuire, Anderson,                                                               
Coghill,  Kott,  Dahlstrom,  and  Gruenberg  voted  in  favor  of                                                               
reporting  HB 260,  as amended,  from committee.   Representative                                                               
Gara voted  against it.   Therefore,  CSHB 260(JUD)  was reported                                                               
from the House Judiciary Standing Committee by a vote of 6-1.                                                                   
                                                                                                                                
HB 53 - CHILDREN IN NEED OF AID/REVIEW PANELS                                                                                 
                                                                                                                                
2:32:41 PM                                                                                                                    
                                                                                                                                
CHAIR McGUIRE announced that the  next order of business would be                                                               
SPONSOR SUBSTITUTE  FOR HOUSE  BILL NO. 53,  "An Act  relating to                                                               
child-in-need-of-aid  proceedings; amending  the construction  of                                                               
statutes pertaining  to children  in need of  aid; relating  to a                                                               
duty and standard of care  for services to children and families,                                                               
to  the confidentiality  of investigations,  court hearings,  and                                                               
public  agency records  and  information in  child-in-need-of-aid                                                               
matters  and  certain  child   protection  matters,  to  immunity                                                               
regarding  disclosure  of  information in  child-in-  need-of-aid                                                               
matters and  certain child protection  matters, to  the retention                                                               
of  certain  privileges  of  a parent  in  a  relinquishment  and                                                               
termination  of a  parent and  child relationship  proceeding, to                                                               
eligibility for permanent fund dividends  for certain children in                                                               
the   custody  of   the  state,   and  to   juvenile  delinquency                                                               
proceedings and  placements; establishing a  right to a  trial by                                                               
jury   in    termination   of   parental    rights   proceedings;                                                               
reestablishing and relating to state  citizens' review panels for                                                               
certain child  protection and custody matters;  amending the duty                                                               
to disclose  information pertaining  to a child  in need  of aid;                                                               
authorizing additional  family members  to consent  to disclosure                                                               
of  confidential or  privileged  information  about children  and                                                               
families involved with children's  services within the Department                                                               
of Health and  Social Services to officials for review  or use in                                                               
official  capacities;   relating  to  reports  of   harm  and  to                                                               
adoptions and foster care; mandating  reporting of the medication                                                               
of  children   in  state  custody;  prescribing   the  rights  of                                                               
grandparents   related   to    child-in-need-of-aid   cases   and                                                               
establishing  a  grandparent  priority for  adoption  in  certain                                                               
child-in-need-of-aid  cases;  modifying  adoption  and  placement                                                               
procedures  in   certain  child-in-need-of-aid   cases;  amending                                                               
treatment service requirements for parents involved in child-in-                                                                
need-of-aid  proceedings;   amending  Rules  9  and   13,  Alaska                                                               
Adoption Rules;  amending Rules  3, 18, and  22, Alaska  Child in                                                               
Need of  Aid Rules of  Procedure; and providing for  an effective                                                               
date."  [Before the committee was CSSSHB 53(STA).]                                                                              
                                                                                                                                
REPRESENTATIVE COGHILL, speaking as the  sponsor of SSHB 53, said                                                               
that he  has prepared a  proposed committee substitute (CS).   He                                                               
opined that  there is need for  a jury trial whenever  a parental                                                               
right is  terminated.  He  relayed that members'  packets contain                                                               
information about the  1982 U.S. Supreme Court  case, Santosky v.                                                             
Kramer, which  discussed "the process  and the  evidence levels."                                                             
He offered  his belief that  severing the relationship  between a                                                               
parent  and child  is a  big  issue, and  although sometimes  the                                                               
process  works  well,  sometimes it  doesn't,  particularly  when                                                               
departmental  employees have  either not  been diligent,  or have                                                               
had an  ax to  grind, or have  gotten into  personality conflicts                                                               
with [parents].                                                                                                                 
                                                                                                                                
REPRESENTATIVE COGHILL  relayed that  he is  willing to  go forth                                                               
with the  proposed CS because  the department has  been agreeable                                                               
to the  provisions that will  "open up the process";  however, he                                                               
is not comforted by the  "huge timeline issues," which can result                                                               
in parents  having as little  as 120  days before going  from one                                                               
court proceeding  to the  final determination  regarding parental                                                               
rights.   He stated his  concern that "if  there is a  doubt that                                                               
that  family should  be  forever severed  from  that child,  that                                                               
there should  be one more  look."   He expressed his  belief that                                                               
there  should be  one more  level to  reach "beyond  a reasonable                                                               
doubt," adding that he had hoped  this would be an issue that the                                                               
committee  could  work  on.    He  opined  that  many  times  the                                                               
compelling interest for  the safety of the child  has ignored the                                                               
importance of the family even those that are dysfunctional.                                                                     
                                                                                                                                
2:39:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ANDERSON moved  to adopt  the proposed  committee                                                               
substitute    (CS)   for    SSHB    53,   Version    24-LS0251\P,                                                               
Mischel/Chenoweth, 4/11/05, as the work draft.                                                                                  
                                                                                                                                
REPRESENTATIVE GRUENBERG objected for the purpose of discussion.                                                                
                                                                                                                                
REPRESENTATIVE  COGHILL  explained  that   in  Version  P,  every                                                               
reference to a jury trial has been removed.                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG removed his objection.                                                                                 
                                                                                                                                
CHAIR McGUIRE announced that Version P was before the committee.                                                                
                                                                                                                                
2:39:51 PM                                                                                                                    
                                                                                                                                
RYNNIEVA  MOSS, Staff  to  Representative  Coghill, Alaska  State                                                               
Legislature,  concurred  that  [Version  P]  no  longer  contains                                                               
reference to a jury trial.                                                                                                      
                                                                                                                                
REPRESENTATIVE  COGHILL  turned   the  committee's  attention  to                                                               
Section 13 on page 21 regarding civil liability.                                                                                
                                                                                                                                
MS. MOSS explained  that the original bill said that  there was a                                                               
duty or  standard of  care for children  in state  custody, while                                                               
[the  current Section  47.10.960] said  that there  is not.   She                                                               
said that the  Department of Law objected to the  language in the                                                               
original bill  because it  would create  a very  expensive fiscal                                                               
note for civil suits.                                                                                                           
                                                                                                                                
REPRESENTATIVE  COGHILL read  Section  47.10.960  in its  current                                                               
form:                                                                                                                           
                                                                                                                                
      Nothing in this title creates a duty or standard of                                                                       
     care for services to children and their families being                                                                     
     served under AS 47.10.                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL  stated that  he strongly objects  to this                                                               
language because it could be misinterpreted.                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  stated  he  would  like  to  offer  an                                                               
amendment that would keep that language  in and add a clause that                                                               
says that  failure to comply  does not create a  civil liability.                                                               
He said he agrees with  Representative Coghill, adding that there                                                               
can be  a duty or standard  of care that's essential  for dealing                                                               
with the adjudication and disposition phase.                                                                                    
                                                                                                                                
2:43:59 PM                                                                                                                    
                                                                                                                                
JOHN McKAY, Anchorage  Daily News, opined that the  bill is "good                                                               
as far as it  goes, but it needs to go a bit  further in terms of                                                               
presumptions of openness."  He  noted that when other states have                                                               
opened these proceedings up, everyone  seems to be glad that they                                                               
did  it.   He  commented that  he would  like  to supplement  his                                                               
remarks with  articles, including  a particular  newspaper series                                                               
that looked  at the effect of  opening these proceedings up.   He                                                               
said that  he would  either fax  or email  these articles  to the                                                               
committee within the next day.                                                                                                  
                                                                                                                                
2:47:28 PM                                                                                                                    
                                                                                                                                
MR.  McKAY  stated  that  he  felt  it  was  important  for  [the                                                               
committee] to  also look  at opening the  records that  relate to                                                               
the proceedings,  which he thought were  not adequately addressed                                                               
in the bill.   He pointed out that some comments  were filed by a                                                               
man named Mr. Wexler from  the Coalition for Child Protection and                                                               
Reform; Mr. McKay  commented that he agreed  with those comments,                                                               
and recommended that  the committee review them.   Mr. McKay also                                                               
asked that  the committee look  at some language that  would help                                                               
create a  stronger presumption of  openness.  He offered  to work                                                               
with the committee  to determine language that  everyone would be                                                               
satisfied with.                                                                                                                 
                                                                                                                                
CHAIR McGUIRE  suggested that Mr.  McKay forward  his suggestions                                                               
on  to  Representative Coghill.    She  noted  that she  too  was                                                               
concerned about  maintaining the balance  between confidentiality                                                               
and public access to information.                                                                                               
                                                                                                                                
MR. McKAY remarked:                                                                                                             
                                                                                                                                
     I think  it enhances the  awareness that the  public is                                                                    
     interested in this, that there's  an extra dimension to                                                                    
     what they're  doing every  day, even  though somebody's                                                                    
     not sitting there [observing]. ...  I think it's really                                                                    
     helpful  to  know that  there  is  experience in  other                                                                    
     states that  have tried  this and  have found  not only                                                                    
     that  there weren't  bad effects,  ...  but [that]  the                                                                    
     experience is so universally the opposite.                                                                                 
                                                                                                                                
2:51:18 PM                                                                                                                    
                                                                                                                                
CHERYL TRAIL  relayed that  she lives in  Nebraska and  has cared                                                               
for her  granddaughter from infancy  until the  age of two  and a                                                               
half years  old.  She  said that her  granddaughter is a  ward of                                                               
the State of  Alaska who was placed with her  on a "foster adopt"                                                               
basis on  an interstate compact.   She shared with  the committee                                                               
her  experiences with  Alaska's Department  of Health  and Social                                                               
Services  (DHSS),  Office  of   Children's  Services  (OCS),  and                                                               
charged  that  the  OCS  took   her  granddaughter  from  her  by                                                               
subterfuge and under pretext.                                                                                                   
                                                                                                                                
MS. TRAIL  pointed out  that when  her granddaughter  was removed                                                               
from her care  by the OCS, she  was not told why  this action was                                                               
taken, but  was instead told by  the OCS that she  wasn't a party                                                               
to  the  case  and  therefore  did   not  have  a  right  to  the                                                               
information.  She  said that it took six months  for her attorney                                                               
to get a hearing, and only at  the time of discovery did she find                                                               
out that the OCS had a lot of erroneous information.                                                                            
                                                                                                                                
MS. TRAIL  stated that  because of  her experience,  she strongly                                                               
supports  the strengthening  of  the rights  of grandparents  who                                                               
have been involved in rearing  their grandchildren.  She remarked                                                               
that in  her experience, the OCS  did not follow many  of its own                                                               
policies  and procedures,  and "actually  lied under  oath during                                                               
the hearing  in front  of a judge";  therefore, she  supports the                                                               
establishment of an  opportunity for a trial by jury  in cases of                                                               
parental  rights  determination.     She  also  stated  that  she                                                               
supports  the establishment  of the  citizens' review  board, and                                                               
commented, "I think  this bill will go a long  way in changing an                                                               
agency  that's  known  by  the  citizens of  their  state  to  be                                                               
corrupt."                                                                                                                       
                                                                                                                                
CHAIR McGUIRE  asked Ms. Trail  if she has any  information about                                                               
where her [granddaughter] is now.                                                                                               
                                                                                                                                
MS. TRAIL replied  that her granddaughter was placed  in a foster                                                               
home and that the OCS is pushing through an adoption.                                                                           
                                                                                                                                
2:57:12 PM                                                                                                                    
                                                                                                                                
MS. TRAIL,  in response to further  questioning by Representative                                                               
Dahlstrom, explained  the circumstances under which  the OCS took                                                               
custody of  her granddaughter, her granddaughter's  diagnosis and                                                               
medication prescriptions, and her own personal background.                                                                      
                                                                                                                                
3:06:22 PM                                                                                                                    
                                                                                                                                
CHAIR  McGUIRE, after  ascertaining that  no one  else wished  to                                                               
testify, closed public testimony on SSHB 53.                                                                                    
                                                                                                                                
REPRESENTATIVE COGHILL made a motion  to adopt Amendment 1, which                                                               
read [original punctuation provided]:                                                                                           
                                                                                                                                
     Page 5, Line 18                                                                                                            
     Delete:  Lines 18 through line 24                                                                                          
                                                                                                                                
     Insert:                                                                                                                    
     (2) follow the findings set out in AS 47.05.65.                                                                        
                                                                                                                                
REPRESENTATIVE KOTT objected for the purpose of discussion.                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL  explained  that he'd  wanted  to  assert                                                               
family primacy in the bill, but  then he learned that AS 47.05.65                                                               
covered his concerns.                                                                                                           
                                                                                                                                
REPRESENTATIVE KOTT removed his objection.                                                                                      
                                                                                                                                
REPRESENTATIVE GARA asked  if he could make  a friendly amendment                                                               
to Amendment 1, as follows:                                                                                                     
                                                                                                                                
     Page 5, Line 17:                                                                                                           
     After "child"                                                                                                              
     Insert ", when in the child's best interests"                                                                              
                                                                                                                                
REPRESENTATIVE  COGHILL objected,  stating  that  AS 47.05.65  is                                                               
"replete with that whole discussion."                                                                                           
                                                                                                                                
3:10:20 PM                                                                                                                    
                                                                                                                                
JAN  RUTHERDALE,  Assistant   Attorney  General,  Human  Services                                                               
Section, Civil Division (Juneau),  Department of Law (DOL), noted                                                               
that  she has  the  same  concern as  Representative  Gara.   She                                                               
remarked that  there are  times when  there's a  conflict between                                                               
ensuring  the  safety of  the  child  and ensuring  the  parents'                                                               
participation in the upbringing of the child.                                                                                   
                                                                                                                                
REPRESENTATIVE  COGHILL,  agreeing  that  there  can  be  such  a                                                               
conflict, then stated:                                                                                                          
                                                                                                                                
     But remember,  this is  a conflict.   We're  asking the                                                                    
     state to  insert itself into  a family for  the child's                                                                    
     welfare.   And in AS  47.05.65, which I'm asking  us to                                                                    
     amend  into here,  it says,  "It is  the policy  of the                                                                    
     state to  strengthen families  and to  protect children                                                                    
     from child abuse and neglect."   I have no problem that                                                                    
     that's the  purpose of what  I'm doing here.   I'm just                                                                    
     asking   that  the   parents'   participation  in   the                                                                    
     upbringing of the child be  included when we're talking                                                                    
     about promoting the child's welfare.                                                                                       
                                                                                                                                
REPRESENTATIVE COGHILL maintained his  objection to the amendment                                                               
to Amendment 1.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  GARA  commented  that   he  certainly  wanted  to                                                               
advocate the concept  that parents should be  able to participate                                                               
throughout  the process,  but remarked  that "you  don't want  to                                                               
tell the  department that a  parent who's  a danger to  the child                                                               
should  keep participating,  and  if we  just  say, 'the  parents                                                               
shall  participate,'   then  I   think  we're  taking   away  the                                                               
department's leeway  to prevent that [participation]  if a parent                                                               
is a danger to the child."                                                                                                      
                                                                                                                                
REPRESENTATIVE  COGHILL   replied  that  he  didn't   think  this                                                               
"construction"  language changes  the intent  regarding the  best                                                               
interests of the child; rather  it simply includes the family "At                                                               
a  higher level."   He  said,  "To me,  this  is one  of the  key                                                               
reasons for me doing this bill."                                                                                                
                                                                                                                                
REPRESENTATIVE   GARA   withdrew    his   suggestion   to   amend                                                               
Amendment 1.                                                                                                                    
                                                                                                                                
3:14:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE COGHILL  reiterated that  one of the  main reasons                                                               
he sponsored this bill is for family protection.                                                                                
                                                                                                                                
CHAIR McGUIRE asked whether there  were any further objections to                                                               
Amendment 1.  There being none, Amendment 1 was adopted.                                                                        
                                                                                                                                
3:15:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DAHLSTROM made  a motion to adopt  Amendment 2, to                                                               
remove  subsection (n)  from Section  5 on  page 4,  lines 19-26,                                                               
regarding adoption.   She pointed  out that  this was not  in the                                                               
original governor's  bill that was  introduced, but was  added in                                                               
by the House  State Affairs Standing Committee.   She offered her                                                               
understanding  that  during  the  House  State  Affairs  Standing                                                               
Committee meeting, the  Department of Law testified  that it knew                                                               
this  was a  potential  issue,  but it  didn't  think this  would                                                               
affect  OCS adoptions.    However,  she said,  "We  heard in  the                                                               
testimony  yesterday that  it will  affect  many other  permanent                                                               
adoptions."                                                                                                                     
                                                                                                                                
CHAIR  McGUIRE  asked  whether   there  were  any  objections  to                                                               
Amendment 2.  There being none, Amendment 2 was adopted.                                                                        
                                                                                                                                
REPRESENTATIVE COGHILL made a motion  to adopt Amendment 3, which                                                               
read [original punctuation provided]:                                                                                           
                                                                                                                                
     Page 17, line 7, after the word "capacities.":                                                                             
     Delete:  the remainder of Line 7 through line 20.                                                                          
                                                                                                                                
MS. MOSS noted that the  language contained in the aforementioned                                                               
lines would require certain  departments to disclose confidential                                                               
information to  family members other than  parents, and explained                                                               
that Legislative Legal Services had  pointed out that the federal                                                               
government would have  a problem with that language  and it could                                                               
cost the state $29 million per year.                                                                                            
                                                                                                                                
REPRESENTATIVE  GARA asked  for  clarification  that "we're  just                                                               
deleting the  changes ... starting  at line  7, and so  we're not                                                               
deleting the rest of the statutory language."                                                                                   
                                                                                                                                
CHAIR McGUIRE concurred.                                                                                                        
                                                                                                                                
MS. MOSS  suggested that  Amendment 3  be a  conceptual amendment                                                               
such that  it would  merely delete the  proposed new  language on                                                               
page 17, lines 7-20.                                                                                                            
                                                                                                                                
REPRESENTATIVE COGHILL restated Conceptual  Amendment 3 as taking                                                               
out the proposed new language on lines 7-20 of page 17.                                                                         
                                                                                                                                
CHAIR  McGUIRE  asked  whether   there  were  any  objections  to                                                               
Conceptual Amendment  3.  There being  none, Conceptual Amendment                                                               
3 was adopted.                                                                                                                  
                                                                                                                                
3:18:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE COGHILL made a motion  to adopt Amendment 4, which                                                               
read [original punctuation provided]:                                                                                           
                                                                                                                                
     Page 27, line 5:                                                                                                           
     Delete:                                                                                                                    
     "may"                                                                                                                      
                                                                                                                                
     Insert:                                                                                                                    
     "shall"                                                                                                                    
                                                                                                                                
REPRESENTATIVE COGHILL  explained that  Amendment 4  would ensure                                                               
that the initial interviews are  audiotaped always and vidoetaped                                                               
when possible.                                                                                                                  
                                                                                                                                
MS.  RUTHERDALE said  that the  Department of  Health and  Social                                                               
Services objects to Amendment 4.                                                                                                
                                                                                                                                
TAMMY SANDOVAL, Acting Deputy  Commissioner, Office of Children's                                                               
Services (OCS), Department of Health  and Social Services (DHSS),                                                               
elaborated:                                                                                                                     
                                                                                                                                
     In working through  this bill, ... it  changed to "may"                                                                    
     and  then today  it's back  to "shall",  and we're  not                                                                    
     sure how  that happened because we'd  had conversations                                                                    
     about that.   And we just have some  concerns about the                                                                    
     logistics of  that:  what  it means to children  in the                                                                    
     interview process.  While I  agree that it does protect                                                                    
     ..., I think it raises so many other issues.                                                                               
                                                                                                                                
REPRESENTATIVE  COGHILL  suggested that  the  issue  of the  cost                                                               
incurred by the  requirements of Amendment 4 be  discussed in the                                                               
House Finance Committee.                                                                                                        
                                                                                                                                
CHAIR  McGUIRE  asked  whether   there  were  any  objections  to                                                               
Amendment 4.  There being none, Amendment 4 was adopted.                                                                        
                                                                                                                                
3:21:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ANDERSON  moved to  report the  proposed committee                                                               
substitute    (CS)   for    SSHB    53,   Version    24-LS0251\P,                                                               
Mischel/Chenoweth,  4/11/05, as  amended, out  of committee  with                                                               
individual recommendations and the accompanying fiscal notes.                                                                   
                                                                                                                                
REPRESENTATIVE COGHILL  relayed that  he had  one other  issue to                                                               
address.                                                                                                                        
                                                                                                                                
CHAIR  McGUIRE   expressed  a  preference  that   that  issue  be                                                               
addressed in the House Finance Committee.                                                                                       
                                                                                                                                
REPRESENTATIVE COGHILL agreed to do so.                                                                                         
                                                                                                                                
REPRESENTATIVE  DAHLSTROM   asked  that   Representative  Coghill                                                               
consider the comments  that she received from  foster parents who                                                               
expressed  concern about  being  mandated  to have  relationships                                                               
with the family.                                                                                                                
                                                                                                                                
3:23:12 PM                                                                                                                    
                                                                                                                                
MS. MOSS noted  that the language in the bill  is permissive, and                                                               
said she'd  been assured by the  OCS that it wouldn't  put foster                                                               
parents or the children in harm's way.                                                                                          
                                                                                                                                
REPRESENTATIVE  COGHILL offered  his belief  that [maintaining  a                                                               
relationship with the family] is not mandated.                                                                                  
                                                                                                                                
REPRESENTATIVE  ANDERSON again  moved to  report the  proposed CS                                                               
for SSHB 53, Version  24-LS0251\P, Mischel/Chenoweth, 4/11/05, as                                                               
amended,  out of  committee with  individual recommendations  and                                                               
the accompanying fiscal notes.                                                                                                  
                                                                                                                                
REPRESENTATIVE GARA objected  for the purpose of  discussion.  He                                                               
said that he thinks generally  the amendments are good changes to                                                               
the  law.   He  stated his  intention to  keep  working with  the                                                               
sponsor on additional changes.                                                                                                  
                                                                                                                                
REPRESENTATIVE GARA then removed his objection.                                                                                 
                                                                                                                                
CHAIR McGUIRE asked whether there  were any further objections to                                                               
reporting  the  proposed CS  for  SSHB  53, Version  24-LS0251\P,                                                               
Mischel/Chenoweth, 4/11/05,  as amended,  from committee.   There                                                               
being no  objection, CSSSHB 53(JUD)  was reported from  the House                                                               
Judiciary Standing Committee.                                                                                                   
                                                                                                                                
HB 257 - STATE PROCUREMENT ELECTRONIC TOOLS                                                                                   
                                                                                                                                
3:24:26 PM                                                                                                                    
                                                                                                                                
CHAIR McGUIRE  announced that the  final order of  business would                                                               
be HOUSE  BILL NO.  257, "An  Act relating  to a  procurement and                                                               
electronic  commerce  tools  program for  state  departments  and                                                               
instrumentalities of  the state;  and providing for  an effective                                                               
date."                                                                                                                          
                                                                                                                                
VERN JONES,  Chief Procurement Officer, Central  Office, Division                                                               
of General  Services (DGS),  Department of  Administration (DOA),                                                               
explained  that  in  2003,  House  Bill 313  was  passed  by  the                                                               
legislature and became law, thereby  creating a state procurement                                                               
pilot program.  He went on to say:                                                                                              
                                                                                                                                
     The [DOA] then prepared and  issued an RFP [request for                                                                    
     proposals]   for  a   contractor  to   outsource  state                                                                    
     procurement functions  in the Southeast Region  of [the                                                                    
     Department  of   Transportation  &   Public  Facilities                                                                    
     (DOT&PF)],  and awarded  a contract  to [Alaska  Supply                                                                    
     Chain  Integrators, LLC  (ASCI)] as  envisioned in  ...                                                                    
     [that] bill.   [The] bill and  subsequent contract were                                                                    
     limited  to two  departments and  two instrumentalities                                                                    
     of the state,  and had a June 2006 sunset  date.  [The]                                                                    
     procurement  pilot contractor,  as we're  calling them,                                                                    
     has   been   operating    [DOT&PF]   Southeast   Region                                                                    
     procurements  for nine  months now.   [House  Bill 257]                                                                    
     would  remove   the  restrictions  on  the   number  of                                                                    
     departments  and  instrumentalities  contained  in  the                                                                    
     current   law,  as   well  as   eliminate  the   sunset                                                                    
     provisions that  are there now.  ... Yesterday  I spoke                                                                    
     with  committee staff  and sent  a message  in which  I                                                                    
     suggested  a couple  of amendments  that  would fix  an                                                                    
     incorrect statutory reference and  clean up some of the                                                                    
     preference  language.   I see  that the  version before                                                                    
     you does  not have those  amendments, and I  would urge                                                                    
     you to consider them.                                                                                                      
                                                                                                                                
CHAIR  McGUIRE, speaking  as  the chair  of  the House  Judiciary                                                               
Standing Committee,  sponsor of  HB 257,  noted that  Mr. Jones's                                                               
suggested amendments are contained in  an e-mail he provided; the                                                               
portion  of his  e-mail  that explains  his suggested  amendments                                                               
read [original punctuation provided]:                                                                                           
                                                                                                                                
     1.Replace   reference   to   AS.36.30.100-190   to   AS                                                                    
     36.30.100-265 -  this would allow  for awarding  of the                                                                    
     contract via RFP rather than  just ITB, which would not                                                                    
     be appropriate for this type of contract.                                                                                  
                                                                                                                                
     2.  "Cleans up"  the  preferences and  makes them  more                                                                    
     uniform and  workable.  The  preferences as  listed are                                                                    
     drawn  from   existing  statute,  which   are  complex,                                                                    
     confusing,  poorly written,  and have  been subject  to                                                                    
     protest.                                                                                                                   
                                                                                                                                
MR. JONES  clarified that the  portion of his e-mail  labeled "1"                                                               
proposes  that  language, "36.30.190"  on  page  1, line  10,  be                                                               
replaced with,  "30.36.265".  He  said that doing so  would allow                                                               
the  department to  "award a  contract of  this type  via an  RFP                                                               
rather than  just an ITB  [invitation to  bid]."  With  regard to                                                               
the portion of his e-mail labeled "2", he said:                                                                                 
                                                                                                                                
     This bill lifts preferences  from existing statute, and                                                                    
     I can tell you from  experience that the preferences we                                                                    
     now have  in statute  are complex, ...  cumbersome, ...                                                                    
     hard to  understand, and hard  to apply - they  are not                                                                    
     consistent,  [and] they  act in  different  ways.   For                                                                    
     example,  some preferences  reduce  an offeror's  price                                                                    
     for  comparison  purposes,  [while]  other  preferences                                                                    
     have  you  go  through  an analysis,  find  the  lowest                                                                    
     price, take  a percentage  of that bidder's  price, and                                                                    
     apply  a discount  to  someone else's  ...  offer.   My                                                                    
     suggestion  and the  language that  I'd provided  would                                                                    
     make  these  preferences,  at   least  for  this  bill,                                                                    
     uniform  and consistent.   And  I would  recommend that                                                                    
     you would consider that.                                                                                                   
                                                                                                                                
3:30:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DAHLSTROM  asked how  the  bill  will affect  the                                                               
transparency of the current procurement process.                                                                                
                                                                                                                                
MR. JONES relayed  that under the bill, as is  now the case under                                                               
the pilot  program, the  state would not  be required  to provide                                                               
formal public notice of either  the opportunity to compete or the                                                               
awards that  are made.   In response to questions,  he reiterated                                                               
that the  pilot program was  implemented by the DOA,  which chose                                                               
to implement it in the DOT&PF's Southeast Region.                                                                               
                                                                                                                                
CHAIR McGUIRE  mentioned that the  administration didn't  want to                                                               
institute  a  pilot  project  in  areas where  it  might  not  be                                                               
successful,  and so  the  bill  gave the  DOA  the discretion  to                                                               
utilize the  pilot program in  up to four  different departments.                                                               
She  offered  her  belief  that  the  intent  of  the  bill  that                                                               
originally  established the  pilot program  was not  carried out.                                                               
She elaborated:                                                                                                                 
                                                                                                                                
     It was for four departments.   We really wanted to see,                                                                    
     in four  different departments,  what are  the measured                                                                    
     savings, how  does it work, how  is it changing -  in a                                                                    
     good way or  bad way - procurement.   And what happened                                                                    
     was that  ... people drug  their feet, [and]  it wasn't                                                                    
     until a  year after the  bill had been signed  into law                                                                    
     that even  any meaningful  steps were made  to identify                                                                    
     which  department   would  then  be  under   the  pilot                                                                    
     [program].   And when it  was done, I would  argue that                                                                    
     it  was done  in  a department  that's very  difficult:                                                                    
     ...    the    [Alaska]   Marine    Highway    Southeast                                                                    
     Transportation System.   That's a  difficult department                                                                    
     [in which] to  employ the kind of success  that I would                                                                    
     have  liked to  have seen.   So  ... as  the [original]                                                                    
     bill's  sponsor,  I  felt  a little  set  up;  I  felt,                                                                    
     personally, as  if the  goal that I  was trying  to get                                                                    
     realized ... wasn't allowed to  ... go forward.  And so                                                                    
     that's a  source of frustration,  and it's part  of the                                                                    
     reason that  ... [HB  257] is before  you today;  ... I                                                                    
     want to give ... [the  DOA] the discretion to expand it                                                                    
     to whatever departments they  believe will be feasible.                                                                    
     ...                                                                                                                        
                                                                                                                                
CHAIR McGUIRE  reiterated that  the intent  of the  original bill                                                               
establishing  the  pilot  program  was to  allow  for  the  pilot                                                               
program to  be instituted  in up  to four  different departments,                                                               
and that  the pilot program  was only utilized in  one department                                                               
and late at that.                                                                                                               
                                                                                                                                
3:36:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KOTT offered  his  understanding  that under  the                                                               
original legislation -  House Bill 313 - the  DOA could outsource                                                               
up to  two departments and  up to two other  instrumentalities of                                                               
the state  - for example,  the Alaska Permanent  Fund Corporation                                                               
(APFC) or  the Alaska Housing  Finance Corporation (AHFC).   With                                                               
regard to the  contract that was let, what period  of time was it                                                               
for, he asked.                                                                                                                  
                                                                                                                                
MR. JONES  said that  the contract aligns  itself with  the bill,                                                               
and  thus  goes through  [June]  of  2006;  however, there  is  a                                                               
provision in  the contract stipulating  that if the bill  were to                                                               
be  amended, the  contract could  be extended  another couple  of                                                               
years through optional renewals.   In response to the question of                                                               
what would  happen if an RFP  was offered and a  different vendor                                                               
was the low  bidder, he said that the contract  which is in place                                                               
now would  "stand on  its own  and would run  its course,  and we                                                               
would have two  contracts up and running."  He  noted that all of                                                               
the DOA's professional services  contracts typically have several                                                               
types of termination clauses that  could be utilized if the state                                                               
so chose, either for cause or for convenience.                                                                                  
                                                                                                                                
REPRESENTATIVE KOTT  asked whether  there are any  annual reports                                                               
required  which could  show  a savings  from  outsourcing or  the                                                               
cost/benefit of outsourcing.                                                                                                    
                                                                                                                                
MR. JONES replied:                                                                                                              
                                                                                                                                
     There's an  understanding with  that contract,  and us,                                                                    
     to perform benchmarking audits.   And we have done that                                                                    
     and continue  to do that so  we can get some  sort of a                                                                    
     gauge for how they're doing  compared to how the agency                                                                    
     was doing previously.                                                                                                      
                                                                                                                                
MR. JONES,  in response  to a further  question, said  that those                                                               
audits  are performed  quarterly; that  the audit  for the  first                                                               
quarter has been completed; that  the contractor is now operating                                                               
in the third  quarter; and that the audit for  the second quarter                                                               
is  just now  coming up  and will  be completed  very soon.   The                                                               
first quarter audit,  he remarked, is for a time  period in which                                                               
"there was a lot of transition  going on," and so the results are                                                               
rather  inconclusive,  particularly  given that  it  occurred  so                                                               
early on in the process, before a lot of data was available.                                                                    
                                                                                                                                
REPRESENTATIVE  KOTT  surmised, then,  that  at  this point,  the                                                               
cost/benefit is not yet known.                                                                                                  
                                                                                                                                
MR. JONES concurred.   He added that he hopes  to have the second                                                               
quarter  audit concluded  and available  for  release to  members                                                               
soon.    In  response  to  further  questions,  he  relayed  that                                                               
although the second  quarter audit has not yet  been released, it                                                               
does appear  that Chair McGuire  has possession of a  letter from                                                               
Commissioner  Barton to  Commissioner Matiashowski  commenting on                                                               
the first  quarter audit, which  was released some time  ago, and                                                               
includes  a fax  from the  DOT&PF, Administrative  Services, that                                                               
pertains to first quarter findings.                                                                                             
                                                                                                                                
3:44:14 PM                                                                                                                    
                                                                                                                                
BRUCE   LUDWIG,  Business   Manager,   Alaska  Public   Employees                                                               
Association/American    Federation   of    Teachers   (APEA/AFT);                                                               
Secretary/Treasurer, Alaska  State, American Federation  of Labor                                                               
and Congress  of Industrial Organizations (AFL-CIO),  offered the                                                               
following comments:                                                                                                             
                                                                                                                                
     The pilot  program, two years  ago, was  rushed through                                                                    
     in the  final days  of the 2003  [legislative] session.                                                                    
     There were  no measurements to success  included in the                                                                    
     bill,  no benchmarks  for  comparison,  and nothing  to                                                                    
     enable anyone  to determine  if it was  a success  or a                                                                    
     failure.   There doesn't appear  to have been a  lot of                                                                    
     thought given  to it.   The bill title  was misleading.                                                                    
     When we  talked to  [legislators] after it  was passed,                                                                    
     we  were  told  [that]  it  was a  bill  to  enable  e-                                                                    
     commerce.   The bill  does much,  much more  than that.                                                                    
     The [Alaska Supply Chain  Integrators, LLC (ASCI)], who                                                                    
     brought  ... [House  Bill 313]  forward,  was the  only                                                                    
     responsive bidder and was awarded the contract.                                                                            
                                                                                                                                
     The  state  determined  they  could  save  $250,000  by                                                                    
     eliminating the warehouse and  using fewer employees in                                                                    
     favor   of   e-commerce.       [Alaska   Supply   Chain                                                                    
     Integrators] actually  began work July 1,  2004, and 10                                                                    
     state  employees  were  laid  off.    Since  the  pilot                                                                    
     project  [began], only  one quarter  has been  audited;                                                                    
     the second  audit is in  process, and the  third should                                                                    
     be getting  underway.  They're actually  working in the                                                                    
     fourth quarter at the moment.   The pilot [program] has                                                                    
     until a year from next June to finish.                                                                                     
                                                                                                                                
     As  the  [DOA]  testified   in  ...  Senate  [committee                                                                    
     hearings], the jury's still out  on whether it's saving                                                                    
     money or  not.  It's too  early to extend it;  it still                                                                    
     has another year to run  its course and determine if it                                                                    
     was a good  pilot project or not.  This  bill should be                                                                    
     held over  while a sufficient record  is established to                                                                    
     be able to intelligently make  a decision on whether it                                                                    
     has been a success or  not.  We've heard various rumors                                                                    
     from people  out in the  agencies about  how successful                                                                    
     it's been.   For one thing, we've heard  that goods and                                                                    
     services cost 20  percent more when you  buy them under                                                                    
     ASCI than what the state was purchasing at.                                                                                
                                                                                                                                
     And if  you extend that out  for the life of  the pilot                                                                    
     project,  that's a cost  to the state of [$2.5 million]                                                                    
     ..., or it's  [$2.5 million worth] of  fewer goods that                                                                    
     you're going to  have.  We've heard  that there's 1,500                                                                    
     invoices sitting out there, where  the invoice can't be                                                                    
     matched  up to  the purchase  order.   Now, that  means                                                                    
     that  the state's  vendors aren't  getting paid.   That                                                                    
     affects the state's  reputation, but, more importantly,                                                                    
     it affects  a lot of  Alaska businesses that  depend on                                                                    
     the  money; they've  already  delivered  the goods  and                                                                    
     they're waiting on payment and aren't getting it.                                                                          
                                                                                                                                
     We've heard [about] other problems.   For instance, the                                                                    
     first audit  points [out] that  when the  M/V Kennicott                                                                    
     was  undergoing engine  overhaul  down in  the yard  in                                                                    
     Portland,  ASCI  ordered   seven  different  orders  of                                                                    
     engine parts [and]  six of them got  shipped to Juneau.                                                                    
     They  had to  be flown  down -  airfreighted down  - to                                                                    
     Portland. ... That  cost the state a lot of  money.  Of                                                                    
     the original  $250,000 savings, about half  of that was                                                                    
     the warehouse  - closing the  warehouse.  On  October 1                                                                    
     they reopened  the warehouse.  It  doesn't work without                                                                    
     the  warehouse;  you  have to  have  the  warehouse  to                                                                    
     transfer goods and  store them.  So the  savings was no                                                                    
     longer $250,000.                                                                                                           
                                                                                                                                
     We're also hearing that the  ASCI employees are working                                                                    
     a lot  of overtime.   So who knows whether  there's any                                                                    
     savings  in  personal services  costs.    But if  we're                                                                    
     losing   on  the   goods   and   services  that   we're                                                                    
     purchasing,  we're  not saving  money.    A far  better                                                                    
     project would  be to  enable state  agencies to  use e-                                                                    
     commerce tools  themselves.   There's some,  right now,                                                                    
     that are using them.  There  ought to be some kind of a                                                                    
     program  that  [the DOA]  establishes  to  let all  the                                                                    
     departments use  them -  one big  e-commerce site.   In                                                                    
     summary,  we just  ask  that you  hold  the bill  over;                                                                    
     let's see how  the pilot project goes, let's  give it a                                                                    
     fair  run, and  see if  we  save money  or lose  money.                                                                    
     Thank you.                                                                                                                 
                                                                                                                                
3:48:54 PM                                                                                                                    
                                                                                                                                
JIM DUNCAN, Business Manager,  Alaska State Employees Association                                                               
(ASEA), said that the ASEA opposes  HB 257 and recommends that it                                                               
be held over.   He offered his belief that it  is very clear that                                                               
the  pilot  project   has  not  been  completed,   and  that  the                                                               
legislature  should  evaluate  the  success or  failure  of  that                                                               
project  before  expanding  it.    Referring to  page  2  of  the                                                               
aforementioned  letter  regarding  the first  quarter  audit,  he                                                               
noted  that  it says  in  part:   "It  is  clear  from the  audit                                                               
conclusions under  ASCI management there has  been no improvement                                                               
in  service and  the cost  of goods  to the  state have  actually                                                               
increased.   Based on these  findings we recommend that  there be                                                               
no expansion  of the pilot until  ASCI's performance demonstrates                                                               
significant benefit  to the  state."  He  said he's  been hearing                                                               
that there has  been no improvement shown in  the second quarter,                                                               
but acknowledged that such has yet to be substantiated.                                                                         
                                                                                                                                
MR. DUNCAN  urged the  committee to  hold HB  257 over  until the                                                               
aforementioned  results are  provided and  until the  legislature                                                               
has  a chance  to understand  what has  really happened  with the                                                               
pilot project.  He indicated  that there is also a constitutional                                                               
question, which  has been provided  to members  in the form  of a                                                               
memorandum, regarding  denying Alaska businesses  and individuals                                                               
equal  protection  [under]  the  law.    He  suggested  that  the                                                               
committee  review   the  memorandum,   and  that   the  committee                                                               
carefully consider what the result  will be of allowing a private                                                               
contractor to  completely bypass Title 36,  the procurement code,                                                               
as is proposed in HB 257.                                                                                                       
                                                                                                                                
MR. DUNCAN  pointed out that  Alaska's procurement laws  were put                                                               
into  place  after  careful consideration,  are  based  on  model                                                               
legislation, and have been updated.   At the time that those laws                                                               
were established, the legislature  worked to ensure that Alaska's                                                               
procurement  process  was  open  and transparent,  and  that  the                                                               
public's  trust would  be maintained.    Passage of  HB 257  will                                                               
allow the  rules of procurement  to be set  by [the DOA]  and the                                                               
contractor, he  remarked, adding his  belief that "those  who set                                                               
the  rules will  control the  game."   He acknowledged  that he's                                                               
heard  that  there is  a  lot  of  interest in  streamlining  the                                                               
process, but opined  that such should not be done  at the expense                                                               
of the public's trust.                                                                                                          
                                                                                                                                
MR. DUNCAN  noted that as  a former  commissioner of the  DOA, he                                                               
had  similar   goals,  and  therefore   worked  with   the  chief                                                               
procurement officer  and others towards  that end.   The statutes                                                               
do not prohibit  e-procurement at this time, he  pointed out, but                                                               
such does  require the proper tools.   He urged the  committee to                                                               
evaluate what  those tools  actually are and  then given  them to                                                               
the administration.  He then  asked the committee to consider the                                                               
issue  of privatization  by  reviewing  the federal  government's                                                               
"OMB Circular  No. A-76", which  gives direction to the  heads of                                                               
departments and establishments to be  very careful with regard to                                                               
what  gets  privatized,  and  which   also  indicates  that  some                                                               
activities are inherently governmental.                                                                                         
                                                                                                                                
MR.  DUNCAN  relayed that  the  aforementioned  document says  in                                                               
part:                                                                                                                           
                                                                                                                                
     An  inherently  governmental  activity is  an  activity                                                                    
     that is  so intimately  related to the  public interest                                                                    
     as to mandate performance  by government personnel. ...                                                                    
     An  inherently   governmental  activity   involves  ...                                                                    
     [e]xerting ultimate control  over the acquisition, use,                                                                    
     or  disposition  of  United States  property  (real  or                                                                    
     personal,    tangible    or   intangible),    including                                                                    
     establishing   policies    or   procedures    for   the                                                                    
     collection,  control, or  disbursement of  appropriated                                                                    
     and other federal funds.                                                                                                   
                                                                                                                                
MR.  DUNCAN  noted  that these  directions  are  currently  being                                                               
applied at  the federal  level, under  an administration  that is                                                               
known  to   favor  privatization,  and  suggested   that  similar                                                               
direction should  apply in the  state of Alaska.   In conclusion,                                                               
he offered his belief that  there are numerous, important reasons                                                               
to hold  the bill over  for further careful consideration  by the                                                               
committee.                                                                                                                      
                                                                                                                                
3:54:44 PM                                                                                                                    
                                                                                                                                
BEN MILAM had his testimony read by Ken Brown as follows:                                                                       
                                                                                                                                
     I  have almost  30  years experience  in logistics  and                                                                    
     purchasing, and  have attended  more formal  classes on                                                                    
     purchasing than  anyone in the state,  including upper-                                                                    
     graduate  level  classes.    I  only  mention  this  to                                                                    
     emphasize that  formal purchasing  for government  is a                                                                    
     science.   It is  often complicated and  very different                                                                    
     from buying groceries  at the local grocery  store.  In                                                                    
     large corporations,  professional buyers are  viewed in                                                                    
     the income  category, rather  than as  expense, because                                                                    
     of the  value they add  to the purchasing process.   In                                                                    
     government  agencies,  those professional  buyers  save                                                                    
     thousands of dollars  that can be then  used to support                                                                    
     programs.                                                                                                                  
                                                                                                                                
     These   profits  and   savings  are   possible  because                                                                    
     professional buyers  are dedicated to their  company or                                                                    
     agency  mission.   The buyers  in the  proposed program                                                                    
     will follow  this same philosophy.   They are dedicated                                                                    
     to  making  money for  their  company.   They  are  not                                                                    
     dedicated to  the government mission  and cannot  be if                                                                    
     they are  loyal to their company.   This is a  very bad                                                                    
     program.   I  am  also very  active  with the  National                                                                    
     Association  of Purchasing  Management.    At a  recent                                                                    
     meeting we  discussed the whole concept  of contracting                                                                    
     out.   Where  private industry  has contracted  out the                                                                    
     purchasing function, however, all  those that I'm aware                                                                    
     of  retained signature  authority  over purchases,  had                                                                    
     documents distributed on their  own forms, and enforced                                                                    
     their own  corporation rules.   In  all of  those cases                                                                    
     the  contractor provided  only  transactional work  and                                                                    
     was hidden from view on purchasing documents.                                                                              
                                                                                                                                
     Even though these  private corporations maintained very                                                                    
     strict control  over their contractors and  even though                                                                    
     the programs were successful  for them, contracting out                                                                    
     purchasing of  a government agency and  spending public                                                                    
     money is  quite different.   In  government purchasing,                                                                    
     public trust  is essential.   I  belong to  a newspaper                                                                    
     clipping  service  that   collects  newspaper  articles                                                                    
     nationwide.   I  have a  stack currently  over an  inch                                                                    
     thick.   Most  of the  articles collected  in the  past                                                                    
     year concerned corruption in government contracts.                                                                         
                                                                                                                                
     There  are  two  points  here.     One,  contracts  are                                                                    
     vulnerable  to  corruption  because  of  the  extremely                                                                    
     large dollar  volume involved.   Two, most of  us would                                                                    
     agree  that all  of these  actions are  wrong and  that                                                                    
     those  involved should  be punished;  however, most  of                                                                    
     these  offenses  are not  against  the  law in  private                                                                    
     contracts.   [A] private contractor can  give contracts                                                                    
     to his friends  if he wants to.   It is his  money.  He                                                                    
     can spend it where and how  he likes.  We can't do that                                                                    
     with public  money.  Citizens of  Alaska deserve strict                                                                    
     accountability   for  their   money  and   we  have   a                                                                    
     procurement code that  makes that possible.   This is a                                                                    
     very bad contract  and very poor public  policy.  Thank                                                                    
     you.                                                                                                                       
                                                                                                                                
3:58:07 PM                                                                                                                    
                                                                                                                                
BARRY JACKSON,  Procurement Analyst; Project  Manager; Programmer                                                               
Analyst, Resource Data, Inc. (RDI),  relayed that he is a retired                                                               
DOA Division  of General Services  (DGS) employee,  having served                                                               
as  Contracting Manager,  Deputy Director,  and Acting  Director.                                                               
While working  for the  DOA, he remarked,  he attempted  to bring                                                               
automation  and improved  productivity to  the DOA's  procurement                                                               
systems, and  in pursuit of  those goals visited other  states to                                                               
examine their automation  systems.  However, he  noted, the State                                                               
of Alaska  never adopted any  of the procurement systems  used by                                                               
other  states, and  so  frustrated by  the  state's inability  to                                                               
bring automation to  the DOA's DGS, he taught  himself to program                                                               
and  then created  applications  that have  since  been used  for                                                               
nearly 15 years.                                                                                                                
                                                                                                                                
MR. JACKSON went on to say:                                                                                                     
                                                                                                                                
     When I first saw the RFP for this pilot program for e-                                                                     
     commerce tools  and web tools  ..., I knew I  wanted to                                                                    
     be  a  part  of  this effort  to  improve  the  state's                                                                    
     procurement system, and [so]  I convinced my company to                                                                    
     offer my  services to  Alaska Supply  Chain Integrators                                                                    
     in support  of their RFP  response.  I  assisted [ASCI]                                                                    
     in winning  the contract and have  since developed most                                                                    
     of the internal procurement  policies used in the pilot                                                                    
     project.   I've  also  conducted  training of  [DOT&PF]                                                                    
     employees  on   "ASCI  Smart  Tool   Applications"  and                                                                    
     assisted in  performance reviews internally.   The ASCI                                                                    
     tools,  as they  currently exist,  are uniquely  suited                                                                    
     and fitted to the State  of Alaska; they've been highly                                                                    
     customized  for the  State's  systems,  and are  better                                                                    
     than anything I've encountered in any other state. ...                                                                     
                                                                                                                                
MR. JACKSON added:                                                                                                              
                                                                                                                                
     In 1969, when  I was hired, agencies of  the state were                                                                    
     ...  limited  to  being  able  to  make  $25  purchases                                                                    
     without  coming back  through the  Division of  General                                                                    
     Services.    In  other  words, the  State  of  Alaska's                                                                    
     procurement  systems were  highly  centralized at  that                                                                    
     time.    Over the  years,  because  this [was]  a  very                                                                    
     paper-oriented system, the more  demand that was placed                                                                    
     upon it, the longer things  took, and there was a trend                                                                    
     towards    decentralization,    which   was    strongly                                                                    
     accelerated in  the mid-80s.  Subsequent  to ... [some]                                                                    
     scandals that  [occurred], ...  a procurement  code was                                                                    
     adopted  which   mandates  a   centralized  procurement                                                                    
     system.                                                                                                                    
                                                                                                                                
     However,  decentralization  kept  apace  to  the  point                                                                    
     where,  now,  I think  it's  fair  to characterize  the                                                                    
     State's procurement  system as  strongly decentralized.                                                                    
     And that  brings with it the  attendant difficulties of                                                                    
     failure  to consolidate  repetitive procurements,  [of]                                                                    
     increases in  personnel because the services  are being                                                                    
     performed over  and over again in  various departments,                                                                    
     and [of]  ... enforcing  the rules and  procedures that                                                                    
     are required.   Today, I  think we have  an opportunity                                                                    
     ... to  recentralize a lot  of the  procurement through                                                                    
     the use  of web tools  and an automated system  such as                                                                    
     the one  that ASCI has.   [It  will] ... provide  for a                                                                    
     better    service,   better    accountability,   better                                                                    
     productivity.                                                                                                              
                                                                                                                                
     Business rules  that the  state now  uses and  tries to                                                                    
     enforce  through   paper  processes  can   be  enforced                                                                    
     through  electronic  means,  and I  believe  all-around                                                                    
     better  efficiency and  productivity  can be  realized.                                                                    
     As a manager, my judgment  is that these tools are well                                                                    
     tailored to  the job - they  create efficiencies, which                                                                    
     increase the productivity of the  users.  That increase                                                                    
     in  productivity can  be put  to use  in several  ways.                                                                    
     The people that are doing  the daily ordering have more                                                                    
     time to  do other things.   In the  centralized portion                                                                    
     of the current  system, the persons that  are now doing                                                                    
     the  buying are  far more  efficient and  productive in                                                                    
     doing their jobs and producing the work that comes in.                                                                     
                                                                                                                                
     Right now we  are in a period of  transition; these are                                                                    
     dramatic changes  that are being  made, and  there will                                                                    
     be challenges, which are due  to the complexity and due                                                                    
     to the  resistance to change  or just  plain resistance                                                                    
     due to  potential for job  loss.  My  estimation, given                                                                    
     the "sea  change" in  the way  the systems  operate, is                                                                    
     that the transition has been  going pretty well so far,                                                                    
     even  given  the  resistance that's  been  encountered.                                                                    
     Regarding  the subject  of  these  quarterly audits,  I                                                                    
     don't remember,  in my 30  years of State service  as a                                                                    
     contracting  official, ever  doing quarterly  audits on                                                                    
     any contractor.                                                                                                            
                                                                                                                                
MR. JACKSON concluded:                                                                                                          
                                                                                                                                
     This  level of  scrutiny, were  it applied  to a  state                                                                    
     agency,  looking   ...  at   the  same   issues,  would                                                                    
     undoubtedly reveal  various issues of  overspending and                                                                    
     such  as   [has]  been  alleged  by   others  providing                                                                    
     testimony here today.  I  guarantee that were I able to                                                                    
     spend   that  level   of   activity   in  scrutiny   in                                                                    
     investigating  another agency  quarterly,  ... I  would                                                                    
     find purchasing  violations and overspending.   I'm not                                                                    
     offering  that as  an excuse,  I'm  simply saying  that                                                                    
     this  level   of  scrutiny   is  unprecedented   in  my                                                                    
     experience, and  I don't believe that  any state agency                                                                    
     could withstand that level of scrutiny ... either.                                                                         
                                                                                                                                
CHAIR McGUIRE said she would leave public testimony open and                                                                    
hold HB 257 over.                                                                                                               
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
4:06:31 PM                                                                                                                    
                                                                                                                                
There being no further business before the committee, the House                                                                 
Judiciary Standing Committee meeting was adjourned at 4:06 p.m.                                                                 

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