Legislature(1995 - 1996)
03/09/1996 10:03 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE March 9, 1996 10:03 a.m. MEMBERS PRESENT Representative Jeannette James, Chair Representative Joe Green Representative Ivan Ivan Representative Brian Porter Representative Caren Robinson MEMBERS ABSENT Representative Scott Ogan, Vice Chair Representative Ed Willis COMMITTEE CALENDAR HOUSE BILL NO. 532 "An Act relating to determination by executive branch agencies of the costs of reviewing, adopting, amending, and repealing regulations." - PASSED OUT OF COMMITTEE 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." - PASSED CSHB 348(STA) OUT OF COMMITTEE * HOUSE BILL NO. 359 "An Act relating to the appointment and confirmation process for members of certain boards, commissions, and similar bodies; relating to terms of certain appointees; and providing for an effective date." - PASSED CSHB 359(STA) OUT OF COMMITTEE * HOUSE BILL NO. 372 "An Act relating to liquor licenses issued to a restaurant or eating place; and providing for an effective date." - PASSED OUT OF COMMITTEE HOUSE BILL NO. 368 "An Act relating to election campaigns, election campaign financing, the oversight and regulation of election campaigns by the Alaska Public Offices Commission, the activities of lobbyists that relate to election campaigns, and the definitions of offenses of campaign misconduct; and providing for an effective date." - PASSED CSHB 368(STA) OUT OF COMMITTEE HOUSE BILL NO. 317 "An Act relating to election campaigns, election campaign financing, the oversight and regulation of election campaigns by the Alaska Public Offices Commission, the activities of lobbyists that relate to election campaigns, and the definitions of offenses of campaign misconduct; and providing for an effective date." - HEARD AND HELD HOUSE BILL NO. 401 "An Act authorizing the issuance and sale of revenue bonds to fund public wastewater systems, nonpoint source water pollution control projects, including solid waste management systems, and estuary conservation and management projects; authorizing the use of the Alaska clean water fund to pay and secure the bonds and to pay costs related to issuance and administration of the bonds; authorizing certain measures to secure payment of the bonds; and amending Alaska Rule of Civil Procedure 3." - PASSED CSHB 401(STA) OUT OF COMMITTEE (*First public hearing) PREVIOUS ACTION BILL: HB 532 SHORT TITLE: COSTS OF ADOPTING REGULATIONS SPONSOR(S): STATE AFFAIRS JRN-DATE JRN-PG ACTION 02/28/96 2912 (H) READ THE FIRST TIME - REFERRAL(S) 02/28/96 2913 (H) STA, FINANCE 03/07/96 (H) STA AT 8:00 AM CAPITOL 102 03/07/96 (H) MINUTE(STA) 03/09/96 (H) STA AT 10:00 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 1:00 PM 08/26/95 (H) MINUTE(STA) 01/08/96 2383 (H) COSPONSOR(S): KELLY, TOOHEY 01/23/96 (H) STA AT 8:00 AM CAPITOL 102 01/23/96 (H) MINUTE(STA) 02/10/96 (H) STA AT 2:00 PM CAPITOL 102 02/10/96 (H) MINUTE(STA) 03/07/96 (H) STA AT 8:00 AM CAPITOL 102 03/07/96 (H) MINUTE(STA) 03/09/96 (H) STA AT 10:00 AM CAPITOL 102 BILL: HB 359 SHORT TITLE: APPOINTMENT PROCESS FOR BDS & COMM'NS SPONSOR(S): REPRESENTATIVE(S) PORTER, Green JRN-DATE JRN-PG ACTION 12/29/95 2360 (H) PREFILE RELEASED 01/08/96 2360 (H) READ THE FIRST TIME - REFERRAL(S) 01/08/96 2360 (H) STATE AFFAIRS, JUDICIARY 03/07/96 (H) STA AT 8:00 AM CAPITOL 102 03/07/96 (H) MINUTE(STA) 03/09/96 (H) STA AT 10:00 AM CAPITOL 102 BILL: HB 372 SHORT TITLE: RESTAURANT LIQUOR LICENSES SPONSOR(S): REPRESENTATIVE(S) ROKEBERG, B.Davis, Brown JRN-DATE JRN-PG ACTION 12/29/95 2363 (H) PREFILE RELEASED 01/08/96 2363 (H) READ THE FIRST TIME - REFERRAL(S) 01/08/96 2363 (H) STATE AFFAIRS, LABOR & COMMERCE 01/10/96 2405 (H) COSPONSOR(S): BROWN 03/07/96 (H) STA AT 8:00 AM CAPITOL 102 03/07/96 (H) MINUTE(STA) 03/09/96 (H) STA AT 10:00 AM CAPITOL 102 BILL: HB 368 SHORT TITLE: ELECTION CAMPAIGN FINANCE REFORM 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 2362 (H) STA, JUDICIARY, FINANCE 01/25/96 (H) STA AT 8:00 AM CAPITOL 102 01/25/96 (H) MINUTE(STA) 01/30/96 (H) STA AT 8:00 AM CAPITOL 102 01/30/96 (H) MINUTE(STA) 02/01/96 (H) STA AT 8:00 AM CAPITOL 102 02/01/96 (H) MINUTE(STA) 02/29/96 (H) STA AT 8:00 AM CAPITOL 102 02/29/96 (H) MINUTE(STA) 03/05/96 (H) STA AT 8:00 AM CAPITOL 102 03/05/96 (H) MINUTES(STA) 03/09/96 (H) STA AT 10:00 AM CAPITOL 102 BILL: HB 317 SHORT TITLE: ELECTION CAMPAIGN FINANCE REFORM SPONSOR(S): REPRESENTATIVE(S) FINKELSTEIN JRN-DATE JRN-PG ACTION 04/21/95 1427 (H) READ THE FIRST TIME - REFERRAL(S) 04/21/95 1427 (H) STATE AFFAIRS, JUDICIARY, FINANCE 01/08/96 2358 (H) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS 01/08/96 2358 (H) STATE AFFAIRS, JUDICIARY, FINANCE 01/25/96 (H) STA AT 8:00 AM CAPITOL 102 01/25/96 (H) MINUTE(STA) 01/30/96 (H) STA AT 8:00 AM CAPITOL 102 01/30/96 (H) MINUTE(STA) 02/01/96 (H) STA AT 8:00 AM CAPITOL 102 02/01/96 (H) MINUTE(STA) 02/29/96 (H) STA AT 8:00 AM CAPITOL 102 02/29/96 (H) MINUTE(STA) 03/05/96 (H) STA AT 8:00 AM CAPITOL 102 03/05/96 (H) MINUTES(STA) 03/09/96 (H) STA AT 10:00 AM CAPITOL 102 BILL: HB 401 SHORT TITLE: REVENUE BONDS: WATER & WASTE PROJECTS SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 01/08/96 2378 (H) READ THE FIRST TIME - REFERRAL(S) 01/08/96 2378 (H) CRA, STATE AFFAIRS, RESOURCES, FINANCE 01/08/96 2379 (H) 2 ZERO FISCAL NOTES (REV, DEC) 01/08/96 2379 (H) GOVERNOR'S TRANSMITTAL LETTER 02/20/96 (H) CRA AT 1:00 PM CAPITOL 124 02/20/96 (H) MINUTE(CRA) 02/21/96 2829 (H) CRA RPT 4NR 02/21/96 2829 (H) NR: ELTON, AUSTERMAN, KOTT, IVAN 02/21/96 2829 (H) 2 ZERO FISCAL NOTES (DEC, REV) 1/8/96 03/09/96 (H) STA AT 10:00 AM CAPITOL 102 WITNESS REGISTER BARBARA COTTING, Legislative Administrative Assistant to Representative Jeannette James State Capitol, Room 102 Juneau, Alaska 99801-1182 Telephone: (907) 465-3743 POSITION STATEMENT: Provided explanation of committee substitute for HB 348. WALTER GAUTHIER, Member Guardians of Family Rights P.O. Box 2246 Homer, Alaska 99603 Telephone: (907) 235-2809 POSITION STATEMENT: Provided testimony on HB 348. JAMES BALDWIN, Assistant Attorney General Governmental Affairs Section Civil Division Department of Law P.O. Box 110300 Juneau, Alaska 99811-0300 Telephone: (907) 465-3600 POSITION STATEMENT: Provided testimony on HB 359. REPRESENTATIVE NORMAN ROKEBERG Alaska State Legislature State Capitol, Room 110 Juneau, Alaska 99801-1182 Telephone: (907) 465-4968 POSITION STATEMENT: Sponsor of HB 372. TOM MCGRATH 1207 West 36th Avenue Anchorage, Alaska 99503 Telephone: (907) 562-8730 POSITION STATEMENT: Provided testimony on HB 372. PAT FULLERTON, Chairman Spenard Community Council 616 West 34th Avenue, 412 Anchorage, Alaska 99503 Telephone: (907) 563-1156 POSITION STATEMENT: Provided testimony on HB 372. DOUG GRIFFIN, Director Alcoholic Beverage Control Board 550 West 7th Avenue, 350 Anchorage, Alaska 99501 Telephone: (907) 277-8638 POSITION STATEMENT: Provided testimony on HB 372. REPRESENTATIVE DAVID FINKELSTEIN Alaska State Legislature State Capitol, Room 424 Juneau, Alaska 99801-1182 Telephone: (907) 465-2435 POSITION STATEMENT: Provided testimony on HB 368 and HB 317. KATHY ASHBY 1835 West 15th Avenue Anchorage, Alaska 99501 Telephone: (907) 278-2302 POSITION STATEMENT: Provided testimony on HB 368 and HB 317. KEITH KELTON, Director Division of Facility Construction and Operation Department of Environmental Conservation 410 Willoughby Avenue, Suite 105 Juneau, Alaska 99801-1795 Telephone: (907) 465-5180 POSITION STATEMENT: Presented HB 401. ACTION NARRATIVE TAPE 96-32, SIDE A Number 0000 The House State Affairs Committee was called to order by Chair Jeannette James at 10:03 a.m. Members present at the call to order were Representatives Green, Ivan, Porter, Robinson and James. Members absent were Representatives Ogan and Willis. HB 532 - COSTS OF ADOPTING REGULATIONS The first order of business to come before the House State Affairs Committee was HB 532. CHAIR JEANNETTE JAMES announced 16, $0 fiscal notes were just received from the various agencies. One department thought there might be a $15 thousand to $17 thousand cost to produce the final report, but it was willing to absorb it into the normal budget process. She thanked the Administration for its cooperation. She called HB 532 a simple bill, and announced she would like to move it from the House State Affairs Committee today. Number 0139 REPRESENTATIVE BRIAN PORTER moved that HB 532 move from committee with individual recommendations and attached fiscal notes. Hearing no objection, it was so moved from the House State Affairs Committee. HB 348 - VIDEO/AUDIOTAPE INTERVIEW OF ABUSED MINOR The next order of business to come before the House State Affairs Committee was HB 348. CHAIR JAMES called on Barbara Cotting, Legislative Administrative Assistant to Representative Jeannette James, to explain the committee substitute. Number 0301 BARBARA COTTING, Legislative Administrative Assistant to Representative Jeannette James, explained the changes to the committee substitute, CSHB 348(STA) (9-LS1187/G). She referred the committee members to page 1, line 12, "(1) one person from the department;" and explained the word "department" referred to the Department of Health and Social Services. She referred the committee members to page 2, line 21 - 22, and explained the following language was added for clarification, "unless the nature of the investigation clearly indicates otherwise; and." Furthermore, she explained on page 2, lines 27 - 28, a redundancy was omitted. The bill was accompanied by a $0 fiscal note from the Department of Public Safety. The Division of Family and Youth Services (DFYS) also promised a $0 fiscal note. Number 0399 REPRESENTATIVE JOE GREEN asked if the millions of dollars were gone from the original fiscal note? He further asked Ms. Cotting if she had actually seen the $0 fiscal note from DFYS? MS. COTTING replied Diane Worley, Director, Division of Family and Youth Services, would probably bring the fiscal note with her. She would be here shortly. She was running late today. CHAIR JAMES called on the first witness via teleconference in Homer, Walter Gauthier. Number 0412 WALTER GAUTHIER, Member, Guardians of Family Rights, explained the Guardians had four branches in Alaska, and more were being organized. It was organized specifically because of the abuse of families by agencies. He stated the agencies were case load driven. Therefore, without a case load, they did not have a budget or a job justification. He said there was no check and balance in the system, and it was based on hearsay. The Guardians demanded videotaping of all interviews in their entirety to provide a check and balance to the system. He objected to the changes in the committee substitute. The Guardians preferred the Senate version to the House version. Number 0603 REPRESENTATIVE IVAN IVAN asked Mr. Gauthier why he did not trust the agencies and the formation of a work group? Number 0643 MR. GAUTHIER replied the agencies involved were case load driven. Therefore, they did not have a budget unless there was a case load. Number 0703 REPRESENTATIVE IVAN thanked Mr. Gauthier for his time. Number 0708 REPRESENTATIVE CAREN ROBINSON moved to adopt CSHB 348(STA) (9- LS1187/G), as a working document. Hearing no objection, it was so adopted. Number 0736 REPRESENTATIVE ROBINSON moved that CSHB 348(STA) move from the committee with individual recommendations and attached fiscal notes. Number 0769 REPRESENTATIVE IVAN objected for discussion purposes. He said he understood the need for CSHB 348(STA) but was not comfortable with the committee substitute because of native children who did not speak the English language. He wanted some protection for the non- English speaking children and families and suggested using a translator, when necessary, for example. He announced he would not hold the bill today, however. Number 0834 CHAIR JAMES replied the testimony was pointed at DFYS. She explained the bill was a management agreement between four departments - the Department of Public Safety, The Department of Education, the Department of Law, and the Department of Health and Social Services. There was more protection because of the variety of agencies involved. The public would be able to participate in the memorandum of agreement process as well. She said she understood the concerns of Representative Ivan, but felt they were being met in the bill. Number 1030 REPRESENTATIVE IVAN removed his objection. Number 1041 REPRESENTATIVE GREEN wondered if the force of the four departments would inhibit the indigenous community from coming forward with their concerns. Number 1087 CHAIR JAMES replied the community would not be talking to the four departments, but rather the memorandum of agreement made by the four departments. REPRESENTATIVE GREEN wondered if that was really a true concern of the indigenous community before discussing the issue further. Number 1110 REPRESENTATIVE IVAN replied he was concerned about the strong force the four departments represented that a family would have to face, whether native or non-native. Number 1142 CHAIR JAMES replied the intent of CSHB 348(STA) (9-LS1187/G) was to agree upon a method to conduct an interview through a management agreement. Number 1175 REPRESENTATIVE IVAN asked if the right to an attorney was infringed? CHAIR JAMES replied the right to an attorney was not infringed. Number 1194 REPRESENTATIVE ROBINSON said CSHB 348(STA) (9-LS1187/G) did not change any laws. It created a standard policy for accountability. It had been done in the past. She explained the bill was a safety net. The bill also called for the best and most effective method to safeguard the child. Number 1314 CHAIR JAMES reiterated it was a written agreement between agencies. Number 1381 MS. COTTING announced Diane Worley, DFYS, was present. The $0 fiscal note had been forwarded already to the House State Affairs Committee. Furthermore, she explained the Indian Child Welfare Act superseded state policy for further safeguards. Number 1403 REPRESENTATIVE IVAN said he would shut-up now. CHAIR JAMES stated hearing no further objection, CSHB 348(STA) (9- LS1187/G) was so moved from the House State Affairs Committee. HB 359 - APPOINTMENT PROCESS FOR BDS & COMM'NS The next order of business to come before the House State Affairs Committee was HB 359. CHAIR JAMES called on the sponsor of HB 359, Representative Brian Porter. Number 1462 REPRESENTATIVE PORTER explained HB 359 was an attempt to take the politics out of the presentment and appointment process. It was based on a lawsuit of which an incoming Governor tried to replace a commission member of the Alaska Public Utilities Commission (APUC). The lawsuit was still on-going. Therefore, the bill attempted to prevent that from happening again as-well-as to prevent the confirmation process from being circumvented. The Administration had some concerns about the original bill resulting in the committee substitute before the committee members today. He asked James Baldwin, Department of Law, to come forward and discuss the concerns of the Administration. Number 1575 JAMES BALDWIN, Assistant Attorney General, Governmental Affairs Section, Civil Division (Juneau), Department of Law, said he came here today wearing two hats due to his long tenure with the Department, and his position of advising the Office of the Governor regarding appointments. The bill addressed the issue in a fair and even manner. There were going to be differences because the Administration represented different branches of government and within each branch there were different attitudes. The changes in the committee substitute did not restrict the Governor's or the Legislature's prerogatives. The Administration was strongly opposed to the original version. The majority of those issues had been resolved in the committee substitute, however. The issues were based on the philosophical changes of different administrations creating disagreements for certain appointments. The disagreements were usually for boards and commissions that carried a salary and a term limit such as the Alaska Public Utilities Commission (APUC). The first litigation case was mentioned by Representative Porter as a result of a disagreement. The case, he explained, was now in the Supreme Court. The main issue was the propriety of the presentment process. Presentment was presumed or impled to have occurred when it was a necessary and an important step in the appointment process according to the Administration. He explained, so far, the superior court judge had agreed with the Administration. Furthermore, he commented the attitude of a governor changed depending on where he was in the term. According to the Office of the Governor it was not a problem anymore because it had passed that point. It was now a problem for the next governor. He agreed the issue needed to be resolved, however, because it was a continuing problem. The bill therefore, made presentment an important part of the process. Moreover, it defined an "interim term," to end at the beginning of a session. The individual could then be reappointed for the remainder of the session, if confirmed. If the individual was not presented at the beginning of the session, he was dismissed. This, he alleged, would solve the legal problem, but it created an administrative problem for the Office of the Governor. He commented Representative Porter was concerned about a governor removing an appointee during the interim, for example, for reasons other than cause. He said that was not a major concern of the Administration, however, because the Governor had to stand behind his appointments and conduct himself in good faith. Furthermore, it created a heavy administrative burden. He cited approximately 1,275 seats were subject to the confirmation process, and according to the bill they were due on March 1, followed by a reappointment presentation period to the legislature. Mr. Baldwin said the spirit behind the bill was to address appointments in the regular session. The law suit contended that the legislature could imply that an appointment had been presented. It appeared to be an administrative act only. The language needed to be clarified. He referred the committee members to page 4, line 12 and suggested adding, "`each' governor shall present to the legislature the names of the people appointed," so that a governor did not have to present the appointments of his predecessor. He further explained there were sections of the bill that made conforming amendments for boards and commissions required by existing law to present a confirmation. According to the Alaska State Constitution it was not necessary, however. He explained, there had been a long standing disagreement between the legislature and the Governor over the interpretation of the Alaska State Constitution addressing the confirmation of certain boards and commissions. The legislature had enacted bills that created boards and commissions and made the members subject to the confirmation process. The Administration said it was unconstitutional because of the laws on the books. The Administration still did not support that notion even though the bill contained conforming amendments. Number 2114 REPRESENTATIVE PORTER explained the conforming amendments were consistent to prevent additional problems in the statutes. However, he understood it would not solve the on-going debate between the Administration and the legislature concerning the interpretation of the Alaska State Constitution. Number 2159 CHAIR JAMES commented the issue needed to be resolved through a court decision. Number 2207 MR. BALDWIN cited the 1976 case of Bradner v. Hammond. He explained based on the decision of the case, the legislature decided to make the deputy commissioners subject to confirmation. It was challenged further, however, and determined the legislature could not extend its confirmation to any office other than what was expressly provided for in the Alaska State Constitution. The constitution stated it had to be a regulatory, a quasi-judicial, a principal department head, or a board that was a principal department head to be subject to the confirmation process. The legislature went its own way, however, and cited the Railroad Corporation as an example. However, even though the Administration and the legislature had disagreed at times, those that made it through were usually signed by the Governor, which should not be implied as a matter of law that it was required. Number 2285 CHAIR JAMES asked if the boards and commissions conformed to in the bill were advisory in nature? Number 2290 MR. BALDWIN replied many were not strictly advisory. He cited the Railroad Corporation as an example. It was not a principal department head, a regulatory, or a quasi-judicial board. Furthermore, the conforming amendments in the bill amended the Historical Commission. He wondered why a confirmation was necessary. It was not within the magnitude required by the Alaska State Constitution. He further cited the Royalty Oil and Gas Development Board. The Board merely advised the legislature regarding oil contracts. He again wondered why a confirmation was necessary. Number 2333 REPRESENTATIVE PORTER replied some appointments were made and not submitted to the confirmation process. REPRESENTATIVE GREEN replied it was a "mixed bag." He cited the Royalty Oil and Gas Development Board members had never been confirmed. Number 2345 CHAIR JAMES wondered about the public state corporations. Number 2361 MR. BALDWIN explained, historically, the drafters of the Alaska State Constitution were tired of so many boards and commissions that balkanized state government. The Alaska State Constitution, therefore, was put together to confirm the central officer, and not put together with the intention of the powerful public corporations. Number 2413 REPRESENTATIVE PORTER commented the next committee of referral for the bill was the House Judiciary Committee. He said it would be more appropriate to discuss these issue in that committee. He asked the committee members to consider moving it forward today. Number 2433 REPRESENTATIVE IVAN asked Mr. Baldwin to clarify the word "balkanization." MR. BALDWIN replied it meant to segregate or divide. Number 2434 CHAIR JAMES agreed with Representative Porter that the legal aspects of the bill should be reviewed by the House Judiciary Committee. Furthermore, she believed the confirmation process served an important purpose. It was the only place the public could listen to the confirmation hearing. Therefore, she supported more confirmation hearings rather than less as long as it did not interfere with the operations of the government. TAPE 96-32, SIDE B Number 0060 REPRESENTATIVE GREEN asked if there were any witnesses to testify today on HB 359? CHAIR JAMES replied, "no." Number 0065 REPRESENTATIVE GREEN commended Chair James for confining the activity of the House State Affairs Committee to its described functions. REPRESENTATIVE GREEN moved to adopt CSHB 359(STA) (9-LS1242/G) as a working document. Hearing no objection, it was so adopted. Number 0093 REPRESENTATIVE IVAN asked Mr. Baldwin to explain subsection (4) on page 5. Number 0109 MR. BALDWIN replied subsection (4) specified the duration of an interim appointment. The appointment would last until the first day of the next regular session unless confirmed. Upon confirmation, the appointee would hold the office for the full statutory term limit. However, if the appointee was not confirmed or continued, reappointment was not possible. Number 0151 REPRESENTATIVE PORTER called the subsection a safeguard so that the Governor could not skip the process. Number 0158 REPRESENTATIVE ROBINSON wondered if anyone had ever introduced legislation to review boards and commissions that did not fit within the Alaska State Constitution that were believed to need legislative confirmation. Number 0174 MR. BALDWIN replied not from the Governor's side. He could not recall working on a bill of that nature. The issue was looked at frequently, however. Number 0191 REPRESENTATIVE ROBINSON asked Mr. Baldwin how many boards and commissions violated the Alaska State Constitution? Number 0197 MR. BALDWIN replied seven to eight. Number 0203 REPRESENTATIVE ROBINSON further asked if those boards and commissions fit under the corporations? Number 0211 MR. BALDWIN replied the big corporation that was subject to the confirmation process was the Railroad Corporation. The Governor disagreed but signed the bill anyway. Number 0238 REPRESENTATIVE GREEN moved that CSHB 359(STA) move from the committee with individual recommendations and attached fiscal notes. Hearing no objection, it was so moved from the House State Affairs Committee. HB 372 - RESTAURANT LIQUOR LICENSES The next order of business to come before the House State Affairs Committee was HB 372. CHAIR JAMES called on the sponsor, Representative Norman Rokeberg. Number 0350 REPRESENTATIVE NORMAN ROKEBERG thanked the Chair for hearing the bill today. He said it was a simple bill because it repealed a current law. He stated, for the record, he did not have a vested interest in the bill. He said he had a personal friend that was interested in the bill, Michael Gordon, owner of Chilkoot Charlie's in Anchorage. He reiterated he did not have an economic interest in the beverage industry right now, only friendships. He did have experience, however, in the industry. REPRESENTATIVE ROKEBERG explained the Spenard Community Council brought this issue to his attention. The Council passed a resolution asking that taverns be repealed. He cited the reasons were due to a disproportionate large number of drinking establishments in the Anchorage Spenard area, and to the impact of alcohol on society. He further said he wanted the opportunity to right a wrong. Senate Bill 87, passed last year, established taverns. He explained the bill was sold to the members of the House of Representatives under the "Cyrano's" law. Cyrano's Bookstore Cafe and Office Center was allowed under exception to sell liquor. The statute allowed for 10 percent of restaurant or eating places to apply for an exemption from the 50 percent food provision to create a tavern. The current statute also did not allow for entertainment after 9:00 p.m. He said HB 372 had an economic impact as well. The beverage dispensing license was valued and purchased on the secondary market for up to $450,000 in the Anchorage area in the peak of the 1980's. Now, there was no value in a restaurant license because of the decline in the economy. House Bill 372, therefore, allowed for competition that was not there before creating an economic impact. He further said the sobriety movement in the state was another reason to repeal the current statute. Moreover, the Anchorage Municipal Assembly originally supported HB 372 until a member asked for a voter reconsideration upon which it failed. The member who asked for a voter reconsideration had failed to disclose to the Anchorage Municipal Assembly he had applied for a restaurant license and failed to disclose his 2.5 percentage ownership in a restaurant. He suggested it needed to be further reviewed. He asked the committee members to take a favorable look at the bill. The next committee of referral was the House Labor and Commerce Committee. He said it was a good bill and he asked again for the support of the committee members. Number 0826 REPRESENTATIVE ROBINSON wondered if Cyrano's could continue to operate under HB 372. Number 0839 REPRESENTATIVE ROKEBERG replied it would not be able to sell beer or wine without meeting the restaurant 50 percent requirement. He said the bill would not close the establishment, however. Number 0859 REPRESENTATIVE GREEN replied it could sell more sandwiches, for example, to meet the 50 percent requirement. REPRESENTATIVE ROBINSON replied that was a good point. REPRESENTATIVE ROKEBERG wondered if Cyrano's had even applied for an exemption. He reiterated the bill would not put anybody out of business. REPRESENTATIVE ROBINSON wondered if the exempted establishments would be able to continue to operate until they were shut down. REPRESENTATIVE ROKEBERG replied Cyrano's had applied, but had not received it yet. CHAIR JAMES called on the first witness via teleconference in Anchorage, Tom McGrath. Number 0911 TOM MCGRATH said he supported HB 372. He explained Cyrano's was not exempt under the law now. The menu had been expanded to cover the 50 percent requirement. He said many of the Senators and Representatives did not know about the exemption provision in SB 87. The exemption created the possibility of 15 taverns in Anchorage. He cited there were 117 liquor licenses in Anchorage, while the state law only allowed 77. This was due to a grandfather provision. House Bill 372, therefore, would correct a wrong and improve the quality of life in Alaska. CHAIR JAMES called on the next witness via teleconference in Anchorage, Pat Fullerton. Number 1073 PAT FULLERTON, Chairman, Spenard Community Council, said the abuse of alcohol had been a problem in the Spenard area for many years. He said he was a recovering alcoholic and was about to celebrate his 7th year of sobriety. Moreover, the current law allowed the establishment of what he called a "cheap" bar. He wanted to see it repealed so that it did not add further to the proliferation of the liquor license. CHAIR JAMES called on the next witness via teleconference in Anchorage, Doug Griffin. Number 1201 DOUG GRIFFIN, Director, Alcoholic Beverage Control Board, said the previous testimony was an accurate description of what the current bill allowed by Representative Rokeberg and the Spenard Community Council. He did not support HB 372, however. He assumed the legislature knew what it was doing when passing the original bill by including the exemption provision. Moreover, he reminded the committee members, the local governing bodies would have to approve these licenses so safeguards did exist. The original bill did not create a separate type of license due to over licensing based on population quotas, for example. Number 1357 CHAIR JAMES asked Mr. Griffin if there had been any exempt licenses distributed? Number 1370 MR. GRIFFIN replied, "yes." He cited Legal Pizza and Railway Brewing Company in Anchorage, and the Chandalar Inn in the Matanuska-Susitna Borough. There were several in the process as well. Number 1485 CHAIR JAMES thanked Mr. Griffin for his testimony. She was concerned about the establishments caught between the two laws. She was concerned about the economic impact as a result of the establishments changing their business. She suggested a grandfather provision. Number 1569 REPRESENTATIVE ROBINSON said she was also concerned about the establishments caught between the two bills and supported a grandfather provision. She was not opposed to moving the bill forward, however. Number 1620 REPRESENTATIVE PORTER explained many establishments tried to circumvent the intent of the law allowing beer and wine with dinner by offering potato chips as food, for example. He said he was not aware of the exception provision last year when he voted in favor of the legislation. Number 1696 CHAIR JAMES commented she had fond memories of taverns in Washington and Oregon where she grew up. She was not negative towards taverns. Number 1760 REPRESENTATIVE PORTER said the state of Washington distinguished between taverns and cocktail lounges. The cocktail lounges fell under the restaurant requirements similar to Alaska's. CHAIR JAMES announced to Frank Smith in Barrow that HB 348 had already been moved from the House State Affairs Committee. She asked for his testimony in writing for the record. Number 1885 FRANK SMITH thanked the Chair. He said he would submit his testimony in writing for the record. Number 1910 REPRESENTATIVE GREEN commented he did not have fond memories of taverns because they attracted individuals that liked to drink too much where he grew up in Wisconsin. He would support anything to reduce that. Number 1979 CHAIR JAMES reiterated her biggest concern were for the establishments that might fall through the cracks. Number 2059 REPRESENTATIVE ROKEBERG explained he was working on a potential amendment to address her concern. He did not want to disrupt the commerce of the state. He pledged the issue would be reviewed in the next committee of referral - the House Labor and Commerce Committee. Number 2109 REPRESENTATIVE IVAN stated he was also concerned about the establishments that would be affected by this bill. Number 2137 REPRESENTATIVE ROKEBERG explained he was a good friend of the father of Richard Sassary, who wrote a letter against HB 372. CHAIR JAMES wondered if friendship was taking Representative Rokeberg a long way with this issue. REPRESENTATIVE ROKEBERG replied, "no." He just knew a lot of people in Anchorage. REPRESENTATIVE ROBINSON stated, for the record, she grew up in Texas. Number 2198 REPRESENTATIVE PORTER moved that HB 372 move from the committee with individual recommendations and attached fiscal notes. Hearing no objection, it was so moved from the House State Affairs Committee. HB 368 - ELECTION CAMPAIGN FINANCE REFORM HB 317 - ELECTION CAMPAIGN FINANCE REFORM The next order of business to come before the House State Affairs Committee was HB 368 and HB 317. CHAIR JAMES called on Representative David Finkelstein to explain the committee substitute. CHAIR JAMES announced she wanted to move the bill forward today. Number 2381 REPRESENTATIVE GREEN moved to adopt CSHB 368(STA) (9-LS1348/C) as a working document. Hearing no objection, it was so adopted. Number 2413 REPRESENTATIVE DAVID FINKELSTEIN explained the comparison chart distributed to the committee members. The first column contained the provisions in the current law, the second column contained the provisions in the initiative, and the third column contained the provisions in the committee substitute (9-LS1348/C). The major provision were: contributions from individuals, contributions from parties, contributions not from individual (i.e. corporations, unions), contributions from groups of individuals, lobbyists, when money can be raised, personal use of campaign funds, carry forward of campaign surpluses, out-of-state contributions, independent expenditures, public funds, serious violations, civil penalties, and power to enforce. TAPE 96-33, SIDE A Number 0063 REPRESENTATIVE GREEN wondered where a party was defined. CHAIR JAMES replied that would be addressed in the proposed amendments. Number 0470 CHAIR JAMES complimented Representative Finkelstein for his work on the comparison chart. She explained there were two definitions of a political party presented. She liked the first definition. The second definition would include all organizations affiliated with a political party in the contribution limits. She was concerned about the organizations that did not want to be a part of the party and remain a group. Number 0518 REPRESENTATIVE GREEN concurred with her support for the first definition. He stated the second definition would cause confusion. Number 0603 REPRESENTATIVE PORTER moved to adopted Amendment 1 (9- LS1348/C.1/B). No one objected, but the discussion continued. Number 0626 REPRESENTATIVE ROBINSON asked if the amendments had been presented to the initiative movement, and wondered which political party definition he supported. Number 0640 REPRESENTATIVE FINKELSTEIN replied there really was not a lot of difference between the two definitions. The key question was who determined who was a subdivision, and both definitions defined it as 3 percent of the total votes casted. He stated the differentiation between a subordinate unit and other units was artificial. All the groups out there should have a choice of joining the party, or being their own group, and both definitions allowed that. A differentiation was not intended in the initiative, however. Number 0765 REPRESENTATIVE PORTER said the first definition allowed a clear separation between the groups that were not traditional party subgroups. Furthermore, it would allow the differentiation between the subgroups of the parties and the affiliated groups of the parties. Number 0821 CHAIR JAMES explained the concept of the district and state central party committees. A coordination of the contribution limits was necessary amongst all the subordinates, therefore, a centralized decision making process was needed. She called it an unwieldy situation. Number 1026 REPRESENTATIVE FINKELSTEIN said everyone agreed that the affiliated groups should have a choice, and both definitions allowed that choice. It was more obvious, however, in the second definition under subsection (C). According to the first definition it was necessary to be subsumed within the party. He was afraid the first definition would be interpreted to preclude some groups from becoming part of the party if they wanted to. The second definition gave the choice under subsection (C). Number 1076 CHAIR JAMES said she did not read the definitions the same as Representative Finkelstein. A political party according to the second definition did not have the option to be a group, but only a political party. REPRESENTATIVE FINKELSTEIN replied he interpreted it differently. There was nothing that mandated it in the second definition. Subsection (C) read, "an organization that, by virtue of the rules or bylaws of the organized group of voters qualifying as a political party under (A) of this paragraph, is affiliated with the political party." Number 1126 REPRESENTATIVE PORTER replied subsection (C) did not give the party the ability say "yes" or "no" to that. Number 1134 REPRESENTATIVE FINKELSTEIN replied according to subsection (C) it was up to the rules of the party. Number 1144 CHAIR JAMES responded the only choice for a person to be a group was for the party to disassociate with them. It was not in the best interest of either Parties to cut the life-line. REPRESENTATIVE FINKELSTEIN replied, according to that interpretation, both definitions achieved the same thing. CHAIR JAMES asked if there was further objection to Amendment 1. Hearing none, it was so adopted. Number 1179 REPRESENTATIVE IVAN wondered about lobbyists contributing in their own district. He said lobbyists lived mostly in Anchorage and Juneau. Number 1247 CHAIR JAMES replied it was a perception issue. The general public did not want a lobbyist to give money to anybody, but he also had a general right as a citizen of a district to contribute to his district. It was a constitutional issue as well. Furthermore, it was not a problem for one that did not have a lobbyist in his district. Number 1343 REPRESENTATIVE ROBINSON stated most lobbyists would probably agree with a total ban on giving money. CHAIR JAMES agreed with Representative Robinson. Lobbyists felt obligated to give money in order to do business again. Number 1388 REPRESENTATIVE PORTER moved to adopt Amendment 2 (9-LS1260/F.2). CHAIR JAMES asked Representative Finkelstein to explain the amendment. Number 1403 REPRESENTATIVE FINKELSTEIN explained Amendment 2 was a technical and conforming amendment. It removed "50 percent" in current law and inserted "33 1/3 percent" for the support or opposition of a candidate and the inclusion of the candidates name as part of the group. This was based on a recommendation from the Alaska Public Offices Commission (APOC). CHAIR JAMES stated hearing no further objection, Amendment 2 was so adopted. Number 1454 REPRESENTATIVE PORTER moved to adopt Amendment 3 (9-LS1260/F.3). CHAIR JAMES asked Representative Finkelstein to explain the amendment. Number 1466 REPRESENTATIVE FINKELSTEIN explained Amendment 3 was a technical amendment. It removed unnecessary language. It did not affect the content, however. CHAIR JAMES stated hearing no further objection, Amendment 3 was so adopted. Number 1488 REPRESENTATIVE PORTER moved to adopt Amendment 4 (9-LS1260/F.4). CHAIR JAMES asked Representative Finkelstein to explain the amendment. Number 1500 REPRESENTATIVE FINKELSTEIN explained Amendment 4 was a technical amendment. An individual could make a contribution to a political party as well as a group. CHAIR JAMES stated hearing no further objection, Amendment 4 was so adopted. CHAIR JAMES explained Amendment 2 - 4 should read CSHB 368(STA) and not CSSB 191( ) as expressed in the draft amendments. Number 1626 REPRESENTATIVE ROBINSON moved that CSHB 368(STA) (9-LS1348/C) move from the committee with individual recommendations and attached fiscal notes. Hearing no objection, it was so moved from the House State Affairs Committee. CHAIR JAMES announced she would attached a $0 fiscal note. CHAIR JAMES apologized to the teleconference testifiers for not calling on their testimony. She suggested they submit a written statement for the record. Number 1770 KATHY ASHBY responded via teleconference in Anchorage that it would be futile. She only suggested that to make us feel better. Number 1818 CHAIR JAMES replied it would become part of the record with a statement explaining the circumstances. She apologized again. MS. ASHBY said she felt very disaffected by the whole procedure. She felt betrayed. The information the committee members were discussing today did not match the information at the Legislative Information Office (LIO) in Anchorage. CHAIR JAMES apologized to Ms. Ashby again. She announced she would personally forward information to her and personally notify her of the next time the bill would be heard. HB 401 - REVENUE BONDS: WATER & WASTE PROJECTS The next order of business to come before the House State Affairs Committee was HB 401. CHAIR JAMES called on Keith Kelton, Department of Environmental Conservation, to present the bill. Number 1900 KEITH KELTON, Director, Division of Facility Construction and Operation, Department of Environmental Conservation (DEC), explained HB 401 was by the request of the Governor. It was a bill that would benefit all the communities in Alaska. He asked the committee members to look at the bill and not at who introduced the piece of legislation. Number 1910 CHAIR JAMES replied the assumption that the bill would not be looked favorably upon because it was introduced by the Governor was not true. Number 1919 MR. KELTON replied, "I stand corrected, Madame Chairman. I apologize." MR. KELTON said the DEC had been operating a loan program for building wastewater facilities throughout the state for the last seven to eight years. Prior to that the federal government financed a grant program under the Clean Water Act. In 1987 the federal government eliminated the grant program and substituted it with a loan program. The demand for the loans had been steadily increasing while the state general funds had decreased. Therefore, the grants were less available. The DEC was interested in developing an alternative funding source for communities that had the ability to borrow money and had a dedicated revenue stream to repay the loans. The problem currently was that the loan fund was demanded in excess of the supply of money available. Therefore, the DEC introduced legislation to allow the Department to leverage the remaining corpus of the loan fund and allow for increased dollars to be available for the loans. To date, Alaska had a good track record for repayments, not one late payment. MR. KELTON referred the committee members to a chart prepared by DEC. He explained the Alaska Clean Water Fund (ACWF) was capitalized by federal grants representing about $80 million. Of that $80 million, $50 million had gone out as low interest loans to the various Alaskan municipal projects. One year after completion, payments were made back including the principal and interest to the ACWF. The interest rate fluctuated with the municipal bond index, currently at 3.55 percent. REPRESENTATIVE GREEN asked if the bond was tax free? MR. KELTON replied it was tax exempt. Furthermore, HB 401 created a bond redemption fund to pay for the bond issuance cost administered through the State Bond Committee including the Department of Revenue, Department of Administration, and Department of Commerce and Economic Development. The Senate amended the bill to include a $15 million limit of bonds sold each year, and a total cap of $150 million. He reiterated the bill was to provide a revolving fund mechanism for the incorporated communities that had a dedicated revenue source for repayments. Anchorage was the big participant, but communities such as Craig and Homer, for example, had applied for a loan. The program included wastewater and solid waste, but not drinking water. There was legislation at the federal level to address a drinking water program, however. Number 2378 REPRESENTATIVE GREEN wondered if the investor was investing in the program and not in the individual location. Number 2394 MR. KELTON replied the investor was putting his money into the pot. The Department had to follow an intended use plan on an annual basis. The plan used a criteria rank system to determine which projects would rank at the top, if it exceeded the amount of money available. Number 2440 REPRESENTATIVE GREEN asked if the criteria ranking system was based on need, the ability to repay, or a combination of the two? Number 2447 MR. KELTON replied the first concern was based on need. Environment and health were also considered, for example. The ability to repay was looked at after everything else was considered. Number 2475 REPRESENTATIVE GREEN wondered if energy was a concern in the rural areas. TAPE 96-33, SIDE B Number 0000 MR. KELTON said the rural areas were eligible to apply. The additional cost would make it more difficult for it to come up with a revenue matching source, however. He did not expect it to be widely used in the rural areas of the state. Number 0022 CHAIR JAMES asked if it was a 50 percent match? MR. KELTON replied it was strictly a loan. CHAIR JAMES asked if a community could get a loan for an entire project? MR. KELTON replied, "that's correct." CHAIR JAMES further wondered if a community could get a grant and apply it towards the loan. Number 0035 MR. KELTON replied, "that's exactly right, Madame Chairman." The Department could mix and match with the loan program in any ratio. Number 0129 REPRESENTATIVE IVAN moved to adopt Amendment 1 (9-GH2014/A.1). Number 0135 REPRESENTATIVE GREEN objected for discussion purposes. Number 0144 MR. KELTON explained Amendment 1 was a technical amendment. It was based on a suggestion by the Department of Revenue. The bill was written in conjunction with the Department of Revenue and the Department of Law. The bill would impact the Department of Revenue due to the bond. Number 0184 REPRESENTATIVE GREEN removed his objection. CHAIR JAMES stated hearing no further objection, Amendment 1 was so adopted. Number 0186 REPRESENTATIVE IVAN moved to adopt Amendment 2 (9-GH2014/A.2). REPRESENTATIVE GREEN objected for discussion purposes. MR. KELTON explained Amendment 2 was based on a suggestion by Senator John Torgerson for greater legislative control. The Department of Environmental Conservation agreed with the amendment. Number 0238 REPRESENTATIVE GREEN removed his objection. CHAIR JAMES stated hearing no further objection, Amendment 2 was so adopted. Number 0246 REPRESENTATIVE IVAN moved to adopt Amendment 3 (9-GH2014/A.3). REPRESENTATIVE GREEN objected for discussion purposes. Number 0255 MR. KELTON explained Amendment 3 modified eligibility. The Senate believed a state agency should not be part of the eligibility process. Therefore, the amendment deleted "state agency" and inserted "other qualified entity." The amendment was based on the recommendation of Senators Fred Zharoff and Lyman Hoffman. The amendment also defined "other qualified entity" to include a municipality and those terms used in 33 U.S.C. 1383. The Department of Law, the Department of Revenue, and the Department of Environmental Conservation supported the amendment. Number 0328 REPRESENTATIVE GREEN removed his objection. CHAIR JAMES stated hearing no further objection, Amendment 3 was so adopted. Number 0337 REPRESENTATIVE PORTER wondered if the suggestions by the Anchorage Water and Wastewater Utility (AWWU) were considered. Number 0348 MR. KELTON replied the Anchorage Water and Wastewater Utility had removed their amendments. The amendments were considered earlier when it appeared the bill would not receive a hearing. The amendments were to simplify the bill for further support. Number 0379 REPRESENTATIVE PORTER wondered if the Anchorage Water and Wastewater Utility supported the bill. MR. KELTON replied the AWWU definitely supported the bill. CHAIR JAMES replied the people in her district were interested in the bill, but were concerned about the payback. Number 0398 MR. KELTON explained two out of the three concerns that Anchorage had were addressed in the amendments adopted today. Number 0420 REPRESENTATIVE GREEN mentioned the problems associated with wastewater treatment such as hepatitis. He was still concerned about the lack of energy to support the projects in the rural areas. Otherwise, he was in full support of HB 401. Number 0442 REPRESENTATIVE GREEN moved that CSHB 401(STA) move from the committee with individual recommendations and attached fiscal notes. Hearing no objection, it was so moved from the House State Affairs Committee. MR. KELTON thanked the committee members. Number 0497 ADJOURNMENT CHAIR JAMES adjourned the House State Affairs Committee meeting at 12:38 p.m.