Legislature(2003 - 2004)
04/03/2003 08:03 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
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
April 3, 2003
8:03 a.m.
MEMBERS PRESENT
Representative Bruce Weyhrauch, Chair
Representative Jim Holm, Vice Chair
Representative Nancy Dahlstrom
Representative Bob Lynn
Representative Paul Seaton
Representative Ethan Berkowitz
Representative Max Gruenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 205
"An Act relating to service in the peace corps as an allowable
absence from the state for purposes of eligibility for permanent
fund dividends and to the period for filing an application for a
permanent fund dividend; authorizing the Department of Revenue
to issue administrative orders imposing sanctions for certain
misrepresentations or other actions concerning eligibility for a
permanent fund dividend and providing for administrative appeal
of those orders; and providing for an effective date."
- MOVED HB 205 OUT OF COMMITTEE
HOUSE BILL NO. 161
"An Act allowing expenses of the correctional industries program
that may be financed from the correctional industries fund to
include the salaries and benefits of state employees."
- HEARD AND HELD
HOUSE BILL NO. 183
"An Act relating to retirement contributions and benefits under
the public employees' retirement system of certain juvenile
detention employees and juvenile correctional institution
employees."
- MOVED HB 183 OUT OF COMMITTEE
HOUSE BILL NO. 93
"An Act relating to boating safety; repealing secs. 3, 5, 7, 9,
11, 14, 16, 18, 20, 23, 26, 27, and 30, ch. 28, SLA 2000; and
providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 215
"An Act repealing statutes that relate to art works in public
buildings and facilities and that require a set percentage of
construction costs to be spent on art."
- HEARD AND HELD
HOUSE BILL NO. 202
"An Act relating to false information or report."
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 50
"An Act relating to the size of national flag to be displayed at
polling places."
- BILL HEARING POSTPONED
HOUSE BILL NO. 60
"An Act relating to construction of a legislative hall."
- BILL HEARING POSTPONED
PREVIOUS ACTION
BILL: HB 205
SHORT TITLE:PFD: PEACE CORPS VOLUNTEERS & MISC
SPONSOR(S): REPRESENTATIVE(S)MCGUIRE
Jrn-Date Jrn-Page Action
03/19/03 0586 (H) READ THE FIRST TIME -
REFERRALS
03/19/03 0586 (H) STA
04/03/03 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 161
SHORT TITLE:CORRECTIONAL INDUSTRIES PROGRAM EXPENSES
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
03/05/03 0431 (H) READ THE FIRST TIME -
REFERRALS
03/05/03 0431 (H) STA, FIN
03/05/03 0432 (H) FN1: (COR)
03/05/03 0432 (H) GOVERNOR'S TRANSMITTAL LETTER
03/05/03 0432 (H) REFERRED TO STATE AFFAIRS
03/11/03 (H) STA AT 8:00 AM CAPITOL 102
03/11/03 (H) Scheduled But Not Heard
04/01/03 (H) STA AT 8:00 AM CAPITOL 102
04/01/03 (H) Heard & Held
MINUTE(STA)
04/03/03 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 183
SHORT TITLE:PERS BENEFITS FOR JUV INSTIT EMPLOYEES
SPONSOR(S): REPRESENTATIVE(S)WEYHRAUCH
Jrn-Date Jrn-Page Action
03/10/03 0491 (H) READ THE FIRST TIME -
REFERRALS
03/10/03 0491 (H) STA, FIN
04/01/03 (H) STA AT 8:00 AM CAPITOL 102
04/01/03 (H) Heard & Held
MINUTE(STA)
04/03/03 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 93
SHORT TITLE:REPEAL BOATING SAFETY SUNSET
SPONSOR(S): REPRESENTATIVE(S)WEYHRAUCH
Jrn-Date Jrn-Page Action
02/12/03 0186 (H) READ THE FIRST TIME -
REFERRALS
02/12/03 0186 (H) TRA, STA
02/18/03 (H) TRA AT 1:30 PM CAPITOL 17
02/18/03 (H) <Bill Hearing Postponed to
2/25/03> -- Meeting Canceled
02/25/03 (H) TRA AT 1:30 PM CAPITOL 17
02/25/03 (H) Heard & Held
MINUTE(TRA)
03/27/03 (H) TRA AT 1:30 PM CAPITOL 17
03/27/03 (H) Scheduled But Not Heard
04/01/03 (H) TRA AT 1:30 PM CAPITOL 17
04/01/03 (H) Moved CSHB 93(TRA) Out of
Committee
MINUTE(TRA)
04/02/03 0730 (H) TRA RPT CS(TRA) NT 1DP 2DNP
2NR
04/02/03 0730 (H) DP: HOLM; DNP: KOHRING,
MASEK;
04/02/03 0730 (H) NR: OGG, FATE
04/02/03 0730 (H) FN1: ZERO(DNR)
04/02/03 0730 (H) REFERRED TO STATE AFFAIRS
04/02/03 0750 (H) COSPONSOR(S): OGG
04/03/03 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 215
SHORT TITLE:REPEAL ONE PERCENT FOR ART
SPONSOR(S): REPRESENTATIVE(S)STOLTZE
Jrn-Date Jrn-Page Action
03/26/03 0640 (H) READ THE FIRST TIME -
REFERRALS
03/26/03 0640 (H) STA, FIN
03/26/03 0640 (H) REFERRED TO STATE AFFAIRS
04/03/03 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
REPRESENTATIVE LESIL McGUIRE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor of HB 205.
LARRY PERSILY, Deputy Commissioner
Office of the Commissioner
Department of Revenue
Juneau, Alaska
POSITION STATEMENT: Answered questions from the committee
during the hearing on HB 205.
JERRY BURNETT, Director
Administrative Services
Department of Corrections (DOC)
Juneau, Alaska
POSITION STATEMENT: Commented on the proposed committee
substitute, Version D, during the hearing on HB 161.
LINDA SYLVESTER, Staff
to Representative Bruce Weyhrauch
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 93 on behalf of Representative
Weyhrauch, sponsor.
MIKE FOLKERTS, Recreational Boating Safety Specialist
District 17
United States Coast Guard
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 93.
CAPTAIN JOHN SCHOTT, Chief of Operations
District 17
United States Coast Guard
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of the United States
Coast Guard in support of the State of Alaska's Safe Boating
program, during the hearing on HB 93.
MARTHA MOORE, Injury Surveillance and Prevention Program Manager
Community Health & Emergency Medical Services
Division of Public Health
Department of Health & Social Services (DHSS)
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of DHSS in support of
HB 93.
CHARLES R. HOSACK, Deputy Director
Director's Office
Division of Motor Vehicles
Department of Administration (DOA)
POSITION STATEMENT: Testified on behalf of DOA in support of
continuing the boating registration program, during the hearing
on HB 93.
REPRESENTATIVE BILL STOLTZE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor of HB 215.
BARBARA BITNEY, Staff
to Representative Bill Stoltze
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions regarding HB 215.
CHARLOTTE FOX, Executive Director
Alaska State Council on the Arts (ASCA)
Anchorage, Alaska
POSITION STATEMENT: Testified regarding 1 percent for art and
art in public places programs during the hearing on HB 215.
SYBIL DAVIS, Executive Director
Juneau Arts & Humanities Council (JAHC)
Juneau, Alaska
POSITION STATEMENT: Testified regarding the effects that HB 215
would have on an [art-related] program in schools and to
emphasize the importance of an esthetic environment.
JUNE ROGERS, Director
Fairbanks Art Association (FAA)
Fairbanks, Alaska
POSITION STATEMENT: Testified regarding the importance of [art-
related] programs that address youth and the health of
communities, during the hearing on HB 215.
KENNETH DeROUX
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of himself, regarding
the issues of the cost of 1 percent for art and quality of life,
during the hearing on HB 215.
JOCELYN YOUNG, Curator
1 percent for art program
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of herself, regarding
some of the history of 1 percent for art and its benefit to
artists, and explaining "1 percent" as it relates to
construction costs, during the hearing on HB 215.
DUKE RUSSELL
Anchorage, Alaska
POSITION STATEMENT: Testified regarding the benefits of 1
percent for art during the hearing on HB 215.
ACTION NARRATIVE
TAPE 03-36, SIDE A
Number 0001
CHAIR BRUCE WEYHRAUCH called the House State Affairs Standing
Committee meeting to order at 8:03 a.m. Representatives Holm,
Seaton, Lynn, and Weyhrauch were present at the call to order.
Representatives Dahlstrom, Berkowitz, and Gruenberg arrived as
the meeting was in progress.
[Due to technical difficulty, the first few minutes of the
meeting were not taped; during that time, the chair discussed
the calendar.]
HB 205-PFD: PEACE CORPS VOLUNTEERS & MISC
CHAIR WEYHRAUCH announced that the first order of business was
HOUSE BILL NO. 205, "An Act relating to service in the peace
corps as an allowable absence from the state for purposes of
eligibility for permanent fund dividends and to the period for
filing an application for a permanent fund dividend; authorizing
the Department of Revenue to issue administrative orders
imposing sanctions for certain misrepresentations or other
actions concerning eligibility for a permanent fund dividend and
providing for administrative appeal of those orders; and
providing for an effective date."
Number 0038
REPRESENTATIVE LESIL McGUIRE, Alaska State Legislature, sponsor
of HB 205, told the committee that "the exact form" of the bill
was heard [in 2002] and passed the House unanimously, but did
not pass the Senate. She stated that in 1982, when the first
permanent fund dividend (PFD) was given out, the legislature
"took up a list of exemptions that they would allow for
permanent fund dividend applications" or allowable absences.
The Peace Corp was one of those allowable absences, she noted.
REPRESENTATIVE McGUIRE clarified that the bill was passed in
1983, but was retroactive to 1982. For 16 years, she said,
Peace Corp volunteers enjoyed an allowable absence to go work
oversees to help stabilize nations. She noted that, in 1998, in
"a mysterious eleventh-hour political shuffle over in the
Senate," Peace Corp volunteers were removed [from the list of
exemptions]. Representative McGuire said that HB 205 would put
Peace Corp volunteers back on the exemption list. She
emphasized that it would not be a new exemption, but a
restoration of "a very good, allowable absence."
REPRESENTATIVE McGUIRE noted that there currently are
approximately 26 Peace Corp volunteers in Alaska who would
qualify [for the PFD]. [If those 26 volunteers are paid a
dividend], the difference to each dividend [issued to every
Alaskan who receives one] would be 4-8 cents.
REPRESENTATIVE McGUIRE stated that she thinks the Peace Corp
volunteer program is one that works hand in hand with the
military service. She noted the current situation in Iraq and
said, "We all have an incredibly high regard for our military
and what they do for us." She posited that the Peace Corp is a
different way to serve the country; it's a way to proactively
help countries build water and sewer systems, and provide food
sources, for example. She added that it is a way to help
stabilize nations so that groups like the Taliban [don't use
food and water, for example, as a means of controlling people].
Representative McGuire referred to Maslow's [hierarchy of needs]
and said that people can't get to "higher degrees of thinking"
until they have the basics of shelter, food, and water, for
example.
Number 0387
REPRESENTATIVE McGUIRE told the committee that the men and women
who volunteer for the Peace Corp do so for a small stipend of
approximately $300 a month and for a period of two years. She
said that one of her constituents who was a Peace Corp volunteer
said that she would have been able to come home for Christmas to
see her family [if she had received a PFD]. She said that the
application process to join the Peace Corp is involved. People
don't enter into [the Peace Corp] lightly. She noted that the
only outstanding debt allowed a Peace Corp volunteer is a
student loan. She stated that people who enter into the program
are making a huge commitment to the nation and to Alaska.
Number 0496
REPRESENTATIVE McGUIRE, referring to another aspect of the bill,
said that Larry Persily, from the Department of Revenue,
informed her that there is a great amount of fraud [in
applications] occurring in the PFD program. She explained that,
in almost every circumstance where fraud is suspected and a
sanction is brought about, a trial is required. When the
question is asked whether it is worth the cost of a trial to
pursue [a fraudulent application], the answer is no in every
case, she stated. The PFD, at its highest [is still much lower
than] the minimum cost of $10,000 for a jury trial.
REPRESENTATIVE McGUIRE referred to page 3, Section 4, of the
bill, which read as follows:
* Sec.4. AS 43.23.035(c) is amended to read:
(c) In addition to any criminal penalties
imposed by state law, if the department finds that an
[AN] individual [WHO], in claiming a permanent fund
dividend, or an individual [WHO], in certifying
another person's eligibility, willfully misrepresents,
exercises gross negligence with respect to, or
recklessly disregards a material fact pertaining to
eligibility, the department may issue an order against
the individual for the
(1) forfeiture of [FORFEITS] the dividend;
(2) imposition of [, IS SUBJECT TO] a civil
fine of up to $3,000; [$5,000,] and
(3) loss of [LOSES] eligibility to receive
the next five dividends following the forfeited
dividend [DIVIDENDS. THE COMMISSIONER MAY COMMENCE
PROCEEDINGS IN COURT TO ENFORCE THIS SUBSECTION].
REPRESENTATIVE McGUIRE explained that the section allows for
forfeiture of the dividend and an imposition of a civil fine,
which would be lowered to $3,000. She said that the reason the
amount is being lowered is "so we don't have to allow for a jury
trial." She explained that "once you start getting up above
that $5,000 threshold, plus your dividend, ... you're now
getting into an area where a person would be entitled to a jury
trial." She mentioned [lines 25-26], regarding the loss of
eligibility to receive the next five dividends.
REPRESENTATIVE McGUIRE, referring again to Section 4, said that
"willfully misrepresents, exercises gross negligence with
respect to, or recklessly disregards a material fact pertaining
to, eligibility" means serious misrepresentation; it does not
mean someone who forgets that one trip taken, for example.
Number 0715
REPRESENTATIVE McGUIRE mentioned estimated recovery figures.
She noted, "Last year, it was around $100,000 to $200,000, but
it may even be higher." She said that it is unfortunate, but
when there is "free money out there," there will be people who
abuse [the dividend program].
REPRESENTATIVE McGUIRE, in conclusion, said she thinks [HB 205]
is a good statement for the Twenty Third Legislature to make to
all the young men and women who would commit two years of their
lives to live oversees, especially in a time when to do so is
dangerous and when the future is uncertain. She said she
conducted a survey last year to find out where former [Alaskan]
Peace Corp volunteers are and what they are doing. She said
that some are coming back to Alaska's school districts and
[teaching about] life overseas, for example. Often the skills
learned overseas are brought back to the state and "transferred"
to the young people of Alaska.
REPRESENTATIVE McGUIRE noted that President Bush continues to
support the Peace Corp and deemed it important enough to mention
in his inaugural address.
Number 0882
REPRESENTATIVE DAHLSTROM asked Representative McGuire for her
thoughts regarding those people who leave the state to volunteer
on religious missions.
REPRESENTATIVE McGUIRE responded that if Representative
Dahlstrom were to introduce a bill "of that nature," she would
be happy to co-sponsor it; however, she wants to focus HB 205 on
the one original exemption that was already allowed, to avoid
"the Christmas tree effect." She stated that the Peace Corp
program is a federally recognized program with definitive
boundaries and applications, whereas missionary work is harder
to define and its organization varies from group to group. The
challenge would be "trying to put a definition on that program,
so that you don't have everybody claiming it."
Number 1031
REPRESENTATIVE SEATON asked if the bill is identical in all
aspects to the form it was in the previous year.
REPRESENTATIVE McGUIRE answered yes.
Number 1065
REPRESENTATIVE GRUENBERG referred to page 3, lines 23-24. He
said that those lines actually take the bill a step backwards.
He suggested that what the sponsor intended to do was to allow
the [Department of Revenue] either to administratively issue an
order up to the maximum of $3,000, or to allow the department to
go into court to seek a higher amount. Under the current
language of the bill, only the former choice would be possible.
He noted that, in some cases, people have perpetrated frauds on
the PFDs that are really large, and only allowing a $3,000 fine
won't be as meaningful a punishment as if the department was
allowed to seek the higher amount in court. He gave an example
of a family who has perpetrated fraud and has gotten thousands
of dollars from the state. He said that if [the department]
does "go the court route," [the sponsor] may want to consider
letting [the department] seek a higher civil fine.
Number 1216
REPRESENTATIVE McGUIRE told Representative Gruenberg that Mr.
Persily drafted the language of the bill. She stated her
understanding that it doesn't take away [the department's]
ability "to do that," but is "in addition to any criminal
penalties imposed by state law." She recommended deferring any
additional comments regarding that issue to Mr. Persily.
REPRESENTATIVE GRUENBERG added, "And clearly they could still go
criminally. I'm not -- that's totally aside."
Number 1278
CHAIR WEYHRAUCH said he had heard about a problem where people
are receiving the PFD year after year without even being [in the
state]. He said he thinks that there has to be "some sort of a
signal where if you're going to get a PFD, you have to be in the
state." He said that [the state] does not want to be exporting
[the PFD]. He noted that the University [of Alaska] wants to
attract local people, but students are given a dividend "for
going out of state." He asked Representative McGuire for her
philosophical views regarding continually granting numerous
exceptions to so many people for all different reasons.
REPRESENTATIVE McGUIRE said she had anticipated the argument
that Chair Weyhrauch made. She said that she thinks it is
appropriate to constantly analyze what is being done with [the
PFD] program, and whether or not [the legislature] is providing
enough incentive for people to live, work, and attend school in
Alaska. That is why, she explained, she felt compelled to put
the penalties for misrepresentation in HB 205, to give the
department more tools [to use]. She referred again to the
original policy in 1983, which allowed the PFD exemption to
Peace Corp volunteers. She said, "If you really are an Alaskan,
[who] chooses to live and work in the state, but wants to take
advantage of an opportunity that will benefit your country and
your state - I think those are the kinds of exemptions that we
really ought to be allowing."
REPRESENTATIVE McGUIRE noted that an estimated 83 percent of
[Peace Corp volunteers] have come back to live and work in
Alaska. She said that there may be a broader philosophical
question to analyze later, but she doesn't think it is
appropriate to single out Peace Corp as "the place to start."
Number 1500
CHAIR WEYHRAUCH agreed and hinted that he may be introducing a
bill to address [that broader philosophical] issue.
Number 1544
REPRESENTATIVE BERKOWITZ asked if [the Department of Revenue]
tracks the number of people who are receiving out-of-state PFDs,
and for how many years each of those people have been receiving
a PFD.
LARRY PERSILY, Deputy Commissioner, Office of the Commissioner,
Department of Revenue, answered the previously stated questions
of the committee as follows: First, he said that HB 205 does
not change state criminal statutes. He indicated that [the
department] could still prosecute someone for fraud, under
criminal statutes. He explained that [the bill] would just
change the dividend statute to allow [the department] the
option, within dividend laws, to penalize someone for fraud,
administratively.
REPRESENTATIVE GRUENBERG referred to the current language on
page 3, lines 16-24, that read "[$5,000]". He said that the way
he interprets that, legally, is that the department can file a
civil case against the person. He said he thinks that is an
extremely important option, whether or not it is exercised. He
continued as follows:
In a criminal case, you have to prove the case beyond
a reasonable doubt, and all sorts of criminal rights
attach. In this case, you could simply go into small
claims court and go after the person, with a
preponderance of the evidence, and get up to $5,000.
[A] simple procedure, relatively. And legally, under
the current language, you have that option.
REPRESENTATIVE GRUENBERG stated that he would hesitate to take
away [the department's] right to pursue the other option. He
suggested one way to retain that option would be to keep the
original language with the new language, and to add a
subjunctive "or".
MR. PERSILY responded that [the department] worked on [the bill]
with the attorney general's office and the collective wisdom was
to keep the value of the fine, plus the dividend, under $5,000,
so [the department] could deal with it administratively. If it
was a serious case involving a lot of money, he said, [the
department] would still have the option [of a criminal trial].
REPRESENTATIVE GRUENBERG asked, "So, you don't want the option
of being able to go civilly for a higher amount in to court."
MR. PERSILY answered as follows:
We don't use it now. I guess the feeling is, looking
at a more efficient government, ... we can keep the
fines a little smaller, do it administratively, and
when we get a really bad case, we can go criminal with
it.
Number 1785
CHAIR WEYHRAUCH asked if it wouldn't make sense, in Section 4,
[line 22], to have a "death penalty for dividends" if there is
fraud or criminal intent to deceive.
REPRESENTATIVE McGUIRE referred to [page 3], line 25, regarding
the loss of eligibility to receive the next five dividends. She
said that there was discussion regarding whether to make it five
or ten years. She said, "Again, it came back to the attorney
general's opinion that we had to keep the overall punitive
impact low enough that you could do it administratively.
CHAIR WEYHRAUCH asked, "What's the threshold on this?"
MR. PERSILY explained that [the department] was trying to
balance what's reasonable, versus what could be considered
excessively punitive, and it thought that five years would be
best. He added that the legislature could make it a lifetime
ban, if it wanted to.
Number 1900
CHAIR WEYHRAUCH asked what the legal reason would be for not
including the forfeiture of the dividend or all future dividends
- to have the discretion of having the dividend death penalty.
Number 1920
REPRESENTATIVE McGUIRE mentioned a case from "our" supreme court
that seemed to indicate that when sanctions are imposed that are
serious enough to rise to the level of a criminal sanction, when
they do so, [the person involved] is entitled to a jury trial.
She added, "And that's the problem." She said that weeks were
spent trying for the right language in the bill and someone
could still challenge it; however, she said that she thinks,
"We're sticking within a reasonable realm here, for an
administrative action."
CHAIR WEYHRAUCH noted that "the statute says in the amendment"
that, in addition to any criminal penalties enforced by state
law, the legislature could impose a dividend death penalty. It
could allow that discretion, he added. He opined, "If somebody
wants to steal the people's dividend, then maybe they shouldn't
receive it again."
REPRESENTATIVE McGUIRE noted that [Section 4, subsection (c)]
only deals with those actions that are taken administratively,
within the dividend program. She added, "Criminally, I don't
know that that couldn't be imposed."
MR. PERSILY offered to speak with the attorney general's office
and report back to the committee.
Number 1954
REPRESENTATIVE BERKOWITZ suggested making the penalty a loss of
five dividends, rather than a loss of five [consecutive] years
of dividends, because he said there might be a year when there
is no dividend. In response to Representative Weyhrauch, he
clarified that five dividends could extend for a period far in
excess of five years.
Number 2025
REPRESENTATIVE GRUENBERG noted that the aforementioned case to
which Representative McGuire referred is Baker v. Fairbanks, 471
P.2d 386 (Alaska 1970). He continued as follows:
It says, "If you're faced with imprisonment, a
substantial fine, or loss of a valuable license,
you're entitled to a jury trial." That was the
seminal case and there have been some cases since
that.
REPRESENTATIVE GRUENBERG said he thought there could be a civil
penalty, with only a preponderance of the evidence and, perhaps,
without a jury trial, although a jury trial would be warranted
for a penalty forfeiture of the dividend forever. He said he
thought that would be possible, because he doesn't believe that
the dividend is a right; it's an entitlement. In a civil
context, he added, the constitutional protections required are
different. Regarding a civil penalty, he stated that it would
be much easier, with the preponderance of the evidence, to make
the case.
Number 2107
MR. PERSILY told the committee that he has been around for six
years and it was before that that anyone was prosecuted
criminally. He suggested that the committee consider that it
might make more sense to err on the side of caution, adopt the
bill, give the dividend division a few years to see how the
administrative penalties work and how the district attorney
responds to any criminal cases which might be found, and
reconsider the legislation in a few years. He added, "Because
we have no experience to report to you on fraud."
Number 2152
CHAIR WEYHRAUCH referred to Section 2, on page 3. He said that
that section "amends to incorporate the Peace Corp provision."
He added that it also states that [the Peace Corp volunteers]
have to have been a resident of the state for at least six
consecutive months. He asked what the policy problem would be
if that were increased to 12 consecutive months.
REPRESENTATIVE McGUIRE responded that she doesn't have [a
problem with that].
MR. PERSILY offered the following example:
If you moved here and established residency on
December 31, 2001, then 2002 is going to be your
eligibility year for the 2003 dividend. So, if you
established residency in ... December 2001, you have
to then have remained in Alaska for at least six
months in 2002, before you leave for military, or for
school, to retain your eligibility. You have to be
here for at least six months before you leave on an
allowable absence. If you're here, you've got to be
here the whole year, but you can't leave on an
allowable absence, before you've been here six months
in that year.
MR. PERSILY, in response to follow-up questions by
Representative Weyhrauch, stated the following:
The "six-month" only applies to the dividend and only
applies to that first year of eligibility. For
example, if a new family moves here in the fall of
2001, ... buys a home, registers to vote, [and] does
everything to establish residency, ... then 2002 is
their eligibility year, [and] they'll get their first
check in 2003.
They have a son who transferred here as a senior,
graduated high school in May of 2002, and went to
college. That six months allows that high school
senior to start qualifying for the dividend, because
he or she left on an allowable absence. If you didn't
have that six-month ... rule, ... that college student
would never get a dividend, because he or she would be
gone all the time, until he or she returned.
So, it applies only to people who then leave on an
allowable absence, where they're still considered a
resident, they're just not physically residing here.
Number 2291
REPRESENTATIVE GRUENBERG mentioned that there is a case
regarding divorce that states that a person can become a
resident if he/she touches down with the intent to remain. He
asked if the term resident, "in this body of law," means
"physically present as a resident," or can people come into the
state, touch down, claim residency, and then "go off" and
continue to claim residency?
MR. PERSILY answered no. He explained that people have to
physically be [in the State of Alaska], not only to establish
residency the day they touch down, but also for at least half
the next calendar year if they leave on an allowable absence and
retain ties to the state - for example, their families still
live in the state, or they have belongings in storage.
MR. PERSILY, in regard to a previously stated question by
Representative Berkowitz, said that the department includes in
its annual report how many of those people who apply for the PFD
are claiming an allowable absence. He listed the following
people claiming exemptions on the 2002 dividend applications:
50 members of congressional delegation or staff, 200 who left to
settle the estate of a deceased direct relative, 300 who were
out caring for a direct relative with a life-threatening
illness, 500 caring for a terminally ill relative, 700 who
received continuous medical treatment, 6,000 military service
personnel, almost 9,000 full-time college university students,
and approximately 10,000 who were accompanying a resident who
was eligible, such as the spouse or children of military
personnel. In response to Representative Berkowitz, Mr. Persily
estimated that the total was approximately 26,000, or 4 percent
of the state's population.
CHAIR WEYHRAUCH commented that he thinks this is a "huge
symbolic problem."
MR. PERSILY stated that [the department's] concern is that the
policy is clearly defined and easily administered. For example,
he noted that according to statute, it is an allowable absence
for a person to attend [an out-of-state] college/university
full-time. Fifteen years ago, the legislature defined "full-
time" as attending a college or university that is accredited.
He noted that there are several religious universities in the
country that are not accredited, by choice. He said [the
department] looked for a means to change that by regulation,
which he added, "I just signed today, in fact." He noted that
the change would include a college or university that is
eligible for certain federal student loan programs.
MR. PERSILY, in response to [Representative Dahlstrom's]
previously stated question regarding people on religious
missions, recommended that, if the legislature wants to include
those people, it does so in such a way that [the department]
knows "what it means" and can administer it. The Peace Corp is
clearly definable, he added.
Number 2475
REPRESENTATIVE BERKOWITZ stated that there is no "catch-all"
exception that allows the division to use discretion as to
whether people [qualify for the dividend under an allowable
absence]. He emphasized that that is problematic. Regarding
the 26,000 people who are Outside, he said that he would be
curious to know what the average period of absence is, within
each of the [aforementioned] categories.
MR. PERSILY clarified that the people [he previously listed] are
those who claim an allowable absence during the year; it doesn't
mean that they resided Outside the entire year. The number of
payments actually mailed out of state "last year," he said, was
approximately 16,000, or 2 percent.
REPRESENTATIVE BERKOWITZ asked if [the department] has a way of
tracking how long those 16,000 people have been gone.
MR. PERSILY replied that he does not know, but can ask the
people in Data Processing. He indicated limiting factors in the
law. For example, no matter what reason someone is out of the
state, he/she must return for at least 72 consecutive hours
every other year. Before that law, he said that people would
book a flight into the state, stay long enough to wash their
hands in the Anchorage International Airport, and get back on
another plane.
REPRESENTATIVE McGUIRE indicated her willingness to work on the
issue in another bill.
REPRESENTATIVE GRUENBERG stated that he dealt with the issue in
past legislative sessions, and it is called the "touch and go"
provision.
Number 2580
MR. PERSILY noted that the 72-hour rule is under AS
43.23.005(a)(4). He said that [the department] is allowed to
waive that statute in one exception found in (f) in that
statute, which is in a time of national military emergency.
[That exception] was invoked within the last month, for the
2002, 2003, and 2004 dividends, he revealed, because some
military personnel and their families will not be able to get
back on the 72-hour rule.
MR. PERSILY noted that other than the 72-hour requirement every
two years, there's a presumption in statute whereby if people
are gone more than 5 years, have not maintained sufficient ties,
and have not returned for at least 30 days during that 5-year
period, they're out. He added, "And then there's a hard-and-
fast 10 years; no matter why you're out, no matter how long you
come back for - how frequently - you're out after ten."
Number 2637
REPRESENTATIVE BERKOWITZ opined that if people are "just sort of
disappearing off the end of a five-year or ten-year period," and
they've been collecting dividends all that time, they are in
violation of the "intent to remain component," and [the
legislature] ought to be able to "recover something from them."
MR. PERSILY, prefacing that what he was about to say would be
more of a political issue for the legislature, stated that the
vast majority of the people that [the department] observes
"running into problems on the five-year rule" are in the
military. He said that [the department] receives reams of
letters from [military personnel] explaining why they cannot
return or why "there is a problem." He continued as follows:
I'll be honest, some of the letters I find bordering a
little bit on offensive, because they accuse the
dividend division of discriminating against the
military, not understanding the situation, and being
un-American, and that's not the fact. We're trying to
enforce the laws and the rules, and we don't pick on
anyone in particular.
But, the presumption is, if you're not back 30 days in
5 years, you obviously must not have an intent to
return, unless you can show why: serious medical
problems, or, if you were stationed somewhere that you
were not allowed leave time. But that 5-year rule is
very controversial within the ranks of military
applicants, so I guess I'm just warning you.
Number 2700
REPRESENTATIVE SEATON asked if there is a requirement that
military personnel [claiming Alaska residency] select Alaska "on
their transfer," as their number one priority for their next
assignment.
MR. PERSILY answered that they must have Alaska as their
official residence on their leave and earnings statement and
list Alaska as their first choice [for transfer]; however, in
many cases, the career options are not [available in Alaska].
He said, "So then what they say is they plan to retire here, and
they search for property in Talkeetna." He stated, "Those
become statements where we're trying to judge someone's intent,
which is difficult."
Number 2739
REPRESENTATIVE HOLM moved to report HB 205 out of committee with
individual recommendations and the accompanying fiscal note.
There being no objection, HB 205 was reported out of the House
State Affairs Standing Committee.
HB 161-CORRECTIONAL INDUSTRIES PROGRAM EXPENSES
Number 2751
CHAIR WEYHRAUCH announced that the next order of business was
HOUSE BILL NO. 161, "An Act allowing expenses of the
correctional industries program that may be financed from the
correctional industries fund to include the salaries and
benefits of state employees."
[In committee packets was a new proposed committee substitute
(CS), Version D, labeled 23-GH1104\D, Luckhaupt, 4/2/03.]
Number 2775
JERRY BURNETT, Director, Administrative Services, Department of
Corrections, stated his understanding that the proposed
Version D would make it easier for the correctional industries
to make sales to private entities. He also noted that Version D
would change the words "have minimal negative impact on" to "be
of benefit to", as it pertains to judging whether a program
works with private sector companies in the work force. He noted
that Version D has an effective date of [July 1] 2004.
MR. BURNETT stated that the department views the [proposed]
changes as positive. He told the committee that the department
does have some concerns regarding the effective date, because it
doesn't allow the funding to pay state employee salaries in the
next fiscal year; however, he said that the department is
willing to work with the legislature on that issue.
MR. BURNETT, in response to a question asked by Representative
Berkowitz at a previous hearing on HB 161 regarding how much
furniture the state buys, noted that in fiscal year 2002 (FY 02)
the state bought $828,000-worth of furniture from the
correctional industry, which equaled 96 percent of the revenue.
To date in FY 03, the state has spent just over $300,000 on
furniture, which is right on track with the amount [spent by]
the same time last year. He commented that the majority of
furniture purchases are made in May and June.
Number 2869
REPRESENTATIVE BERKOWITZ asked what the comparable cost would
have been if that furniture had been commercially purchased.
MR. BURNETT replied that [finding the answer to that question]
is one of the assignments that the department's internal auditor
is working on presently. In response to a follow-up question,
he said he believes that prison industry furniture is less
expensive than commercially available furniture. He indicated
that there are opportunities for change regarding pricing and
marketing.
REPRESENTATIVE BERKOWITZ said, "But that's not reflected in the
fiscal note."
MR. BURNETT said, "Right."
Number 2900
CHAIR WEYHRAUCH noted that there is some concern from the
private sector that it has to compete with the prison industry.
He commented that there is a wage differential between the
private sector and prison industries.
MR. BURNETT responded as follows:
Well, there is a correctional industries board which
is required to make the finding. Currently, the
correctional industries have minimal impact on the
private sector. And, with the passage of this bill,
you would have to make the finding that it would be of
benefit to the private sector or to a labor force.
For ... free venture cooperative arrangements with the
Department of Corrections and prison industries, the
requirement is that the ... private sector company who
benefits from prison labor pays minimum wage to the
department. And the difference between what the
department receives and the actual payments to the
inmates is used to offset program expenses.
Number 2966
REPRESENTATIVE HOLM asked, "Did you not just say $828,000-worth
of furniture was purchased locally, through this program?"
MR. BURNETT indicated that [that was the amount] in FY 02.
TAPE 03-36, SIDE B
MR. BURNETT [listed some of the] system's plants. He mentioned
wood furniture.
REPRESENTATIVE HOLM said, "It seems like an awful lot of money
to me. I don't know about you, but it's a lot more than I get
on a yearly basis as a salary. So I just think that that's a
significant number, so we need to be very cautious." He asked
about the laundry business.
MR. BURNETT said he does not have the figures for [the laundry
business]; however, he noted that it generates a significant
amount of income.
Number 2944
REPRESENTATIVE BERKOWITZ said that Mr. Burnett had indicated at
the last hearing on HB 161 that the commissioner is working on a
plan to "manage this transition." He asked Mr. Burnett if he
has that plan.
MR. BURNETT answered no. He explained that it is in progress.
He reminded the committee that he had mentioned at the last
hearing that the current program manager is due to retire this
month. He indicated that the department is determining "where
to do the recruitment and how to do that."
Number 2915
REPRESENTATIVE SEATON moved to adopt the proposed committee
substitute (CS), Version 23-GH1104\D, Luckhaupt, 4/2/03, as a
work draft. There being no objection, Version D was before the
committee.
Number 2900
REPRESENTATIVE BERKOWITZ noted that there are 2 employees for
"each site," which totals 14 employees for 7 locations.
MR. BURNETT said, "Right - approximately."
REPRESENTATIVE BERKOWITZ stated that he would like to know what
those individuals are doing, and what would happen to the
revenue that the state is generating if those individuals were
not employed.
MR. BURNETT responded that [those are] good questions that will
be included in the department's [considerations].
REPRESENTATIVE BERKOWITZ said, "It seems to me that that's
something that we're looking at right now, and that if this
legislation is before us, the appropriate time for us to look at
it is right now."
MR. BURNETT said, "Right." In response to a follow-up comment
by Representative Berkowitz, he reminded the committee that he
had stated at the previous hearing on HB 161 that it is not the
intent of the department to eliminate "these programs or these
positions."
REPRESENTATIVE BERKOWITZ stated, "That seems the consequence of
moving forward with this legislation when there's no plan in
place." He said that perhaps the legislation might be good;
however, it seems premature to bring it before the committee
without being able to provide the answers to the legitimate
policy questions that are being raised by the committee.
Number 2837
REPRESENTATIVE SEATON said that he still does not see what he
had hoped for in the proposed legislation. He noted that his
concern relates to the budget. He remarked that the way that
[Version D] reads, if the program does not increase its revenue
sufficiently to be able to pay the salaries, there is no other
source identified for those salaries. The result, he noted,
would be that prison industries would disappear because there
would be no managers. Therefore, he said, if it is not the
intent of the administration to only fund salaries and benefits
to state employees out of this program, with no fallback
position for maintaining that funding, then he would like to see
the committee offer a letter of intent that it is passing the
legislation along, only with the intention that the
administration will maintain the program. Furthermore, the
administration may use any revenues for salaries and benefits,
but it will not, for lack of those revenues from this program,
terminate the program.
Number 2759
CHAIR WEYHRAUCH asked Representative Seaton to draft a letter of
intent for the committee to include with the bill and fiscal
note before moving the proposed legislation out of committee at
the next hearing on HB 161.
REPRESENTATIVE BERKOWITZ stated that [regardless of the letter
of intent] he will object [to moving the legislation out of
committee] if there is not a plan in place by [DOC]. He opined:
It seems precipitous of us to be making policy
decisions when the administration hasn't brought
forward to us adequate information to make good
decisions. I realize this is a transitional period -
there's a new administration [and a] steep learning
curve - but when ideas are presented, they ought to be
presented in such a way that the legislature has the
information necessary to make quality decisions on
them, whether we agree or disagree.
Number 2734
CHAIR WEYHRAUCH told Mr. Burnett that it would be beneficial to
the committee if he would include in the letter of intent any of
his statements regarding the administration's planning process.
CHAIR WEYHRAUCH announced that HB 161 would be held over.
HB 183-PERS BENEFITS FOR JUV INSTIT EMPLOYEES
Number 2700
CHAIR WEYHRAUCH announced that the next order of business was
HOUSE BILL NO. 183, "An Act relating to retirement contributions
and benefits under the public employees' retirement system of
certain juvenile detention employees and juvenile correctional
institution employees."
CHAIR WEYHRAUCH reviewed the highlights of the bill and said he
wants to move the bill out of committee.
Number 2645
REPRESENTATIVE HOLM observed that he doesn't know how
appropriate it is to go from a 30-year [retirement for juvenile
institution employees] to a 20-year retirement, in one fell
swoop. He indicated the committee should perhaps suggest a 25-
year retirement.
CHAIR WEYHRAUCH announced that he would consider that a motion
by Representative Holm to adopt Amendment [1], which would
change the 20-year retirement to a 25-year retirement.
Number 2620
REPRESENTATIVE BERKOWITZ objected. He said all the testimony
that the committee has heard [supports] the 20-year
[retirement]. He suggested that if Amendment 1 is an effort to
reconcile some of the financial impact, then perhaps that issue
should be taken up in the [House Finance Committee]. He noted
that the committee is hearing that juvenile justice officers are
subject to the same conditions that peace officers in harm's way
are, for example.
Number 2580
REPRESENTATIVE LYNN concurred with Representative Berkowitz. He
stated, "This is a dangerous occupation and a 20-year retirement
for dangerous occupations is not that uncommon." He noted that
the military has a 20-year retirement, "going up to 30." He
said he would [support] the 20-year retirement. He commented
that people need to be younger [in those dangerous occupations].
Number 2525
REPRESENTATIVE HOLM said he just wanted to bring the subject
forward and put it on the record, because "we can't afford to
have people double- and triple-dipping like we have so much of."
Number 2509
REPRESENTATIVE HOLM withdrew [his motion to adopt Amendment 1].
Number 2494
REPRESENTATIVE SEATON moved to report HB 183 out of committee
with individual recommendations and the accompanying fiscal
note. [No objection was stated, and HB 183 was reported out of
the House State Affairs Standing Committee.]
HB 93-REPEAL BOATING SAFETY SUNSET
[Contains discussion of HB 49]
Number 2428
CHAIR WEYHRAUCH announced that the next order of business was
HOUSE BILL NO. 93, "An Act relating to boating safety; repealing
secs. 3, 5, 7, 9, 11, 14, 16, 18, 20, 23, 26, 27, and 30, ch.
28, SLA 2000; and providing for an effective date."
[Before the committee was CSHB 93(TRA), Version 23-LS0230\Q.]
Number 2400
LINDA SYLVESTER, Staff to Representative Bruce Weyhrauch, Alaska
State Legislature, told the committee that the proposed
legislation is a continuation of work done in 2001 by then-
Representative Bill Hudson, at the request of the United States
Coast Guard. She said [that previous work] brought a fine
boating safety program to the State of Alaska. The funding for
[the program] is provided in large part by Wallop-Breaux trust
fund monies, which she explained is federal fund money. By
having a boating safety program in Alaska "on the books," the
state was able to access a marine motor fuel tax, she said. Ms.
Sylvester noted that [the state] has a program that provides
boater education, as well as programs like "Kids Don't Float."
MS. SYLVESTER noted that one of the legislature's concerns in
the year 2000 was that the funding would "dry up" on the federal
level, and the state would have an unfunded program. She said
that the bill was crafted "with repealers all through it." The
proposed legislation would eliminate the repealers, she said,
with the exception of an amendment made in the House
Transportation Standing Committee. She explained that one of
the most problematic portions of the [boating] safety law was
that it required non-motor boats 10 feet and over - for example,
paddle boats and kayaks - to be registered. That requirement
has been eliminated from HB 93, she said. Now, she added, the
proposed legislation applies only to the registration of
motorboats. In conclusion, she noted that the Coast Guard has
been relentless in this issue.
Number 2189
MIKE FOLKERTS, Recreational Boating Safety Specialist, District
17, United States Coast Guard, read his testimony as follows:
The Coast Guard, through the Secretary of
Transportation, is directed to carry out a national
Recreational Boating Safety program under Chapter 31
of Title 46, United States Code. The goal of the
program is to encourage the states to assume the major
role in carrying out the boating safety mission.
Federal financial assistance to the states is provided
through the boating safety account of the Aquatic
Resources Trust Fund, also known as the Wallop-Breaux
Trust Fund. Part of that eligibility requirement to
receive the funding was achieved when Alaska passed
House Bill 108, an Act Relating to Boating Safety, in
the year 2000.
House Bill 108 was passed with a sunset clause that
would allow the legislature to revisit the law,
primarily to ensure that consistent and adequate
funding was in place. House Bill 93 repeals that
sunset, allowing the law to become permanent and
helping build a long-term program that will continue
to reduce recreational boating fatalities.
The United States Coast Guard supports House Bill 93
and will maintain the relationship with the State of
Alaska as outlined in a Memorandum of Understanding
between the state and the Coast Guard.
Number 2157
CAPTAIN JOHN SCHOTT, Chief of Operations, District 17, United
States Coast Guard, read his testimony as follows:
The Coast Guard enthusiastically supports the State of
Alaska's Safe Boating program. This program provides
vital boating safety education for Alaskans, reducing
the number of accidents, saving lives, and reducing
the need for costly search and rescue.
The accurate vessel registration information available
to us from the state is also essential to our search
and rescue efforts.
Currently, with the homeland security concerns we all
share, it's more important than ever that we educate
boaters so they operate safely. This helps the Coast
Guard and other public safety agencies maintain an
appropriate homeland security posture with our limited
surface and air assets.
Number 2121
MARTHA MOORE, Injury Surveillance and Prevention Program
Manager, Community Health & Emergency Medical Services, Division
of Public Health, Department of Health & Social Services (DHSS),
told the committee the department enthusiastically supports
HB 93. She stated that drowning has been a huge problem in
Alaska for many decades. She said that she has been in the
state for 24 years and knows approximately half a dozen people
who were victims of drowning. Furthermore, she said she is sure
that everyone in the room at present knows "a number of people
who have drowned in this state." She said that it reaches the
point where people start to think, "Well, this is just Alaska,
this is the way it has to be." Conversely, Ms. Moore stated
that, with her experience in injury prevention, she knows that
it doesn't have to be this way. She noted that drowning is one
of the most predictable and preventable causes of accidental
death.
MS. MOORE told the committee that she collaborates with [Mr.
Folkerts] and the Boating Safety Office regarding the Kids Don't
Float program. She stated that she and [Mr. Folkerts] are also
on the board of the Alaska Marine Safety Education Association
(AMSEA) organization. Ms. Moore said that the boating safety
programs that the federal money supports have been evaluated and
proven to be effective. In conclusion, she said that last year
there were 16 boating fatalities, the lowest number of
fatalities in one year [for the past] decade. She added, "And I
think that with these programs in place, it will just continue
to go down."
Number 2003
CHARLES R. HOSACK, Deputy Director, Director's Office, Division
of Motor Vehicles, Department of Administration (DOA), told the
committee that he was available to answer questions. In
response to a question by Chair Weyhrauch, he stated that the
department supports the continuation of the boating registration
program. He stated that the department thinks that - as the
witnesses from the United States Coast Guard have previously
stated - "it is an important safety aspect." He said, "The
committee substitute before you does eliminate the need to
register the non-powered boats, so there will be a slight
decrease in revenue." He said that the non-powered boats
require a $10 fee for a three-year registration, as opposed to
the $24 fee for the powered boats. [The department] will be
submitting a fiscal note that will show that decrease in
revenues.
[Chair Weyhrauch passed around the complete registration record
for his 16-foot Boston Whaler.]
Number 1891
REPRESENTATIVE GRUENBERG asked if the Department of Natural
Resources (DNR) would administer this.
Number 1886
JEFF JOHNSON, Boating Law Administrator, Office of Boating
Safety, Division of Parks & Outdoor Recreation, Department of
Natural Resources (DNR), answered that yes, the Alaska Boating
Safety program is currently administered by DNR through the
Division of Parks & Outdoor Recreation.
MR. HOSACK, in response to a question from Representative
Gruenberg, said there is a fiscal note missing from the
committee packet. He stated that because [of] "the amendment to
eliminate the requirement to register non-powered boats," there
would be a decrease in revenue, estimated to drop from the
$39,000 currently collected to approximately $35,000 a year.
MR. FOLKERTS, in response to a question by Representative
Gruenberg, reiterated that the program is federally funded. He
added that it is almost exclusively [supported by] federal
funding and registration receipts; "there's no money out-of-
pocket for the state on this." In response to a follow-up
question from Representative Gruenberg, he said that the amount
of federal funding varies. He explained that it [involves] a
three-part program, which is based on the number of
registrations "last year." He stated that he thinks "the
federal funding portion of it was slightly in excess of
$400,000."
REPRESENTATIVE GRUENBERG said, "I gather ... that there was some
concern about ... taking this over, because what happens when
the federal funding goes away?"
MR. FOLKERTS answered yes, there was concern that there would be
an unfunded mandate to the state; however, in this case, when
there's no state money being applied to the program, "if the law
were to go away, so would the program and so would the money."
Number 1705
REPRESENTATIVE GRUENBERG noted that the House Judiciary Standing
Committee was faced with a similar question over a bill
regarding federal money for DNA identification for criminal
justice [HB 49]. He noted that he offered an amendment adopted
by [the House Judiciary Standing Committee] that stated, in that
case, that "the Commissioner of Public Safety shall notify the
president of the Senate and the speaker of the House of
Representatives if, at any time after the effective date of the
bill, the federal government fails to pay the cost of the DNA
identification registration system." He suggested that that
amendment could be tailored to fit [HB 93] and may be a way for
the legislature to know if the government stops funding [the
boating safety program].
Number 1639
CHAIR WEYHRAUCH stated that the bill would have to be held,
pending the missing fiscal note.
REPRESENTATIVE GRUENBERG said, "That was Section 14 of the
bill."
Number 1621
REPRESENTATIVE BERKOWITZ referred to part of Section 2, which
read as follows [on page 2, lines 13-20, of the House
Transportation Standing Committee CS, original punctuation
provided]:
(4) a boat that is not equipped with
mechanical propulsion [, THAT IS EXCLUSIVELY PADDLED,
POLED, ROWED, OR POWERED BY WIND, AND THAT IS
(A) UNDER 10 FEET IN LENGTH; OR
(B) OPERATED IN THIS STATE FOR A PERIOD
NOT EXCEEDING 30 DAYS IN A CALENDAR YEAR BY A
PERSON WHO HAS NOT ESTABLISHED RESIDENCY AS
DESCRIBED UNDER AS 01.10.055];
REPRESENTATIVE BERKOWITZ, regarding "a boat that is not equipped
with mechanical propulsion", said, "It seems to me that you
could read that in such a way that you're excluding boats - that
might be equipped with outboards, but currently don't actually
have the outboards mounted - from registration, which would have
an impact on the fiscal note."
MR. FOLKERTS replied that if a vessel, such as a rowboat, does
not have an outboard motor attached to it, and it is exclusively
rowed or pulled, then it would be exempt under "this committee
substitute" from the registration process.
Number 1555
REPRESENTATIVE BERKOWITZ stated his understanding that the CS
from the House Transportation Standing Committee amended the
section regarding "THAT IS EXCLUSIVELY PADDLED, POLED, ROWED, OR
POWERED BY WIND", which he said leaves the following boats that
are exempt: "a boat that is not equipped with mechanical
propulsion". He explained that a Lund, or a Whaler, for
example, without the outboard mounted, is "not equipped with
mechanical propulsion"; therefore it would not be subject to
registration requirements.
MR. FOLKERTS responded that, if [Representative Berkowitz] had a
22- or 24-foot Boston Whaler, without any type of mechanical
propulsion, it would be exempt from registration. He added,
"And I would love to watch you dock in a wind, sir."
CHAIR WEYHRAUCH ask Mr. Folkerts if there will or will not be a
fiscal note.
Number 1507
MR. FOLKERTS, referring to the previous comments of Mr. Hosack,
stated his belief that the original HB 93 would not require a
fiscal note because there would be no fiscal impact; however,
the CS would reduce the amount of registration monies available
to the state by removing the registration requirement for non-
powered boats.
Number 1480
REPRESENTATIVE SEATON asked what percentage of the registration
applies to non-powered boats.
Number 1452
MR. HOSACK answered that, currently, there are 56,900 registered
boats. Of those, 7,100 are non-powered boats. He said, "Last
year, we had about 17,900 transactions from motorized boats and
[3,500] transactions from non-powered boats." In response to a
request for clarification from Representative Seaton, Mr. Hosack
explained that the registrations are valid for a three-year
period. He added, "So, of those total boats, we'll see them
once every three years, unless they change ownership."
Number 1384
REPRESENTATIVE HOLM asked Mr. Hosack, "If you don't have the
$35,000, you have no access to the general fund to get that
money back any place. Is that correct?"
MR. HOSACK answered that is correct.
REPRESENTATIVE HOLM stated, "If that were true ... sir, then
there is no negative impact to your operating budget, or to the
revenue stream of the State of Alaska. There's only a negative
impact to how much money that you have to spend." He asked if
that is correct.
MR. HOSACK answered, "I don't believe so." He stated that "last
year," the total collected was $456,600 in boat registrations,
which included both motorized and non-motorized boats. He
reiterated that $35,000 of that was from the non-motorized boats
and [that money would not be collected if the proposed CS is
passed], which decrease the revenue going into the state's
general fund. That's what a fiscal note would reflect, he
explained.
Number 1302
REPRESENTATIVE HOLM asked Mr. Hosack if it was his assessment
that, by decreasing the workload, there would be no effect on
the cost of the operation.
MR. HOSACK answered that there will be associated costs for the
tabs and mailing, for example, as well as "about ... half a
position," based on the previously stated transaction numbers.
REPRESENTATIVE HOLM asked how that would then translate to a
positive impact on the cash flow of the department.
MR. HOSACK responded that he does not believe that it will be a
positive cash flow. He said, "My fiscal note will reflect a
reduction in the revenue due to not registering the non-
motorized boats; it will reflect a decrease in costs for those
3,500 transactions, which we'll no longer have to do."
REPRESENTATIVE HOLM asked if Mr. Hosack was stating to the
committee that the cost of those transactions is less than $10 a
piece. In response to a comment by Mr. Hosack, Representative
Holm clarified that he was asking if the cost to the department
of providing those registrations is less than $10 per unit.
MR. HOSACK answered yes. He continued as follows:
Our total fiscal note for the boating bill, as it was
originally passed - in the current fiscal year - is, I
believe, $378,000. We took in $456,600 in revenue in
fiscal year 2002.
Number 1165
CHAIR WEYHRAUCH requested that Mr. Hosack produce the fiscal
note by tomorrow.
MR. HOSACK agreed to do so.
REPRESENTATIVE SEATON asked that the fiscal note reflect an
estimate of the "half position" previously mentioned.
REPRESENTATIVE GRUENBERG asked, "If there's federal money coming
in, and there's revenue from the sale of these registrations,
isn't there a considerable profit to the state?"
Number 1090
MR. FOLKERTS explained that there is a benefit to the state, in
that, by law, 75 percent of the monies coming in is designated
for education, which he said is "what the state's boating
program does." He suggested that Mr. Johnson may have more to
add to the answer. In response to a follow-up question by
Representative Gruenberg, he said that he believes that the
other 25 percent is used administratively, perhaps to help the
Department of Public Safety "do the enforcement portion of it,"
for example.
Number 1040
MR. JOHNSON noted that there are several qualifiers that all 56
states and territories must satisfy in order to qualify for
federal [funding]. Boat registration is one of those, he said.
If [Alaska] fulfills those requirements, the registration
receipts that used to be paid to the federal government, and
therefore went into the U.S. Treasury, now remain in the State
of Alaska. Furthermore, the state qualifies for the federal
grant money, which it didn't qualify for before. The net
benefit to the state, estimated in FY 03, totals $490,000.
CHAIR WEYHRAUCH asked Mr. Johnson and Mr. Hosack to work
together to prepare the fiscal note previously requested, so
that they are "both on the same page."
[HB 93 was held over.]
HB 215-REPEAL ONE PERCENT FOR ART
[Contains brief mention of HB 134]
CHAIR WEYHRAUCH announced that the next order of business was
HOUSE BILL NO. 215, "An Act repealing statutes that relate to
art works in public buildings and facilities and that require a
set percentage of construction costs to be spent on art."
Number 0991
REPRESENTATIVE BILL STOLTZE, Alaska State Legislature, sponsor
of HB 215, told the committee the bill was not new, noting that
his "colleague from District 20" probably had a previous
opportunity to vote on some permutation of this bill in the
past. He indicated that he was the beneficiary of a
considerable amount of research on this issue that had been done
by [former] Representative [Mark] Hanley. Representative
Stoltze said that he would be approaching the merits of the 1
percent for art from the fiscal rather than the aesthetic
perspective.
Number 0833
REPRESENTATIVE STOLTZE said that with more school construction
and more new projects, each dollar would need to be spent more
intelligently by weighing all of the costs involved. He
referred to his presentation a few days ago of [HB 134], "a
prison bill," during which he had asked the Department of
Corrections [how much] 1 percent [for] art would amount to on
the "Sutton proportion" [a proposed prison facility under
HB 134]. He was given the estimated amount of $1.3 million,
which he said he found to be staggering. He said that
Representative Holm was concerned about the cost of public
facilities. He added, "That really brought that to home, that's
why I asked him that question." Regarding prisons, he said,
given the choice, he'd rather allocate towards officer safety or
more beds. He said he expected that there would be quite a bit
of testimony on HB 215, adding that he respects a divergence of
opinion and also that he comes from a family involved in the
arts, with his grandmother [Margaret G. Mielke] being the first
poet laureate [of Alaska].
Number 0656
REPRESENTATIVE SEATON asked Representative Stoltz to explain the
zero fiscal note.
REPRESENTATIVE STOLTZE responded that it was probably because
the Department of Transportation & Public Facilities (DOT&PF)
didn't have any major facilities being constructed this year.
He said that obviously there was a cost involved, but this was
difficult to quantify. He told the committee that getting
information from state agencies can be difficult and that "this
probably hasn't been the best-run program that the state's ever
put out." He noted that there have been innumerable audits.
REPRESENTATIVE SEATON mentioned that the fiscal note goes
through [2009], shows a zero amount, and does not include any
analysis.
Number 0509
BARBARA BITNEY, Staff to Representative Bill Stoltze, Alaska
State Legislature, said it was very difficult to obtain the
funding analysis. She explained this was because in 1975 all
construction projects were under [DOT&PF] and were gradually
released so that eventually, for example, responsibilities for
school construction projects were transferred from DOT&PF to
[the Department of Education and Early Development]. She said
there are other instances such as the Alaska Court System,
wherein policies and procedures have been developed similar to
DOT&PF's. With this being split out among agencies, one source
doesn't have the information as to cost savings. She said that
DOT&PF can authorize the purchase of art during the construction
phase. She said that the costs aren't being tracked, so it is
not easy to obtain information in a simple format.
Number 0423
MS. BITNEY referred to an audit of January 4, 1999, by the
Legislative Audit Division explaining that there are 13
Department of Law memorandums detailing the discussion on what
is and what is not applicable.
Number 0400
CHAIR WEYHRAUCH asked if DOT&PF could develop a fiscal note that
would reflect the fiscal impact, if it were given more time to
do so.
Number 0352
MS. BITNEY replied that she didn't know the answer to that
question. She added that after attempting to gather information
for several weeks, all she ended up with was the art in public
places fund, and instead of people depositing money into the
fund and then purchasing art, it was done "directly at
construction"; therefore, the fund doesn't accurately reflect
the percentage of money being spent.
Number 0330
REPRESENTATIVE HOLM referred to an earlier conversation with
Representative Stoltze in which it was intimated that the
percentage was 1 percent for state projects but less than that
for other projects within the state.
REPRESENTATIVE STOLTZE said he believed it was in the late 1970s
that there was a statutory change for schools in rural Alaska in
which the percentage was reduced to 0.5 percent. He said this
isn't new - value judgments have been made in the past,
depending upon such things as intrinsic value or construction
costs.
REPRESENTATIVE HOLM asked why the number used was 1 percent.
REPRESENTATIVE STOLTZE surmised that it mirrored a federal
program and said he suspected it was modeled after federal law.
Number 0170
REPRESENTATIVE HOLM asked if it made sense to have a requirement
without having a way to audit, track, or to ensure
accountability.
REPRESENTATIVE STOLTZE replied that this was a multi-committee,
bicameral process and that this may evolve to a lesser
percentage.
REPRESENTATIVE HOLM suggested that whether the institution
involved was a jail or a school would indicate a different
necessity for art.
REPRESENTATIVE STOLTZE agreed that these were valid points to
consider.
Number 0079
REPRESENTATIVE BERKOWITZ interjected that this only relates to
art in public places, so regarding prison facilities, it would
not be art within the entire institution, it would just be
within the public sections of that facility. It would not go to
areas like bridges or sewer facilities but just to public
facilities.
REPRESENTATIVE STOLTZE indicated that the prisons are included,
noting that the commissioner is struggling to incorporate the
art costs into construction.
REPRESENTATIVE BERKOWITZ asked if the audit could be made
available.
The committee took an at-ease from 9:38 a.m. to 9:41 a.m.
TAPE 03-37, SIDE A
Number 0001
CHAIR WEYHRAUCH referred to page 2, Section 3 of the bill, which
allows the construction of memorials to Alaska veterans. He
said, "I'm just wondering, if we're doing away [with] 1 percent
[for] art, should we do away with the construction of memorials
[to Alaska veterans]?" He told Representative Stoltz that the
question is more or less rhetorical.
Number 0076
REPRESENTATIVE STOLTZ responded that there certainly isn't a
mandate "by percentage for those." He said he thinks that "this
actually refers to the 1 percent [for] art not applying to
that." He opined that the way the 1 percent [for] art has been
structured through a committee process; the committee wouldn't
want to create that clash between the arts community and the
veterans community. He said that Representative Gruenberg
probably remembers the visual arts center in Anchorage, Alaska.
He added, "It's probably very intelligent that those that
proceeded us didn't apply the 1 percent [for] art to the
veterans' memorial and probably prevented a lot of political
animosity."
Number 0151
REPRESENTATIVE GRUENBERG stated his understanding that there are
so many legal opinions because the art projects are spread out
among "the departments," and when "they did this audit," legal
opinions [were necessary for each project].
Number 0266
CHARLOTTE FOX, Executive Director, Alaska State Council on the
Arts (ASCA), stated that she thinks that when the legislation
was written in 1975, it was pretty clear that the state took its
responsibility seriously to ensure that all Alaskans have access
to the arts. She said that she likes to think of art in public
places as "art in surprising places," because it is outside of
the normal galleries and museums.
MS. FOX said that Representative Stoltz had previously stated a
good point - an issue that the people who work at "the agency"
struggle with - that there's really no clear method of how the
art in public places fund works. The two statutes that deal
with "percent for art" and "art in public places" were well-
intentioned, but didn't give anyone real authority to "oversee
the program or have any enforcements."
MS. FOX stated that [ASCA] is concerned and interested that the
program be a success, but has not been given any authority to
make sure that 1 percent for art is always set aside, for
example. She said that a lot of times [ASCA] doesn't even know
that a project is going on. She said that she agrees and that
the audit shows that something needs to be done, but she doesn't
want [the program] abolished, because it's very important. She
told committee members that she thinks they will hear [through]
other testimony that the program is vital, provides jobs to
Alaskans, and, basically, doesn't cost the State of Alaska any
money out of its operating budget. She added, "So, it's a win-
win program," and it needs to be operated efficiently.
REPRESENTATIVE STOLTZ thanked Ms. Fox for the help she has given
to him and his staff.
Number 0583
SYBIL DAVIS, Executive Director, Juneau Arts & Humanities
Council (JAHC), told the committee that she has been a resident
of Alaska since statehood and is a concerned citizen. She
continued as follows:
What struck me first and foremost is that ... because
they have to meet Alaska standards in art, [the state
requires] our Alaskan students to develop an
understanding and appreciation of art, and yet House
Bill 215 would eliminate a program that feeds right
into that.
MS. DAVIS opined that Alaska is a "magnificently beautiful"
state. Furthermore, she stated that it is critical that the
imprint and physical mark that is made in the state should be
esthetic. She said, "Our environment is extremely critical."
She told the committee that the first thing she noticed when she
walked into the committee room was its "colorful backdrop"
[referring to a textile "northern lights" piece, created by the
Auke Bay Elementary students].
MS. DAVIS told the committee that Lieutenant Governor Loren
Leman's staff came into the Juneau Arts & Humanities Council
office in need of art for their walls and was able to borrow art
from the council. She said, "It just reinforces how critically
important our environment is. What we live with, what we see
every day, and what we nourish our students with is critical."
Number 0737
REPRESENTATIVE BERKOWITZ shared a comment he had received from
an artist. He said, "Apparently, someone had asked [Winston]
Churchill why they were continuing funding for the arts during
the war, and [Mr. Churchill] said, 'That's what we're fighting
for'."
Number 0815
JUNE ROGERS, Director, Fairbanks Art Association (FAA), told the
committee that she agrees with the previously stated points made
by both Ms. Davis and Ms. Fox. She indicated the bill's fiscal
intent language stating that other needs more important than the
1 percent for art expenditure are being considered. She stated
that she takes exception to that.
MS. ROGERS said that she finds that the best value is gained
from working with programs that address youth and the health of
communities, to make certain that jails are less filled, rather
than more filled. She said she hopes that youth who are in
[juvenile detention] facilities have access to art materials,
"so that we can continue to try to reach them, to address their
relationship to the community in a way that's most positive for
all of us."
MS. ROGERS said that FAA works with the school district, the
state arts council, and [other] organizations in the state. She
mentioned a recent arts conference attended by representatives
from major arts organizations. She told the committee that she
spoke at length with a woman from Seldovia, [Alaska], who is
working desperately to address problems of "a variety of
community ills through the arts," such as alcoholism. She
stated that art in public places is "the one way that can
address this across the board for all (indisc.)." She indicated
working in a positive way to address the issues.
Number 1002
REPRESENTATIVE HOLM thanked Ms. Rogers for all the work that
she's done for the arts community in Fairbanks, Alaska.
Number 1000
MS. ROGERS mentioned libraries. She stated that she thinks
public art is a public museum. Every community in the state
does not have the funds for a museum, and the 1 percent for art
projects provide public access to art. She referred to a
previously stated point made by Ms. Fox that this doesn't save
money, but just reallocates money. She said, "I don't think
that there is a possibility of finding a better value for those
dollars."
Number 1120
KENNETH DeROUX told the committee that he is an artist and a
resident of Juneau, Alaska. He noted that he created one piece
of public art for the state in the 1980s, as well as
participated on "a number of panels, back in the 1980s, when the
program had more life to it." He said that he is a curator at
the Alaska State Museum, [Juneau]; however, he is on leave and
testifying on behalf of himself.
MR. DeROUX said that [the issues surrounding] the bill have been
discussed repeatedly, back in the 1980s. He stated his belief
that the 1 percent for art program is a model of the federal 1
percent for art program. Art in public places is a feature of
civilized countries all over the world. Mr. DeRoux said that
probably one of the more notable federal programs was the WPA
program [part of the U.S. Work Progress Administration Federal
Writers' Project and Historical Records Survey] back in the
1930s, which [not only] made work for artists, but also created
beautiful works of art throughout the country, which are still
appreciated today.
Number 1218
MR. DeROUX noted two issues: the cost of the program, and the
quality of life issue. Regarding the cost of the program, he
said that he thinks the public frequently perceives the 1
percent as [an additional cost] to construction programs. He
stated that it is 1 percent of the construction cost, which is
"arrived at independently." He explained that the 1 percent for
art is built into the project as a feature of it, but doesn't
really detract from the specifications of that project. The
cost of a [construction] project can change significantly, he
said, depending on who is doing the specs. Mr. DeRoux said that
a small project is currently underway at the [Alaska State]
Museum. He said, "If somebody is not watch-dogging every step
of the way, there's a lot of money in any given project that can
go into one thing or another thing."
Number 1337
MR. DeROUX said he knows that (DOT&PF) does not like to
administer the program, [because] it is not a familiar area and
is, perhaps, extra work that can create administrative costs
within personnel budgets. He said that the arts council would
like to see the program administered better, but frequently does
not have the money to "watch-dog it."
Number 1390
MR. DeROUX stated his belief that the money goes into a fund
that can be used to purchase artwork for the state art bank,
which then can be used in public buildings. He noted that the
art bank is another related program. He told the committee
members that if they saw what is in the art bank and where it is
[displayed], they would be impressed at how well Alaska does at
"getting its art around and really dressing up its buildings."
Number 1411
MR. DeROUX returned to the quality of life issue. He told the
committee that he had attended a conference in Anchorage,
Alaska. The keynote speaker was a school administrator from an
inner city district in a big East Coast city who testified to
the importance of the environment of schools. Mr. DeRoux said
that the speaker talked about a school in an industrial zone
that was designed by a good architect and cost more money than
normal, in order to be a facility that the students could be
proud of. The students were proud of the school and vandalism
dropped dramatically. Furthermore, the school became a magnate
for events and, as more people used the school, the neighborhood
blossomed as well. Mr. DeRoux posited that the end result was
because of the concern for the quality of the environment.
Number 1509
REPRESENTATIVE LYNN asked Mr. DeRoux to explain how 1 percent of
the construction cost is not an additional cost to the project.
MR. DeROUX stated that it is his understanding that [the 1
percent] does not actually increase the cost of the project.
REPRESENTATIVE LYNN indicated the 1 percent is built in;
however, if there was no 1 percent, wouldn't that make the cost
of the project 1 percent less?
MR. DeROUX said that he does not "cost out" projects and
therefore does not understand the process completely. In
response to a follow-up question by Representative Lynn, he
suggested that [DOT&PF] could perhaps explain the issue.
Number 1610
JOCELYN YOUNG, Curator, 1 percent for art program in Anchorage,
Alaska, testifying as a private citizen, stated that the
municipality [of Anchorage] passed its own ordinance in 1978,
after the state law was passed in 1975, because major
construction projects were beginning and Anchorage wanted to
have control over the funds and make decisions on a very local
level. The people who work in the buildings are the ones who
are making the decisions about the artwork, she said; therefore,
the artwork chosen will be different from place to place.
MS. YOUNG noted that Alaska was the tenth state in the country
to pass a 1 percent for art statute, and now there are hundreds
of programs throughout the country, supporting the addition of
artwork for private and public buildings. The program in Alaska
is seen as one of the best in the country, she said. Artists
within the state, and those who have lived in Alaska previously,
are proud to claim that they have work in the collection, she
said.
MS. YOUNG said that, in Anchorage, 1 percent is the cost set
aside for the artwork in its buildings. When projects are bid
upon, she said, 15-20 percent of the budget is usually for
contingency alone. The 1 percent funds would not translate into
better building material if the program was no longer in
existence; it wouldn't be used for stronger structural support
or better flooring, for example, because there are codes in
place that "already address these things." Ms. Young said that
those funds would be lost to the artists and to the structures,
and would be reabsorbed into the construction of the project.
MS. YOUNG said that the artists benefit from the challenge of
creating designs and projects "at this scale." She said, "This
is a way to treat our artists in our state and community like
professionals, on a par with architects and designers and other
project personnel." She stated that 1 percent may look like a
large amount of money, but a lot of artists are not making very
much money on these projects. She explained that there are a
lot of expenses that go into building public art. Many artists,
she said, "do this" because they love to see their artwork out
there for the general public to enjoy, and they want to enhance
the buildings.
MS. YOUNG noted that she is very familiar with the state
program, because the program in Anchorage, Alaska was modeled
after it. She told the committee that she hopes it finds lots
of reasons to support public art and "few reasons to support HB
215."
Number 1842
REPRESENTATIVE GRUENBERG asked if Ms. Young is aware of any
other states that have chosen to balance their budgets by
repealing "this kind of a program."
MS. YOUNG answered no. She said she has been hearing that more
codes are being passed in municipalities [within other] states
that require private development to also include public art.
Number 1888
REPRESENTATIVE SEATON referred to an article from the Homer
Daily News that speaks to [the issue of public art] and
addresses the Alaska Center for the Performing Arts (ACPA), in
Anchorage, Alaska, regarding ACPA's use of 1 percent [for] art
money towards design elements of the carpets, railings, and
lighting. He asked if elements [that are incorporated into the
building, such as carpets] count as those that don't necessarily
increase the cost of the project by 1 percent.
MS. YOUNG explained that, for example, an artist is selected out
of proposals submitted to develop a design for the upholstery in
one of the theatres, and is paid a nominal design fee of,
perhaps, $5,000 to oversee "the running of the mill of ... their
design and installation." The upholstery was going to be milled
anyway, she said, "so this is a way to stretch the 1 percent for
art dollars."
Number 1990
DUKE RUSSELL testified that he is a veteran artist and a "super
voter" who has lived in [Anchorage] for over 30 years. He said,
"I can't help but think this is kind of a 'Nimbus' thing, that
it's more not liking some of the products of this project." He
opined that the benefits of the 1 percent for art go far beyond
the obvious. He said its "soul food"; it's "contagious
creativity." He explained that people spur ideas off of ideas.
He said, "The art and the artists are not just subcontractors
laying pipe." He stated that the presence of public art is a
unique component of the city that delineates it from any other
place. He mentioned imagining Chicago having problems with its
Picassos, or its large public art. He said that [Chicago] is
certainly "a model for us all."
MR. RUSSELL said [Anchorage] is suffering from homogenization of
the Outside - the franchises and the "super stores." He said,
"Don't further impact this blight by rescinding the 1 percent
for the arts." He said that he has lived "here" for his entire
adult life and has never "experienced the level of so much
spastic legislation." Mr. Russell expressed his dissatisfaction
with the current administration. In response to a remark by
Chair Weyhrauch, he said that [the legislature] is [also] trying
to save money and "all it takes is income tax." He said the
ideas [of the legislature] don't make sense or reflect the
values of Alaskans and that he expects more from [the
legislature].
Number 2120
CHAIR WEYHRAUCH responded, "Well, we expect a lot from
ourselves, Mr. Russell."
[HB 215 was held over.]
ADJOURNMENT
Number 2126
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at
10:10 a.m.
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