Legislature(1995 - 1996)

01/23/1996 08:00 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
             HOUSE STATE AFFAIRS STANDING COMMITTEE                            
                        January 23, 1996                                       
                           8:00 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                                                                
                                                                               
 All members present.                                                          
                                                                               
 OTHER MEMBERS PRESENT                                                         
                                                                               
 Speaker of the House of Representatives, Gail Phillips                        
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 * HOUSE BILL NO. 369                                                          
 "An Act extending to certain partnerships and corporations the 10             
 percent procurement preference currently given to certain sole                
 proprietorships who are Alaska bidders and owned by persons with              
 disabilities."                                                                
                                                                               
      - PASSED OUT OF COMMITTEE                                                
                                                                               
 * HOUSE BILL NO. 363                                                          
 "An Act requiring banks to pay interest on money in reserve                   
 accounts held in connection with mortgage loans."                             
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 * HOUSE BILL NO. 348                                                          
 "An Act requiring that all official interviews with children who              
 are alleged to have been abused or neglected be videotaped or                 
 audiotaped."                                                                  
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 (* First public hearing)                                                      
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 369                                                               
 SHORT TITLE: PROCUREMENT PREF FOR DISABLED                                    
 SPONSOR(S): REPRESENTATIVE(S) JAMES                                           
                                                                               
 JRN-DATE  JRN-PG  ACTION                                                      
 12/29/95      2362    (H)   PREFILE RELEASED                                  
 01/08/96      2362    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/08/96      2363    (H)   STATE AFFAIRS, LABOR & COMMERCE                   
 01/18/96              (H)   STA AT 08:00 AM CAPITOL 102                       
 01/18/96              (H)   MINUTE(STA)                                       
 01/23/96              (H)   STA AT 08:00 AM CAPITOL 102                       
                                                                               
 BILL:  HB 363                                                               
 SHORT TITLE: INTEREST ON MORTGAGE ESCROW ACCTS                                
 SPONSOR(S): REPRESENTATIVE(S) BUNDE                                           
                                                                               
 JRN-DATE  JRN-PG  ACTION                                                      
 12/29/95      2361    (H)   PREFILE RELEASED                                  
 01/08/96      2361    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/08/96      2361    (H)   STATE AFFAIRS, L&C, FINANCE                       
 01/18/96              (H)   STA AT 08:00 AM CAPITOL 102                       
 01/18/96              (H)   MINUTE(STA)                                       
 01/23/96              (H)   STA AT 08:00 AM CAPITOL 102                       
                                                                             
 BILL:  HB 348                                                               
 SHORT TITLE: VIDEO/AUDIOTAPE INTERVIEW OF ABUSED MINOR                        
 SPONSOR(S): REPRESENTATIVE(S) JAMES, Therriault, Kelly, Toohey                
                                                                               
 JRN-DATE  JRN-PG  ACTION                                                      
 05/13/95      2173    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 05/13/95      2174    (H)   STATE AFFAIRS, HES, JUD, FINANCE                  
 08/26/95              (H)   STA AT 01:00 PM                                   
 08/26/95              (H)   MINUTE(STA)                                       
 01/08/96      2383    (H)   COSPONSOR(S): KELLY, TOOHEY                       
 01/23/96              (H)   STA AT 08:00 AM CAPITOL 102                       
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 WALTER WILCOX, Committee Aide                                                 
 House State Affairs Committee                                                 
 State Capitol, Room 102                                                       
 Juneau, Alaska 99801-1182                                                     
 Telephone:  (907) 465-3743                                                    
  POSITION STATEMENT:   Provided information on HB 369.                        
                                                                               
 STAN RIDGEWAY, Deputy Director                                                
 Division of Vocational Rehabilitation                                         
 Department of Education                                                       
 801 West 10th Street, Suite 200                                               
 Juneau, Alaska 99801-1894                                                     
 Telephone:  (907) 465-2856                                                    
  POSITION STATEMENT:   Provided testimony in support of HB 369.               
                                                                               
 DUGAN PETTY, Director                                                         
 Division of General Services                                                  
 Department of Administration                                                  
 P.O. Box 110210                                                               
 Juneau, Alaska 99811-0210                                                     
 Telephone:  (907) 465-2250                                                    
  POSITION STATEMENT:   Provided comments on HB 369.                           
                                                                               
 DAVE GERKE                                                                    
 1265 Norman Street Number 7                                                   
 Anchorage, Alaska 99504                                                       
 Telephone:  (907) 337-4657                                                    
  POSITION STATEMENT:   Provided testimony in support of HB 369.               
                                                                               
 REPRESENTATIVE CON BUNDE                                                      
 Alaska State Legislature                                                      
 State Capitol, Room 108                                                       
 Juneau, Alaska 99801-1182                                                     
 Telephone:  (907) 465-4843                                                    
  POSITION STATEMENT:   Provided sponsor statement on HB 363.                  
                                                                               
 WILLIS KIRKPATRICK, Director                                                  
 Division of Banking, Securities and Corporations                              
 Department of Commerce and Economic Development                               
 P.O. Box 110807                                                               
 Juneau, Alaska 99811-0907                                                     
 Telephone:  (907) 465-2521                                                    
  POSITION STATEMENT:   Provided comments on HB 363.                           
                                                                               
 ROBIN WARD, President                                                         
 Summit Title Insurance Agency Ltd.                                            
 341 West Tudor Road, Suite 102                                                
 Anchorage, Alaska 99503                                                       
 Telephone:  (907) 562-3770                                                    
  POSITION STATEMENT:   Provided comments on HB 363.                           
                                                                               
 BARBARA COTTING, Legislative Assistant                                        
    to Representative Jeannette James                                          
 State Capitol, Room 102                                                       
 Juneau, Alaska 99801-1182                                                     
 Telephone:  (907) 465-3743                                                    
  POSITION STATEMENT:   Provided sponsor statement on HB 348.                  
                                                                               
 GENE OTTENSTROER                                                              
 P.O. Box 1059                                                                 
 Delta Junction, Alaska 99737                                                  
 Telephone:  (907) 895-4805                                                    
  POSITION STATEMENT:   Provided comments on HB 348.                           
                                                                               
 NANCY BUELL, Director                                                         
 Education Program Support                                                     
 Department of Education                                                       
 801 West 10th Street, Suite 200                                               
 Juneau, Alaska 99801-1894                                                     
 Telephone:  (907) 465-8689                                                    
  POSITION STATEMENT:   Provided comments on HB 348.                           
                                                                               
 JAYNE ANDREEN, Executive Director                                             
 Council on Domestic Violence and Sexual Assault                               
 Department of Public Safety                                                   
 P.O. Box 111200                                                               
 Juneau, Alaska 99811-1200                                                     
 Telephone:  (907) 465-4356                                                    
  POSITION STATEMENT:   Provided comments on HB 348.                           
                                                                               
 DEL SMITH, Deputy Director                                                    
 Office of the Commissioner                                                    
 Department of Public Safety                                                   
 P.O. Box 111200                                                               
 Juneau, Alaska 99811-1200                                                     
 Telephone:  (907) 465-4322                                                    
  POSITION STATEMENT:   Provided comments on HB 348.                           
                                                                               
 YVONNE CHASE, Deputy Commissioner                                             
 Office of the Commissioner                                                    
 Department of Health and Social Services                                      
 P.O. Box 110601                                                               
 Juneau, Alaska 99811-0601                                                     
 Telephone:  (907) 465-3030                                                    
  POSITION STATEMENT:   Provided comments on HB 348.                           
                                                                               
 BETTY ROLLINS                                                                 
 P.O. Box 55163                                                                
 North Pole, Alaska 99705                                                      
 Telephone:  (907) 488-9030                                                    
  POSITION STATEMENT:   Provided testimony in support of HB 348.               
                                                                               
 CHARLES ROLLINS                                                               
 P.O. Box 55163                                                                
 North Pole, Alaska 99705                                                      
 Telephone:  (907) 488-9030                                                    
  POSITION STATEMENT:   Provided testimony in support of HB 348.               
                                                                               
 LAUREE HUGONIN, Executive Director                                            
 Alaska Network on Domestic Violence and Sexual Assault                        
 130 Seward Street, Room 501                                                   
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 586-3650                                                    
  POSITION STATEMENT:   Provided comments on HB 348.                           
                                                                               
 JODI DELANEY                                                                  
 3200 Kris Kringle Drive                                                       
 North Pole, Alaska 99705                                                      
 Telephone:  (907) 488-0334                                                    
  POSITION STATEMENT:   Provided comments on HB 348.                           
                                                                               
 GENE ALTIG                                                                    
 4396 Al Cory Road                                                             
 North Pole, Alaska 99705                                                      
 Telephone:  (907) 488-4216                                                    
  POSITION STATEMENT:   Provided comments on HB 348.                           
                                                                               
 HARRY NIEHAUS                                                                 
 P.O. Box 55455                                                                
 North Pole, Alaska 99705                                                      
 Telephone:  (907) 488-9328                                                    
  POSITION STATEMENT:   Provided comments on HB 348.                           
                                                                               
 SCOTT CALDER                                                                  
 P.O. Box 75011                                                                
 Fairbanks, Alaska 99707                                                       
 Telephone:  (907) 474-0174                                                    
  POSITION STATEMENT:   Provided comments on HB 348.                           
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 96-02, SIDE A                                                            
 Number 0000                                                                   
                                                                               
 The House State Affairs Committee was called to order by Chair                
 Jeannette James at 8:00 a.m.  Members present at the call to                  
 order were Representatives James, Ivan, Porter and Willis.                    
 Members absent were Representatives Ogan, Green and Robinson.                 
 HB 369 - PROCUREMENT PREF FOR DISABLED                                      
                                                                               
 The first order of business to come before the House State                    
 Affairs Committee was HB 369.                                                 
                                                                               
 Number 0056                                                                   
                                                                               
 CHAIR JEANNETTE JAMES announced Walter Wilcox, Committee Aide,                
 would present the sponsor statement for HB 369.                               
                                                                               
 WALTER WILCOX, Committee Aide, House State Affairs Committee,                 
 read the following sponsor statement into record.                             
                                                                               
 "This Bill allows 100% disabled owned corporations and                        
 partnerships to be eligible for a disabled bidder preference.                 
                                                                               
 "Current law allows disabled owned sole proprietorships to take               
 advantage of the disabled bidder preference that excludes                     
 partnerships and corporations.  This bill rectifies that."                    
                                                                               
 Number 0135                                                                   
                                                                               
 CHAIR JAMES asked if there were any questions or comments.  She               
 called on the first witness Stan Ridgeway, Deputy Director,                   
 Division of Vocational Rehabilitation.                                        
                                                                               
 Number 0156                                                                   
                                                                               
 STAN RIDGEWAY, Deputy Director, Division of Vocational                        
 Rehabilitation, Department of Education, said the division                    
 supported HB 369.  He stated it would allow persons with                      
 disabilities who were sole owners of corporations to qualify for              
 state bidders preference.                                                     
                                                                               
 CHAIR JAMES asked if there were any further questions or                      
 comments.                                                                     
                                                                               
 Number 0240                                                                   
                                                                               
 REPRESENTATIVE IVAN IVAN enquired to what extend a person needed              
 to be disabled to qualify for HB 369.                                         
                                                                               
 Number 0264                                                                   
                                                                               
 MR. RIDGEWAY responded the Department of Education defined an                 
 individual severely disabled if a major life function was                     
 restricted.  For veterans, he stated, it was defined as 50                    
 percent and above of a major life function restricted.  Mr.                   
 Ridgeway further cited examples of individuals blind, deaf or in              
 a wheelchair as severely disabled.                                            
                                                                               
 Number 0308                                                                   
                                                                               
 CHAIR JAMES announced the presence of Representatives Robinson,               
 Green and Ogan.                                                               
                                                                               
 CHAIR JAMES asked if there were any further questions or                      
 comments.                                                                     
                                                                               
 REPRESENTATIVE JOE GREEN said there was a similar bill passed and             
 modified in the Senate last year then vetoed.  He asked, for the              
 record if those differences had been discussed.                               
                                                                               
 Number 0340                                                                   
                                                                               
 CHAIR JAMES responded HB 369 was written the same way the Senate              
 bill was written before modification, and declared the                        
 Administration agreed to support it.  She further stated she                  
 hoped the bill would move forward without modifications.  Chair               
 James called on Dugan Petty, Director, Department of                          
 Administration.                                                               
                                                                               
 Number 0392                                                                   
                                                                               
 DUGAN PETTY, Director, Division of General Services, Department               
 of Administration, said the department did not object to HB 288               
 last year.  Mr. Petty said HB 288 corrected the inequity by                   
 adding the qualifying entities of partnership and corporation for             
 those with disabilities.                                                      
                                                                               
 CHAIR JAMES asked if there were any further questions or                      
 comments.                                                                     
                                                                               
 Number 0476                                                                   
                                                                               
 REPRESENTATIVE BRIAN PORTER moved that HB 369 move from                       
 committee.  Hearing no objection, HB 369 was moved from the House             
 State Affairs Committee with the attached fiscal note and                     
 individual recommendations.                                                   
                                                                               
 Number 0569                                                                   
                                                                               
 CHAIR JAMES agreed to take further testimony despite the bill had             
 been moved and passed from the committee.  She called on Dave                 
 Gerke via teleconference in Anchorage.                                        
                                                                               
 DAVE GERKE sole proprietor of Sunshine General said he had been               
 disabled due to a heart attack since 1983.  He announced he                   
 completely supported HB 369 and especially the qualifying entity              
 of corporation.  He thanked the committee for their efforts.                  
                                                                               
 HB 363 - INTEREST ON MORTGAGE ESCROW ACCTS                                  
                                                                               
 Number 0645                                                                   
                                                                               
 The next order of business to come before the House State Affairs             
 Committee was HB 363.                                                         
                                                                               
 REPRESENTATIVE CON BUNDE read the following sponsor statement                 
 into record.                                                                  
                                                                               
 "Congress found that many lenders were maintaining bloated escrow             
 accounts with a year or more of excess escrow payment in them.                
 Lenders called this excessive amount a "cushion," but are unable              
 to justify the need for such an excess.  In response, Congress                
 has enacted the Real Estate Settlement Procedures Act (RESPA)                 
 which prohibits lenders and mortgage servicers from requiring                 
 consumers to maintain more than an extra two months' worth of the             
 yearly amount necessary to pay taxes and insurance premiums.                  
 Some escrow accounts do not have more than two months' payment                
 available.  However, the accounting system used by the                        
 institutions holding the escrow account may cause the account to              
 be seriously over the two month ceiling set by RESPA.                         
                                                                               
 "Lenders often invest these escrow accounts for the short term                
 and use the profits as their institution sees fit.  The consumer              
 that pays into the escrow account gives the use of their money to             
 the bank and gains nothing."                                                  
                                                                               
 Representative Bunde interjected and said it was considered                   
 previously in Alaska to pay interest on escrow accounts but was               
 discovered it was only worth a few dollars.  As a result, some                
 felt it was not worth the effort.  Collectively, however, the                 
 mortgages generated a great deal of money.                                    
                                                                               
 He continued to read his sponsor statement into the record.                   
                                                                               
 "Therefore the institutions that hold escrow accounts have an                 
 incentive to ignore RESPA and bloat their accounts in order to                
 maximize profits."                                                            
                                                                               
 He further stated some mortgages did not allow the two month                  
 cushion that RESPA supported.  Most institutions, however, used               
 the two month cushion even though the underlying mortgage                     
 prohibited any cushion or more than a one month cushion.                      
                                                                               
 He continued to read his sponsor statement into the record.                   
                                                                               
 "HB 363 would require lending institutions to pay interest on                 
 money in escrow in reserve accounts.  The interest shall be                   
 credited to the principal balance of a mortgage or paid directly              
 to the borrower.                                                              
                                                                               
 "It's certainly time lending institutions give the consumer a                 
 better deal and I urge the committee to careful consideration of              
 passage of this legislation."                                                 
                                                                               
 Representative Bunde said he would be happy to answer any                     
 questions.                                                                    
                                                                               
 Number 0897                                                                   
                                                                               
 REPRESENTATIVE GREEN commented he understood the concept of a two             
 month pool built to pay insurance, but wondered about accounts                
 paid semi-annually such as property taxes.                                    
                                                                               
 Number 0929                                                                   
                                                                               
 REPRESENTATIVE BUNDE responded there was an accounting system                 
 that separated the items.                                                     
                                                                               
 Number 0965                                                                   
                                                                               
 REPRESENTATIVE GREEN stated it would be an additional safety if               
 an account was above the amount due.                                          
                                                                               
 Number 0975                                                                   
                                                                               
 REPRESENTATIVE PORTER enquired why a lending institution would                
 not make up the difference in fees performed on the loans for the             
 various costs they were reserving for the funds.  They were                   
 actively involved in paying and receiving bills, he said.                     
                                                                               
 Number 1000                                                                   
                                                                               
 REPRESENTATIVE BUNDE responded there was a service and a cost                 
 attached. However, an accounting for that cost needed to be                   
 established rather than alluding to it as a "slush" fund, he                  
 asserted.                                                                     
                                                                               
 Number 1037                                                                   
                                                                               
 REPRESENTATIVE SCOTT OGAN referred to the language "a bank" in HB
 363, and questioned if there was a more generic term to cover                 
 other entities such as credit unions.  He recommended the term                
 "lending institution."                                                        
                                                                               
 Number 1066                                                                   
                                                                               
 REPRESENTATIVE BUNDE agreed the more appropriate term was                     
 "lending institution" and commented he did not attempt to single              
 out banks.                                                                    
                                                                               
 REPRESENTATIVE OGAN asked if it would be appropriate to make a                
 motion to amend the language.                                                 
                                                                               
 REPRESENTATIVE BUNDE said it was an oversite on his part.  He                 
 thought the language had already been corrected.                              
                                                                               
 Number 1109                                                                   
                                                                               
 REPRESENTATIVE GREEN suggested it be used in the definition of                
 "bank" to cover everything.                                                   
                                                                               
 Number 1115                                                                   
                                                                               
 REPRESENTATIVE BUNDE said he was using the term "bank"                        
 generically and suggested Willis Kirkpatrick, Director, Division              
 of Banking, Securities and Corporations, Department of Commerce               
 and Economic Development respond to the dialogue for technical                
 support.                                                                      
                                                                               
 Number 1135                                                                   
                                                                               
 REPRESENTATIVE IVAN asked how Representative Bunde arrived at the             
 2 percent figure stated in HB 363.                                            
                                                                               
 Number 1145                                                                   
 REPRESENTATIVE BUNDE responded it was an area of discussion and a             
 starting point for negotiation.  He announced he was willing to               
 discuss the figure.                                                           
                                                                               
 Number 1185                                                                   
                                                                               
 CHAIR JAMES asked why it was not the same as a savings account                
 interest rate.                                                                
                                                                               
 Number 1190                                                                   
                                                                               
 REPRESENTATAIVE BUNDE responded it was a good suggestion.                     
                                                                               
 Number 1195                                                                   
                                                                               
 REPRESENTATIVE GREEN said 2 percent mentioned in HB 363 narrowed              
 the difference more than a savings account.  He stated there was,             
 more often than not, a larger gap than 2 percent between the                  
 lending and saving account.  He said he understood why                        
 Representative Bunde wanted to close the gap.                                 
                                                                               
 Number 1211                                                                   
                                                                               
 CHAIR JAMES responded institutions would be obliged to stay at                
 the 2 percent rate rather than give an accelerated rate based on              
 the overall banking theory.  Therefore, paying extra money, for               
 the use of money, in this case, challenged that concept.  She                 
 asserted this would result in more service charges because it                 
 would cost the banks extra.                                                   
                                                                               
 Number 1258                                                                   
                                                                               
 REPRESENTATIVE GREEN further stated this created a tendency not               
 to use the money.  He alluded the bill was intended to reduce the             
 number of banks using the reserve accounts for their own gain.                
                                                                               
 Number 1266                                                                   
                                                                               
 CHAIR JAMES asked if Representative Bunde had any figures on the              
 discrepancy in reserved accounts.  She said she knew of a number              
 of institutions where there were insufficient funds demanding                 
 adjustments the following year.  She stated this was especially               
 true when taxes were increased.  She further questioned if the                
 cushion was sufficient - too much or too little.                              
                                                                               
 Number 1300                                                                   
                                                                               
 REPRESENTATIVE BUNDE responded he had figures nationwide and                  
 reminded the committee members many Alaskans took their mortgages             
 to banks outside.  The purpose of the cushion, he further said,               
 was so that lending institutions would not have to dip into their             
 funds.  He said institutions did not dip into their accounts                  
 nationwide.  The cushion sometimes was several months up to a                 
 year in excess of what was needed to protect themselves.                      
 Representative Bunde again stated Willis Kirkpatrick was here to              
 testify and to answer any technical questions.                                
                                                                               
 Number 1355                                                                   
                                                                               
 CHAIR JAMES replied the balance in escrow accounts were                       
 relatively small according to her experiences in tax preparation.             
                                                                               
 Number 1372                                                                   
                                                                               
 REPRESENTATIVE BUNDE stated a similar bill had been introduced to             
 the Alaska State Legislature several years ago.  The impetus was              
 based on a situation where a woman could not move her money from              
 one mortgage to the next.                                                     
                                                                               
 CHAIR JAMES asked if there were any further questions or                      
 comments.                                                                     
                                                                               
 Number 1425                                                                   
                                                                               
 WILLIS KIRKPATRICK, Director, Division of Banking, Securities and             
 Corporations, Department of Commerce and Economic Development,                
 said he was not here to testify but to answer any questions.                  
                                                                               
 Number 1465                                                                   
                                                                               
 REPRESENTATIVE GREEN referred to the question asked earlier, if               
 it was customary for lending institutions to have a "cushy"                   
 amount or a modest amount in excess.                                          
                                                                               
 Number 1480                                                                   
                                                                               
 MR. KIRKPATRICK responded according to RESPA, institutions were               
 not allowed to have more than two months of cushion as far as                 
 taxes and hazardous insurance were concerned.  In his situation,              
 he shared, his escrow account was always short especially when                
 taxes were paid in September, and his payments tended to increase             
 every year due to the shortage.  Mr. Kirkpatrick shared with the              
 committee member his tax bill was around $2,000 which meant he                
 would have around $2,000 in September in his escrow account.  He              
 further stated 90 institutions outside of Alaska regulated under              
 Title VI - banks, credit unions and mutual savings banks - had a              
 certificate of authority to do lending business in the state.  He             
 questioned how an escrow account outside of Alaska would be                   
 affected by HB 363.  He also commented mortgage loans were                    
 accessed over the internet now and wondered how this would affect             
 the bill.                                                                     
                                                                               
 Number 1625                                                                   
                                                                               
 REPRESENTATIVE GREEN said there were many institutions not                    
 adhering to the federal law.  He also asserted the law was not                
 being enforced.  He asked if there really was a problem, or was               
 something needed to reassure the federal law.                                 
                                                                               
 Number 1655                                                                   
                                                                               
 MR. KIRKPATRICK said he did not have the information available to             
 answer Representative Green's question.  He felt the commercial               
 banks, credit unions and mutual savings banks were complying with             
 the federal law.                                                              
                                                                               
 Number 1673                                                                   
                                                                               
 REPRESENTATIVE PORTER asked if HB 363 would put Alaska in an                  
 inferior position.                                                            
                                                                               
 Number 1693                                                                   
                                                                               
 MR. KIRKPATRICK responded financial institutions were targeted                
 under the generic term "bank."  He stated it was a highly                     
 competitive business and Congress was continually battling the                
 over regulation of banks.  There were other financial                         
 intermediaries that had no Congressional regulations, such as                 
 American Express.  He divulged there were other states that had               
 this law and were not put at a disadvantage.  A financial                     
 institution would have to look at the law as the cost of                      
 conducting business, and it would increase their interest                     
 expense.  He concluded, he really did not know if HB 363 would                
 put Alaska at a disadvantage.                                                 
                                                                               
 CHAIR JAMES asked if there were any further questions or                      
 comments.                                                                     
                                                                               
 Number 1765                                                                   
                                                                               
 REPRESENTATIVE CAREN ROBINSON asked if the committee was going to             
 change the wording to read "financial institutions" rather than               
 "banks."                                                                      
                                                                               
 Number 1693                                                                   
                                                                               
 MR. KIRKPATRICK suggested to change the wording under Title VI,               
 chapter one, the administrative title, would direct all                       
 institutions under the title.  He was not sure how to include                 
 mortgage companies, but agreed the term "bank" needed to be                   
 broadened.                                                                    
                                                                               
 Number 1765                                                                   
                                                                               
 REPRESENTATIVE ROBINSON suggested Mr. Kirkpatrick think about the             
 wording further and return with a recommendation.                             
 Number 1828                                                                   
                                                                               
 MR. KIRKPATRICK agreed with Representative Robinson's statement.              
                                                                               
 Number 1830                                                                   
                                                                               
 REPRESENTATIVE ROBINSON asked Mr. Kirkpatrick to respond to                   
 Representataive Ivan's earlier question regarding the 2 percent               
 interest referenced in HB 363.                                                
                                                                               
 Number 1840                                                                   
                                                                               
 MR. KIRKPATRICK cited if the mortgage loan interest rate was 10               
 percent, therefore, according to HB 363, the escrow interest                  
 would be 8 percent.  That, he said, was a favorable rate.  Mr.                
 Kirkpatrick shared with the committee his account was only paying             
 2.3 percent interest.  He suggested looking at the relationship               
 between the deposit and the interest of a depository institution.             
 If, however, it was not a depository institution he did not know              
 what to recommend.                                                            
                                                                               
 Number 1893                                                                   
                                                                               
 REPRESENTATIVE ROBINSON said this discussion made her curious                 
 about her own mortgage account.                                               
                                                                               
 Number 1906                                                                   
                                                                               
 CHAIR JAMES called on a banking industry representative to                    
 testify.                                                                      
                                                                               
 ROBIN WARD, President, Summit Title Insurance Agency Ltd., said               
 the Alaska Mortgage Bankers Association (AMBA) opposed HB 363.                
 She said it would cause a problem with competitive mortgage rates             
 within Alaska.  There was a national law in effect that                       
 restricted institutions to a small escrow cushion account.                    
 Consequently, the institutions could no longer hold the excess                
 needed to pay the taxes, insurance or any other items held in                 
 escrow.  The important part, however, was that investors provided             
 a free flow of competitive rates in Alaska.  With this                        
 requirement came an administrative service cost to monitor each               
 loan, she asserted.  Right now, the servicers were providing the              
 service at no charge.  However, HB 363, would result in                       
 institutions charging a fee for that service.  She alleged it was             
 an administrative and an accounting nightmare to keep track of                
 and pay interest.  As a result, interest rates would increase to              
 cover the fees.  The greatest concern, she asserted, was the                  
 possibility companies would not want to do business in Alaska                 
 affecting the competitiveness of the interest rate and the                    
 attractiveness of the state to loan money to.                                 
                                                                               
 Number 2071                                                                   
 REPRESENTATIVE GREEN enquired if Ms. Ward's banking institution               
 was not complying with federal law.                                           
                                                                               
 Number 2077                                                                   
                                                                               
 MS. WARD said as far as she knew the banking institutions were                
 complying with federal law and were holding a very small cushion              
 of two months in excess.                                                      
                                                                               
 Number 2090                                                                   
                                                                               
 REPRESENTATIVE GREEN remarked that HB 363 did the same thing.                 
                                                                               
 MS. WARD replied it did not.                                                  
                                                                               
 REPRESENTATIVE GREEN asked where it was different from the                    
 federal law.                                                                  
                                                                               
 Number 2093                                                                   
                                                                               
 MS. WARD said HB 363 required the servicer to pay interest on the             
 amount of money held to the buyer in reserve to pay their taxes               
 and insurance.                                                                
                                                                               
 Number 2110                                                                   
                                                                               
 CHAIR JAMES commented escrow accounts were calculated at the                  
 beginning of the year based on an estimate of the amount of                   
 insurance and taxes due.                                                      
                                                                               
 Number 2126                                                                   
                                                                               
 MS. WARD responded that was exactly what happened.  That was the              
 only difference in a payment on a loan.  She said they based it               
 on the past years taxes for the coming year.                                  
                                                                               
 Number 2138                                                                   
                                                                               
 CHAIR JAMES responded 1/6 of taxes and 1/6 in addition to the                 
 requirement for the taxes and insurance was held.                             
                                                                               
 Number 2146                                                                   
                                                                               
 MS. WARD said it was more complicated than the above description              
 by Chair James.  She cited in Anchorage taxes were paid in two                
 separate installments and insurance was paid in one installment.              
 Ms. Ward agreed, however, that was the general idea.                          
                                                                               
 Number 2159                                                                   
                                                                               
 REPRESENTATIVE BUNDE referred to a handout titled "Overcharging               
 on Mortgages:  Violations of Escrow Account Limits by the                     
 Mortgage Lending Industry" by the attorneys general of                        
 California, Florida, Iowa, Massachusetts, Minnesota, New York and             
 Texas."  The report found the banking industry was not as service             
 oriented as prior testimony had indicated.  He referred the                   
 committee members to page 8 of the report and called their                    
 attention to the individual item analysis verbiage.  He alluded               
 the accounting system allowed only a two month cushion the day                
 the insurance payment was due and an equal amount due in taxes in             
 six months.  Therefore, the two month cushion sat for six months.             
 Representative Bunde said there was a cost for this service.  It              
 was derived from the interest gained on the float.  He stated it              
 might be equal to the cost of doing business, but no one really               
 knew.  If interest were paid on the escrow, the state of Alaska               
 would attract more money and mortgages, he suggested.                         
 Representative Bunde further said in response to a previous                   
 comment, this was not an accounting nightmare due to computer                 
 technology.  He agreed with previous testimony the money belonged             
 to the homeowner.  Representative Bunde further stated the entire             
 purpose of HB 363 was to make sure the bank complied with RESPA.              
 He advised the bill was an encouragement to comply with federal               
 law and further suggested banks should be required to pay                     
 interest on anything over the two month cushion.  He said, he did             
 not want the bank to use its own money nor charge a service fee.              
 However, there was no assurance the banks were only using the                 
 amount of money they needed for the service charge now.                       
                                                                               
 Number 2324                                                                   
                                                                               
 CHAIR JAMES stated the mortgage owner needed to take individual               
 responsibility.  She questioned whether the mortgage escrow                   
 account was setup for the benefit of the bank or the individual.              
 If it were setup for the individual they would have a choice                  
 where their money went until it was required to make their                    
 insurance and tax payments.  Currently, individuals did not have              
 a choice.  She further voiced there was little argument to pay                
 interest other than what was the standard passbook savings                    
 interest.  Lastly, Chair James declared the individual needed to              
 take more responsibility to ascertain if their account was being              
 handled legally.                                                              
                                                                               
 REPRESENTATIVE BUNDE responded the market forces would respond if             
 there was a lending institution acting unlawfully.  He further                
 stated the main issue was no one knew how much money was being                
 made on servicing a loan.  The difference between the interest                
 and the charges, he asserted, was the problem.  He agreed with                
 Chair James that passbook savings was a logical interest amount.              
                                                                               
 Number 2405                                                                   
                                                                               
 CHAIR JAMES stated we did not know the situation collectively,                
 but each person would be able to ascertain their situation                    
 individually.                                                                 
 Number 2425                                                                   
                                                                               
 REPRESENTATIVE BUNDE cited an example where an individual                     
 negotiated a mortgage with no escrow account so the individual                
 was responsible for paying his own taxes and insurance.  He                   
 further stated escrow accounts were a product of the 1930's when              
 individuals could not pay their taxes and insurance.  However,                
 that was not the situation today.  Representative Bunde lastly                
 pointed out there were 14 states that passed similar legislation              
 and mortgages were still being made.                                          
                                                                               
 TAPE 96-2, SIDE B                                                             
 Number 0000                                                                   
                                                                               
 REPRESENTATIVE ROBINSON questioned why HB 363 was necessary when              
 a federal law existed and suggested a resolution requiring the                
 state financial lenders to follow the federal law.                            
                                                                               
 Number 0037                                                                   
                                                                               
 REPRESENTATIVE BUNDE responded a state resolution would not have              
 an impact when they did not follow the federal law now.                       
                                                                               
 Number 0042                                                                   
                                                                               
 CHAIR JAMES questioned if there was evidence the banks were not               
 following the federal law.                                                    
                                                                               
 Number 0047                                                                   
                                                                               
 REPRESENTATIVE BUNDE said there was evidence at a nationwide                  
 level.                                                                        
                                                                               
 CHAIR JAMES asked about Alaska.                                               
                                                                               
 REPRESENTATIVE BUNDE replied many mortgages went outside Alaska               
 and on a national level there was evidence they were not                      
 following the federal law.  Based on the individual item analysis             
 accounting system, literally billions of dollars were in excess               
 of actual expenses.  He suggested billions of dollars was a lot               
 of money when considering the cost of servicing a loan.                       
                                                                               
 Number 0071                                                                   
                                                                               
 REPRESENTATAIVE GREEN referred to page 9 of the report titled                 
 "Overcharging on Mortgages:  Violations of Escrow Account Limits              
 by the Mortgage Lending Industry" by the attorneys general of                 
 California, Florida, Iowa, Massachusetts, Minnesota, New York and             
 Texas."  He referred the committee members to the bar graph                   
 depicted which illustrated the escalation in the account before               
 each payment.  Representative Green questioned why passbook                   
 interest could not be paid to the amount above the RESPA ceiling.             
 Number 0100                                                                   
                                                                               
 REPRESENTATIVE BUNDE replied that was his original idea.                      
 However, the individual item analysis accounting method                       
 calculated a two month cushion.  The goal he reiterated was to                
 forbid the individual accounting method, require a collective two             
 month cushion, and mandate institutions to pay interest on                    
 anything collected over the two month cushion.  The consumer,                 
 however, had no choice in the amount of money the bank required               
 for their mortgage payments to service the loan without interest.             
 He asserted, the question was how much was actually needed to                 
 service the loan.  He commented he would prefer to see the bank               
 charge a service fee and then pay interest.                                   
                                                                               
 Number 0163                                                                   
                                                                               
 REPRESENTATIVE GREEN said he knew of lending institutions that                
 paid interest on checking accounts without charging a service fee             
 and it did not appear to be an accounting nightmare as previous               
 testimony indicated.  He suggested, the 1/4 to 1/2 percent                    
 additional loan fee to cover the cost was inflated.                           
 Representative Green further suggested there must be a method to              
 discourage the banks from collecting beyond the two month cushion             
 and perhaps charge a fraction of the amount of money they planned             
 to make on the excess.  He cited, if the banks were making 10                 
 percent and paying 3 percent on the excess they were still making             
 money as well as the customer.                                                
                                                                               
 Number 0215                                                                   
                                                                               
 REPRESENTATIVE BUNDE responded it was not a huge amount of money.             
 However, it was a forced participation as Chair James stated                  
 earlier.  He suggested the comfort level would increase if the                
 participants knew that only the amount of money necessary to                  
 service the loan was being used.  Representative Bunde further                
 said this was a highly competitive industry and when given the                
 chance to make money institutions would.                                      
                                                                               
 Number 0261                                                                   
                                                                               
 REPRESENTATIVE OGAN asked if Ms. Ward had any further comments.               
                                                                               
 Number 0282                                                                   
                                                                               
 MS. WARD said, due to possible liens on mortgages, taxes and                  
 insurance, payments were necessary to protect the lender.  Most               
 of the loans made in Alaska, she stated, were high ratio                      
 requiring less than 10 percent down.  Therefore, to protect the               
 lender the property was used as collateral.                                   
                                                                               
 Number 0319                                                                   
                                                                               
 CHAIR JAMES said she felt it was not an accounting nightmare if               
 passbook savings interest was paid on the balance in the escrow               
 account.  She further alleged it was an advantage to the bank to              
 pay interest to help ensure there was sufficient money in the                 
 account to pay the bills.                                                     
                                                                               
 Number 0338                                                                   
                                                                               
 MS. WARD said that was true, except currently, the mortgage rates             
 were 7.5 to 8 percent and the majority of the interest rate went              
 to the investor and not the servicer.                                         
                                                                               
 Number 0366                                                                   
                                                                               
 CHAIR JAMES asked whether servicers, not banks, maintained                    
 escrows in an interest bearing or a trust account.                            
                                                                               
 Number 0382                                                                   
                                                                               
 MS. WARD replied it was held in an interest bearing account.  She             
 further commented the servicer was working for the investor.                  
                                                                               
 Number 0388                                                                   
                                                                               
 CHAIR JAMES said in this case the homeowner did not get any                   
 benefit from the interest bearing account.                                    
                                                                               
 Number 0395                                                                   
                                                                               
 MS. WARD replied the impound account protected the loan and the               
 collateral according to the servicer.  She cited she recently                 
 received a refund from her impounded account.                                 
                                                                               
 Number 0412                                                                   
                                                                               
 CHAIR JAMES asked if there were any further questions or                      
 comments.                                                                     
                                                                               
 REPRESENTATIVE BUNDE informed the committee members the statues               
 defined "bank" and "banking."                                                 
                                                                               
 CHAIR JAMES also reported the term "bank" was defined broadly and             
 included all other financial institutions.                                    
                                                                               
 Number 0430                                                                   
                                                                               
 CHAIR JAMES said she would like to work closely with the sponsor              
 of HB 363 and address the interest dilemma.  She proposed a                   
 possible committee substitute was necessary.                                  
                                                                               
 Number 0461                                                                   
                                                                               
 REPRESENTATIVE BUNDE thanked the chair and quoted 3 percent as a              
 fair amount or tie it to a passbook savings interest.                         
                                                                               
 Number 0472                                                                   
                                                                               
 CHAIR JAMES responded there were institutions that did not have               
 passbook savings.                                                             
                                                                               
 Number 0480                                                                   
                                                                               
 REPRESENTATIVE BUNDE replied then an average of passbook savings              
 paid in Alaska was fair.  He further reiterated Ms. Ward's                    
 testimony that servicers made money on the interest in the escrow             
 accounts.  He suggested there existed the potential to pad the                
 escrow and urged the committee members to require paying a                    
 predetermined percentage on the entire account to prevent                     
 dishonestly.                                                                  
                                                                               
 Number 0509                                                                   
                                                                               
 REPRESENTATIVE PORTER suggested the subcommittee address other                
 issues as well.  He expressed he was not sure if a problem really             
 existed.  He commented there was the unknown cost factor added to             
 the mortgage account based on the institution benefitting, but                
 the borrower benefited as well by not having to pay for the                   
 services.  Furthermore, the testimony today indicated the                     
 services were required.  Representative Porter, in conclusion,                
 stated, if we were to compensate the borrower for using the money             
 then we should also compensate the institution for the service.               
 He further said he was not comfortable passing a bill that could              
 potentially cost people money.                                                
                                                                               
 Number 0580                                                                   
                                                                               
 CHAIR JAMES disagreed with Representative Porter.  She alleged                
 the institutions were providing a service for themselves and not              
 for the mortgage holder.                                                      
                                                                               
 Number 0629                                                                   
                                                                               
 REPRESENTATIVE ROBINSON appreciated the consumer right aspect of              
 HB 363 but again questioned whether or not a bill was necessary.              
 She stated the committee should enforce the banks to comply with              
 the existing laws rather than produce another piece of                        
 legislation.                                                                  
                                                                               
 Number 0670                                                                   
                                                                               
 CHAIR JAMES said the issues involved were putting money into an               
 interest bearing account and not getting a return and taking away             
 individual responsibility.  Chair James expressed it was an                   
 individual's responsibility to comply with the escrow laws.  She              
 lastly asked for members who were interested in working on HB 363             
 further.                                                                      
                                                                               
 Number 0743                                                                   
                                                                               
 REPRESENTATIVE BUNDE replied to Representative Porter's previous              
 comment regarding the service fee.  He said, the consumer was                 
 paying a service fee now, however, they did not know how much.                
                                                                               
 CHAIR JAMES asked Ms. Ward if she would be available in the                   
 future to answer further questions.                                           
                                                                               
 MS. WARD responded, "yes."                                                    
                                                                               
 Number 0788                                                                   
                                                                               
 CHAIR JAMES excused Representative Ogan due to an Oil and Gas                 
 Committee meeting.                                                            
                                                                               
 HB 348 - VIDEO/AUDIOTAPE INTERVIEW OF ABUSED MINOR                          
                                                                               
 Number 0797                                                                   
                                                                               
 The next order of business to come before the House State Affairs             
 Committee was HB 348.                                                         
                                                                               
 CHAIR JAMES explained, Barbara Cotting, Legislative Assistant to              
 Representative Jeannette James, was here to read the sponsor                  
 statement.                                                                    
                                                                               
 BARBARA COTTING, Legislative Assistant to Representative                      
 Jeannette James, read the following statement into the record.                
                                                                               
 "The intent of the bill is to have a video camera or an audiotape             
 recorder turned on immediately at the start of the original,                  
 initial official interview with an allegedly abused or neglected              
 child and top record the entire interview and all subsequent                  
 interviews with the child.                                                    
                                                                               
 "When dealing with emotion-lade situations, adults' perceptions               
 and memories are not necessarily reliable; and children can be                
 led to make imaginary happenings sound like fact and to finally               
 believe these fantasies themselves.  The credibility of all                   
 parties can become suspect and an accurate objective judgement is             
 then impossible.  This bill would held dispel incorrect                       
 perceptions and allow fairness to all parties involved.                       
                                                                               
 "I met with strong resistance from DFYS and other state agencies              
 when I introduced a similar bill two years ago.  This year the                
 agencies should be much more receptive due to a recent                        
 Ombudsman's investigation, which found:                                       
                                                                               
 "Arguments in favor of videotaping or at least audiotaping are as             
 compelling as those against the practice....                                  
                                                                               
 "Administrative conveniences does not justify lack of agency                  
 accountability in this sensitive area....                                     
                                                                               
 "Where video and audio recorders might have intimidated children              
 in the 1960's, the same likely cannot be said in the 1990's.                  
 (Sponsor's insert:  I also believe that taping makes the child                
 feel validated, not intimidated.)  And finally....                            
                                                                               
 "Social workers questioned by the ombudsman investigator either               
 said that audio taping would not be a problem and might be easier             
 than note taking, or said that a videotape would be the best way              
 to review a case.                                                             
                                                                               
 "HB 348 will help implement sound public policy by requiring                  
 accountability of agency action in the sensitive area of state                
 interference in private family life, and I strongly urge your                 
 support for this important piece of legislation."                             
                                                                               
 CHAIR JAMES asked if there were any questions or comments and                 
 called on Gene Ottenstroer via teleconference in Delta Junction.              
                                                                               
 MS. COTTING said, for the record, Steve Grunstein, P.O. Box                   
 32604, Juneau, Alaska 99803, (907) 789-2155, called and stated an             
 important line needed to be drawn between abuse and discipline.               
                                                                               
 GENE OTTENSTROER said HB 348 helped but was not the answer.  He               
 referred the committee members to line 13, "A school official                 
 shall be present during an interview at the school unless the                 
 child objects...."  Mr. Ottenstroer asserted a parent needed to               
 be present also.  He alleged a child would be nervous without a               
 parent present when faced with officials.  He also referred the               
 committee members to page 2, line 2, "The interview shall be                  
 videotaped or audiotaped as required by AS 47.17.035."  He stated             
 the interview should be done by a non-biased party.  The police               
 department, he said, had been known to tamper with tapes to their             
 advantage.  He further referred the committee members to line 6,              
 "the department or agency shall make every reasonable effort to               
 notify the child's parent, guardian, or custodian that the                    
 interview occurred unless it appears to the department or agency              
 that notifying the child's parent, guardian, or custodian would               
 endanger the child."  Mr. Ottenstroer questioned, who, had the                
 authority to make that decision.  He stated, a social worker                  
 would cause problems.  He also cited the case described in the                
 State of Alaska Ombudsman report dated June 21, 1995.  He said it             
 had gotten to the point where parents could not touch their                   
 children.                                                                     
                                                                               
 CHAIR JAMES called on the next testifier, Nancy Buell, Director,              
 Education Program Support.                                                    
                                                                               
 NANCY BUELL, Director, Education Program Support, Department of               
 Education, stated the protection of the child and the                         
 availability of technology were the two issues the department was             
 concerned about.  Ms. Buell alleged the factors that influenced               
 children were trust, stress, and technology.  She further alleged             
 technology was not always reliable or available in rural areas                
 potentially keeping the child in a dangerous situation.  She                  
 stated the department did not oppose HB 348 but was concerned                 
 administrative convenience would interfere with the intent of the             
 legislation.                                                                  
                                                                               
 Number 1430                                                                   
                                                                               
 CHAIR JAMES asked the committee members if they wanted to hold                
 questions until the end or after each testimony.                              
                                                                               
 Number 1444                                                                   
                                                                               
 REPRESENTATIVE ROBINSON replied it was best to ask questions                  
 after each testimony.                                                         
                                                                               
 CHAIR JAMES asked if there were any further questions or                      
 comments.                                                                     
                                                                               
 Number 1456                                                                   
                                                                               
 MS. BUELL further stated she was concerned about the cultural                 
 protection of children.  She cited for spiritual reasons some                 
 cultures did not allow video/audiotaping.                                     
                                                                               
 CHAIR JAMES responded she was open to any suggestions.                        
                                                                               
 Number 1475                                                                   
                                                                               
 REPRESENTATIVE IVAN said he would like to absorb the information              
 presented further before asking any questions.                                
                                                                               
 CHAIR JAMES called on the next testifier, Jayne Andreen,                      
 Executive Director, Council on Domestic Violence and Sexual                   
 Assault.                                                                      
                                                                               
 Number 1503                                                                   
                                                                               
 JAYNE ANDREEN, Executive Director, Council on Domestic Violence               
 and Sexual Assault, said she was concerned about the initial                  
 interview of children who had alleged abuse or neglect.  She                  
 asserted it was important to look at the children's needs upon                
 disclosure.  Ms. Andreen cited the environment must be safe and               
 supportive, and the children must be surrounded by someone they               
 trust.  She stated the majority of child abuse complaints did not             
 go beyond the initial complaint and was concerned HB 348 would                
 subject Alaskan children to a formal process potentially causing              
 damage.                                                                       
                                                                               
 Number 1675                                                                   
                                                                               
 REPRESENTATIVE ROBINSON asked Ms. Andreen what type of interviews             
 were being conducted around the state.  She stated at one point               
 interview rooms were at the prosecutor's office and then at some              
 point all parties involved were videotaped in an official                     
 interview.                                                                    
                                                                               
 Number 1715                                                                   
                                                                               
 MS. ANDREEN responded the ideal situation was to use a one-way                
 mirror with a camera in another room.  The interview was usually              
 conducted after a determination had been made that it was                     
 warranted by trained officials such as a police officer.  The                 
 idea was to get it on tape for the court and to eliminate the                 
 number of times the child had to repeat his testimony.                        
                                                                               
 Number 1783                                                                   
                                                                               
 REPRESENTATIVE ROBINSON suggested to the committee members more               
 information was needed statewide to ascertain exactly what was                
 being done to eliminate repeated testimony.                                   
                                                                               
 Number 1855                                                                   
                                                                               
 CHAIR JAMES called on the next testifier, Del Smith, Deputy                   
 Commissioner, Office of the Commissioner, Department of Public                
 Safety.                                                                       
                                                                               
 DEL SMITH, Deputy Commissioner, Office of the Commissioner,                   
 Department of Public Safety, stated the department had some                   
 practical concerns regarding HB 348.  Mr. Smith expressed the                 
 logistical concerns of furnishing interview rooms throughout the              
 state and was afraid someone would not be prosecuted because of               
 technical problems.  He suggested officials use a tape recorder               
 in the field to eliminate repetition and interpretation mistakes.             
                                                                               
 Number 1968                                                                   
                                                                               
 REPRESENTATIVE ROBINSON questioned if bringing all the parties                
 concerned together for an initial interview was the direction the             
 state should take.                                                            
                                                                               
 Number 1993                                                                   
                                                                               
 MR. SMITH replied it was the best direction to take.  Repeated                
 interviews were problematic and any way to capture the                        
 information needed in the initial interview was less intrusive.               
 However, statutorily mandating this would cause problems, he                  
 alleged.                                                                      
                                                                               
 Number 2044                                                                   
                                                                               
 REPRESENTATIVE ROBINSON asked Mr. Smith if children were                      
 reporting the incident to a teacher, for example, whereupon the               
 teacher would contact the appropriate authorities.                            
                                                                               
 Number 2073                                                                   
                                                                               
 MR. SMITH responded he imagined a child would tell a teacher what             
 happened and because it was not recorded he was concerned the                 
 information would be suppressed.                                              
                                                                               
 CHAIR JAMES called on the next testifier, Yvonne Chase, Deputy                
 Commissioner, Office of the Commissioner, Department of Health                
 and Social Services.                                                          
                                                                               
 Number 2121                                                                   
                                                                               
 YVONNE CHASE, Deputy Commissioner, Office of the Commissioner,                
 Department of Health and Social Services, said the department                 
 conducted a study to look at videotaping.  The report in summary              
 stated at this point no state had a mandatory videotaping policy.             
 However, 35 states actively use audio/videotaping.  The                       
 department did not oppose the use of videotaping, she asserted,               
 when useful, but there were problems inherent when mandating such             
 legislation.  Ms. Chase further stated HB 348 clearly                         
 demonstrated what happened during an interview affected the                   
 outcome of a case.  She informed the committee members staff at               
 the Department of Health and Social Services indicated they would             
 like to use audiotaping more widely for accountability and                    
 training reasons.  She lastly asked the committee to consider the             
 logistical and legal issues involved with this bill.                          
                                                                               
 TAPE 96-3, SIDE A                                                             
 Number 0000                                                                   
                                                                               
 CHAIR JAMES asked if there were any further questions or                      
 comments.                                                                     
                                                                               
 Number 0070                                                                   
                                                                               
 REPRESENTATIVE PORTER said he was only familiar with Anchorage                
 cases and commented it was unlikely a DFYS professional, for                  
 example, would be the initial contact person.  He questioned if               
 there were in fact times when a DFYS professional was the initial             
 contact.                                                                      
                                                                               
 Number 0123                                                                   
 MS. CHASE responded teenagers self-referred themselves to DFYS.               
                                                                               
 CHAIR JAMES asked if there were any further questions or comments             
 and called on Betty Rollins via teleconference in Fairbanks.                  
                                                                               
 Number 0140                                                                   
                                                                               
 BETTY ROLLINS said she could not imagine why a department such as             
 DFYS would object to videotaping an interview for the protection              
 of the child and the agency.  Ms. Rollins asserted she supported              
 the mandate for fear of agencies using technical reasons as                   
 excuses not to tape the interview.  She further expressed parents             
 should be notified of the interview but not necessarily present               
 at the interview.  Ms. Rollins also expressed her concerns of                 
 agencies writing the bill for fear of changing the intent.  She               
 suggested individuals carried the equipment with them as small                
 cameras were available.  She said she preferred a videotape over              
 an audiotape for fear of tampering.  In conclusion, she said, she             
 supported HB 348 because it protected the agency, the child, and              
 the parent.                                                                   
                                                                               
 CHAIR JAMES called on the next testifier, Charles Rollins via                 
 teleconference in Fairbanks.                                                  
                                                                               
 Number 0330                                                                   
                                                                               
 CHARLES ROLLINS said he supported HB 348.  Child abuse was a                  
 serious crime and the children were worth the expense of such a               
 bill.                                                                         
                                                                               
 CHAIR JAMES called on the next testifier, Lauree Hugonin,                     
 Executive Director, Alaska Network on Domestic Violence and                   
 Sexual Assault.                                                               
                                                                               
 Number 0388                                                                   
                                                                               
 LAUREE HUGONIN, Executive Director, Alaska Network on Domestic                
 Violence and Sexual Assault, discussed the tenderness of child                
 abuse as a topic.  It was a difficult dialogue and she                        
 appreciated the legislature for addressing the issue.  She stated             
 it was a surprise to learn in Alaska only certain professionals               
 were qualified to report child abuse.  She asked the committee                
 members to think about the mitigation of false reporting and                  
 suggested there needed to be an opportunity to check each report.             
 Ms. Hugonin said we needed to look at what was best for children.             
 She further suggested more training would be necessary to ensure              
 accurate interviews.  She reiterated earlier testimony that the               
 fewer interviews the better for the children to lessen the                    
 trauma.  She suggested a solution was to provide a room with a                
 two-way mirror and video camera where the experienced personnel               
 were present behind the mirror asking the needed questions.                   
 This, she hoped, would prevent repeated interviews.  She also                 
 suggested different requirements and expectations for different               
 ages.  She said she was concerned about the storage of tapes in               
 the event of an unfounded case, for example.  In conclusion, she              
 stated she was concerned about the good faith of people reporting             
 cases and was concerned about creating an environment which would             
 discourage reporting of abuse.                                                
                                                                               
 CHAIR JAMES called on the next testifier, Jodi Delaneyvia                     
 telephone in North Pole.                                                      
                                                                               
 Number 0888                                                                   
                                                                               
 JODI DELANEY said she lost her family due to a child abuse                    
 allegation.  Ms. Delaney asserted videotaping was a check and                 
 balance in the system.  She inferred there was not a check and                
 balance on the social workers and cited a case where her nephew               
 was sexually abused in a specialized foster home.  She further                
 stated Alaska led the nation in false allegations of child abuse              
 and no one was available to pick up the pieces.  She cited 60                 
 percent of allegations were false and 80 hours minimum were spent             
 on investigating each case.  Ms. Delaney felt a videotape of an               
 interview would decrease false allegations, and all individuals               
 involved would be working from the same report.  She further                  
 stated all laws on child abuse were written as if the parent was              
 the perpetrator.  She declared a video camera was a very                      
 inexpensive tool to save the lives of families.  She questioned               
 the domino effect on the family in the event of a false                       
 allegation.  Ms. Delaney declared she had designed a chart to                 
 illustrate how the state of Alaska could save money to help our               
 social workers.  She stated she requested for two years a                     
 grievance procedure after she was falsely accused.  She cited                 
 there were hidden agendas in the system and they needed to be                 
 cleaned-up.  She further asserted if there had been a videotape               
 in her case she would not have been falsely accused.  In                      
 conclusion, she cited her son was highly traumatized by the                   
 process.                                                                      
                                                                               
 CHAIR JAMES introduced the next testifier, Gene Altig via                     
 teleconference in North Pole.                                                 
                                                                               
 Number 1444                                                                   
                                                                               
 GENE ALTIG suggested the teacher should be the interviewer.  He               
 referred the committee members to line 12, page 1 and line 6,                 
 page 2, and agreed parents needed to be notified.  Mr. Altig                  
 responded to earlier testimony regarding the storage of tapes.                
 He stated, technology already existed to conveniently store them.             
 He expressed his desire for videotaping over audiotaping and                  
 cited the Rodney King court case.                                             
                                                                               
 CHAIR JAMES called on the next testifier, Harry Niehaus via                   
 teleconference in North Pole.                                                 
 Number 1515                                                                   
                                                                               
 HARRY NIEHAUS said HB 348 needed work for the simple reason an                
 audiotape could be turned off and manipulated.  However, a                    
 videotape displayed the time and date therefore protecting the                
 child.  Mr. Niehaus also stated accountability and checks and                 
 balances were needed in the system.  He referred the committee                
 members to line 6, page 2 and suggested striking "make every                  
 reasonable effort" and replace it with "the department shall."                
 He also referred the committee members to page 1, line 14, "A                 
 school official shall be present during an interview at the                   
 school unless the child objects."  An official should be present              
 even if a child objected due to accountability, he asserted.                  
                                                                               
 CHAIR JAMES called on the next testifier, Scott Calder via                    
 teleconference in Fairbanks.                                                  
                                                                               
 Number 1625                                                                   
                                                                               
 SCOTT CALDER said HB 348 moved in the right direction.  He                    
 stated, however, the provision for audiotaping was not a good                 
 idea.  Strong, empirical evidence was needed to prove or disprove             
 the actions of the government to protect family integrity.  The               
 lack of public trust was the real issue, he alleged.  Mr. Calder              
 said he could not think of any reason to trust the individuals                
 involved in an investigation.  He expressed accountability was                
 needed in the departments interfering with family life.  He said              
 there was an assumption the parents needed to be investigated on              
 the part of the department.  He said he knew of many parents who              
 felt the departments needed to be investigated.  He disagreed                 
 with earlier testimony regarding the age of children and the type             
 of interview used.  He felt it was a side issue.  He also                     
 suggested the departments were accountable for the potential mis-             
 use of information.  He alleged there was an epidemic of hysteria             
 regarding the reporting of child abuse.  Lastly, he commented, a              
 public review process was needed to address the foster care                   
 system as established within the Department of Administration.                
 He cited for five years now Fairbanks wanted a review.  In                    
 conclusion, he reiterated a strong, empirical document was needed             
 in every situation where action was needed.                                   
                                                                               
 Number 1861                                                                   
                                                                               
 CHAIR JAMES recognized the presence of Gail Phillips, Speaker of              
 the House of Representatives.                                                 
                                                                               
 Number 1882                                                                   
                                                                               
 REPRESENTATIVE ROBINSON responded Ms. Hugonin did not have a                  
 problem regarding the storage of videotapes.  Representative                  
 Robinson further stated the budget for the foster care review                 
 panel had been cut, and commented that was the reason Fairbanks               
 was not involved.                                                             
                                                                               
 Number 1944                                                                   
                                                                               
 CHAIR JAMES said there was a problem and she would like to work               
 with the Department of Health and Social Services, the Department             
 of Public Safety, the Department of Law, and anyone on the                    
 committee who was interested to ensure HB 348 addressed the                   
 issues discussed today on a statewide basis.                                  
                                                                               
 Number 1983                                                                   
                                                                               
 MS. DELANEY asked if the public would be allowed to participate.              
 She further asked for someone to address the incident in Delta                
 Junction mentioned in previous testimony.                                     
 ADJOURNMENT                                                                   
                                                                               
 Number 2008                                                                   
                                                                               
 CHAIR JAMES adjourned the House State Affairs Committee Meeting               
 at 10:10 a.m.                                                                 
                                                                               
                                                                               

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