Legislature(2003 - 2004)

04/15/2004 09:08 AM RLS

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
                 HOUSE RULES STANDING COMMITTEE                                                                               
                         April 15, 2004                                                                                         
                           9:08 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Norman Rokeberg, Chair                                                                                           
Representative John Coghill                                                                                                     
Representative Lesil McGuire                                                                                                    
Representative Carl Morgan                                                                                                      
Representative Ethan Berkowitz                                                                                                  
Representative Beth Kerttula                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Pete Kott                                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 334                                                                                                              
"An Act relating to unlawful exploitation of a minor."                                                                          
                                                                                                                                
     - MOVED CSHB 334(RLS) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE JOINT RESOLUTION NO. 9                                                                                                    
Proposing amendments to the Constitution of the State of Alaska                                                                 
relating to an appropriation limit and a spending limit.                                                                        
                                                                                                                                
     - HEARD/AVAILABLE FOR CALENDARING                                                                                          
                                                                                                                                
HOUSE JOINT RESOLUTION NO. 26                                                                                                   
Proposing amendments to the Constitution of the State of Alaska                                                                 
relating to and limiting appropriations from and inflation-                                                                     
proofing the Alaska permanent fund by establishing a percent of                                                                 
market value spending limit.                                                                                                    
                                                                                                                                
     - AVAILABLE FOR CALENDARING                                                                                                
                                                                                                                                
HOUSE BILL NO. 298                                                                                                              
"An Act relating  to the distribution of  appropriations from the                                                               
Alaska permanent fund under art.  IX, sec. 15(b), Constitution of                                                               
the  State  of  Alaska,  and making  conforming  amendments;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD/AVAILABLE FOR CALENDARING                                                                                          
                                                                                                                                
HOUSE BILL NO. 542                                                                                                              
"An Act relating to specialty construction contractors and to                                                                   
construction contractor exemptions."                                                                                            
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 334                                                                                                                  
SHORT TITLE: UNLAWFUL EXPLOITATION OF MINOR                                                                                     
SPONSOR(S): REPRESENTATIVE(S) MEYER                                                                                             
                                                                                                                                
01/12/04       (H)       PREFILE RELEASED 1/2/04                                                                                
01/12/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/12/04       (H)       JUD                                                                                                    
01/30/04       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
01/30/04       (H)       <Bill Hearing Postponed>                                                                               
02/20/04       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/20/04       (H)       Scheduled But Not Heard                                                                                
02/23/04       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/23/04       (H)       Heard & Held; Assigned to Subcommittee                                                                 
02/23/04       (H)       MINUTE(JUD)                                                                                            
03/01/04       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
03/01/04       (H)       <Bill Hearing Postponed Wed. 3/3/04>                                                                   
03/03/04       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
03/03/04       (H)       Scheduled But Not Heard                                                                                
03/05/04       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
03/05/04       (H)       -- Meeting Postponed to 3/16/04 --                                                                     
03/16/04       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
03/16/04       (H)       Moved CSHB 334(JUD) Out of Committee                                                                   
03/16/04       (H)       MINUTE(JUD)                                                                                            
03/18/04       (H)       JUD RPT CS(JUD) NT 5DP 1NR 1AM                                                                         
03/18/04       (H)       DP: SAMUELS, HOLM, ANDERSON, OGG,                                                                      
03/18/04       (H)       MCGUIRE; NR: GARA; AM: GRUENBERG                                                                       
04/15/04       (H)       RLS AT 9:00 AM FAHRENKAMP 203                                                                          
                                                                                                                                
BILL: HJR  9                                                                                                                  
SHORT TITLE: CONST AM: APPROPRIATION/SPENDING LIMIT                                                                             
SPONSOR(S): REPRESENTATIVE(S) STOLTZE                                                                                           
                                                                                                                                
01/31/03       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/31/03       (H)       STA, JUD, FIN                                                                                          
02/11/03       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
02/11/03       (H)       Heard & Held                                                                                           
02/11/03       (H)       MINUTE(STA)                                                                                            
04/04/03       (H)       W&M REFERRAL ADDED BEFORE STA                                                                          
04/09/03       (H)       W&M AT 7:00 AM HOUSE FINANCE 519                                                                       
04/09/03       (H)       Heard & Held                                                                                           
04/09/03       (H)       MINUTE(W&M)                                                                                            
04/17/03       (H)       W&M AT 7:00 AM HOUSE FINANCE 519                                                                       
04/17/03       (H)       Heard & Held                                                                                           
04/17/03       (H)       MINUTE(W&M)                                                                                            
04/24/03       (H)       W&M AT 7:00 AM HOUSE FINANCE 519                                                                       
04/24/03       (H)       Heard & Held                                                                                           
04/24/03       (H)       MINUTE(W&M)                                                                                            
04/29/03       (H)       W&M AT 7:00 AM HOUSE FINANCE 519                                                                       
04/29/03       (H)       Heard & Held                                                                                           
04/29/03       (H)       MINUTE(W&M)                                                                                            
04/30/03       (H)       W&M AT 8:00 AM HOUSE FINANCE 519                                                                       
04/30/03       (H)       Heard & Held                                                                                           
04/30/03       (H)       MINUTE(W&M)                                                                                            
05/02/03       (H)       W&M RPT CS(W&M) NT 3DP 2NR 2AM                                                                         
05/02/03       (H)       DP: HEINZE, WHITAKER, HAWKER;                                                                          
05/02/03       (H)       NR: MOSES, GRUENBERG; AM: KOHRING,                                                                     
05/02/03       (H)       WILSON                                                                                                 
05/02/03       (H)       W&M AT 7:00 AM HOUSE FINANCE 519                                                                       
05/02/03       (H)       Moved CSHJR 9(W&M) Out of Committee                                                                    
05/02/03       (H)       MINUTE(W&M)                                                                                            
05/06/03       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
05/06/03       (H)       Scheduled But Not Heard                                                                                
05/06/03       (H)       JUD AT 5:30 PM CAPITOL 120                                                                             
05/06/03       (H)       -- Meeting Canceled --                                                                                 
05/06/03       (H)       STA AT 5:30 PM CAPITOL 102                                                                             
05/06/03       (H)       -- Meeting Canceled --                                                                                 
05/07/03       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
05/07/03       (H)       Heard & Held                                                                                           
05/07/03       (H)       MINUTE(STA)                                                                                            
05/07/03       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
05/07/03       (H)       <Bill Hearing Postponed>                                                                               
05/08/03       (H)       STA RPT CS(STA) NT 3DP 3NR                                                                             
05/08/03       (H)       DP: SEATON, LYNN, DAHLSTROM;                                                                           
05/08/03       (H)       NR: GRUENBERG, HOLM, WEYHRAUCH                                                                         
05/08/03       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
05/08/03       (H)       Moved CSHJR 9(STA) Out of Committee                                                                    
05/08/03       (H)       MINUTE(STA)                                                                                            
05/08/03       (H)       JUD AT 3:30 PM CAPITOL 120                                                                             
05/08/03       (H)       <Bill Hearing Postponed>                                                                               
05/09/03       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
05/09/03       (H)       Heard & Held                                                                                           
05/09/03       (H)       MINUTE(JUD)                                                                                            
05/12/03       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
05/12/03       (H)       <Bill   Hearing    Postponed   to   Wed.                                                               
                         5/14/03>                                                                                               
05/14/03       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
05/14/03       (H)       Heard & Held                                                                                           
05/14/03       (H)       MINUTE(JUD)                                                                                            
05/15/03       (H)       JUD AT 8:30 AM CAPITOL 120                                                                             
05/15/03       (H)       -- Meeting Canceled --                                                                                 
10/29/03       (H)       JUD AT 5:00 PM Anch LIO Conf Rm                                                                        
10/29/03       (H)       Heard & Held                                                                                           
10/29/03       (H)       MINUTE(JUD)                                                                                            
01/23/04       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
01/23/04       (H)       Heard & Held                                                                                           
01/23/04       (H)       MINUTE(JUD)                                                                                            
02/02/04       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/02/04       (H)       Moved CSHJR 9(JUD) Out of Committee                                                                    
02/02/04       (H)       MINUTE(JUD)                                                                                            
02/04/04       (H)       JUD RPT CS(JUD) NT 1DP 6NR                                                                             
02/04/04       (H)       DP: MCGUIRE; NR: SAMUELS, HOLM, GARA,                                                                  
02/04/04       (H)       GRUENBERG, ANDERSON, OGG                                                                               
03/15/04       (H)       FIN AT 4:00 PM HOUSE FINANCE 519                                                                       
03/15/04       (H)       -- Meeting Canceled --                                                                                 
03/16/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/16/04       (H)       Heard & Held                                                                                           
03/16/04       (H)       MINUTE(FIN)                                                                                            
03/17/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/17/04       (H)       Heard & Held                                                                                           
03/17/04       (H)       MINUTE(FIN)                                                                                            
03/22/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/22/04       (H)       Heard & Held                                                                                           
03/22/04       (H)       MINUTE(FIN)                                                                                            
03/25/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/25/04       (H)       Heard & Held                                                                                           
03/25/04       (H)       MINUTE(FIN)                                                                                            
03/29/04       (H)       FIN AT 9:00 AM HOUSE FINANCE 519                                                                       
03/29/04       (H)       Scheduled But Not Heard                                                                                
04/06/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/06/04       (H)       Failed To Move Out Of Committee                                                                        
04/06/04       (H)       MINUTE(FIN)                                                                                            
04/07/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/07/04       (H)       Moved CSHJR  9(FIN) Out of Committee                                                                   
04/07/04       (H)       MINUTE(FIN)                                                                                            
04/08/04       (H)       FIN RPT CS(FIN) NT 2DP 5NR                                                                             
04/08/04       (H)       DP: MEYER, STOLTZE; NR: HAWKER, FATE,                                                                  
04/08/04       (H)       FOSTER, HARRIS, WILLIAMS                                                                               
04/15/04       (H)       RLS AT 9:00 AM FAHRENKAMP 203                                                                          
                                                                                                                                
BILL: HJR 26                                                                                                                  
SHORT TITLE: CONST. AM: PERMANENT FUND P.O.M.V.                                                                                 
SPONSOR(S): RULES BY REQUEST OF LEG BUDGET & AUDIT BY REQUEST                                                                   
                                                                                                                                
04/17/03       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/17/03       (H)       W&M, JUD, FIN                                                                                          
04/22/03       (H)       W&M AT 7:00 AM HOUSE FINANCE 519                                                                       
04/22/03       (H)       Heard & Held                                                                                           
04/22/03       (H)       MINUTE(W&M)                                                                                            
04/24/03       (H)       W&M AT 7:00 AM HOUSE FINANCE 519                                                                       
04/24/03       (H)       Heard & Held                                                                                           
04/24/03       (H)       MINUTE(W&M)                                                                                            
04/25/03       (H)       W&M AT 7:00 AM HOUSE FINANCE 519                                                                       
04/25/03       (H)       Heard & Held                                                                                           
04/25/03       (H)       MINUTE(W&M)                                                                                            
04/29/03       (H)       W&M AT 7:00 AM HOUSE FINANCE 519                                                                       
04/29/03       (H)       Heard & Held                                                                                           
04/29/03       (H)       MINUTE(W&M)                                                                                            
04/30/03       (H)       W&M AT 8:00 AM HOUSE FINANCE 519                                                                       
04/30/03       (H)       Heard & Held                                                                                           
04/30/03       (H)       MINUTE(W&M)                                                                                            
05/02/03       (H)       W&M RPT CS(W&M) NT 5DP 1DNP 1NR                                                                        
05/02/03       (H)       DP: HEINZE, MOSES, WILSON, HAWKER,                                                                     
05/02/03       (H)       WHITAKER; DNP: KOHRING; NR: GRUENBERG                                                                  
05/02/03       (H)       W&M AT 7:00 AM HOUSE FINANCE 519                                                                       
05/02/03       (H)       Moved CSHJR 26(W&M) Out of Committee                                                                   
05/02/03       (H)       MINUTE(W&M)                                                                                            
05/06/03       (H)       JUD AT 5:30 PM CAPITOL 120                                                                             
05/06/03       (H)       -- Meeting Canceled --                                                                                 
05/07/03       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
05/07/03       (H)       Moved CSHJR 26(JUD) Out of Committee                                                                   
05/07/03       (H)       MINUTE(JUD)                                                                                            
05/08/03       (H)       JUD RPT CS(JUD) NT 3DP 3NR                                                                             
05/08/03       (H)       DP: OGG, SAMUELS, MCGUIRE;                                                                             
05/08/03       (H)       NR: GRUENBERG, GARA, HOLM                                                                              
05/16/03       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
05/16/03       (H)       Heard & Held                                                                                           
05/16/03       (H)       MINUTE(FIN)                                                                                            
01/20/04       (H)       FIN AT 0:00 AM HOUSE FINANCE 519                                                                       
03/16/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/16/04       (H)       Heard & Held                                                                                           
03/16/04       (H)       MINUTE(FIN)                                                                                            
03/17/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/17/04       (H)       Heard & Held                                                                                           
03/17/04       (H)       MINUTE(FIN)                                                                                            
03/22/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/22/04       (H)       Heard & Held                                                                                           
03/22/04       (H)       MINUTE(FIN)                                                                                            
03/25/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/25/04       (H)       Heard & Held                                                                                           
03/25/04       (H)       MINUTE(FIN)                                                                                            
03/29/04       (H)       FIN AT 9:00 AM HOUSE FINANCE 519                                                                       
03/29/04       (H)       Heard & Held                                                                                           
03/29/04       (H)       MINUTE(FIN)                                                                                            
04/06/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/06/04       (H)       Moved CSHJR 26(FIN) Out of Committee                                                                   
04/06/04       (H)       MINUTE(FIN)                                                                                            
04/07/04       (H)       FIN RPT CS(FIN) NT 2DP 2DNP 2NR 3AM                                                                    
04/07/04       (H)       DP: HAWKER, FOSTER; DNP: CHENAULT,                                                                     
04/07/04       (H)       FATE; NR: CROFT, WILLIAMS; AM: STOLTZE,                                                                
04/07/04       (H)       JOULE, HARRIS                                                                                          
04/15/04       (H)       RLS AT 9:00 AM FAHRENKAMP 203                                                                          
                                                                                                                                
BILL: HB 298                                                                                                                  
SHORT TITLE: DISTRIBUTIONS OF APPROPS FROM PERM FUND                                                                            
SPONSOR(S): WAYS & MEANS                                                                                                        
                                                                                                                                
05/05/03       (H)       READ THE FIRST TIME - REFERRALS                                                                        
05/05/03       (H)       W&M, FIN                                                                                               
05/06/03       (H)       W&M AT 7:00 AM HOUSE FINANCE 519                                                                       
05/06/03       (H)       Heard & Held                                                                                           
05/06/03       (H)       MINUTE(W&M)                                                                                            
05/08/03       (H)       W&M AT 7:00 AM HOUSE FINANCE 519                                                                       
05/08/03       (H)       Heard & Held                                                                                           
05/08/03       (H)       MINUTE(W&M)                                                                                            
05/14/03       (H)       W&M AT 7:00 AM HOUSE FINANCE 519                                                                       
05/14/03       (H)       -- Meeting Canceled --                                                                                 
03/17/04       (H)       W&M AT 7:00 AM HOUSE FINANCE 519                                                                       
03/17/04       (H)       Moved CSHB 298(W&M) Out of Committee                                                                   
03/17/04       (H)       MINUTE(W&M)                                                                                            
03/18/04       (H)       W&M RPT CS(W&M) NT 5DP 1DNP 1NR                                                                        
03/18/04       (H)       DP: WEYHRAUCH, GRUENBERG, WILSON, OGG,                                                                 
03/18/04       (H)       HAWKER; DNP: KOHRING; NR: ROKEBERG                                                                     
03/18/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/18/04       (H)       Heard & Held                                                                                           
03/18/04       (H)       MINUTE(FIN)                                                                                            
03/22/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/22/04       (H)       Heard & Held                                                                                           
03/22/04       (H)       MINUTE(FIN)                                                                                            
03/25/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/25/04       (H)       Heard & Held                                                                                           
03/25/04       (H)       MINUTE(FIN)                                                                                            
03/29/04       (H)       FIN AT 9:00 AM HOUSE FINANCE 519                                                                       
03/29/04       (H)       Scheduled But Not Heard                                                                                
04/06/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/06/04       (H)       Moved CSHB 298(FIN) Out of Committee                                                                   
04/06/04       (H)       MINUTE(FIN)                                                                                            
04/07/04       (H)       FIN RPT CS(FIN) NT 1DP 2DNP 4NR 3AM                                                                    
04/07/04       (H)       DP: HAWKER; DNP: CROFT, CHENAULT;                                                                      
04/07/04       (H)       NR: MOSES, FATE, FOSTER, WILLIAMS;                                                                     
04/07/04       (H)       AM: STOLTZE, JOULE, HARRIS                                                                             
04/15/04       (H)       RLS AT 9:00 AM FAHRENKAMP 203                                                                          
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE KEVIN MEYER                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Spoke as the sponsor of HB 334.                                                                            
                                                                                                                                
SUZANNE CUNNINGHAM, Staff                                                                                                       
to Representative Kevin Meyer                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions  on behalf of the sponsor                                                               
of HB 334.                                                                                                                      
                                                                                                                                
REPRESENTATIVE RALPH SAMUELS                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Explained that  auto waiver as it applies to                                                               
HB 334.                                                                                                                         
                                                                                                                                
REPRESENTATIVE MIKE HAWKER                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Discussed his suggested  amendment to CSHJR                                                               
9(FIN).                                                                                                                         
                                                                                                                                
ROBERT STORER, Executive Director                                                                                               
Alaska Permanent Fund Corporation                                                                                               
Department of Revenue                                                                                                           
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   During discussion  of HB  298, recommended                                                               
that the  draw downs  for government occur  on 12  equal payments                                                               
throughout the year.                                                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 04-2, SIDE A                                                                                                             
Number 0001                                                                                                                     
                                                                                                                                
CHAIR NORMAN  ROKEBERG called the House  Rules Standing Committee                                                             
meeting  to  order  at  9:08   a.m.    Representatives  Rokeberg,                                                               
Coghill, McGuire,  Morgan, Berkowitz,  and Kerttula  were present                                                               
at the call to order.                                                                                                           
                                                                                                                                
HB 334-UNLAWFUL EXPLOITATION OF MINOR                                                                                         
                                                                                                                                
CHAIR ROKEBERG announced  that the first order  of business would                                                               
be HOUSE BILL NO. 334,  "An Act relating to unlawful exploitation                                                               
of a minor."                                                                                                                    
                                                                                                                                
Number 028                                                                                                                      
                                                                                                                                
REPRESENTATIVE  COGHILL  moved to  adopt  CSHB  334, Version  23-                                                               
LS1246\Q,  Luckhaupt, 4/6/06,  as  the working  document.   There                                                               
being no objection, Version Q was before the committee.                                                                         
                                                                                                                                
Number 037                                                                                                                      
                                                                                                                                
REPRESENTATIVE KEVIN MEYER, Alaska  State Legislature, sponsor of                                                               
HB 334, remarked  that initially the intent of HB  334 was simple                                                               
in  that  the  intent  was  to  change  the  criminal  status  of                                                               
exploitation  of a  minor from  a  class B  felony to  a class  A                                                               
felony.   As a  member of Standing  Together Against  Rape (STAR)                                                               
and  the  father of  two  young  daughters, Representative  Meyer                                                               
mentioned  that  he may  have  a  conflict  of interest  on  this                                                               
matter.   He pointed out that  in Anchorage there have  been some                                                               
high profile cases  in which people have been  abusing minors and                                                               
making child  pornography.   Representative Meyer  clarified that                                                               
"sexual  exploitation" doesn't  involve any  sexual contact  with                                                               
[minors], rather it's  the making of photographs,  film, or video                                                               
of minors.                                                                                                                      
                                                                                                                                
REPRESENTATIVE MEYER  recalled the  hearings on  this legislation                                                               
in the  House Judiciary Standing  Committee where  the discussion                                                               
turned  to  the  question  of   what  is  worse:    making  child                                                               
pornography  or selling  it.   Representative  Meyer opined  that                                                               
making  child  pornography is  worse  because  without making  it                                                               
there is  nothing to sell.   Furthermore, some people  make child                                                               
pornography for  their own use  and don't  actually sell it.   He                                                               
recalled that  Representative Gruenberg felt that  the selling of                                                               
child  pornography  is  as  bad   as  making  child  pornography.                                                               
Therefore,  Representative  Gruenberg  proposed an  amendment  to                                                               
change the distribution of child  pornography to a class A felony                                                               
after  the  second offense.    The  aforementioned amendment  was                                                               
adopted.   Although  the past  criminal code  reveals that  there                                                               
aren't  many  circumstances  in   which  [minors]  were  actually                                                               
charged with this, the difficulty  arose when the committee began                                                               
to pose "what if" scenarios.  For example, what if an 18-year-                                                                  
old boy  takes [naked] photographs of  his 17-year-old girlfriend                                                               
that are ultimately placed on  the Internet and the girl's father                                                               
files  charges  against  the  boy.    The  father  could  do  the                                                               
aforementioned now and [the boy] could  be charged with a class B                                                               
felony.  The question is whether to  make it a class A felony, to                                                               
which Representative Meyer announced that is not his intention.                                                                 
                                                                                                                                
REPRESENTATIVE  MEYER  clarified  that he  isn't  [targeting  the                                                               
minors]  who are  having consensual  sex rather  [the legislation                                                               
intends] to  target those  adults who  are enticing  [minors] and                                                               
unlawfully  exploiting   them.    He  recalled   that  the  House                                                               
Judiciary  Standing  Committee accepted  making  this  a class  A                                                               
felony, but the  desire was to attach a letter  of intent.  After                                                               
he and  Representative Gruenberg  worked on  a letter  of intent,                                                               
the  two  realized that  people  don't  really pay  attention  to                                                               
letters  of intent.    Therefore, the  discussion  turned to  the                                                               
possibility   of   making   the  second   offense   of   unlawful                                                               
exploitation of a  minor a class A felony.   He suggested that if                                                               
minors in the  situation laid out above are charged  with a class                                                               
B felony,  those minors probably deserve  a class A felony  for a                                                               
subsequent  offense.    Representative  Meyer  characterized  the                                                               
change of the second offense to  a class A felony as a reasonable                                                               
compromise.  Representative Meyer  pointed out that the committee                                                               
packet  should  include a  breakdown  of  offenses.   A  class  B                                                               
felony, first offense receives one to  four years while a class B                                                               
felony, second offense  receives four years.  However,  a class A                                                               
felony, first  offense receives  five years.   Therefore,  one is                                                               
gaining a  year of  punishment by raising  the second  offense of                                                               
unlawful exploitation of a minor to a class A felony.                                                                           
                                                                                                                                
Number 120                                                                                                                      
                                                                                                                                
REPRESENTATIVE  McGUIRE inquired  as to  why Version  Q is  being                                                               
proposed.                                                                                                                       
                                                                                                                                
SUZANNE CUNNINGHAM,  Staff to Representative Kevin  Meyer, Alaska                                                               
State  Legislature,  explained that  [in  Version  Q] the  second                                                               
offense of unlawful exploitation of a minor is a class A felony.                                                                
                                                                                                                                
REPRESENTATIVE McGUIRE asked if the  auto waiver is addressed [in                                                               
Version Q].                                                                                                                     
                                                                                                                                
REPRESENTATIVE MEYER confirmed that the  auto waiver was left out                                                               
of  [Version  Q].    He noted  that  Representative  Samuels  was                                                               
comfortable with [leaving  the auto waiver out]  since the second                                                               
offense is [increased to] a class A felony.                                                                                     
                                                                                                                                
REPRESENTATIVE  KERTTULA surmised  then  that there  has been  no                                                               
automatic  waiver, and  therefore it  wouldn't matter  whether it                                                               
was  a second  offense  for a  juvenile  [because that  juvenile]                                                               
wouldn't be in the adult system.  She asked if she is correct.                                                                  
                                                                                                                                
MS. CUNNINGHAM answered  that for the second  offense, a juvenile                                                               
would be waived into adult court for the class A felony.                                                                        
                                                                                                                                
REPRESENTATIVE KERTTULA inquired as to  other crimes in which the                                                               
automatic waiver of a juvenile occurs.                                                                                          
                                                                                                                                
REPRESENTATIVE  McGUIRE  turned  attention  to  the  auto  waiver                                                               
statute, AS 47.12.030.   The auto waiver statute says  that for a                                                               
class  A felony  or unclassified  felony, or  a felony  against a                                                               
person, there is an auto waiver of  a minor to adult court if the                                                               
minor is 16 years of  age.  Representative McGuire explained that                                                               
when [unlawful  exploitation of a minor]  was going to be  made a                                                               
class A  felony on the first  offense, she was concerned  about a                                                               
scenario as laid out earlier  between a boyfriend and girlfriend.                                                               
She recalled  that the  desire was  to make  an exemption  to the                                                               
auto  waiver.   However,  [Version  Q]  specifies that  [unlawful                                                               
exploitation of a minor] would be  a class A felony on the second                                                               
offense.  Therefore, the auto waiver isn't included.                                                                            
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  pointed  out   that  the  auto  waiver                                                               
statute applies  to any  felonies against  a person  and unlawful                                                               
exploitation against  a minor is  a crime  against a person.   He                                                               
asked if currently the auto waiver isn't [available].                                                                           
                                                                                                                                
REPRESENTATIVE   MEYER   specified    that   currently   unlawful                                                               
exploitation  against a  minor  carries  a class  B  felony.   He                                                               
related his  understanding that  the auto  waiver only  refers to                                                               
class A felonies.                                                                                                               
                                                                                                                                
REPRESENTATIVE KERTTULA remarked that she wasn't sure.                                                                          
                                                                                                                                
REPRESENTATIVE BERKOWITZ  turned to  the auto waiver  statute, AS                                                               
47.12.030, and  pointed out that  it says  in part "in  which the                                                               
minor is alleged  to have used a deadly weapon  in the commission                                                               
of  the offense".    There isn't  a deadly  weapon  used in  [the                                                               
unlawful exploitation of a minor].                                                                                              
                                                                                                                                
Number 176                                                                                                                      
                                                                                                                                
REPRESENTATIVE  KERTTULA  inquired as  to  the  broadness of  the                                                               
[definition]   of   "exploitation   of   a  minor."      If   the                                                               
aforementioned  language refers  to 15-16  year olds  having sex,                                                               
then  she remains  concerned  that [the  second  offense being  a                                                               
class A felony] is too harsh.                                                                                                   
                                                                                                                                
MS. CUNNINGHAM  pointed out that  AS 11.41.455 defines  the crime                                                               
of  unlawful  exploitation of  a  minor.    She noted  that  [the                                                               
sponsor]  worked  fairly  close  with the  Division  of  Juvenile                                                               
Justice, which  had the same concern  as Representative Kerttula.                                                               
However,  after  the division  compiled  a  10-year history  with                                                               
regard  to  the   minors  who  have  committed   this  crime  and                                                               
discovered that none of them were second offenders.                                                                             
                                                                                                                                
REPRESENTATIVE  KERTTULA   inquired  as  to  the   definition  of                                                               
"exploitation."                                                                                                                 
                                                                                                                                
REPRESENTATIVE McGUIRE  specified that  the definition  refers to                                                               
photographs,  videos,  and  the  making of  [pornography].    She                                                               
clarified that  "exploitation" doesn't  refer to  consensual sex,                                                               
rather "exploitation" involves enticing  a minor into a situation                                                               
in which pornography is made.                                                                                                   
                                                                                                                                
REPRESENTATIVE  KERTTULA  highlighted   the  language  "knowingly                                                               
induces"  in  AS 11.41.455.    She  reiterated her  concern  with                                                               
regard to consensual behavior rising to a class A felony.                                                                       
                                                                                                                                
REPRESENTATIVE   MEYER   informed   the   committee   that   this                                                               
legislation  was brought  forward  [on behalf  of]  STAR and  the                                                               
Council  on Domestic  Violence &  Sexual  Assault, entities  that                                                               
frequently  apply  for  federal  grants.    Representative  Meyer                                                               
indicated  that the  committee  packet  should include  documents                                                               
showing  that  Alaska's  criminal   [statutes],  as  compared  to                                                               
federal  [statutes],   are  very  liberal  for   this  particular                                                               
offense.     The   aforementioned  impacts   the  above-mentioned                                                               
entities when trying to obtain federal [grants].                                                                                
                                                                                                                                
REPRESENTATIVE BERKOWITZ  recalled that the  original legislation                                                               
back  in   1978  included  the   component  that   [the  unlawful                                                               
exploitation of a  minor] was being done  for commercial purpose.                                                               
He mentioned  the aggravator  section of  Title 12,  and recalled                                                               
that  if  one  commits  a   crime  for  commercial  purposes,  it                                                               
constitutes  an aggravator.   Therefore,  the sentences  could be                                                               
increased above  the norm.  Representative  Berkowitz opined that                                                               
the  sentences Representative  Meyer  specified  earlier are  the                                                               
standard realms, but the courts  have the ability to deviate from                                                               
those in exceptional cases.                                                                                                     
                                                                                                                                
Number 224                                                                                                                      
                                                                                                                                
CHAIR  ROKEBERG  related  his understanding  that  Representative                                                               
Kerttula  is concerned  with  regard to  whether  there could  be                                                               
multiple charges  by a vigorous  district attorney.   He surmised                                                               
that  one  couldn't  necessarily  be  charged  with  assault  and                                                               
exploitation [of  a minor] unless it  fits the fact pattern.   He                                                               
asked if that is correct.                                                                                                       
                                                                                                                                
REPRESENTATIVE BERKOWITZ surmised that  Chair Rokeberg was asking                                                               
if, in  a continuing course  of conduct, there could  be multiple                                                               
charges in that continuing course of conduct.                                                                                   
                                                                                                                                
CHAIR ROKEBERG interjected,  "Oh, yeah you could ... if  it was a                                                               
continuing  course  of conduct.    But  ...  I think  you're  ...                                                               
concerned about isolated incidence or ..."                                                                                      
                                                                                                                                
REPRESENTATIVE KERTTULA  stated that  she is concerned  about the                                                               
auto  waiver with  which  she  didn't agree,  even  for a  second                                                               
offense.   "We're  talking  about kids  and I  just  don't see  a                                                               
reason why you don't have a  hearing before a judge about whether                                                               
they should be waived or not,"  she explained.  She stressed that                                                               
it  would be  a step  and the  waiver could  occur with  judicial                                                               
involvement.  She  surmised that CSHB 334(JUD) took  out the auto                                                               
waiver.                                                                                                                         
                                                                                                                                
REPRESENTATIVE McGUIRE explained that  Section 3 of CSHB 334(JUD)                                                               
addresses the auto waiver.  On  page 2, line 14, of CSHB 334(JUD)                                                               
the  felonies   that  would  be   included  under   the  unlawful                                                               
exploitation of a  minor were taken out of the  auto waiver.  She                                                               
related her  understanding that Version  Q takes the  auto waiver                                                               
out  and only  increases the  crime to  a class  A felony  on the                                                               
second    offense.        Representative    McGuire    clarified,                                                               
"Representative Rokeberg,  Mr. Chairman,  just to  be clear:   it                                                               
...  cannot be  within  the  same first  offense,  it  has to  be                                                               
previous conviction  of an  unlawful exploitation  of a  minor in                                                               
either this jurisdiction or another."                                                                                           
                                                                                                                                
Number 260                                                                                                                      
                                                                                                                                
REPRESENTATIVE  RALPH SAMUELS,  Alaska State  Legislature, turned                                                               
to the auto  waiver, and explained that it only  applies to those                                                               
age  16 and  17.   "To  get caught,  go through  the system,  get                                                               
caught again,  ... they'd  have to know  what they're  doing," he                                                               
remarked.   In such a  situation, he  opined that "you'd  want to                                                               
come down  on them."   For the very young,  say 15 years  of age,                                                               
those minors do not ever get  auto waived because there is always                                                               
a  waiver hearing.    He said  that since  the  auto waiver  only                                                               
applies to those 16 and 17 years  of age, the window for a second                                                               
offense is almost nonexistent.                                                                                                  
                                                                                                                                
REPRESENTATIVE MEYER pointed out that  a first offense would be a                                                               
class  B felony,  which  is a  fairly serious  offense.   If  the                                                               
individual hasn't  learned from that,  then he agreed that  he or                                                               
she deserves  the class  A felony.   Representative  Meyer opined                                                               
that Version Q is a good compromise.                                                                                            
                                                                                                                                
REPRESENTATIVE McGUIRE  inquired as to why  this wasn't addressed                                                               
in the House Judiciary Standing Committee.                                                                                      
                                                                                                                                
REPRESENTATIVE   MEYER  reiterated   that  [CSHB   334(JUD)]  was                                                               
reported  from the  House Judiciary  Standing Committee  with the                                                               
understanding that he and Representative  Gruenberg were going to                                                               
continue to  work on  the legislation and  make the  amendment on                                                               
the House  floor.  However,  he felt that the  change encompassed                                                               
in Version Q is  too large to do on the  House floor.  Therefore,                                                               
he requested a House Rules Standing Committee hearing.                                                                          
                                                                                                                                
Number 310                                                                                                                      
                                                                                                                                
REPRESENTATIVE KERTTULA  announced that  she is  more comfortable                                                               
with  CSHB 334(JUD)  because  she believes  there  could be  some                                                               
difficult situations.                                                                                                           
                                                                                                                                
CHAIR ROKEBERG  opined that  Representative Samuels'  and Meyer's                                                               
arguments  are  very  compelling.    The  [possibility]  of  this                                                               
falling unjustly  on some teenager  is slim, and  furthermore the                                                               
judicial discretion would address that.                                                                                         
                                                                                                                                
REPRESENTATIVE KERTTULA  pointed out  that [under Version  Q] the                                                               
problem  is  that it  will  be  done automatically,  without  any                                                               
judicial involvement.   She remarked  that she has seen  teens be                                                               
charged with things that are surprising.                                                                                        
                                                                                                                                
CHAIR ROKEBERG commented, "This is the second offense."                                                                         
                                                                                                                                
REPRESENTATIVE BERKOWITZ  pointed out  that the  committee packet                                                               
includes documents  from the Division of  Juvenile Justice, which                                                               
specify  the number  of  youth  charged with  this  conduct.   He                                                               
related that  the document specifies  that in 2004 there  was one                                                               
18-year-old charged  who was waived.   In 2003 there was  one 13-                                                               
year-old  for whom  the waiver  wouldn't matter.   In  1999, four                                                               
[minors] were charged  and the cases were  dismissed.  Therefore,                                                               
he concluded  that there just aren't  a lot of cases  that impact                                                               
juveniles.   He  opined  that  getting hung  up  on the  juvenile                                                               
waiver issue isn't  focusing on the appropriate  issue.  However,                                                               
he  expressed concern  with the  legislature tinkering  with what                                                               
judges do.   He noted that currently [unlawful  exploitation of a                                                               
minor] is a  class B felony that  a judge can ramp  up for second                                                               
and subsequent  offenses.  In  essence, this  legislation reaches                                                               
into  the  judiciary and  instructs  the  judges with  regard  to                                                               
sentencing.    Although   Representative  Berkowitz  related  his                                                               
belief  that   harsher  sentences  for  this   type  conduct  are                                                               
appropriate,  [the   legislature]  should   be  mindful   of  the                                                               
separation of powers issue.                                                                                                     
                                                                                                                                
Number 0356                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL moved  to  report CSHB  334, Version  23-                                                               
LS1246\Q, Luckhaupt,  4/6/06,  out  of committee  with individual                                                               
recommendations and the accompanying fiscal notes.                                                                              
                                                                                                                                
REPRESENTATIVE BERKOWITZ  highlighted that  all the  fiscal notes                                                               
are zeroed out, which he  interpreted to mean this legislation is                                                               
completely  ineffective or  else people  aren't "being  straight"                                                               
with the  fiscal notes.  Therefore,  he expressed the need  to be                                                               
vigilant of zeroed fiscal notes.                                                                                                
                                                                                                                                
Number 368                                                                                                                      
                                                                                                                                
CHAIR  ROKEBERG,  upon  determining  there  were  no  objections,                                                               
announced that  CSHB 334(RLS) was  reported from the  House Rules                                                               
Standing Committee.                                                                                                             
                                                                                                                                
HJR  9-CONST AM: APPROPRIATION/SPENDING LIMIT                                                                                 
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be  HOUSE JOINT  RESOLUTION NO.  9, Proposing  amendments to  the                                                               
Constitution of the State of  Alaska relating to an appropriation                                                               
limit and a spending limit.                                                                                                     
                                                                                                                                
CHAIR  ROKEBERG explained  his intention  to  bring up  HJR 9  in                                                               
order  to have  a  very  minor discussion.    He  noted that  the                                                               
committee  packet   should  include  a  suggested   amendment  by                                                               
Representative Hawker,  who he wanted  to explain  the amendment.                                                               
He announced that HJR 9 would  be set aside without taking up the                                                               
amendment.                                                                                                                      
                                                                                                                                
Number 372                                                                                                                      
                                                                                                                                
REPRESENTATIVE MIKE  HAWKER, Alaska  State Legislature,  spoke to                                                               
his suggested amendment, which read:                                                                                            
                                                                                                                                
     Page 3, line 17:                                                                                                           
     Delete "Reconsideration"                                                                                                 
     Insert "Repeal"                                                                                                          
                                                                                                                                
     Page 3, lines 25 - 30:                                                                                                     
     Delete all material.                                                                                                       
     Insert "Section 16 of Article IX (appropriation limit)                                                                     
     is repealed July 1, 2009."                                                                                                 
                                                                                                                                
REPRESENTATIVE HAWKER explained that  the amendment would provide                                                               
a hard  sunset to HJR 9  so that it didn't  constitutionally bind                                                               
future  legislatures.     Although  Representative  Stoltze,  the                                                               
sponsor of  HJR 9,  is very  receptive to  the discussion  of the                                                               
issue, he  would prefer that it  occur on the House  floor rather                                                               
than   through  a   House  Rules   Standing  Committee   hearing,                                                               
Representative Hawker  related.  Representative  Hawker explained                                                               
that  this  resolution  would place  a  constitutional  amendment                                                               
before the  voters to limit  future appropriations by  a formula.                                                               
Therefore,  the concern  is the  inability  to prognosticate  the                                                               
future with any particular accuracy  or to anticipate what future                                                               
legislatures  may  face.   Some  believe  the  aforementioned  is                                                               
[acceptable] because  they don't  want to  allow spending  in the                                                               
state to  expand very far.   However,  others don't want  to bind                                                               
future  legislatures  inappropriately  due to  the  inability  to                                                               
predict  the  future.   Representative  Hawker  related that  the                                                               
public  has  expressed the  need  to  have reassurance  that  the                                                               
legislature  wouldn't   embark  upon  a  campaign   of  frivolous                                                               
spending.  To that end, HJR 9 was introduced.                                                                                   
                                                                                                                                
REPRESENTATIVE  HAWKER  acknowledged  that  the  resolution  does                                                               
require  that it  reappear on  the  ballot after  six years,  but                                                               
noted that  it would require  an affirmative vote to  approve the                                                               
spending limit.  Representative  Hawker stated that he subscribes                                                               
to a  theory of a  window of  constraint to provide  assurance to                                                               
the  public   and  establish  credibility  to   the  legislature.                                                               
However, to make  it a permanent change is of  concern because to                                                               
create an  algorithm regarding what  state spending should  be in                                                               
15 years is  problematic.  Out of respect for  the sponsor of HJR                                                               
9, Representative  Hawker requested  that the  committee consider                                                               
the debate, but take up the amendment on the House floor.                                                                       
                                                                                                                                
CHAIR  ROKEBERG asked  if the  House Finance  Committee discussed                                                               
having   automatic   reconfirmation   similar  to   the   state's                                                               
constitutional  convention provision  in order  to have  a review                                                               
without  having  to go  through  the  process and  the  amendment                                                               
again.                                                                                                                          
                                                                                                                                
Number 426                                                                                                                      
                                                                                                                                
REPRESENTATIVE  HAWKER said  he understood  Chair Rokeberg  to be                                                               
referring to  a future  vote that would  be required  to reaffirm                                                               
this  particular  resolution  rather  than requiring  a  vote  to                                                               
negate the resolution.   He said the House  Finance Committee did                                                               
discuss that,  although it wasn't  made as  much an issue  as was                                                               
looking at the algorithm.                                                                                                       
                                                                                                                                
CHAIR  ROKEBERG turned  attention to  page 1,  line 10,  of CSHJR                                                               
9(FIN), and asked whether the  matter of [the appropriation limit                                                               
being]  75 or  100 percent  of  the sum  is an  issue that  needs                                                               
illumination.                                                                                                                   
                                                                                                                                
REPRESENTATIVE HAWKER  stated that the question  is probably best                                                               
directed to the sponsor of HJR  9.  However, he offered his view.                                                               
He recalled that this resolution  was introduced and heard in the                                                               
House Special  Committee on Ways  and Means,  of which he  is the                                                               
chair, last year.  The House  Special Committee on Ways and Means                                                               
reported  the resolution  out with  an algorithm  creating tiered                                                               
percentages  that   required  different  levels   of  legislative                                                               
approval.   He explained  that [the  first] 2  percent [increase]                                                               
would require  a simple  majority vote  of the  legislature while                                                               
the next  2 percent [increase]  would require a  two-thirds vote,                                                               
and the third 2 percent  [increase] would require a three-quarter                                                               
vote.    The aforementioned  would  essentially  allow 6  percent                                                               
inflation in the budget  with increasing legislative concurrence.                                                               
Through the  process, the discussion  highlighted that  there are                                                               
certain  fallacies with  the [tiered  approach].   Therefore,  he                                                               
suggested that a better bench mark  would be to use inflation and                                                               
the state's  population growth.   Allowing the state's  budget to                                                               
grow based  on inflation and  the state's population  sounds easy                                                               
until one attempts to put the concept into words.                                                                               
                                                                                                                                
REPRESENTATIVE  HAWKER pointed  out that  it would  be simple  to                                                               
specify that  [the calculation] go  back two years and  take into                                                               
account inflation and  population and add those  two together for                                                               
one year  and say that  is what the  state's budget can  grow for                                                               
the  next year.    However, the  aforementioned  produces a  very                                                               
erratic  growth  pattern  because  of the  possible  variance  in                                                               
spending of  any given year.   Therefore,  the model used  by the                                                               
permanent fund  dividend was  used and thus  an average  of three                                                               
year's  percentage changes  [is used].   In  order to  do a  look                                                               
back, one  has to go  back almost two years  in order to  reach a                                                               
year that has  closed out [budget] for which  the percentages can                                                               
be used.   He recalled that the language  specified "the earliest                                                               
three of  four prior  fiscal years".   He explained,  "We'd leave                                                               
this year  that we're  currently in open,  but we're  budgeting a                                                               
year hence  so there's a  two-year gap between the  empirical CPI                                                               
[consumer price  index] and population  information and  the year                                                               
you're  budgeting."   Therefore,  if  the  average inflation  and                                                               
population  for those  three years  is taken  and applied  to the                                                               
average budget for  those three years, an entire  year's worth of                                                               
inflation  and population  growth  isn't being  recognized.   The                                                               
aforementioned is  tantamount to keeping the  inflating factors a                                                               
year in  arrears.   The above  is the  problem with  converting a                                                               
simple  idea and  turning it  to  practical, implementable  words                                                               
that  don't  "box us  into  some  place  we  don't want  to  be."                                                               
Therefore, the  formula [in CSHJR  9(FIN)] specifies that  if the                                                               
first  three to  four  years  of inflation  is  added  up and  75                                                               
percent of it  is taken, it would provide a  1.5 factor growth on                                                               
the numbers from two year's ago.                                                                                                
                                                                                                                                
REPRESENTATIVE  HAWKER opined  that  all the  formulas have  been                                                               
equally  valid intellectual  exercises.    However, the  decision                                                               
before [the legislature] is whether there is a "right answer."                                                                  
                                                                                                                                
CHAIR ROKEBERG announced  that HJR 9 would be held  over and that                                                               
he anticipated it being before the full House next week.                                                                        
                                                                                                                                
HJR 26-CONST. AM: PF APPROPS/INFLATION-PROOFING                                                                               
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be HOUSE  JOINT RESOLUTION  NO. 26,  Proposing amendments  to the                                                               
Constitution  of the  State of  Alaska relating  to and  limiting                                                               
appropriations from  and inflation-proofing the  Alaska permanent                                                               
fund by establishing a percent of market value spending limit.                                                                  
                                                                                                                                
CHAIR ROKEBERG  informed the committee  that HJR 26 will  be held                                                               
for further consideration.   He also informed  the committee that                                                               
he anticipated it being before the full House next week.                                                                        
                                                                                                                                
HB 298-DISTRIBUTIONS OF APPROPS FROM PERM FUND                                                                                
                                                                                                                                
CHAIR ROKEBERG announced  that the final order  of business would                                                               
be HOUSE  BILL NO. 298, "An  Act relating to the  distribution of                                                               
appropriations  from the  Alaska  permanent fund  under art.  IX,                                                               
sec.  15(b), Constitution  of  the State  of  Alaska, and  making                                                               
conforming amendments; and providing for an effective date."                                                                    
                                                                                                                                
CHAIR ROKEBERG  related his  belief that  there is  some question                                                               
about  the  cash  flow  incidence  with regard  to  HB  298,  and                                                               
therefore  requested that  Mr. Storer  speak on  the matter.   He                                                               
announced that no further action would be taken on HB 298 today.                                                                
                                                                                                                                
Number 512                                                                                                                      
                                                                                                                                
ROBERT   STORER,  Executive   Director,  Alaska   Permanent  Fund                                                               
Corporation (APFC),  Department of Revenue, explained  that as HB                                                               
298 now  stands, it  would draw  down money  for payment  for the                                                               
dividend and  for government all on  one day.  The  payment would                                                               
be  withdrawn 14  days after  the end  of the  fiscal year.   Mr.                                                               
Storer  acknowledged   that  as  it  applies   to  the  dividend,                                                               
historically  there has  been  a single  draw  down, which  makes                                                               
sense  because the  funds are  transferred to  the Department  of                                                               
Revenue and then  the payments go out quickly  afterwards.  While                                                               
[APFC] can  live with and  manage drawing  down the money  on one                                                               
day,  it believes  there are  more effective  ways to  manage the                                                               
assets of the permanent fund.   Therefore, Mr. Storer recommended                                                               
that the  draw downs  for government occur  on 12  equal payments                                                               
throughout the year.  He explained  that when large sums of money                                                               
are liquidated,  material adjustments to the  asset allocation of                                                               
the fund  occur.  Furthermore, there  are significant transaction                                                               
costs.   He  pointed out  that the  act of  selling the  security                                                               
comes with  a transaction cost.   "To the degree one  can make it                                                               
over  some  systematic  payout,   the  permanent  fund  can  more                                                               
effectively manage  the asset  allocation and  the assets  of the                                                               
fund,"  he  suggested.    Mr. Storer  clarified  that  under  the                                                               
suggestion  of  government draw  downs  occurring  over 12  equal                                                               
payments,   there  [APFC]   wouldn't   have   to  make   material                                                               
adjustments to  asset allocation,  but rather  draw down  on cash                                                               
flow every month.   Therefore, rather than reinvest  cash flow in                                                               
the  equity   market,  it  would   be  distributed  out   to  the                                                               
government.                                                                                                                     
                                                                                                                                
MR. STORER  informed the committee that  if the draw all  goes to                                                               
the  general  fund at  the  beginning  of  the fiscal  year,  the                                                               
general fund  would earn  interest on that  larger sum  of money.                                                               
However, if the funds are retained  with the permanent fund for a                                                               
longer  period of  time, [APFC]  invests for  a longer  period of                                                               
time and thus  the permanent fund [monies] earn a  higher rate of                                                               
return than  the general fund.   "On  some time basis,  one would                                                               
earn more money in the aggregate  at the permanent fund.  So, you                                                               
would not only  be mitigating against transaction  costs, but you                                                               
would earn  some higher rate  of return  if the money  resided at                                                               
the permanent fund," he explained.                                                                                              
                                                                                                                                
Number 538                                                                                                                      
                                                                                                                                
CHAIR  ROKEBERG related  his understanding  that  because of  the                                                               
cash  flow requirements  of the  general fund,  there are  timing                                                               
issues.   He  further  related his  understanding that  currently                                                               
[the  legislature]  draws  down from  the  constitutional  budget                                                               
reserve  fund   (CBRF)  as   part  of  a   cash  cushion.     The                                                               
aforementioned  draw down  is  as  much as  $400  million of  the                                                               
moving average throughout the year,  depending upon the timing of                                                               
other revenue receipts.                                                                                                         
                                                                                                                                
MR. STORER agreed.  He recalled  that there is a larger draw down                                                               
of  the CBRF  in  the first  quarter of  the  fiscal year,  which                                                               
diminishes as  it goes along.   Therefore, maybe there  are other                                                               
alternatives  that could  be worked  out with  the Department  of                                                               
Revenue.                                                                                                                        
                                                                                                                                
CHAIR  ROKEBERG inquired  as to  how the  primary liquidation  of                                                               
assets or  realized gains  necessary to  fund the  permanent fund                                                               
dividend are performed.  He  mentioned his belief that it depends                                                               
on market  conditions.  "I  recall ... '01  or '02 where  ... you                                                               
caught it on the rise to  be able to ... provide the availability                                                               
of cash flow that most people don't recall now," he asked.                                                                      
                                                                                                                                
MR.  STORER said  that's correct.   Mr.  Storer pointed  out that                                                               
over time  it has varied.   However,  he noted that  [APFC] knows                                                               
fairly well what the obligation,  plus or minus $50-$100 million,                                                               
will  be   to  the  Department   of  Revenue  well   in  advance.                                                               
Therefore, to  some degree  the asset  allocation and  the market                                                               
environment determine the  payout and funding.   He recalled that                                                               
it  used to  be that  [APFC] would  structure the  bond portfolio                                                               
such  that   some  [investments]   matured  around   the  payout.                                                               
However, the  aforementioned is no  longer done because  the fund                                                               
is mature and  fully invested in the equity  markets.  Currently,                                                               
[APFC] makes  a recommendation  to the Board  of Trustees  of the                                                               
Permanent Fund  at the  June board  meeting.   The recommendation                                                               
relates how [APFC] proposes to  liquidate the assets, while being                                                               
mindful of market conditions and  asset allocation.  Furthermore,                                                               
staff is driven to reduce transaction costs as much as possible.                                                                
                                                                                                                                
CHAIR  ROKEBERG  inquired   as  to  the  period   of  time  those                                                               
transactions are made.                                                                                                          
                                                                                                                                
MR.  STORER  answered  that  depending  upon  the  markets,  [the                                                               
transactions] could  occur within  a month to  three months.   He                                                               
specified that it would be over  a month because of the timing of                                                               
the  payment to  the department.   "That's  not to  say we  don't                                                               
build up some cash in  the bond portfolio to mitigate transaction                                                               
costs," he  explained.  The [APFC]  reports to the board  what it                                                               
does in terms of liquidation.                                                                                                   
                                                                                                                                
CHAIR  ROKEBERG surmised,  "I think  the  issue does  need to  be                                                               
identified  and  worked  with.   You're  asking  for  a  12-month                                                               
window, basically,  for a  portion of  the draw  down, but  ... I                                                               
think you  need to have some  type of window in  which to operate                                                               
that's not  a single day  as required in the  bill, fundamentally                                                               
now.  Is that correct," he asked.                                                                                               
                                                                                                                                
MR.  STORER  replied  yes,  pointing  out  that  the  legislation                                                               
provides 14 days to liquidate  the securities.  The longer [APFC]                                                               
has to liquidate the portfolio,  the more efficient [APFC] can be                                                               
in reducing the transaction costs.                                                                                              
                                                                                                                                
Number 579                                                                                                                      
                                                                                                                                
CHAIR ROKEBERG  announced, "Rather than the  committee taking any                                                               
action on this today, I'd like  the various bill sponsors and the                                                               
corporation to massage  this ... rather than get  too involved in                                                               
the minutia  of this  stage of its  incubation."   Chair Rokeberg                                                               
announced that HB 298 would be  held over and that he anticipated                                                               
it being before the full House next week.                                                                                       
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Rules Standing Committee meeting was adjourned at 9:53 a.m.                                                                     

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