Legislature(1993 - 1994)

03/22/1994 03:00 PM House L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    HOUSE LABOR AND COMMERCE                                   
                       STANDING COMMITTEE                                      
                         March 22, 1994                                        
                            3:00 p.m.                                          
  MEMBERS PRESENT                                                              
  Rep. Bill Hudson, Chairman                                                   
  Rep. Joe Green, Vice Chair                                                   
  Rep. Brian Porter                                                            
  Rep. Joe Sitton                                                              
  Rep. Eldon Mulder                                                            
  Rep. Bill Williams                                                           
  MEMBERS ABSENT                                                               
  Rep. Jerry Mackie                                                            
  COMMITTEE CALENDAR                                                           
  HB 506:   "An Act relating to student loans; to sanctions                    
            for defaulting on a student loan, including denial                 
            of a state occupational license or disbursement of                 
            state money; and providing for an effective date."                 
            HEARD AND HELD IN COMMITTEE                                        
  HB 497:   "An Act relating to electric and telephone                         
            PASSED OUT OF COMMITTEE                                            
  SB 212:   "An Act relating to the giving of procurement                      
            notices; changing the content of the required                      
            procurement reports to the legislature by the                      
            commissioner of administration; relating to                        
            publications produced by state agencies;                           
            establishing an innovative construction                            
            procurement methods pilot program; and                             
            establishing legislative findings, a legislative                   
            purpose, and legislative intent for state                          
            procurement; and providing for an effective date."                 
            PASSED OUT OF COMMITTEE                                            
  HB 487:   "An Act relating to the sale, display, or                          
            distribution of material harmful to minors at                      
            places where minors are present or allowed to be                   
            present and where minors are able to view such                     
            material; and prohibiting the sale or display of                   
            certain audio recordings, phonograph records,                      
            magnetic tapes, compact discs, or videotapes,                      
            without warning labels and opaque wrappings."                      
            PASSED OUT OF COMMITTEE                                            
  WITNESS REGISTER                                                             
  REP. CON BUNDE                                                               
  Alaska State Legislature                                                     
  State Capitol                                                                
  Juneau, Alaska  99801-1182                                                   
  Position Statement:  Prime sponsor of HB 506                                 
  JOE McCORMICK, Executive Director                                            
  Postsecondary Education Commission                                           
  Department of Education                                                      
  3030 Vintage Blvd.                                                           
  Juneau, Alaska  99801-7109                                                   
  Position Statement:  Supported HB 506                                        
  NANCY BEAR USERA, Commissioner                                               
  Department of Administration                                                 
  P.O. Box 110200                                                              
  Juneau, Alaska  99811-0200                                                   
  Position Statement:  Opposed HB 506                                          
  PAIGE ADAMS                                                                  
  6-B Lifesaver Dr.                                                            
  Sitka, Alaska  99835                                                         
  Position Statement:  Supported HB 506                                        
                       (Spoke via teleconference)                              
  TRACI COHEN                                                                  
  Kenai Peninsula College                                                      
  College Road                                                                 
  Soldotna, Alaska  99669                                                      
  Position Statement:  Supported HB 506                                        
                       (Spoke via teleconference)                              
  HELEN PHINNEY                                                                
  P.O. Box 739                                                                 
  Ward Cove, Alaska  99928                                                     
  Position Statement:  Supported HB 506                                        
                       (Spoke via offnet)                                      
  BRIAN BREBAKER                                                               
  University of Fairbanks                                                      
  Fairbanks, Alaska                                                            
  Position Statement:  Supported HB 506                                        
                       (Spoke via offnet)                                      
  NICKO BRANCHEK                                                               
  No further information given                                                 
  BING SANTAMOUR                                                               
  P.O. Box 1573                                                                
  Pouch 219                                                                    
  Bethel, Alaska  99559                                                        
  Position Statement:  Supported HB 506                                        
                       (Spoke via teleconference)                              
  STEVE LEVINSON                                                               
  P.O. Box 930                                                                 
  Dillingham, Alaska  99576                                                    
  Position Statement:  Supported HB 506                                        
                       (Spoke via teleconference)                              
  BOBBITT BUSH                                                                 
  P.O. Box 49                                                                  
  Aniak, Alaska  99557                                                         
  Position Statement:  Supported HB 506                                        
  REP. JOE GREEN                                                               
  Alaska State Legislature                                                     
  State Capitol                                                                
  Juneau, Alaska  99801-1182                                                   
  Position Statement:  Prime Sponsor of HB 497                                 
  DAVE HUTCHENS                                                                
  Alaska Rural Cooperative                                                     
  703 W. Tudor Rd., #200                                                       
  Anchorage, Alaska  99503                                                     
  Position Statement:  Supported HB 497                                        
                       (Spoke via teleconference)                              
  DAN BLOOMER                                                                  
  Chugach Electric Association                                                 
  5601 Minnesota Dr.                                                           
  Anchorage, Alaska  99519                                                     
  Position Statement:  Supported HB 497                                        
                       (Spoke via teleconference)                              
  JOSH FINK, Staff                                                             
  Sen. Tim Kelly                                                               
  Alaska State Legislature                                                     
  Juneau, Alaska  99801-1182                                                   
  Position Statement:  Read sponsor statement on SB 212                        
  CHRIS GATES, Director                                                        
  Division of Economic Development                                             
  Department of Commerce and Economic Development                              
  P.O. Box 110804                                                              
  Juneau, Alaska  99811-0804                                                   
  Position Statement:  Supported SB 212                                        
  RESA JERREL, Lobbyist                                                        
  National Federation of Independent Businesses                                
  9159 Skywood Lane                                                            
  Juneau, Alaska  99801                                                        
  Position Statement:  Supported SB 212                                        
  JOSH WARNER, Owner                                                           
  Alaska Corporation Printing                                                  
  P.O. Box 22451                                                               
  Juneau, Alaska  99801                                                        
  Position Statement:  Supported SB 212                                        
  LOREN RASMUSSEN, Chief                                                       
  Design and Construction Center                                               
  Department of Transportation                                                 
  3132 Channel Drive                                                           
  Juneau, Alaska  99801                                                        
  Position Statement:  Present to answer questions                             
  JACK PHELPS, Staff                                                           
  Rep. Pete Kott                                                               
  Alaska State Legislature                                                     
  State Capitol                                                                
  Juneau, Alaska  99801-1182                                                   
  Position Statement:  Presented HB 487                                        
  REED STOOPS, Lobbyist                                                        
  240 Main Street, Suite 600                                                   
  Juneau, Alaska  99801                                                        
  Position Statement:  Testified on HB 487                                     
  PREVIOUS ACTION                                                              
  BILL:  HB 506                                                                
  SHORT TITLE: STUDENT LOAN PROGRAM                                            
  JRN-DATE    JRN-PG                     ACTION                                
  02/16/94      2416    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  02/16/94      2416    (H)   HES, L&C, FINANCE                                
  03/03/94              (H)   HES AT 03:00 PM CAPITOL 106                      
  03/03/94              (H)   MINUTE(HES)                                      
  03/07/94              (H)   MINUTE(HES)                                      
  03/08/94              (H)   MINUTE(HES)                                      
  03/08/94              (H)   MINUTE(HES)                                      
  03/08/94              (H)   MINUTE(HES)                                      
  03/11/94      2720    (H)   HES RPT  CS(HES) 3DP 4NR 2AM                     
  03/11/94      2721    (H)   DP:  G.DAVIS, BUNDE, TOOHEY                      
  03/11/94      2721    (H)   NR:  VEZEY, OLBERG, NICHOLIA,                    
  03/11/94      2721    (H)   AM:  B.DAVIS, BRICE                              
  03/11/94      2721    (H)   -FISCAL NOTE (DCED) 3/11/94                      
  03/11/94      2721    (H)   -ZERO FISCAL NOTE (DOE) 3/11/94                  
  03/22/94              (H)   L&C AT 03:00 PM CAPITOL 17                       
  BILL:  HB 497                                                                
  SHORT TITLE: OFFICERS OF UTILITY COOPERATIVES                                
  SPONSOR(S): REPRESENTATIVE(S) GREEN                                          
  JRN-DATE    JRN-PG                     ACTION                                
  02/14/94      2381    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  02/14/94      2381    (H)   CRA, L&C                                         
  02/28/94      2550    (H)   SPONSOR SUBSTITUTE                               
  02/28/94      2550    (H)   CRA, LABOR & COMMERCE                            
  BILL:  SB 212                                                                
  TASK FORCE                                                                   
  JRN-DATE    JRN-PG                     ACTION                                
  05/07/93      2113    (S)   READ THE FIRST TIME/REFERRAL(S)                  
  05/07/93      2113    (S)   LABOR & COMMERCE, FINANCE                        
  11/17/93              (S)   MINUTE(L&C)                                      
  01/27/94              (S)   L&C AT 01:30 PM FAHRENKAMP                       
                              ROOM 203                                         
  01/27/94              (S)   MINUTE(L&C)                                      
  02/03/94              (S)   L&C AT 01:30 PM FAHRENKAMP                       
                              ROOM 203                                         
  02/03/94              (S)   MINUTE(L&C)                                      
  02/08/94              (S)   L&C AT 01:30 PM FAHRENKAMP                       
                              ROOM 203                                         
  02/08/94              (S)   MINUTE(L&C)                                      
  02/09/94      2749    (S)   L&C RPT  CS  2DP 2NR                             
                              NEW TITLE                                        
  02/09/94      2749    (S)   FNS TO SB & CS PUBLISHED (ADM,                   
  02/09/94      2749    (S)   ZERO FN TO SB & CS PUBLISHED                     
  02/15/94      2859    (S)   FIN RPT  CS  5DP 1NR                             
                              NEW TITLE                                        
  02/15/94      2859    (S)   PREVIOUS FNS APPLY (ADM, DOT)                    
  02/15/94      2859    (S)   PREVIOUS ZERO FN APPLIES (ADM)                   
  02/15/94              (S)   FIN AT 09:00 AM SENATE FINANCE                   
                              ROOM 518                                         
  02/22/94              (S)   RLS AT 00:00 AM FAHRENKAMP                       
                              ROOM 203                                         
  02/22/94              (S)   MINUTE(RLS)                                      
  02/27/94              (S)   MINUTE(L&C)                                      
  02/28/94      2990    (S)   RULES TO CALENDAR  3CAL 1NR                      
  02/28/94      2996    (S)   READ THE SECOND TIME                             
  02/28/94      2996    (S)   FIN  CS ADOPTED UNAN CONSENT                     
  02/28/94      2996    (S)   AM NO  1     MOVED BY DUNCAN                     
  02/28/94      2996    (S)   MOTION TO HOLD TO 3/2 CAL                        
  02/28/94      2997    (S)   AM NO  1     WITHDRAWN                           
  02/28/94      2997    (S)   AM NO  2     MOVED BY DONLEY                     
  02/28/94      2997    (S)   AM NO  2     ADOPTED Y11 N6 A3                   
  02/28/94      2998    (S)   ADVANCED TO THIRD READING                        
                              UNAN CONSENT                                     
  02/28/94      2998    (S)   READ THE THIRD TIME                              
                              CSSB 212(FIN) AM                                 
  02/28/94      2998    (S)   PASSED Y16 N1 A3                                 
  02/28/94      2998    (S)   EFFECTIVE DATE  SAME AS PASSAGE                  
  02/28/94      2998    (S)   Adams NOTICE OF RECONSIDERATION                  
  03/02/94      3039    (S)   RECONSIDERATION NOT TAKEN UP                     
  03/02/94      3040    (S)   TRANSMITTED TO (H)                               
  03/04/94      2598    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  03/04/94      2598    (H)   LABOR & COMMERCE, FINANCE                        
  03/05/94              (H)   MINUTE(ECO)                                      
  BILL:  HB 487                                                                
  SPONSOR(S): REPRESENTATIVE(S) KOTT                                           
  JRN-DATE    JRN-PG                     ACTION                                
  02/14/94      2379    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  02/14/94      2379    (H)   LABOR & COMMERCE, JUDICIARY,                     
  02/24/94      2522    (H)   SPONSOR SUBSTITUTE                               
  02/24/94      2522    (H)   LABOR & COMMERCE, JUDICIARY,                     
  ACTION NARRATIVE                                                             
  TAPE 94-27, SIDE A                                                           
  Number 001                                                                   
  HB 506 - STUDENT LOAN PROGRAM                                                
  REP. CON BUNDE, Co-Chair of the House HESS Committee,                        
  presented HB 506.  Rep. Bunde stated that HB 506 was                         
  requested by the Postsecondary Education Commission to allow                 
  the program to run in a more business like fashion.                          
  REP. BUNDE outlined the important changes to the program and                 
  asked Mr. McCormick of the Postsecondary Education                           
  Commission to elaborate.                                                     
  Number 080                                                                   
  JOE McCORMICK,  Executive Director, Postsecondary Education                  
  Commission, Department of Education, testified in support of                 
  HB 506.  He stated that HB 506 would accomplish the                          
  1) Enhancement of repayment terms by allowing for a variable                 
  interest rate and providing a consolidation program.                         
  2) Improved ability to collect loans.                                        
  3) Would allow for garnishment of wages when loan is in                      
  4) Simplify the loan process.                                                
  5) Prevent future delinquencies by disallowing people to                     
  reapply for a student loan within five years of bankruptcy                   
  or default.                                                                  
  Number 175                                                                   
  NANCY BEAR USERA, Commissioner, Department of                                
  Administration, testified in opposition to certain                           
  provisions of HB 506.  Ms. Usera stated there are three                      
  areas of the bill that the department objects to:                            
  1) HB 506 gives priority to garnishment of wages for                         
  repayment of student loans over and above all other                          
  garnishments or attachments with the exception of child                      
  MS. USERA stated that better tools need to be given to the                   
  commission to make better loans, but to supercede private                    
  sector obligations is not the way to handle it.                              
  2) The Department of Administration also objects to the                      
  provision in HB 506 that would hold up vendor payments to                    
  contractors who have otherwise completed the terms of a                      
  contract but have a student loan delinquency.                                
  MS. USERA noted that the commission already has the ability                  
  to garnish wages; this bill would place the student loan                     
  program second behind child support payments.                                
  Number 275                                                                   
  MS. USERA offered an amendment that would in effect remove                   
  the priority of the student loans programs for garnishment                   
  second to child support obligations.  Secondly, it would                     
  remove the requirements that the department would withhold                   
  vendor payments.                                                             
  Number 295                                                                   
  REP. MULDER stated that he was opposed to the amendment                      
  because it is bad public policy to turn a blind eye to                       
  someone who is delinquent on their student loan and then                     
  award and pay them through a state contract.                                 
  Number 310                                                                   
  REP. PORTER agreed with Rep. Mulder, but stated he does                      
  support the provision in the bill that would give the                        
  student loan corporation priority over and above all other                   
  garnishments except child support.                                           
  Number 315                                                                   
  COMMISSIONER USERA noted that there would be a significant                   
  fiscal impact on the Department of Administration if HB 506                  
  passes as is.                                                                
  Number 330                                                                   
  REP. SITTON asked what sort of impact HB 506 would have on                   
  the Department of Administration.                                            
  Number 335                                                                   
  MR. McCORMICK interjected that the commission has                            
  approximately 125,000 loan accounts out, and only a small                    
  percentage do contractual work for the state of Alaska.  Of                  
  those, only a fraction may be in default.                                    
  Number 342                                                                   
  COMMISSIONER USERA replied that the department would have to                 
  scan 125,000 files prior to making a disbursement to a                       
  Number 375                                                                   
  REP. SITTON asked what the average number of vendors was in                  
  a typical month.                                                             
  Number 385                                                                   
  COMMISSIONER USERA responded there are 52,000 vendors that                   
  the Department of Administration process's checks for.                       
  Number 395                                                                   
  REP. MULDER discussed the ways in which the Department of                    
  Administration could meld 150,000 student loan applicants                    
  with 52,000 vendors.                                                         
  Number 406                                                                   
  MR. McCORMICK responded that he didn't believe the issue to                  
  be an administrative one, but more of a public policy                        
  question of whether or not to pay vendors if they are behind                 
  in their student loan payments.                                              
  MR. McCORMICK stated he felt it was important to send a                      
  message to applicants that the state of Alaska sincerely                     
  expects them to repay the loans they have with the state.                    
  Number 435                                                                   
  REP. PORTER stated the technology is such that running the                   
  delinquency list against the vendor list once a month                        
  wouldn't involve much.                                                       
  COMMISSIONER USERA stated that there would be a hefty                        
  administrative cost to accomplish this function and it is                    
  not as simple as it sounds.                                                  
  REP. WILLIAMS asked how the student loan program is funded.                  
  COMMISSIONER USERA replied that the loans are funded through                 
  Number 460                                                                   
  CHAIRMAN HUDSON clarified for the committee what he thought                  
  the issues were in this debate.                                              
  Number 480                                                                   
  COMMISSIONER USERA reiterated that adding the function of                    
  scanning the student loan rolls to match delinquent                          
  applicants to vendor payments adds a tremendous burden to                    
  the Division of Finance.  She added that if there was some                   
  RSA funds suggested to cover this added burden she would                     
  certainly reconsider.                                                        
  Number 490                                                                   
  MR. McCORMICK responded by saying that he would entertain a                  
  reasonable charge back type of arrangement.                                  
  Number 510                                                                   
  REP. GREEN asked if there was a higher delinquency rate for                  
  those students who attended school outside the state and may                 
  have stayed outside.  Also, can you garnish outside the                      
  Number 525                                                                   
  MR. McCORMICK responded that we can garnish outside the                      
  state, but you have to look at the costs involved to see                     
  whether or not its worth it.                                                 
  Number 542                                                                   
  PAIGE ADAMS, Coalition of Student Leaders, testified via                     
  teleconference in support of HB 506.                                         
  Number 549                                                                   
  TRACI COHEN, Student Network, Kenai Peninsula College,                       
  testified via teleconference in support of HB 506.  Ms.                      
  Cohen felt it was important that the message get out to                      
  people that if you do not pay your student loan your wages                   
  will be garnished.                                                           
  Number 573                                                                   
  HELEN PHINNEY testified via offnet in support of HB 506.                     
  She stated she could not overstate the importance of the                     
  student loan program and the importance of using all the                     
  available resources to make sure these loans are paid back.                  
  Number 588                                                                   
  BRIAN BREBAKER, University of Fairbanks, Coalition of                        
  Student Leaders, stated his support of HB 506 via offnet.                    
  He added that the coalition would like to see a cap on the                   
  interest rate for the loans.                                                 
  TAPE 94-27, SIDE B                                                           
  Number 001                                                                   
  NICKO BRANCHEK stated he is a recipient of a student loan                    
  and supports HB 506.  He added that he is supportive of the                  
  idea of a cap on the interest rates on student loans.                        
  Number 020                                                                   
  BING SANTAMOUR testified via teleconference in support of HB
  506.  Ms. Santamour stated she also supports the cap on                      
  interest rates.                                                              
  Number 082                                                                   
  STEVE LEVINSON, Alaska State Chamber and Bethel Chamber of                   
  Commerce, testified via teleconference in support of HB 506.                 
  Both chambers have adopted resolutions in support of reform                  
  of the program.  The State Chamber opposes a cap on interest                 
  rates because the costs of the bonds could go well beyond                    
  the cap and make the program not cost efficient.                             
  Number 115                                                                   
  TRACI COHEN added to her previous testimony by saying that                   
  she perceives the permanent fund to be a privilege and the                   
  students who are in default on loans don't deserve it.                       
  Number 130                                                                   
  REP. MULDER asked if the interest rate cap was ever                          
  considered in the discussions on HB 506.                                     
  Number 135                                                                   
  MR. McCORMICK stated that it was considered, but interest                    
  rates can skyrocket and if there was a cap the loan program                  
  could become unsound if they skyrocket too high.                             
  Number 160                                                                   
  CHAIRMAN HUDSON announced that the committee would hold                      
  HB 506 over until the next meeting and asked Commissioner                    
  Usera to prepare the amendments she testified to.                            
  HB 497 - OFFICERS OF UTILITY COOPERATIVES                                    
  Number 190                                                                   
  REP. JOE GREEN, Prime Sponsor of HB 497, stated that HB 497                  
  would modify an existing statute to allow electric                           
  cooperatives to change the names of its officers to come in                  
  line with the standard business titles of other corporations                 
  in the country.                                                              
  Number 231                                                                   
  DAVE HUTCHENS, Executive Director of the Alaska Rural                        
  Cooperative, testified via teleconference in support of HB
  497.  Mr. Hutchens dittoed Rep. Green's testimony.                           
  Number 251                                                                   
  DAN BLOOMER, Chugach Electric Association, testified via                     
  teleconference by echoing the supportive testimony given                     
  above.  He said he believes HB 497 would allow his                           
  organization to work more efficiently with their peers.                      
  Number 270                                                                   
  REP. PORTER asked if the terms in HB 497 were politically                    
  Number 284                                                                   
  REP. MULDER moved CSHB 497(L&C) with zero fiscal notes and                   
  individual recommendations.                                                  
  SB 212 - STATE PROCUREMENTS AND PUBLICATIONS                                 
  Number 295                                                                   
  JOSH FINK, Staff, Sen. Tim Kelly, Chair of the Senate Labor                  
  & Commerce Committee, presented SB 212 and read the                          
  following sponsor statement:                                                 
  State government is one of the largest purchasers of goods                   
  and services in the Alaskan economy.                                         
  SB 212 aims to help strengthen Alaska's economy by                           
  increasing the share of State government's contracts for                     
  goods and services going to Alaskan businesses.                              
  Specifically, this legislation would establish an Innovative                 
  Construction Procurement Methods Pilot Program within the                    
  DOT/PF for a period of two years to implement an Alaska                      
  Bonus Program to replace the current preferences.                            
  Current incentives include the Alaskan Bidders Preference,                   
  Alaska Subcontracting, Disadvantage Business                                 
  Enterprises/Equal Employment Opportunity programs, and                       
  Alaska Products Preference, and the Alaska Hire Program.                     
  The latter two are largely unworkable and consequently                       
  underutilized or not utilized at all.  Allowing DOT/PF to                    
  test on a trial basis a bonus system which provides bonuses                  
  at project completion and encourages the same policy goals                   
  would be more economically beneficial for vendors, reduce                    
  administrative costs and bid protests, and could likely be                   
  used in joint federal/state projects where State preferences                 
  are currently not allowed.                                                   
  Lastly, this bill incorporates a number of provisions from                   
  the "Make-it-Alaskan" legislation from the 17th Legislature,                 
  House Bill 245, which would also increase the amount of                      
  State work going to Alaskans.  This bill would:                              
  1)  Encourage procurement officers to restrict notice of                     
  contract solicitation to Alaskan suppliers and providers of                  
  services desiring to compete for state contract work.  (This                 
  practice is already standard in DOT/PF);                                     
  2)  Require the commissioner to include in his report to the                 
  legislature on State procurement the number of bidders                       
  located in-state and out-of-state that bid or made proposals                 
  on procurement;                                                              
  3)  Replace the statutory requirement that State                             
  publications be produced at State-operated facilities with a                 
  requirement that State publications be produced at a private                 
  sector facility located in the State when practical.  In                     
  addition, standards for the production of publications would                 
  be established by the Department of Administration, and a                    
  cost box would be required for all publication's exceeding                   
  $1,500.00 in cost.                                                           
  Number 342                                                                   
  CHRIS GATES, Director, Division of Economic Development,                     
  Department of Commerce and Economic Development, testified                   
  in support of SB 212.  He stated that his division has been                  
  working hard on one provision in SB 212, the Innovative                      
  Construction Procurement Methods Pilot Program.  Mr. Gates                   
  stated that SB 212 will allow the state to offer incentives                  
  for federal contracts.                                                       
  MR. GATES added that SB 212 cures a lot of administrative                    
  problems that the state currently has with the bid based                     
  Number 388                                                                   
  RESA JERREL, Lobbyist, National Federation of Independent                    
  Businesses (NFIB), testified in support of SB 212.  She                      
  added that 83% of the members of NFIB polled support getting                 
  government out of competing with private business.                           
  Number 400                                                                   
  JOSH WARNER, Owner, Alaska Corporation Printing, testified                   
  in support of SB 212.  He stated that with the technological                 
  advances of the last decade, centralized printing centers                    
  run by the government are outdated.                                          
  Number 435                                                                   
  LOREN RASMUSSEN, Chief of Design and Construction Center,                    
  Department of Transportation, testified in favor of SB 212.                  
  He stated that SB 212 would not eliminate the competitive                    
  sealed bid process.  He said SB 212 would allow the                          
  opportunity to improve the use of Alaskan products                           
  preferences, subcontracting and Alaska hire.                                 
  Number 485                                                                   
  REP. SITTON asked if the integrated pilot program in SB 212                  
  would get in the way of the minority business enterprise                     
  Number 487                                                                   
  MR. RASMUSSEN replied no.                                                    
  Number 490                                                                   
  REP. MULDER asked if the effective dates in Sections 2 and 3                 
  were the result of this being a pilot program.                               
  Number 500                                                                   
  MR. RASMUSSEN stated that those sections do not apply to the                 
  integrated program, it applies to when and where DOT                         
  advertises contracts.                                                        
  Number 505                                                                   
  REP. GREEN offered Amendment 1, page 2, line 30.  This                       
  amendment would encourage use of in-state investment and                     
  brokerage services whenever possible.                                        
  Number 530                                                                   
  MR. FINK added that there was similar language in the                        
  original bill, but it was taken out as there was some                        
  concern that other legislation could get tagged on to it.                    
  Number 535                                                                   
  CHAIRMAN HUDSON asked if there were any objections to                        
  Amendment 1.  No objections were heard; Amendment 1 was                      
  Number 540                                                                   
  REP. GREEN moved HCSCS SB 212(L&C) am with individual                        
  recommendations and fiscal note.  No objections were heard;                  
  it was so ordered.                                                           
  HB 487 - SALE/DISPLAY OF MATERIAL HARMFUL TO MINOR                           
  Number 555                                                                   
  CHAIRMAN HUDSON brought up HB 487 and noted that Rep. Sitton                 
  and Chairman Hudson made up the subcommittee that asked the                  
  sponsor of the bill to present to the committee a CS that                    
  addressed some of the concerns expressed.                                    
  Number 575                                                                   
  JACK PHELPS, Staff, Rep. Pete Kott, Prime Sponsor of HB 487,                 
  outlined the proposed CS.  Mr. Phelps explained the                          
  differences between the original bill and the CS:                            
  1) added a section of intent;                                                
  2) CS removes the labeling requirements on recorded                          
  3) CS only restricts sale and display for sale;                              
  4) expansive definition of what was harmful to minors has                    
  been greatly reduced;                                                        
  5) CS provides for an affirmative defense for a person who                   
  makes a bonifide attempt to determine the age of the                         
  Number 625                                                                   
  CHAIRMAN HUDSON moved to adopt the 3/22/94 CS of HB 487.  No                 
  objections were heard; it was so ordered.                                    
  TAPE 94-28, SIDE A                                                           
  Number 001                                                                   
  MR. GREEN asked if Section 2 would now have no effect on the                 
  material but how it is presented.                                            
  Number 015                                                                   
  MR. PHELPS explained that Section 2 would prohibit the sale                  
  of material harmful to minors and would require that printed                 
  materials be sealed.  If it is recorded material it would                    
  only have to be sealed if the harmful materials are depicted                 
  on the cover.                                                                
  Number 035                                                                   
  CHAIRMAN HUDSON asked Rep. Porter the difference between a                   
  Class A misdemeanor and a Class B misdemeanor.                               
  REP. PORTER answered that the difference is the range of                     
  REP. SITTON asked for an example of something that was not                   
  obscene to adults but would be harmful to minors.                            
  Number 095                                                                   
  MR. PHELPS stated that there is material that at an adult                    
  level may be acceptable but from which we would want to                      
  protect young people.                                                        
  Number 114                                                                   
  REP. SITTON again asked for an example.                                      
  Number 127                                                                   
  MR. PHELPS suggested that the committee look at the                          
  definitions that are provided in the bill.                                   
  Number 138                                                                   
  REP. SITTON stated he still didn't understand.  He asked                     
  what data could the sponsor provide that would tell us that                  
  materials harmful to minors is increasing.                                   
  Number 148                                                                   
  MR. PHELPS pointed to the lyrics included in the packets.                    
  Number 169                                                                   
  REP. SITTON asked, on page 2, line 31, what is an "average                   
  adult person?"                                                               
  Number 186                                                                   
  MR. PHELPS replied that this is language that comes from the                 
  U.S. Supreme Court.  It is essentially what a representative                 
  sample of the local community would be, similar to a jury.                   
  Number 195                                                                   
  REP. SITTON asked when any court in this land decided that                   
  nudity by itself is obscene.                                                 
  Number 205                                                                   
  MR. PHELPS replied that it did not.  He stated that it was                   
  important to take the entire definition together, it never                   
  says that nudity standing alone was obscene.  Nudity as a                    
  whole has all three of the following characteristics listed                  
  on page 2, line 30.                                                          
  Number 216                                                                   
  REP. SITTON asked if an anatomically correct doll used for                   
  instructional purposes would be construed as obscene.                        
  Number 224                                                                   
  MR. PHELPS asked Rep. Sitton to look at lines 8 and 9 on                     
  page 3.  He stated he believed the scenario he painted would                 
  fail the test.                                                               
  Number 235                                                                   
  REP. SITTON asked who decides what materials have serious                    
  literary, scientific, educational, artistic, or political                    
  value for minors.                                                            
  Number 247                                                                   
  MR. PHELPS replied that ultimately it would be a jury.                       
  Number 255                                                                   
  REP. SITTON referenced page 3, line 21, and asked if under                   
  this definition of sexual conduct a magazine cover showing                   
  two fully clothed women kissing on the cheek would be                        
  considered to fall under this definition.                                    
  Number 270                                                                   
  MR. PHELPS responded that the example used would not meet                    
  the three-part test under this definition.                                   
  Number 277                                                                   
  REP. SITTON asked what prompted this legislation.  He noted                  
  that nowhere in the bill did it outline the parent's                         
  responsibilities in keeping the minors away from harmful                     
  Number 280                                                                   
  MR. PHELPS noted that the primary responsibility is with the                 
  parents and the bill is just seeking to address the display                  
  in commercial establishments where children are likely to be                 
  present and are allowed to be present.                                       
  MR. PHELPS gave the example of a general merchandize store                   
  in Cordova that has toys on one side of the isle and                         
  material harmful to minors on the other with no division or                  
  attempt to hide it.                                                          
  Number 290                                                                   
  REP. SITTON stated he is thinking about offering an                          
  amendment that would impose fines on the parents of these                    
  children when they are allowed into places that may be                       
  harmful to them.                                                             
  Number 300                                                                   
  REED STOOPS, Lobbyist for the Motion Picture Association and                 
  Recording Institute, testified on HB 487.  He stated that he                 
  has heard from the Recording Institute regarding the CS and                  
  they only offered one amendment that would further define                    
  what contemporary community standards would be.  He said                     
  that the attorney for the Motion Picture Association was                     
  travelling and unable to review the CS.                                      
  MR. STOOPS stated his clients were not necessarily in                        
  support of HB 487, but if the committee were to pass this                    
  version out, they were at least comfortable with the                         
  constitutionality of the bill.                                               
  REP. PORTER asked if the Supreme Court has ruled on what is                  
  meant by community standards.                                                
  MR. PHELPS responded that the court ruled that community                     
  standards would essentially be reflected through juries.                     
  REP. PORTER offered an amendment provided by Mr. Stoops with                 
  the qualification that when it gets to the Judiciary                         
  Committee it will be looked at from a constitutional                         
  Number 360                                                                   
  CHAIRMAN HUDSON explained that Amendment 1 would modify the                  
  bill to define contemporary community standards.                             
  Amendment 1 was adopted.                                                     
  Number 370                                                                   
  REP. GREEN moved CSHB 487(L&C) with individual                               
  recommendations and a zero fiscal note.                                      
  REP. SITTON objected, so the following roll call vote was                    
  REP. MULDER       YES                                                        
  REP. GREEN        YES                                                        
  REP. WILLIAMS     NAY                                                        
  REP. SITTON       NAY                                                        
  REP. PORTER       YES                                                        
  REP. HUDSON       YES                                                        
  CSHB 487(L&C) moved out of committee with individual                         
  recommendations and a zero fiscal note.                                      
  CHAIRMAN HUDSON adjourned the meeting at 5:00 p.m.                           

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