Legislature(1995 - 1996)
02/07/1995 08:05 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE February 7, 1995 8:05 a.m. MEMBERS PRESENT Representative Jeannette James, Chair Representative Scott Ogan, Vice Chair Representative Joe Green Representative Ivan Ivan Representative Brian Porter Representative Caren Robinson Representative Ed Willis MEMBERS ABSENT None COMMITTEE CALENDAR SJR 7:Relating to mandates imposed on states by the federal government. PASSED OUT OF COMMITTEE *HB 17:"An Act relating to the titles that describe the two principal executive officers of electric and telephone cooperatives." PASSED OUT OF COMMITTEE *HB 13:"An Act requiring persons authorized to make or incur political campaign expenditures before filing for nomination to office and groups acting on behalf of them to file certain election campaign financial disclosure reports." PASSED OUT OF COMMITTEE *HB 32:"An Act relating to administrative proceedings involving a determination of eligibility for a permanent fund dividend or authority to claim a dividend on behalf of another." HEARD AND HELD HB 44:"An Act providing that a political use is not an authorized use of charitable gaming proceeds; prohibiting the contribution of charitable gaming proceeds to candidates for certain public offices, their campaign organizations, or to political groups; providing that a political groups is not a qualified organization for purposes of charitable gaming; relating to what is a qualified organization for the purpose of charitable gaming permitting; and providing for a effective date." HEARD AND HELD *HB 106:"An Act relating to art in public places requirements and the art in public places fund." SCHEDULED BUT NOT HEARD HJR 20:Relating to unfunded federal mandates and the Conference of the States. SCHEDULED BUT NOT HEARD HJR 4:Proposing amendments to the Constitution of the State of Alaska authorizing the use of the initiative to amend the Constitution of the State of Alaska. SCHEDULED BUT NOT HEARD (*First public hearing) WITNESS REGISTER SENATOR ROBIN TAYLOR Alaska State Legislature State Capitol, Room 30 Juneau, AK 99801 Telephone: 465-3873 POSITION STATEMENT: Provided sponsor statement for SJR 7 JEFF LOGAN, Legislative Assistant Alaska State Legislature State Capitol, Room 24 Juneau, AK 99801 Telephone: 465-4931 POSITION STATEMENT: Provided Sponsor Statement for HB 17 DAVE HUTCHENS Alaska Rural Electric Cooperative Association 703 W. Tudor, #200 Anchorage, AK 99503 Telephone: 907-561-6103 POSITION STATEMENT: Supported HB 17 KAREN BOORMAN, Executive Director Alaska Public Offices Commission 2221 E. Northern Lights, #128 Anchorage, AK 99508 Telephone: 907-276-4176 POSITION STATEMENT: Provided information for HB 13 MELINDA GRUENING, Legislative Assistant Alaska State Legislature State Capitol, Room 24 Juneau, AK 99801 Telephone: 465-4931 POSITION STATEMENT: Provided Sponsor Statement for HB 32 TOM WILLIAMS, Director Permanent Fund Division Alaska Department of Revenue PO Box 110460 Juneau, AK 99811 Telephone: 465-2323 POSITION STATEMENT: Answered Questions on HB 32 REPRESENTATIVE TERRY MARTIN Alaska State Legislature State Capitol, Room 502 Juneau, AK 99801-1182 Telephone: 465-3783 POSITION STATEMENT: Provided Sponsor Statement for HB 44 REPRESENTATIVE GENE THERRIAULT Alaska State Legislature State Capitol, Room 421 Juneau, AK 99801 Telephone: 465-4797 POSITION STATEMENT: Spoke in support of HB 44 PREVIOUS ACTION BILL: SJR 7 SHORT TITLE: OPPOSING FEDERAL MANDATES ON STATES SPONSOR(S): SENATOR(S) TAYLOR,Halford,Kelly,Sharp,Torgerson,Green,Pearce Leman,Frank,Miller; REPRESENTATIVE(S) Grussendorf,Navarre JRN-DATE JRN-PG ACTION 01/16/95 11 (S) READ THE FIRST TIME - REFERRAL(S) 01/16/95 11 (S) JUDICIARY 01/25/95 (S) JUD AT 01:30 PM BELTZ ROOM 211 01/25/95 (S) MINUTE(JUD) 01/26/95 93 (S) JUD RPT 3DP 2NR 01/26/95 93 (S) ZERO FISCAL NOTE (S.JUD) 01/26/95 (S) RLS AT 12:30 PM FAHRENKAMP ROOM 203 01/26/95 (S) MINUTE(RLS) 01/27/95 104 (S) RULES TO CALENDAR 1/27/94 01/27/95 105 (S) READ THE SECOND TIME 01/27/95 105 (S) COSPONSOR(S): PEARCE 01/27/95 105 (S) THIRD READING 2/1 CALENDAR 02/01/95 129 (S) READ THE THIRD TIME SJR 7 02/01/95 130 (S) RETURN TO SECOND FOR AM 1 UNAN CONSENT 02/01/95 130 (S) AM NO 1 FAILED Y7 N12 E1 02/01/95 131 (S) AUTOMATICALLY IN THIRD READING 02/01/95 131 (S) COSPONSOR(S): LEMAN, FRANK, MILLER 02/01/95 131 (S) PASSED Y18 N1 E1 02/01/95 134 (S) TRANSMITTED TO (H) 02/03/95 217 (H) READ THE FIRST TIME - REFERRAL(S) 02/03/95 217 (H) STATE AFFAIRS 02/03/95 243 (H) CROSS SPONSOR(S): GRUSSENDORF, NAVARRE 02/07/95 (H) STA AT 08:00 AM CAPITOL 102 BILL: HB 17 SHORT TITLE: OFFICERS OF UTILITY COOPERATIVES SPONSOR(S): REPRESENTATIVE(S) GREEN JRN-DATE JRN-PG ACTION 01/06/95 25 (H) PREFILE RELEASED 01/16/95 25 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 25 (H) STATE AFFAIRS, LABOR & COMMERCE 02/07/95 (H) STA AT 08:00 AM CAPITOL 102 BILL: HB 13 SHORT TITLE: CAMPAIGN DISCLOSURE REPORTS SPONSOR(S): REPRESENTATIVE(S) GREEN,Bunde JRN-DATE JRN-PG ACTION 01/06/95 23 (H) PREFILE RELEASED 01/16/95 23 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 24 (H) STA, JUD, FIN 01/19/95 88 (H) COSPONSOR(S): BUNDE 02/07/95 (H) STA AT 08:00 AM CAPITOL 102 BILL: HB 32 SHORT TITLE: PFD ADMINISTRATIVE PROCEEDINGS SPONSOR(S): REPRESENTATIVE(S) GREEN JRN-DATE JRN-PG ACTION 01/06/95 29 (H) PREFILE RELEASED 01/16/95 29 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 29 (H) STA, JUD, FIN 02/07/95 (H) STA AT 08:00 AM CAPITOL 102 BILL: HB 44 SHORT TITLE: GAMING PROCEEDS/DEFINE CHARITABLE ORG'NS SPONSOR(S): REPRESENTATIVE(S) MARTIN,Rokeberg,Porter,Bunde JRN-DATE JRN-PG ACTION 01/06/95 32 (H) PREFILE RELEASED 01/16/95 32 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 32 (H) STATE AFFAIRS, JUDICIARY 01/19/95 90 (H) COSPONSOR(S): BUNDE 01/26/95 (H) STA AT 08:00 AM CAPITOL 102 01/26/95 (H) MINUTE(STA) 02/07/95 (H) STA AT 08:00 AM CAPITOL 102 BILL: HB 106 SHORT TITLE: REPEAL ART IN PUBLIC PLACES REQUIREMENT SPONSOR(S): REPRESENTATIVE(S) VEZEY JRN-DATE JRN-PG ACTION 01/20/95 102 (H) READ THE FIRST TIME - REFERRAL(S) 01/20/95 102 (H) STATE AFFAIRS, FINANCE 02/07/95 (H) STA AT 08:00 AM CAPITOL 102 BILL: HJR 20 SHORT TITLE: CONFERENCE OF THE STATES SPONSOR(S): REPRESENTATIVE(S) BARNES,Grussendorf,Foster,Mulder JRN-DATE JRN-PG ACTION 01/23/95 115 (H) READ THE FIRST TIME - REFERRAL(S) 01/23/95 115 (H) WTR, STA 01/31/95 (H) WTR AT 05:00 PM CAPITOL 408 01/31/95 (H) MINUTE(WTR) 02/01/95 195 (H) WTR RPT 6DP 02/01/95 195 (H) DP: PHILLIPS, WILLIAMS, KUBINA 02/01/95 195 (H) DP: G.DAVIS, MULDER, BARNES 02/01/95 195 (H) FISCAL NOTE (LAA) 2/1/95 02/01/95 195 (H) ZERO FISCAL NOTE (GOV) 2/1/95 02/01/95 196 (H) REFERRED TO STATE AFFAIRS 02/07/95 (H) STA AT 08:00 AM CAPITOL 102 BILL: HJR 4 SHORT TITLE: USE OF INITIATIVE TO AMEND CONSTITUTION SPONSOR(S): REPRESENTATIVE(S) MARTIN,Rokeberg JRN-DATE JRN-PG ACTION 01/06/95 17 (H) PREFILE RELEASED 01/16/95 17 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 17 (H) STATE AFFAIRS, JUDICIARY 01/26/95 (H) STA AT 08:00 AM CAPITOL 102 01/26/95 (H) MINUTE(STA) 02/07/95 (H) STA AT 08:00 AM CAPITOL 102 ACTION NARRATIVE TAPE 95-10, SIDE A Number 001 CHAIR JEANNETTE JAMES called the meeting to order at 8:05 a.m. and announced, for the record, that Representative Gene Therriault was in the audience. HSTA - 02/07/95 SJR 7 - OPPOSING FEDERAL MANDATES ON STATES SENATOR ROBIN TAYLOR read the following sponsor statement on SJR 7: Senate Joint Resolution 7 is virtually identical to resolutions already passed in Colorado, Hawaii, Missouri, California, Pennsylvania and Michigan. Separate resolutions have been passed by the Senate and House in Illinois, by the House in Oklahoma and Louisiana and by the Senate in Kentucky. The resolution has been introduced in 12 other states and has sponsors in an additional 20 states. SJR 7 is representative of what has become a national movement, started in the West, to reassert the sovereignty of the people and the individual states under the Tenth Amendment. The Tenth Amendment to the Constitution of the United States is brief and to the point. It reads: "The powers not delegated to the United States by the Constitution, nor prohibited to it by the States, are reserved to the States, respectively, or to the people." Passage of SJR 7 will send a strong, clear message to the Congress that Alaska is ready to claim her rights under the Tenth Amendment. Those rights include the power to choose whether or not to implement mandates imposed on the states by a Congress, which fails to recognize the intent of the Founding Fathers in limiting the powers of the central government. Past Legislatures have protested individual mandates in numerous resolutions, without result. Passage of SJR 7 will strengthen the resolve of those members of Congress currently working to end the tyranny of unfunded and unconstitutional mandates. There will be those who argue that SJR 7 has no force of law because it is only a resolution. State Senator Charles Duke, of Colorado, when he won passage of the first resolution of this kind, answered that argument eloquently. He reminded his colleagues, and I quote, Our Declaration of Independence had no force of law. I ask the committee's support of SJR 7. Number 047 CHAIR JAMES said she suggested an amendment and a committee substitute, which she would discuss with the sponsor. A copy of the amendment was passed out to members of committee. REPRESENTATIVE JOE GREEN asked Senator Taylor what the status was in the other states that are working this issue. SENATOR TAYLOR said he couldn't answer that, except it is very positive. There are many other states apart from those he mentioned in his opening statement that are working on this same process. Number 085 CHAIR JAMES read the following amendment to the committee: WHEREAS the United States Constitution envisions sovereign states and guarantees the states a republican form of government; and WHEREAS Alaska and its municipalities are losing their power to act on behalf of state citizens as the power of government is moving farther away from the people into the hands of federal agencies composed of officials who are not elected and who are unaware of the needs of Alaska and the other states; and WHEREAS the federal court system affords a means to liberate the states from the grips of federal mandates; FURTHER RESOLVED that the Governor is respectively requested to examine and challenge by legal action on behalf of the state, federal mandates contained in court rulings, federal laws and regulations, or federal practices to the extent to those mandates infringe on the sovereignty of Alaska or the state's authority over issues affecting its citizens; and be it FURTHER RESOLVED that Alaska's sister states are urged to participate in any legal action brought under this resolution. CHAIR JAMES wanted to submit the above amendment to the committee and said she had the CS for SJR 7. She asked for comments from the sponsor regarding the proposed changes. SENATOR TAYLOR did not believe the changes would do any disservice to the legislation. He said if people feel they are of assistance, then wanted to participate in that also, it was a good idea. Number 128 REPRESENTATIVE ED WILLIS asked Senator Taylor how he envisioned this resolution would work, if it were implemented. Another question he had was if this resolution included both funded and unfunded mandates. Number 139 SENATOR TAYLOR explained that it is not a question of whether or not money is involved. The question is not just unfunded mandates. Frequently, those mandates that do not require a specific amount of funding are probably as onerous to us as anything. There are Environmental Protection Agency (EPA) mandates that set various standards and tell us that we, if we wish to have our Department of Environmental Conservation participate in the game, have to pass higher standards, or that we cannot pass any standard lower than those of the federal government. That is a mandate on us; for instance, mandating how our garbage dumps work, and it mandates how our water works. Those mandates are just as offensive as those that require us to spend money on various programs yet they fail to send the money. This legislation is worded in such a way that it encompasses all mandates: Funded and unfunded. Number 173 REPRESENTATIVE GREEN voiced his support for this Senate resolution. Number 191 REPRESENTATIVE WILLIS expressed that this is saying that problems are strictly problems of the states. Some mandates, such as with EPA, were triggered in the past because at the time, they felt compelling needs for the problems to be looked at nationally. Representative Willis's concern was if this action would preclude the national government from looking at a problem that might have national implications. SENATOR TAYLOR answered that this was not the intent of this resolution. There are always going to be matters of national significance that need the attention of the federal government. The problem is that the federal government made a decision to go way beyond what either the Constitution or the forefathers of this country ever intended for the federal government to do. It is micro-managing almost every aspect of our lives within the state. If the state is going to retain any semblance of state's rights in this constitutional balance, then the people of the state must reassert themselves for that purpose. The national requirements for defending this nation, the national requirement for providing for ease of transportation and access across state lines, and to make certain that disease and illness are attacked, that education is funded, and that various standards are set, are not perceived as being as local or on a regional basis, so that they would not have a national significance. He doesn't believe they say that in this resolution. He believes it speaks loudly about the concerns of whether or not there is any state jurisdiction left. Number 231 REPRESENTATIVE GREEN brought up the wetlands act as a classic example of government overreaction. In a state like Florida where the Everglades are drying up, there is a crisis and there should be a stoppage of continued watering or "de-watering" encroachment into wetlands, but to strike a pen and say that all states will have no net loss of wetlands, it is micro-managing. SENATOR TAYLOR said he was in the Florida Everglades about four weeks ago. For the last five or six years they have used the drying up of the Everglades as a campaign issue and fund raiser. Now because of unusual rains, they are experiencing the highest water level in 42 years, so the people of Florida worry now about the panther and deer populations because they are stuck up on an island and the panthers are eating the deer, and the deer are starving. The campaign presentingly is to save the deer and to do something about all that water. CHAIR JAMES spoke up about our practice of social engineering, financial engineering, and natures engineering. She said, "If man believes that they can manipulate nature, they are on an ego trip. There is absolutely no power as strong as nature to destroy or to create." Number 275 REPRESENTATIVE IVAN IVAN said he respects the intent of the resolution, and he agreed with some of the problems that have been incurred in other parts of Alaska, and the topic of wetlands that has been wrestled with by Alaskans trying to develop resources. However, he wanted to address the amendment submitted by Representative Ogan, wondering if it is speaking to actions such as the lawsuit recently addressed: Babbitt v. Alaska. He asked if this was part of addressing it into the amendment, on lines 15 and 16. CHAIR JAMES said that was not her intention. This legislation has nothing to do with the Babbitt lawsuit. It is a different issue altogether. What it is suggesting is that the Governor examine and challenge the federal government, by legal action, on behalf of the state: Federal mandates, like the mandatory helmet law. There are many mandates, particularly in the Department of Transportation (DOT) and if the state does not do what they say, DOT takes away our highway funds. She believes this is a blackmail clause. REPRESENTATIVE SCOTT OGAN said we need to move that this first amendment be accepted. REPRESENTATIVE BRIAN PORTER moved that the committee adopt the CS for SJR 7, Draft C, dated 2/6/95. CHAIR JAMES asked if there was any objection to the motion. There being no objection, she said the motion passed and they would be working from the CS for SJR 7, Draft C. REPRESENTATIVE OGAN referred to his amendment, which he passed out, and moved to adopt amendment 3, to be added to the CS. It includes a change on line 1 and line 2 of page 2 on the CS. It reads: WHEREAS the powers of the Congress are itemized in Art. I, Sec.8, of the United States Constitution, and the Congress should concentrate on carrying out those important duties while leaving local matters to each of the states to resolve based upon the unique needs and circumstance of each state; WHEREAS the management of fish and wildlife resources by the federal government within the State of Alaska is not authorized by the United States Constitution and is a gross abrogation of power reserved to the several states thereunder; and Number 360 SENATOR TAYLOR said there are errors in the first paragraph, because there are more powers than are addressed: Military powers and other powers. Number 415 REPRESENTATIVE OGAN, after hearing more comments, withdrew his amendment. REPRESENTATIVE GREEN moved that the committee pass CS for SJR 7 out of committee, with individual recommendations. There being no objection, it was so moved. HSTA - 02/07/95 HB 17 - OFFICERS OF UTILITY COOPERATIVES JEFF LOGAN, Legislative Assistant for Representative Green, sponsor of HB 17, testified on the CS for HB 17, Version C, dated February 1, 1995. This is the version of the bill that he and Representative Green are asking the committee to adopt and pass out of the committee. The proposed version of HB 17 is different than the originals. As the sponsors did research on HB 17, working with the Electrical Utilities and their representatives, they discovered they had other needs that weren't addressed in the original bill. Some of the needs are a result of federal legislation that passed last fall. They are addressed in sections 1 and 2 of the bill. In section 3 or 4 there are housekeeping clarifications. Mr. Logan said that Mr. Dave Hutchens was there from the Rural Utility Cooperative to testify and to answer questions. The rest of the bill is a new tack on what was the original language of HB 17. The change in federal statutes is a consolidation of some of the financing agencies in the federal government that finance low interest loans to utilities. For Alaskan Cooperative Utilities to take advantage of those changes, they need a major change in statute. Mr. Logan said that previously, the Rural Electric Administration (REA) provided low interest loans to electric cooperatives, to finance very expensive generation transmission equipment, which was necessary to do the work that these people do. The REA has now been combined with a number of other agencies that provided loans for other utilities, and this co-op is called the RUS, or the Rural Utilities Service. MR. LOGAN had with him the CS for HB 17. At the bottom of page 2 is the crux of the CS; it is a major change. It reads: "Electric cooperatives may now offer services other than electricity, and those services are direct satellite television, sewer and water and gas." Section 3 of the proposed CS was the crux of the original HB 17, which is AS 10.25.200. Last year the prime sponsors of this bill also sponsored HB 497, which passed the House, but it did not make it through the Senate. HB 497 addressed this statute which says, essentially, that the state requires that officers of a utility board be titled a president, a vice president, a secretary and a treasurer. The problem is, in business, the presiding offer of the board is not always given the title of president. A large utility in the state found this problematic, and this bill takes a new tack on it, saying that the state has no business telling a utility what to call their officers. It simply says "those officers authorized by the bylaws." Essentially, what the bill is doing is getting out of telling utilities what to call their officers. That is what section 3 states. The rest of the bill except for section 4 is housekeeping clarifications. One housekeeping clarification is to make sure the statute is clear that the bylaws can be changed by a two-thirds vote of those members present, or voting by mail when it is appropriate, as opposed to requiring two-thirds of the members of the co-op, which could be a rather unruly election process. Number 517 REPRESENTATIVE PORTER said that from the way the amendment is written, in terms of the voting for the co-op, he would interpret it to mean the election has to be one or the other; either the election by vote at a meeting or an election by mail. It could not be both and he wondered if that is what the bill intended. MR. LOGAN said he did not think that was the sponsor's intention. Number 527 REPRESENTATIVE GREEN, prime sponsor of HB 17, concurred that it was not the intent. The wording was taken from an article provided by the co-op itself, that a vote counts whether it is by mail or voted at the meeting, and that is what they meant. He said they would modify the CS to keep with the intent. Number 550 CHAIR JAMES asked Representative Porter if the wording were changed to "and/or by mail" if it would fit his criteria. REPRESENTATIVE PORTER thought it would be more prudent to run this by persons who know these things than tinker with it at this committee table. Number 571 REPRESENTATIVE PORTER moved that the committee adopt CS for HB 17, version C, dated 2/1/95 as a working draft. There being no objection, it was so ordered. CHAIR JAMES asked if anyone on the committee wanted to make a conceptual amendment to CS HB 17. Number 576 REPRESENTATIVE PORTER moved that the committee adopt a conceptual amendment to request the drafter to reconsider the language of page 3, line 22 and other places where this language appears, where is says: "at a meeting or by mail." The drafter should consider if "at a meeting or by mail" allows a vote of both simultaneously, and if not, to make the appropriate changes. There being no objection, it was so ordered. REPRESENTATIVE PORTER asked, referring to the original HB 17, if the Alaska Public Utilities Commission (APUC) has direct satellite television within its jurisdiction. Mr. Logan said that Dave Hutchens could answer that question. REPRESENTATIVE OGAN asked if it is a new form of business for these co-ops, adding these new services: Sewer, water, satellite television and gas services. CHAIR JAMES said that it is a federal change to allow and encourage these companies to do that. Number 610 REPRESENTATIVE GREEN brought up that some of the utilities, especially in smaller communities, are being more streamlined. The federal attitude was that the REA or electric co-ops have been so successful that it would be more streamlined and successful if they could allow the local communities to piggyback some other utilities with the structure that they have with the electrical utilities. Number 625 DAVE HUTCHENS, Executive Director, Alaska Electric Cooperative Association, said that the association is composed of 18 electric co-ops scattered around the state, and it serves about two-thirds of the people. Three of those co-ops have celebrated their 50th anniversary. In late 1986 or 1987, the legislature passed a re- codification of the Electric and Telephone Cooperative Act, AS 10.25, and that has served the people well. In regards to the U.S. Department of Agriculture where changes occurred, the cooperative thought it was time for some modest revisions to this Act. Regarding the issue of voting that was raised, on page 3, line 22, about voting by mail or at the meeting, he suggested the language could be clarified if they simply reverse the order and put "by mail or at the meeting." Number 653 REPRESENTATIVE IVAN said he saw the original bill without the CS and had some concerns to clear up. He explained that he has concerns with section 2: "expanding the utilities to other services besides electric or telephone." His concern is that small business would have to compete with big business. MR. HUTCHENS assured Representative Ivan that this is not cable television, but direct satellite broadcasts. Someone had questioned if this was something that presently came through the APUC and the answer he gave was "no." The satellite that brings the service to people across the Lower 48 is not positioned where Alaska can receive data from it. He mentioned ads on direct television with a little 18-inch disk: This is what he has been talking about. We in Alaska cannot get that service. TAPE 95-10, SIDE B Number 000 MR. HUTCHENS continued to say that there would be someone selling the direct programming and someone else selling the hardware. The market for this would not be in the villages where people live compactly to where they could be reached by cable televisions. The market would be rural parts of the Kenai Peninsula, the Matanuska Valley, the rural areas outside of Fairbanks, and through the Copper River Valley. REPRESENTATIVE GREEN asked him to address that small villages might want to form their own small co-op. The point in section 1 is that they have no intention of going into competition with businesses already established in an area. Number 087 MR. HUTCHENS assured Representative Ivan that this is not mandatory at all, and the Rural Utilities Service (RUS) does loan money directly to small municipalities in rural areas. The reason they want the electric cooperatives to become prepared to be available as backups for the sewer and water business is that the predecessor agencies to RUS have loaned money to a number of small communities that did not have the management system to satisfactorily operate sewer and water systems over the long haul, so they failed or are failing. They want somebody to be able to step in and provide the management service to keep those systems operating. Number 127 REPRESENTATIVE IVAN said that speaking of past history, we did not have people in management or people capable of financial planning and organizing for business, but now, after 20 years, there is the expertise and capabilities in small communities. He said it is not just satellite, but gas and services, and those are some of the things they will be looking at to make lives better. CHAIR JAMES asked how we can address these things when we are trying to encourage people to do more for themselves, and to make their small businesses work, then we allow big business to come in to do the same things. Little businesses cannot always compete with big businesses. This is not a mandate, it is an allowance, but she understands the threat felt by small business, that big businesses will come in and push them out. MR. HUTCHENS pointed out that the electric coops are not big business. Those serving in the larger communities have become large, but those in the rural areas are quite small, such as Naknek, King Salmon and North Naknek. They think there is a local gas supply in the immediate area that is not large enough to attract oil companies to come in to develop it for export, but would be available for local furnishing of service. About how to protect people who were there first, to keep other people from coming in on top of them, that is why they made a point in section 1, the legislative intent section, to say it is not intended that the cooperative would go into competition with anyone that is already there. CHAIR JAMES called for a motion to move the bill out of committee. Number 138 REPRESENTATIVE PORTER moved that the committee pass the CS for HB 17 as conceptually amended with individual recommendations. There being no objection, it was so ordered. HSTA - 02/07/95 HB 13 - CAMPAIGN DISCLOSURE REPORTS Number 156 CHAIR JAMES said the next bill on the agenda is HB 13. JEFF LOGAN, Legislative Assistant to Representative Joe Green, the prime sponsor of HB 13, gave the sponsor statement. HB 13 makes it easier for the public to know who is contributing money to non-party candidates for statewide office. Problem: Currently, non-party candidates for legislative office who gain access to the general election ballot by going through the petition or write-in process are not required to file campaign finance disclosure reports during the primary election cycle. Alaska Public Office Commission Policy Decision 15.13-82-2 sets requirements for these candidates. The commission has ruled that non-party candidates, groups formed to influence the outcome of ballot issues not appearing on the primary ballot, and political party subdivisions and multi-candidate PACs which do not make expenditures to benefit a candidate on the primary ballot..."need not file either primary or general election reports so long as their only activity during those reporting periods is the receipt of contributions or the expenditures of funds for administrative purposes." When a campaign-related expenditure is made, the reporting cycle is triggered. Until that time, the public has no idea who is contributing money to non-party candidates. Solution: HB 13 requires prospective non-party candidates for legislative office to disclose to the public, during the primary election reporting cycle, who is making campaign contributions to them. MR.LOGAN pointed out that HB 13 will eliminate corruption. Also the bill has a zero fiscal note. Number 278 KAREN BOORMAN, Executive Director, Alaska Public Offices Commission, testified by teleconference that their office has been working with Mr. Logan on HB 13. The commission supports this CS, and Mr. Logan is correct in saying it would have a zero fiscal note rather than the positive fiscal note that was attached to the original bill. The bill would require that those state candidates who become active during the primary election cycle by raising or spending money file a series of reports, as in the primary election cycle, even though they are running on the general election ballot. The commission supports this, having noticed in the last two state elections that this group of people has increased: In the 1992 election there were 11 such candidates, and in 1994 there were 17 such candidates. The change can be attributed to an apportionment where the districts changed; also, the closed primary. REPRESENTATIVE CAREN ROBINSON asked why this has not been part of the law in the past. Number 300 MS. BOORMAN answered there have not been that many candidates that ran by nominating petition in this way. It was the commission's position that if they were not active in the primary election, they did not have to report during that cycle. It is a new and increasing problem now, that these people are viable candidates, actively raising and spending money. Before, the commission was trying to avoid unnecessary reports to those small campaigns and groups whose activity was very limited. CHAIR JAMES questioned Ms. Boorman about the rule that says that before any candidate can collect or raise funds, they must file an intent to run. MS. BOORMAN said that Chair James was correct, and filing an intent would be an indication that disclosure would be necessary. She anticipated there would be approximately 20 in any given campaign cycle. Number 334 REPRESENTATIVE PORTER moved they pass CS for HB 13 Version G, dated 2/3/95. Hearing no objection, the motion passed. Chair James affirmed that the CS for HB 13, Version G would be the working document. REPRESENTATIVE PORTER added that he would support the bill, but there is another bill coming up that might render this piece of legislation unnecessary. CHAIR JAMES said he was speaking of legislation that indicates that the two highest vote getters out of the primary go on to the general election. She would take deference to Representative Porter's stand, because it eliminates the people who are without a party from running. Number 360 REPRESENTATIVE WILLIS went through that process and said, for the interest of fairness, this is a good piece of legislation. He thought, as an Independent, that he would have to file, but when he went to file he was told that he didnt have to. Again, in the interest of fairness, he supported the bill. Number 379 REPRESENTATIVE PORTER moved that the committee move CS HB 13, Version G, dated 2/3/95 from committee with individual recommendations and adopt a zero fiscal note. There being no objection, CS for House Bill 13 passed out of committee. HSTA - 02/07/95 HB 32 - PFD ADMINISTRATIVE PROCEEDINGS Number 391 MELINDA GRUENING, Legislative Assistant to Representative Joe Green, the prime sponsor of HB 32, said that because of one of his constituents who had been waiting two years for his Permanent Fund Division (PFD) Representative Green began investigating the problem. He thought two years was entirely too long for anyone to wait on appeals. When he contacted the Permanent Fund Dividend Division, he found out the number of appeals pending were directly related to the high number of appeals filed. A number of these, he discovered, could be considered frivolous appeals. HB 32 addresses the problem of the huge number of appeals after a person has been denied a PFD, and the time it takes to file those appeals. MS. GRUENING commented as of January 1995, there were 9,704 appeals pending. This is the highest number since the PFD program's inception. The statistics received from the Department of Revenue show there are some people who have waited longer than two years. Processing such a large number of appeals is costly, and the time delays are unfair to persons with legitimate claims to appeal. Currently, there are 10 permanent full-time employees in the PFD division, and three appeals officers in the commissioner's office working on processing appeals. They are reorganizing the appeals officers in the commissioner's office, so there will be one person full time in the commissioner's office. MS. GRUENING said part of the problem is that it only costs a 32- cent stamp to file an appeal, so people tend to automatically file an appeal when they are denied. Many people who are not qualified clearly file for an appeal; some who were out of state, or they missed the deadline. The denial rate was 64 percent last year, and in previous years the rate has been even higher. HB 32 would implement a $25.00 filing fee for individuals protesting the denial of their PFD application. The department will adopt a regulation that will allow an indigent individual to be exempt from this fee. The filing fee would be refundable if the applicant's appeal is successful, and it would be non-refundable if the denial is not overturned. It is anticipated that the implementation of a filing fee would discourage clearly unqualified persons from appealing. It would reduce the cost and make the appeals process shorter and more streamlined for those with legitimate claims. Also, because administrative costs are deducted from each person's PFD check, the positive fiscal note associated would mean a slightly larger check. REPRESENTATIVE ROBINSON asked why the appeals process takes so long. Number 456 MS. GRUENING answered it is a three tier process: An informal appeal process, then the formal appeal process, and then finally, they can appeal to Superior Court. They have worked on efficiencies, but there are a large number of appeals and they cannot get caught up. REPRESENTATIVE ROBINSON said she was also trying to imagine $25.00 coming in and then $25.00 going out, and about who will cut the checks. Number 479 TOM WILLIAMS, Director, Permanent Fund Dividend Division, Department of Revenue, addressed the appeals process. Some individuals are denied a PFD check by their document processing section, based on the information they provide on their application, if it shows they are clearly ineligible. They also select other applications for an eligibility determination process by their review staff. They can issue denials, and they do. An 7individual who has been denied by either process has 60 days to file an informal conference appeal. It is for someone whose application has an error and the applicant has an opportunity to say we have the facts wrong. Then there are the informal conference levels that determine if they made a right decision; otherwise, they pay the individual. If the applicant is denied, but they think the department is still wrong, they can request a formal hearing. They have 30 days to do that. The formal hearing is conducted before the commissioner's office staff. The division has people who represent the department's position, and the individual can represent their position before the formal hearing staff. The formal hearing staff will issue a decision, either overturning the denial or upholding it. If the denial is upheld by the informal hearing staff, the individual has 30 days to appeal to the Superior Court, so there is a three tier appeal process. Most denials that will be overturned are overturned at the informal conference stage. They are trying to reduce the number of frivolous appeals. Number 553 CHAIR JAMES asked if they have a calculation based on the volume of appeals, and what the cost is. MR. WILLIAMS said they do not have an overall cost. It varies by the nature of the appeals. He could get the committee an amount of how much it costs to run the appeal's section. Number 564 REPRESENTATIVE ROBINSON said this is a good idea, yet she wondered if money going in and out again would be a problem. This legislation might solve one problem and create another one. Number 570 MR. WILLIAMS said that when adding a procedure there are administrative things that need to be done to implement that. They have the basic mechanism there to deal with money coming in and going out, so the most significant impact would be the time it would take to do the necessary data processing programming. REPRESENTATIVE ROBINSON asked if Mr. Williams thought it would be a benefit, or a good direction to go. She also asked if they started making money if it would go to the general fund. Number 595 MR. WILLIAMS thought it would be "do-able." It would reduce the number of appeals they would get, and it would ultimately show a reduction in staff. Also, any money they made would go to the permanent dividend fund. Number 596 REPRESENTATIVE PORTER said he assumed that the appeals form provided for people who disagreed about the denial and informed them clearly about the process involved. He was skeptical about the odds of them winning their cases. Number 603 REPRESENTATIVE WILLIS asked if a household was denied payment of the PFD checks, based on the sponsor being denied, if every member of the household would have to pay the $25.00. MR. WILLIAMS answered, yes. There are variations of situations, and individual determinations. If the sponsor qualifies the child will qualify. REPRESENTATIVE IVAN had a question of Ms. Gruening. He asked what the definition is for indigent. Number 622 MS. GRUENING said she spoke to Vince Usera in the Department of Law who said it would be the same criteria that are used for determining indigent status for the court system. REPRESENTATIVE IVANS concern was for the constituents in his district who cannot speak or read the English language. He needed to know what the impact would be on people such as them, including the dollar amount involved. Number 633 CHAIR JAMES said what "indigent" means is that they don't have any money to pay. The person is not financially able to pay the $25.00. There are other reasons a person might not be able to pay a fee that would not indicate the person is indigent. Number 654 REPRESENTATIVE OGAN suggested amending the bill with language similar to that in the application to get a hunting license. When a person cannot afford to pay for the license, the criteria are simple. If a person's income is less than a designated amount they can sign an affidavit and get the hunting license. Number 664 REPRESENTATIVE GREEN suggested that we modify the bill, which now reads "indigent." The committee could modify that, replacing indigent with a dollar amount, like $2,000 a year, if that would be the desire of the committee. Number 667 REPRESENTATIVE PORTER suggested that the wording merely include "indigent, as defined in a designated state statute." REPRESENTATIVE ROBINSON stated that if HB 70 was passed, it will take out anyone in the military who is on food stamps, or a person who is sick and on food stamps, or anyone on welfare who is on food stamps, so very few people will even qualify for this. Number 675 MS. GRUENING passed on to the committee that Vince Usera in the Department of Law said that the court is determined that this should be handled by regulation, not by law. She said they could find what the criteria are, and it could be written into the bill, if that is the wish of the committee. REPRESENTATIVE IVAN said he would like to request a definition of the word, "indigent" and what impact it would have on the people in that category. Number 682 REPRESENTATIVE GREEN said the issue of importance is whether it is the will committee to use the word "indigent" and then define the word in the bill, or not to use "indigent" and put in a dollar amount. Number 685 REPRESENTATIVE ROBINSON said she would like to know how "indigent" is defined in other areas, so that the committee is consistent. Number 687 REPRESENTATIVE OGAN moved that the committee adopt the proposed amendment and word it similarly to the hunting license criteria. CHAIR JAMES said that since we did not have a copy of the regulations about getting a hunting license, she would have to say that motion was not in order. REPRESENTATIVE PORTER suggested that we hold the bill over and research what the criteria are for getting a hunting license. If it is a straightforward position, then we may see if that is appropriate for HB 32. TAPE 95-11, SIDE A Number 000 CHAIR JAMES also felt that since the committee was not in consensus on this issue, there needed to be a change in the language of the bill. MS. GRUENING asked exactly what it was the committee wished for her to research. CHAIR JAMES answered that she should look in other areas to see what people are exempt from paying certain fees because they don't have any money, then bring it forward to committee to see what options they have. If "indigent" is the only option, then they will need to know what it means so they can relate it to specific people in their districts. She said they would hold the bill over until the next meeting on Thursday, February 9, and put it under previously heard bills on the agenda. HSTA - 02/07/95 HB 44 - GAMING PROCEEDS/DEFINE CHARITABLE ORGNS Number 043 REPRESENTATIVE TERRY MARTIN brought forth to the committee HB 44 with his sponsor statement. The sponsor statement reads: In August of 1994 before the Primary Election, the Anchorage Daily News published an information article disclosing where candidates for the governorship were receiving their financial support. Lawyers became very prominent, as did construction and the oil industries, as well as the fishing industry who flapped its wings to get candidates' attention. Five days later the Voice of the Times brought into focus two other major players who financed political campaigns - unions and state employee groups. Both articles missed the real Motherload. The newest, most prolific motherload to fill Alaska's campaign coffer is Gam(bl)ing - or more specifically, pull-tab permits. Alaska is the only state that allows political parties and local political districts to maintain gambling permits while also allowing a limitless contributory ability from political units and pull-tab permitees to candidates. The lack of restriction on gambling dollars directed to political campaigns has given those in control over permits an incalculable influence and control over elected officials who are beholden to them for special voting and political generosity. The process is one in which the operators and political district officers decide who will receive the largest gambling receipts, thus gaining the highest level of control. The operators of the permits can and do use the political permits at the most profitable places and at the most prolific times, while the true charitable permitees suffer accordingly. There should be an outcry of public disdain for this practice in Alaska, but it will not be heard until the facts of gambling's influence are exposed. The gurus of ethics who, for the last ten years have been shouting the virtues of reform of special interest in political campaigns, have developed a scam of the worst kind. It involves political parties posing as charitable organizations in the name of reform. What we have seen guised as a "charity," is nothing less than raw political abuse of influence peddling and powers to corrupt the minds of the innocent for personal gains. This misuse of charity is no longer to be concealed. Rather it should be brought to bear before the public, in its true form, as an instrument of power that attracts the greed of elected officials. Since the passage of legislation orchestrated through several Spenard lawyer/legislators and gam(bl)ing operators that legalized pull-tabs and licensing (monopolizing) operators under the guise of "reform", we see the industry's growth escalate from an annual gross revenue of $60 million in 1988 to over $227 million in 1993. When zeroing in on just political permits we see a phenomenal growth of gross revenues in 1989 of $874,958 to $3,978,179 in 1993. There are 13 Democrat organizations, 5 Republican units and the Alaska Independence Party that have pull-tab permits. Labor organizations also depend on gam(bl)ing activities, especially pull-tabs, to fuel their political machinery. During 1993, 21 labor unions received $4,269,972 in gross revenues through their permits. By holding gaming permits, politicians, political parties and precincts strip millions of dollars away from the true charities. True charities have a purpose in that they assist those who require aid, whether by training to work, or by clothing and feeding. The gaming process in-turn reduces state expenditures and services. Those who own gaming permits for reasons other than charity control the distribution to political groups and candidates, and end up controlling the legislature in a more sinister way than true advocates of ideologies in a democratic-representative government. This new motherload that fills political coffers must be eliminated. As evident by the 1994 primary and general elections, the amount of political contributions and proceeds originating from charitable gaming (pull-tab) receipts distributed to Alaskan political candidates is overwhelming. House Bill 44 is the vehicle through which to change this problem. I urge your support. REPRESENTATIVE MARTIN believes that politics must be taken out of gaming. Political groups should not be considered charities. He would like to go back to the IRS to define "charity." Number 211 REPRESENTATIVE WILLIS asked Representative Martin who would be eliminated under this bill. He wanted to know what the ramifications would be? REPRESENTATIVE MARTIN said he couldn't tell him what the full ramifications would be, but his intent is simply to get political groups out of gaming. The labor groups are the main ones that create the most problems. Last year there were 19 political groups that signed up for political pull tabs, and it is increasing. In Valdez there was $52,000 raised for payout to political groups. True charities are those who do not use money for candidates. Twenty-one unions had permits for the year 1993. REPRESENTATIVE WILLIS asked just what groups would be eliminated. He wondered if the Elks, Lions and American Legion were involved in this. CHAIR JAMES said, to clarify this issue, that by tying this into the 501-C3 regulations, by who is entitled to get tax exempt status as a nonprofit corporation with Internal Revenue Service for tax purposes, the one prerequisite is that the corporation must not be involved in affecting legislation or political issues. REPRESENTATIVE MARTIN said there is an expansion on that, Section B, F, and G, that need to be put in the amendment, to cover organizations such as the American Legion and VFW. CHAIR JAMES said it would be necessary to carry HB 44 to the next meeting. She also wanted to hear HB 49 because it pertained to the same thing, gambling proceeds. REPRESENTATIVE GENE THERRIAULT said that his bill, HB 49, is identical to Representative Martin's except for certain nonprofits. He supports Representative Martin's bill, which is intended to tighten up the rules on using money from pull-tabs and other gaming proceeds for political candidates. Also, people play pull-tabs without knowing what they are supporting. REPRESENTATIVE ROBINSON said there was a bill passed to determine where the money goes from pull-tabs, and she wondered if this bill affects raffles at schools, clubs and other nonprofit organizations. Political parties use raffles, both Republicans and Democrats, and she sees nothing wrong with that. REPRESENTATIVE MARTIN said most people don't care where their money comes from, but he is trying to take politics out of it. Number 469 REPRESENTATIVE THERRIAULT said that when people chose to play pull- tabs, it is time driven. It is okay to get scholarship funds with raffles and pull-tabs. His bill, HB 49, does not include raffles. ADJOURNMENT CHAIR JAMES held HB 44 over to the next meeting and the meeting adjourned at 10:10 a.m.