Legislature(1993 - 1994)
05/03/1994 08:00 AM House STA
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
May 3, 1994
8:00 a.m.
MEMBERS PRESENT
Representative Al Vezey, Chairman
Representative Pete Kott, Vice-Chairman
Representative Bettye Davis
Representative Gary Davis
Representative Harley Olberg
Representative Jerry Sanders
MEMBERS ABSENT
Representative Fran Ulmer
COMMITTEE CALENDAR
SB 190: "An Act relating to income withholding and
other methods of enforcement for orders of
support; relating to medical support orders;
amending Alaska Rule of Civil Procedure
90.3(d); and providing for an effective
date."
HELD IN COMMITTEE
SB 333 : "An Act relating to disclosure of close
economic associations by certain state
employees and to the prohibition against
nepotism in the executive branch of state
government; and providing for an effective
date."
HELD IN COMMITTEE
WITNESS REGISTER
PHILLIP PETRIE
Child Support Enforcement Division
Department of Revenue
550 W. 7th Ave.
Anchorage, AK 99501
Phone: 269-6803
POSITION STATEMENT: Addressed CSSB 190(FIN)am
RANDY WELKER, Legislative Auditor
Legislative Audit
P.O. Box 113300
Juneau, AK 99811-3300
Phone: 465-3830
POSITION STATEMENT: Addressed CSSB 333(FIN)am
PREVIOUS ACTION
BILL: SB 190
SHORT TITLE: ENFORCEMENT OF SUPPORT ORDERS
SPONSOR(S): JUDICIARY BY REQUEST
JRN-DATE JRN-PG ACTION
04/13/93 1336 (S) READ THE FIRST TIME/REFERRAL(S)
04/13/93 1336 (S) JUDICIARY, FINANCE
02/23/94 (S) JUD AT 1:30 PM BELTZ RM 211
02/28/94 2987 (S) JUD RPT CS 3DP SAME TITLE
02/28/94 2987 (S) FN TO SB & CS PUBLISHED (REV)
03/15/94 (S) FIN AT 08:30 AM SENATE FIN 518
03/15/94 (S) MINUTE(FIN)
03/15/94 (S) MINUTE(FIN)
03/17/94 (S) FIN AT 09:30 AM SENATE FIN 518
04/06/94 3463 (S) FIN RPT CS 1DP 3NR SAME TITLE
04/06/94 3463 (S) LETTER OF INTENT WITH FIN
REPORT
04/06/94 3463 (S) FN TO CS PUBLISHED(REV, COURT)
04/06/94 (S) FIN AT 08:00 AM SENATE FIN 518
04/08/94 (S) RLS AT 00:00 AM FAHRENKAMP
ROOM 203
04/08/94 (S) MINUTE(RLS)
04/11/94 3555 (S) RULES TO CALENDAR 4/11/94
04/11/94 3558 (S) READ THE SECOND TIME
04/11/94 3558 (S) FIN CS ADOPTED UNAN CONSENT
04/11/94 3558 (S) ADVANCED TO THIRD READING UNAN
CONSENT
04/11/94 3558 (S) READ THE THIRD TIME
CSSB 190(FIN)
04/11/94 3558 (S) (S) ADOPTED FIN LETTER OF
INTENT
04/11/94 3559 (S) PASSED Y17 N3
04/11/94 3559 (S) EFFECTIVE DATE SAME AS PASSAGE
04/11/94 3559 (S) Adams NOTICE OF RECONSIDERATION
04/11/94 3567 (S) ZERO FN TO FIN CS PUBLISHED
(COURT)
04/12/94 3589 (S) FN TO FIN CS PUBLISHED (REV)
04/12/94 3589 (S) RECON TAKEN UP/IN THIRD READING
04/12/94 3589 (S) HELD ON RECONSIDERATION TO 4/13
CALENDAR
04/13/94 3642 (S) HELD ON RECONSIDERATION TO 4/14
CALENDAR
04/14/94 3679 (S) RETURN TO SECOND FOR AM 1
UNAN CONSENT
04/14/94 3682 (S) AM NO 1 MOVED BY TAYLOR
04/14/94 3682 (S) AM NO 1 ADOPTED UNAN CONSENT
04/14/94 3682 (S) AUTOMATICALLY IN THIRD READING
04/14/94 3682 (S) MOTION TO RETURN TO 2ND FOR
AM 2
04/14/94 3682 (S) RETURN TO 2ND FOR AM 2 UNAN
CONSENT
04/14/94 3683 (S) AM NO 2 MOVED BY TAYLOR
04/14/94 3683 (S) AM NO 2 FAILED Y6 N13 E1
04/14/94 3684 (S) AUTOMATICALLY IN THIRD READING
04/14/94 3684 (S) MOTION TO RETURN TO 2ND FOR
AM 3
04/14/94 3684 (S) RETURN TO 2ND FOR AM 3 Y12
N7 E1
04/14/94 3684 (S) AM NO 3 MOVED AND WITHDRAWN
04/14/94 3684 (S) AUTOMATICALLY IN THIRD READING
04/14/94 3685 (S) (S) ADOPTED FIN LETTER OF
INTENT
04/14/94 3685 (S) PASSED ON RECONSIDERATION Y19
N- E1
04/14/94 3685 (S) EFFECTIVE DATE SAME AS PASSAGE
04/15/94 3732 (S) COURT RULE CHANGE VOTE SAME
AS PASSAGE
04/15/94 3734 (S) TRANSMITTED TO (H)
04/18/94 3540 (H) READ THE FIRST TIME/REFERRAL(S)
04/18/94 3540 (H) STATE AFFAIRS,JUDICIARY,FINANCE
05/03/94 (H) STA AT 09:00 AM CAPITOL 102
BILL: SB 333
SHORT TITLE: DISCLOSURE OF EXEC.BR. CLOSE ASSOCIATIONS
SPONSOR(S): RULES BY REQUEST OF LEGISLATIVE BUDGET AND AUDIT
JRN-DATE JRN-PG ACTION
02/22/94 2912 (S) READ THE FIRST TIME/REFERRAL(S)
02/22/94 2912 (S) STA, JUD
03/16/94 (S) STA AT 9:00 AM BUTROVICH RM 205
03/16/94 (S) MINUTE(STA)
03/18/94 3266 (S) STA RPT 3NR
03/18/94 3266 (S) FISCAL NOTE PUBLISHED (ADM)
03/18/94 3266 (S) ZERO FNS PUBLISHED (LAW, GOV)
02/22/94 3522 (S) JUD RPT 5DP
04/06/94 (S) JUD AT 01:30 PM BELTZ ROOM 211
04/08/94 3523 (S) PREVIOUS FN (ADM)
04/08/94 3523 (S) PREVIOUS ZERO FN (LAW, GOV)
04/08/94 3523 (S) ADDITIONAL REFERRAL TO FIN
04/18/94 (S) FIN AT 09:00 AM SENATE FIN 518
04/19/94 (S) FIN AT 08:15 AM SENATE FIN 518
04/19/94 (S) RLS AT 12:30 PM FAHRENKAMP
ROOM 203
04/19/94 3778 (S) FIN RPT CS 5DP 1NR SAME TITLE
04/20/94 3803 (S) FN TO CS PUBLISHED (ADM)
04/19/94 3778 (S) PREVIOUS ZERO FNS APPLY
(GOV, LAW)
04/25/94 3971 (S) RULES TO CALENDAR 4/25/94
04/25/94 3973 (S) READ THE SECOND TIME
04/25/94 3973 (S) FIN CS ADOPTED UNAN CONSENT
04/25/94 3973 (S) ADVANCED TO THIRD READING UNAN
CONSENT
04/25/94 3973 (S) READ THE THIRD TIME
CSSB 333(FIN)
04/25/94 3974 (S) RETURN TO SECOND FOR AM 1 UNAN
CONSENT
04/25/94 3974 (S) AM NO 1 MOVED BY LITTLE
04/25/94 3974 (S) AM NO 1 ADOPTED UNAN CONSENT
04/25/94 3974 (S) AUTOMATICALLY IN THIRD READING
04/25/94 3974 (S) PASSED Y19 N- A1
04/25/94 3975 (S) EFFECTIVE DATE SAME AS PASSAGE
04/25/94 3986 (S) TRANSMITTED TO (H)
04/27/94 3745 (H) READ THE FIRST TIME/REFERRAL(S)
04/27/94 3745 (H) STATE AFFAIRS
05/03/94 (H) STA AT 09:00 AM CAPITOL 102
ACTION NARRATIVE
TAPE 94-52, SIDE A
Number 000
CHAIRMAN AL VEZEY called the meeting to order at 9:00 a.m.
Members present were REPRESENTATIVES G. DAVIS, SANDERS and
OLBERG. CHAIRMAN VEZEY postponed the meeting to 9:00 a.m.
due to a late session the previous night. A quorum was
present.
HCSCSSB 190(STA) - ENFORCEMENT OF SUPPORT ORDERS
CHAIRMAN VEZEY opened CSSB 190(FIN)am for discussion. He
recognized HCSCSSB 190(STA), version M, as a new committee
substitute and asked if there was a motion to adopt it for
the purpose of discussion.
REPRESENTATIVE HARLEY OLBERG so moved.
(REPRESENTATIVE B. DAVIS joined the meeting at 9:01 a.m.)
CHAIRMAN VEZEY adopted HCSCSSB 190(STA) for discussion. He
noted REPRESENTATIVE B. DAVIS's arrival. He pointed out the
differences in the committee substitute. On page 6,
beginning on line 11, wording was added that clarifies that
withholding orders are not obligatory upon employers in
perpetuity. Withholding orders are valid for three years,
which is concurrent with an employer's record keeping
requirements for taxes. He stated the rest of Section 11 is
a slight rewording of existing statute for clarification.
(REPRESENTATIVE KOTT joined the meeting at 9:03 a.m.)
CHAIRMAN VEZEY noted REPRESENTATIVE KOTT's arrival.
CHAIRMAN VEZEY pointed out the change under Section 30, page
14, line 7, whereby the words "or" and "intentionally" have
been added to qualify what would trigger a civil fine
against an employer for failure to honor an assignment of
wages.
CHAIRMAN VEZEY asked Phillip Petrie to join the table to
give a sectional summary. He noted most of the sections are
attempts to comply with federal law and some are inclusions
by the Senate for improving Alaska's Child Support
Enforcement Division laws.
(REPRESENTATIVE KOTT left the meeting at 9:05 a.m.)
Number 109
PHILLIP PETRIE, OPERATIONS MANAGER, CHILD SUPPORT
ENFORCEMENT DIVISION (CSED) in Anchorage, addressed HCSCSSB
190(STA). He supported the passage of the committee
substitute. He stated both the Department of Revenue and
CSED fully support the bill and the changes made in HCSCSSB
190(STA).
MR. PETRIE explained Section 1 adds to the duties and titles
of CSED considered under paragraph 9, provisions for Indian
health care for families, if it is available. Section 2
adds the same provision. Section 3 aligns the Alaska Court
System with federal law and requirements for the state plan.
Therefore, after January 1, 1995, the court system must
issue a child support order with an immediate income
withholding order in it. Section 4 addresses the court
issue of the order.
Number 135
CHAIRMAN VEZEY asked for a more detailed explanation of
Section 3.
MR. PETRIE referred to Section 3, page 3, beginning on line
16, "Except as provided in (m) of this section..." He
explained the current change to the federal statute gives
the court and the agency an opportunity to give an exception
to immediate income withholding under limited circumstances.
Section (m), found later in HCSCSSB 190(STA), addresses what
those circumstances are and how an exception for an
immediate income withholding is given.
MR. PETRIE stated there are two kinds of withholdings in a
child support case: 1) An immediate withholding, which
takes effect upon issuance of the order, or 2) an initiated
withholding, which starts as soon as the agency receives it
or as soon as the custodial parent serves it on an employer.
He noted an exception is given, whereby no withholding is
taking place, as long as they continue to pay in accordance
with the court order. If payments fall behind, or the
custodial parent goes on Aid for Families with Dependent
Children (AFDC) initiated income withholding is triggered.
The obligor must be notified and have an opportunity to
appeal before the withholding is initiated.
Number 181
REPRESENTATIVE JERRY SANDERS observed MR. PETRIE had been
referring to "her" receiving support, and questioned if any
men received support.
MR. PETRIE apologized for the reference. He clarified the
proper terms were "obligor" and "obligee." There is no
gender basis.
REPRESENTATIVE SANDERS inquired about the ratio between men
and women receiving child support.
MR. PETRIE answered of the cases, approximately 21 percent
are paid by females and 79 percent are paid by males.
CHAIRMAN VEZEY added changes in federal law are pushing
states toward a program where it is mandated that child
support payments flow through the state agency. It is not
mandated at this time.
REPRESENTATIVE SANDERS inquired what effect this would have
on the money flowing through. Would CSED take a portion of
the money. What is the purpose.
CHAIRMAN VEZEY answered the employer has an option of
charging $5 for each payment it deducts from a person's
paycheck. This would not apply to those making voluntary
payments. The obligor, under HCSCSSB 190(STA), could be
held obligated for all court costs related to the court
action. The state has to pay for the handling of the paper.
REPRESENTATIVE SANDERS clarified the money received by the
custodial parent does not decrease.
CHAIRMAN VEZEY affirmed REPRESENTATIVE SANDERS.
Number 228
MR. PETRIE continued his sectional summary. Section 4
requires the CSED to be sent a copy of the support order by
the court, as it will serve for accounting and records
maintenance. Section 5 sets up the provisions under which a
person can have an exception. He noted the federal
regulation states the state must set some standards for
initiating. Those standards were already in existing
statute and regulation; therefore, they were borrowed and
put in this particular statute. Section 6 explains appeal
processes and states income withholding under support does
not require immediate income withholdings not satisfied.
Under Section 7, "under this chapter" and "the relevant
provisions of" were added as housekeeping measures. Section
7 provides for those who are not applying for CSED services
or AFDC support, and for those who go strictly through the
court. He expressed CSED functions only for record keeping
and accounting for those people not under Title IV(d) of the
Social Securities Act. Serving orders will now be served
under first class mail, which the court prefers, rather than
certified mail. However, if an employer does not respond to
the notice by first class mail, a certified, registered
notice will be sent out 30 days later. Under Section 7,
existing statute which reads "14 days" is changed to read
"14 working days." This will give the employer more time to
respond. Currently, weekends or holidays are not counted.
He pointed out at the bottom of Section 7, the paragraph
added by the Senate which allows the employer to deduct $5
for every payment made to the CSED. Currently, there is no
provision for an employer to deduct any money from a
withholding to pay for their withholding.
Number 228
CHAIRMAN VEZEY interjected he believed current statute
allowed $1.
(REPRESENTATIVE OLBERG left the meeting at 9:15 a.m.)
MR. PETRIE clarified $1 was allowed only in the employer
reporting program, relating to new hires only, from three
years ago. The $5 which would be charged per HCSCSSB
190(FIN) is in line with federal statute and other states.
He noted Missouri allows the employer to charge $6 a month.
MR. PETRIE stated Section 8, 9 & 10 have a section to
chapter word change.
CHAIRMAN VEZEY noted he had explained Section 11 earlier.
MR. PETRIE continued Section 12, inserted by the Senate,
states any time CSED over collects they will return the
money immediately or pay interest to the obligor. He felt
this was fair even though it will cause the agency more
work. Section 13, section m, outlines the exceptions for
immediate income withholding for both the agency and the
court. The agency has restrictions as to when it can issue
exceptions; however, the court does not. He stated in
conversations with the federal government they specifically
said "that they were allowing a great deal more latitude for
those cases that are not enforced by the agency." The judge
can grant an exception based on his interpretation of what
he believes is fair.
CHAIRMAN VEZEY questioned if the court has considerably more
leeway in dealing with the federal government.
MR. PETRIE affirmed CHAIRMAN VEZEY. He referred to
paragraph 3, Section 13, inserted as a Senate amendment,
which is supposed to be considered as an exception for
disability payments the children are receiving directly. He
referred to section (n) which calculates the amount of child
support and credits the obligor for medical and dental
insurance, and educational payments. He explained this
provision is already contained in Alaska Rule of Civil
Procedure 90.3, however, he believed the intent was to put
it in statute.
MR. PETRIE explained Section 15 states, to the extent
allowed by federal law, CSED is to deduct $5.
CHAIRMAN VEZEY questioned what the Code of Federal
Regulations (CFR) allowed in this case.
MR. PETRIE answered the CFR allows fees to be charged to
either party or split equally. An amount is not specified.
He pointed out CSED is not allowed by CFR to deduct them
from a custodial parent's payment, if that parent has
assigned their rights to the state. In this case, the
custodial parent would be on some form of public assistance
(e.g., Medicaid, AFDC, etc.). CSED enforces on behalf of
the public assistance agency.
Number 378
CHAIRMAN VEZEY tried to recall the federal statute which he
believed limited the deduction to $25 a year.
MR. PETRIE corrected the limit was for a fee CSED may charge
to maintain and enforce a case. Currently, the state does
not opt to do this. He stated Alaska designated $1 in its
state plan. He explained $1 is paid out of general funds
for every case per year the CSED enforces.
CHAIRMAN VEZEY asked what percentage of cases the $5 would
apply to.
MR. PETRIE responded CSED is estimating, based on
information from the courts and vital statistics, of the
average 1,600 cases per year of court child support orders,
CSED is "picking up" 1,200. He explained 400-600 cases per
year will be categorized as not being enforced by the agency
and in the "non-IV(d)" program.
CHAIRMAN VEZEY inquired how many cases CSED does per year.
MR. PETRIE answered CSED has 24,000+ with orders and another
16,000 they are trying to get orders for.
Number 412
MR. PETRIE continued with reference to Section 16 in which
statute numbers were added. He explained Section 17 was a
rewrite of the "notice of liability" statute. Under the new
federal guidelines the state is supposed to have immediate
income withholding, as opposed to noticing. The notice is
given through the court proceedings or they receive a notice
of findings and financial responsibility from the agency.
He noted they have 30 days to appeal the notice by going to
informal conference, formal hearing and judicial appeal.
Due process rights are followed at the time the order is
issued. Section 17 has been rewritten to cover initiated
income withholding aspects. He pointed out the federal
government gives the individual 15 days to notify CSED, 15
days for CSED to hold a hearing, and 15 days for CSED to
issue the decision. He continued in Section 18, the
misstatement of "130" was corrected to read "120." Section
19 adds a formal hearing for clarification and mentions
posting bond of security due under financial responsibility,
if a person requests that formal hearing. He explained
currently, it is known that CSED is not establishing child
support as fast as the federal government requires. The
requirements, however, are constantly changing. CSED needs
to cut down the time of a formal hearing process from the
current 270 days, in regulation and statute, to
approximately 75 days in order to ever reach compliance.
Since 1986, he noted, there has been a requirement for
posting a bond in regulation and Alaska has never passed
that statute. The auditors from the 1992 audit strongly
suggested that requirement be put into statute in 1994 as
part of SB 190. He further stated the 1986 state plan
stated Alaska already had this provision.
Number 459
CHAIRMAN VEZEY clarified Section 19 brings Alaska into
compliance with a federal requirement of ten years ago.
MR. PETRIE answered the basic requirements dealing with SB
190 were passed in the federal Family Support Recovery Act
of 1988 (FSRA), with a final implementation date of January
1, 1994, for the court ordered income withholding. CSED has
been required to do income withholding since October 1,
1990, and has done so. Section 19 brings the court system
into compliance and is the last aspect of the FSRA. He said
the bonding provision was passed as amendments to the Social
Security Act of 1984 with an implementation date of 1985.
In 1986, the CSED director certified to the federal
government that Alaska had this bonding statute in place.
He expressed CSED will write regulations for implementation.
Public hearings will occur.
MR. PETRIE continued his sectional analysis with Section 20.
Section 20 is a "clean up of the number." Section 21 & 22
have small wording changes and statute number changes.
Section 23 deals with the service notice of findings of
financial responsibility and when CSED can insert a lien.
He noted ".062 changes" are added.
MR. PETRIE explained he added Section 24 to SB 190 through
consultation with Bruce Twomley, Chairman, Commercial
Fisheries Entry Commission. He gave an example of a
controversy CSED had with the Internal Revenue Service
regarding the seizure of moneys from commercial fishers with
CSED liens against them. CSED files every place an obligor
resides; however, the IRS interpretation of state statute
concluded that for the lien to be valid it had to be filed
wherever the individual fished. He expressed IRS's
complaints that no place in the statute did it state that a
lien filed at Commercial Fisheries Entry Commission had any
validity. Section 24 provides this validity and gives CSED
leverage against the IRS. He noted the bureaucracy to find
out where everyone fished would be cumbersome.
Number 514
MR. PETRIE continued with Section 25. Section 25 gets CSED
down to the 15 days required for the initiated income
withholding. He noted the 30 days included in the section
is for the notice of finding of financial responsibility
order. Section 26 is an amendment inserted by the Senate
which is in line with Civil Rule 90.3(d). He emphasized
Section 26 does no harm to the statute. Section 27 has
minor wording changes. Section 28 reasserts the authority
of an employer to deduct from other wages and salary owed to
the obligor. Section 29 is required language, by the
federal government, that states CSED will not take more than
what is required under the Consumer Credit Protection Act, a
sliding scale between 50-65 percent. CSED does not often
ask for more than 50 percent. There is a small wording
change on service of process, whereby CSED will serve
penalties by certified mail rather than by first class mail.
Section 31 is a provision requested by the court system and
inserted by the Senate.
CHAIRMAN VEZEY interjected it is therefore not required by
federal law.
MR. PETRIE answered it is not. Federal law requires if an
employer fails to respond to a withholding order that the
state have a mechanism to enforce it with penalties
established. He stated currently, when CSED uses the
enforcement process the money does not go to the child
support case. The money is a fine and penalty going to the
general fund. The employer does not pay the obligor's child
support if they fail to honor the withholding order. The
courts felt it was unfair if CSED was not enforcing the
withholding order, but an individual was through private
parties. They wanted an obligee, who had served the
withholding order themselves, could exercise the penalty
aspects, thereby making it payable to them, not the state.
He did not foresee anyone allowing or attempting to exercise
"both paragraphs" concurrently.
MR. PETRIE stated Section 32 was inserted by the Senate and
he believed it appeared to be doing something for the
Department of Corrections (DOC).
CHAIRMAN VEZEY clarified HCSCSSB 190(STA) jumped from Alaska
Statute Title 25 to Title 33. He noted the only change in
existing Title 33 is found on page 15, line 6, whereby "AS
25.27.062" is deleted and the whole chapter "AS 25.27" is
added.
MR. PETRIE expressed he had no objections to the change. He
stated CSED sends withholding orders to DOC for any prisoner
in custody, thereby receiving a portion of whatever the
facility pays them while incarcerated. Section 33 amends
Civil Rule 90.3(d), considering the Indian Health Service
provision. He noted the federal government does not want to
recognize medical services provided by the Indian Health
Service as "adequate medical insurance." CSED could not get
them to solidify their opinion, therefore a year-and-a-half
ago CSED made it policy to recognize the Indian Health
Service. He pointed out this was a specific concern of
Senator Al Adams. He emphasized military personnel are not
required to find another insurance policy if their
dependents have military medical care. He continued with
Section 34 which deletes two provisions in existing statute
that are in contravention with current withholding statutes
and the process to get a withholding order lifted. He
pointed out sections 2 & 5, Chapter 75, SLA 1991, regarding
the employer reporting program, are repealed. He strongly
urged the reporting program be left in statute even though
it is not a federal requirement. The employer must have 20+
employees and must be designated by CSED. He estimated 190
employers in the state are now designated.
CHAIRMAN VEZEY interjected the committee is familiar with
those sections.
Number 641
MR. PETRIE continued with Section 35, a transitional
provision, which the court subsystem wanted to insert to
give them the opportunity to "work in" all orders they had
issued between January 1 and when HCSCSSB 190(STA) becomes
effective. He urged the committee to pass HCSCSSB 190(STA)
from committee.
CHAIRMAN VEZEY called for an at ease at 9:42 a.m. so as the
committee could review their paperwork. He resumed the
meeting at 9:47 a.m.
REPRESENTATIVE G. DAVIS, in reading the letters from the
Federal Department of Health and Human Services, questioned
their threat of withholding certain funds from the state
should the state not come into compliance. What would the
fiscal ramifications be.
MR. PETRIE answered "in round numbers" $10 million of direct
funding from the federal government to CSED, essentially all
of their operating money and incentives and federal matching
funds will be forfeited. The federal government will also
take an appropriate penalty against an approximate $70
million a year in AFDC money. He noted the worst case would
be a loss of $80 million and the very least would be $10
million. The loss would be almost immediately because they
gave Alaska almost two years leeway to get this legislation
passed.
Number 667
REPRESENTATIVE BETTYE DAVIS stated she wanted to move
HCSCSSB 190(STA).
CHAIRMAN VEZEY responded he would like to hold on the
motion. He recognized two fiscal notes for HCSCSSB
190(STA). He prepared a new fiscal note for the CSED which
now read zero. The other zero fiscal note dated 4-11-94,
was from the Alaska Court System. He moved to adopt these
two accompanying fiscal notes.
CHAIRMAN VEZEY, hearing no objection, adopted the new fiscal
notes. He stated he wanted to hold HCSCSSB 190(STA) in
committee for further review.
REPRESENTATIVE B. DAVIS asked to find out if the committee
had a need to further review the bill. She expressed
concern that it pertained to a federal mandate.
CHAIRMAN VEZEY responded he wanted to hold the bill in
committee.
(REPRESENTATIVE B. DAVIS left the meeting at 9:52 a.m.)
CSSB 333(FIN)am - DISCLOSURE OF EXECUTIVE BRANCH CLOSE
ASSOCIATIONS
CHAIRMAN VEZEY opened CSSB 333, by request of Legislative
Budget & Audit, for discussion.
TAPE 94-52, SIDE B
Number 016
RANDY WELKER, LEGISLATIVE AUDITOR, addressed CSSB 333. He
began CSSB 333 was introduced as a result of an audit
Legislative Budget & Audit (LB&A) conducted on the Division
of Fish & Wildlife (F&W), Department of Public Safety. He
noted a couple years ago the legislature passed legislation,
as a result of a prior audit, that prohibited F&W protection
officers from being employed also as assistant guides. LB&A
felt this was a direct conflict of interest and the
legislature agreed.
MR. WELKER explained CSSB 333 is focused on the aspect of
close economic association between people who regulate
industries and have the ability to exercise discretion, over
people whom they may have economic associations with. He
commented in the F&W audit they found officers, or spouses
of officers, who held commercial fishing licenses or owned
commercial fishing vessels. They found indications of
significant property transactions between F&W protection
officers and the industry they regulate. Presently, there
is nothing in law requiring those associations to be
disclosed to anyone.
MR. WELKER emphasized this problem does not only relate to
F&W. He gave a hypothetical example, whereby there is
nothing in law that requires an alcoholic beverage control
board inspector to inform anyone if he/she has an interest
in a liquor license. The intent of CSSB 333, he stated, is
to put a disclosure requirement in law, in the executive
branch ethics act, similar to that which exists in the
legislative ethics act. They are required to refrain from
taking a withholding action that may be questioned because
of their economic association. CSSB 333 further provides
the supervisor "can or should" either reassign functions, or
direct the divestiture of the interest if it is in the best
interest of the state.
MR. WELKER commented the other section of CSSB 333 is an
expansion of the nepotism prohibition in statute.
Currently, the only relationship prohibited by state law is
an employee cannot be related to the commissioner of the
department in which they work. LB&A does not believe it is
appropriate for there to be any supervisor/subordinate
relationships in state employment. The amendment prohibits
relationships of a supervisor position for anyone in the
employee's immediate family. This problem was noticed by
the LB&A in an audit of the Alaska Psychiatric Institute
where they found a supervisor had provided for the promotion
and salary advancement of a member in their immediate
family. The addition of this section, he believed, would
improve public perception and remove any possible direct
conflicts that might exist.
(REPRESENTATIVE KOTT entered the meeting at 9:55 a.m.)
CHAIRMAN VEZEY observed the current nepotism statute has
been in place without amendment since 1959. He believed
regulations also existed within agencies regarding nepotism.
MR. WELKER replied there are some nepotism regulations in
place, however, he was not sure they were solidly based in
statute. He felt the reading of the nepotism statute was
very clear as to what it covered.
CHAIRMAN VEZEY interjected it read "department or agency,"
therefore the definition was a little broader.
MR. WELKER further stated if there are any regulations that
try to prohibit lower level relationships they "may be
suspect."
CHAIRMAN VEZEY replied they may be suspect in terms of their
impact of law, but they are policy. He noted the problem of
nepotism arises particularly in rural areas. Hiring of
local people is often limited because of nepotism
restrictions.
MR. WELKER clarified the intent of LB&A is to place it
permanently is statute so it applies equally to all
departments and agencies.
Number 164
CHAIRMAN VEZEY commented CSSB 333 may be wise for Anchorage
and Fairbanks, but he questioned the impact on rural areas
where the populations are significantly smaller. He
inquired to what degree CSSB 333 went.
MR. WELKER answered spouse, parent, children, grandparent,
and regular members of the person's household.
Number 190
CHAIRMAN VEZEY stated he did not intend to move CSSB 333 at
this meeting, however, it was an interesting subject. He
was surprised to see the nepotism statute had not been
amended since 1959 considering the changes in the ethics
which took place in the 1970s and 1980s. CHAIRMAN VEZEY
held CSSB 333 in committee.
ADJOURNMENT
CHAIRMAN VEZEY, having no more business before the
committee, adjourned the meeting at 10:00 a.m.
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