Legislature(1997 - 1998)

03/22/1997 10:05 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
             HOUSE STATE AFFAIRS STANDING COMMITTEE                            
                         March 22, 1997                                        
                           10:05 a.m.                                          
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Jeannette James, Chair                                         
 Representative Ethan Berkowitz                                                
 Representative Fred Dyson                                                     
 Representative Kim Elton                                                      
 Representative Ivan Ivan                                                      
 Representative Al Vezey                                                       
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Mark Hodgins                                                   
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 *HOUSE BILL NO. 78                                                            
 "An Act relating to the definition of certain state receipts; and             
 providing for an effective date."                                             
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 HOUSE BILL NO. 84                                                             
 "An Act limiting the authority to conduct pull-tab charitable                 
 gaming to qualified organizations that are exempt from taxation               
 under 26 U.S.C. 501(c)(3) or (19); and providing for an effective             
 date."                                                                        
                                                                               
      - FAILED TO MOVE HB 84 OUT OF COMMITTEE                                  
                                                                               
 *HOUSE BILL NO. 155                                                           
 "An Act relating to hearings before and authorizing fees for the              
 State Commission for Human Rights; and providing for an effective             
 date."                                                                        
                                                                               
      - HEARD AND HELD                                                         
 HOUSE BILL NO. 143                                                            
 "An Act relating to the art in public places requirements for                 
 state-owned and state-leased buildings and facilities."                       
                                                                               
      - SCHEDULED BUT NOT HEARD                                                
 HOUSE BILL NO. 83                                                             
 "An Act relating to commercial motor vehicle inspections; and                 
 providing for an effective date."                                             
                                                                               
      - SCHEDULED BUT NOT HEARD                                                
 (* First public hearing)                                                      
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB  78                                                               
 SHORT TITLE: AMEND DEFINITION OF "PROGRAM RECEIPTS"                           
 SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                  
                                                                               
 JRN-DATE      JRN-PG             ACTION                                       
 01/16/97        88    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/97        88    (H)   STA, L&C, FINANCE                                 
 01/16/97        88    (H)   ZERO FISCAL NOTE (GOV\VARIOUS DEPTS)              
 01/16/97        88    (H)   GOVERNOR'S TRANSMITTAL LETTER                     
 03/11/97              (H)   STA AT  8:00 AM CAPITOL 102                       
 03/11/97              (H)   MINUTE(STA)                                       
 03/13/97              (H)   STA AT  8:00 AM CAPITOL 102                       
 03/13/97              (H)   MINUTE(STA)                                       
 03/20/97              (H)   STA AT  8:00 AM CAPITOL 102                       
 03/20/97              (H)   MINUTE(STA)                                       
 03/22/97              (H)   STA AT 10:00 AM CAPITOL 102                       
                                                                               
 BILL:  HB  84                                                               
 SHORT TITLE: PULL-TABS LIMITED TO 501(C)(3) OR (19)                           
 SPONSOR(S): REPRESENTATIVE(S) MARTIN                                          
                                                                               
 JRN-DATE      JRN-PG             ACTION                                       
 01/22/97       122    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/22/97       122    (H)   STATE AFFAIRS, L&C, FINANCE                       
 03/11/97              (H)   STA AT  8:00 AM CAPITOL 102                       
 03/11/97              (H)   MINUTE(STA)                                       
 03/13/97              (H)   STA AT  8:00 AM CAPITOL 102                       
 03/13/97              (H)   MINUTE(STA)                                       
 03/15/97              (H)   STA AT 11:00 AM CAPITOL 102                       
 03/15/97              (H)   MINUTE(STA)                                       
 03/22/97              (H)   STA AT 10:00 AM CAPITOL 102                       
                                                                               
 BILL:  HB 155                                                               
 SHORT TITLE: HUMAN RIGHTS COMMISSION FEES & HEARINGS                          
 SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                  
                                                                               
 JRN-DATE      JRN-PG             ACTION                                       
 02/24/97       443    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/24/97       443    (H)   STATES AFFAIRS, HES, FINANCE                      
 02/24/97       444    (H)   ZERO FISCAL NOTE (GOV)                            
 02/24/97       444    (H)   GOVERNOR'S TRANSMITTAL LETTER                     
 03/11/97              (H)   STA AT  8:00 AM CAPITOL 102                       
 03/11/97              (H)   MINUTE(STA)                                       
 03/13/97              (H)   STA AT  8:00 AM CAPITOL 102                       
 03/13/97              (H)   MINUTE(STA)                                       
 03/20/97              (H)   STA AT  8:00 AM CAPITOL 102                       
 03/20/97              (H)   MINUTE(STA)                                       
 03/22/97              (H)   STA AT 10:00 AM CAPITOL 102                       
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 ROYCE WELLER, Budget Analyst                                                  
 Office of Management and Budget                                               
 Office of the Governor                                                        
 P.O. Box 110020                                                               
 Juneau, Alaska 99811-0020                                                     
 Telephone:  (907) 465-4694                                                    
 POSITION STATEMENT:  Provided testimony on behalf of the Governor             
                      on HB 78.                                                
                                                                               
 ARNOLD BROWER, JR., President                                                 
 Arctic Slope Region                                                           
 Native Village of Barrow                                                      
 P.O. Box 1139                                                                 
 Barrow, Alaska 99723                                                          
 Telephone:  (907) 852-4411                                                    
 POSITION STATEMENT:  Provided testimony on HB 84.                             
                                                                               
 REPRESENTATIVE TERRY MARTIN                                                   
 Alaska State Legislature                                                      
 State Capitol, Room 502                                                       
 Juneau, Alaska 99801-1182                                                     
 Telephone:  (907) 465-3793                                                    
 POSITION STATEMENT:  Sponsor of HB 84.                                        
                                                                               
 ALFREDA LORD                                                                  
 Address not provided                                                          
 Barrow, Alaska 99723                                                          
 Telephone:  Not provided                                                      
 POSITION STATEMENT:  Provided testimony on HB 84.                             
                                                                               
 DENNIS POSHARD, Director                                                      
 Charitable Gaming Division                                                    
 Department of Revenue                                                         
 P.O. Box 110440                                                               
 Juneau, Alaska 99811-0440                                                     
 Telephone:  (907) 465-2229                                                    
 POSITION STATEMENT:  Provided testimony on HB 84.                             
                                                                               
 PAULA HALEY, Executive Director                                               
 Alaska State Commission for Human Rights                                      
 800 "A" Street, Suite 204                                                     
 Anchorage, Alaska 99501-3669                                                  
 Telephone:  (907) 274-4692                                                    
 POSITION STATEMENT:  Provided testimony in support of HB 155.                 
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 97-31, SIDE A                                                            
 Number 0001                                                                   
                                                                               
 The House State Affairs Standing Committee was called to order by             
 Chair Jeannette James at 10:05 a.m.  Members present at the call to           
 order were Representatives James, Berkowitz, Dyson, Elton and                 
 Vezey.  Members absent were Hodgins and Ivan.  Representative Ivan            
 arrived at 10:08 a.m.                                                         
                                                                               
 HB 78 - AMEND DEFINITION OF "PROGRAM RECEIPTS"                              
                                                                               
 The first order of business to come before the House State Affairs            
 Standing Committee was HB 78, "An Act relating to the definition of           
 certain state receipts; and providing for an effective date."                 
                                                                               
 CHAIR JEANNETTE JAMES called on Royce Weller, Office of the                   
 Governor, to present the bill.                                                
                                                                               
 Number 0060                                                                   
                                                                               
 ROYCE WELLER, Budget Analyst, Office of Management and Budget                 
 (OMB), Office of the Governor, explained HB 78 related to the                 
 definition of certain state receipts.  State receipts essentially             
 came in as general funds or something other than general funds.               
 The statute that the bill proposed to amend, AS 37.05.146, defined            
 what was a general fund and what was not a general fund receipt.              
                                                                               
 MR. WELLER explained the first concern was the constitutional                 
 prohibition against dedicated funds under Article IV, Section 7.              
 The second concern was that the bill did not take any revenues off            
 of the book.  The third concern was that the receipts did not                 
 impact the fiscal gap.                                                        
                                                                               
 MR. WELLER explained the bill did not in any way circumvent the               
 constitutional dedication.  In fact, it made it clear that the                
 revenues would be available and subject to appropriation.  In no              
 way were the revenues off of the book from legislative monitoring             
 and reviewing.  The receipts were collected and restricted by a               
 gift, grant, request, federal or state law and appropriated for a             
 specific purpose.  Therefore, if the budget was cut, the receipts             
 coming in would also be cut.  It was not like a normal general fund           
 program receipt where the revenues could be used some other place.            
 For instance, if the Division of Occupational Licensing's budget              
 was cut, the division was obligated under statute to reduce its               
 fees to reduce the revenues coming in.                                        
                                                                               
 Number 0284                                                                   
                                                                               
 MR. WELLER further explained that there were three technical and              
 three substantive changes in the bill.                                        
                                                                               
 MR. WELLER explained the first technical change was on page 2, line           
 11, "(E) corporate receipts earned or managed by a public                     
 corporation or enterprise of the state authorized by law                      
 including."  Corporate receipts had been around for some time -               
 Alaska Housing Finance Corporation, Municipal Bond Bank Authority             
 and the Alaska Industrial Development and Export Authority - but              
 they had never been put in statute.  There was a reference only;              
 not a lead-in statement that indicated they were corporate                    
 receipts.                                                                     
                                                                               
 MR. WELLER explained the second technical change was on page 2,               
 line 24, "(K) public school trust fund."  The word "trust" was              
 being added to make it clear that it was a trust fund.                        
                                                                               
 MR. WELLER explained the third technical change was on page 3, line           
 5, "(T) Alaska children's trust (AS 37.14.200):"  The trust was               
 identified because for the first time the state was going to have             
 receipts coming in.                                                           
                                                                               
 MR. WELLER explained the first substantive change was on page 2,              
 lines 3-5, "(3) designated program receipts (INDIVIDUAL,                      
 FOUNDATION, OR CORPORATION GIFTS, GRANTS, OR BEQUESTS THAT BY THEIR           
 TERMS ARE RESTRICTED TO A SPECIFIC PURPOSE);"  The deleted language           
 was being rolled into the definition of a designated program                  
 receipt because there was no reason to have two similar definitions           
 on the books.                                                                 
                                                                               
 MR. WELLER explained the second substantive change was on page 2,             
 line 3, "(3) designated program receipts".  The definition was on             
 page 3, line 10-11, "(c) For purposes of this section, `designated            
 program receipts' means money that is received from a source other            
 than the state and that is (1) restricted to a specific use under             
 the terms of a gift, grant, bequest, contract, or federal law; or             
 (2) subject to appropriation for another purpose, but is designated           
 by state law as available for a specific use."                                
                                                                               
 MR. WELLER explained the third substantive change was on page 3,              
 line 8-9, "(6) receipts of commercial fisheries test fishing                  
 operations (AS 16.05.050(15)."  It was a specific and unique                  
 receipt established by the legislature so it needed to be included            
 in the bill.                                                                  
                                                                               
 MR. WELLER further stated that attached to the fiscal note was a              
 spreadsheet which identified the receipts and their associated                
 revenues for Fiscal Year (FY) 96 and 98.                                      
                                                                               
 Number 0647                                                                   
                                                                               
 CHAIR JAMES stated she had a lot of problems with the bill and a              
 lot of questions.  She understood the definition of program                   
 receipts, but she wanted to know what kind, and where the receipts            
 would come from.  She understood that this was a good tool when it            
 came to "cutting the budget without cutting the budget."  She was             
 not happy with the way the state measured how it cut the budget.              
 The general public really wanted the state to downsize government.            
 The public did not care if the money came from the federal                    
 government, the state general fund, or the program receipts.  The             
 state had been measuring its budget reduction by the general funds.           
 "This has been an argumentative issue as to what the total state              
 spending is.  We don't tell the people that.  We only tell them               
 that we're trying to keep it down to 2.4."  Therefore, this would             
 be a bigger subterfuge by not including the program receipts in the           
 column of general funds when they could not be anything except                
 general funds according to the constitution.  It appeared that the            
 state was trying to take program receipts as another source so that           
 they would not be counted as general funds.  She suggested adding             
 another column titled "general funds-program receipts" to the                 
 budget process to identify them.                                              
                                                                               
 CHAIR JAMES further stated she was concerned about the departments            
 making applications for permits; such as, the oil companies trying            
 to get their permits run through at a faster pace when staff was              
 not available.  A designated receipt was taken in allowing for the            
 hiring of a person in order for the oil company to get its permits.           
 She was concerned about the little guy who did not have the money             
 to pay extra to get a permit.  She did not see it as fair and                 
 equitable.  She had heard stories that the extra money was not on             
 a list of schedule and fees; it was arbitrary.  The state should              
 not be arbitrarily collecting money from anyone to get a service              
 that the state was supposed to be providing anyway.  She understood           
 that the Division of Occupational Licensing was supposed to charge            
 the cost of doing business; so, if the legislature cut its budget,            
 then the division would have to cut its fees because it was suppose           
 to be a wash.                                                                 
                                                                               
 Number 0973                                                                   
                                                                               
 REPRESENTATIVE ETHAN BERKOWITZ stated that the legislature did cut            
 its budget.                                                                   
                                                                               
 CHAIR JAMES replied she did not cut its budget.  Nevertheless, the            
 public did not want to pay any taxes until the legislature reduced            
 governmental spending and every time a charge or fee was added                
 "you're taxing the people."  The issue should be black and white so           
 that the ordinary person could understand it.  Right now, the                 
 ordinary person could not understand this because it was a                    
 subterfuge.                                                                   
                                                                               
 Number 1024                                                                   
                                                                               
 REPRESENTATIVE KIM ELTON stated that the bill would help the public           
 understand because it would establish categories and identify                 
 different funding sources.  For example, a bill was introduced that           
 would allow dive fishermen to assess themselves a tax and the                 
 proceeds would be given by statute to the Division of Fish and Game           
 for the purpose of hiring the management and enforcement of that              
 fishery.  The dive fishermen were doing that because the department           
 did not have the money to manage the fishery.  According to HB 78,            
 the funds would not be identified as general fund dollars, but as             
 dollars collected for a specific purpose.                                     
                                                                               
 REPRESENTATIVE ELTON further stated that there was a public that              
 needed governmental services.  Thus, it was important to                      
 distinguish between voluntary funds for a specific purpose and                
 general funds.  In addition, an advantage to the little guy - big             
 guy permitting process would be that the money would not go into              
 the pot causing the little guy to wait longer.  The new money was             
 incremented for the purpose of permitting for the big guy only                
 which would include the staff.                                                
                                                                               
 Number 1217                                                                   
                                                                               
 CHAIR JAMES replied she now understood what the Governor meant by             
 "open for business."  "We have a store front and if you can come in           
 and pay for our services you can have some.  If you don't have any            
 money you don't get any."  It was a question of what the private              
 and public sectors should do.  She wondered why the dive fishermen            
 did not put their money into a pot and hire somebody from the                 
 private sector.  The expertise was out there and they could even              
 get it for less.  "By doing it this way, we're totally changing the           
 face of government and what's it here for.  It's here to provide              
 services that the public needs and not those that it doesn't need."           
 Therefore, she saw the bill as a crossing of the lines and a                  
 blurring of the edges between what the people should be doing and             
 what the government should be doing.                                          
                                                                               
 Number 1300                                                                   
                                                                               
 REPRESENTATIVE ELTON replied the difference was that the state was            
 constitutionally mandated to manage its natural resources for the             
 benefit of all the people.  Furthermore, the legislature had -                
 collectively - created the store front Chair James mentioned.  The            
 Department of Fish and Game, for example, had fewer scientists and            
 managers now than in 1979 before the oil money when now there were            
 more complex fisheries and user groups.  Thus, the bill allowed for           
 the opportunity of the industry to help itself and the state                  
 entities as well.                                                             
                                                                               
 Number 1356                                                                   
                                                                               
 CHAIR JAMES replied the state entity, Department of Fish and Game,            
 was not mandated to do research which was what the money for the              
 dive fishermen would be used for; not management.                             
                                                                               
 Number 1367                                                                   
                                                                               
 REPRESENTATIVE ELTON replied research was necessary to determine              
 the size of the bio-mass to determine the limits of the harvest,              
 for example.                                                                  
                                                                               
 Number 1380                                                                   
                                                                               
 CHAIR JAMES replied she understood but it could be done by a                  
 private individual as well.                                                   
                                                                               
 Number 1392                                                                   
                                                                               
 REPRESENTATIVE FRED DYSON stated he agreed with the limits of what            
 Representative Elton and Chair James were saying.  There was reason           
 to be concerned about losing control of the cost.  In addition,               
 there was a difference between a tax and a fee for service.  He was           
 in favor of the bill, but the list of designated program receipts             
 was long and he felt intimidated that he would not get enough                 
 information about each program.  The principle argument -                     
 historically - was to keep police officers from pinching tourists             
 to raise the local police budget.  Thus, it was important to ensure           
 that there was a mechanism to prohibit misuse.                                
                                                                               
 REPRESENTATIVE DYSON declared a conflict of interest with the test            
 fisheries because he had tried for several years to bid for that              
 project.  He was concerned that the Department of Fish and Game               
 would shut down the entire fishery and contract with just fishermen           
 and put half of the catch or all of it into the budget.  "I don't             
 foresee that happening but that's the kind of thing we worry about            
 that is possible."                                                            
                                                                               
 REPRESENTATIVE DYSON further stated that the next bill - HB 155 -             
 was his idea three or four years ago.  It was the other side that             
 was very valuable and needed to be done.                                      
                                                                               
 Number 1554                                                                   
                                                                               
 CHAIR JAMES asked Mr. Weller if the figures in the spreadsheet                
 would not be measured as general funds in the budget process?                 
                                                                               
 Number 1584                                                                   
                                                                               
 MR. WELLER replied, "That's correct."  The figures in the                     
 spreadsheet would be defined as designated program receipts and               
 they would not roll up as general funds.                                      
                                                                               
 Number 1600                                                                   
                                                                               
 CHAIR JAMES asked Mr. Weller if the bill was passed would there be            
 a $53 million budget cut in general funds - automatically?                    
                                                                               
 Number 1611                                                                   
                                                                               
 MR. WELLER replied the Governor did not intent to portray it in               
 that way.  The budget plan as submitted by the Governor showed                
 three columns:  general funds, general funds with designated                  
 program receipts and other funds.  Representative Terry Martin                
 wanted all revenues appropriated by the legislature to be shown and           
 we intend to do that.  The programs in the spreadsheet would not              
 roll up as a general fund appropriation but, they would roll up as            
 a designated program receipt appropriation.                                   
                                                                               
 Number 1657                                                                   
                                                                               
 CHAIR JAMES replied they were already being designated.  Generally,           
 the legislature authorized money to be spent according to the fees.           
 For example, the marine highway revenues went into an account that            
 was used for its budget.  It was considered part of the "sweep" at            
 the end of the budget process.                                                
                                                                               
 Number 1693                                                                   
                                                                               
 MR. WELLER replied the issue she was addressing was the self-                 
 sufficiency requirement where the programs were required to cover             
 their full cost of operation in statute, such as, the Division of             
 Insurance.  Every year the legislature appropriated the balance of            
 funds for those programs into the carry-forward so that there was             
 no leakage into the General Fund.  In other words, it was swept and           
 put back into the programs because they were funded by the users.             
                                                                               
 MR. WELLER further stated that the legislature required in statute            
 that OMB submit a fee report every year in January that showed any            
 regulatory changes to the program receipts.  In addition, general             
 fund program receipts were not included in HB 78.  The bill only              
 addressed designated program receipts and there was a big                     
 difference between them.  For example, the parks levied a fee, but            
 it only covered a small portion of the cost of managing and                   
 operating them.  The rest of their budget was funded through the              
 General Fund; there was not a one-to-one relationship.                        
                                                                               
 Number 1779                                                                   
                                                                               
 CHAIR JAMES replied the Salcha River property owners in her area              
 organized to take care of its park because it was going to be                 
 closed.  "So don't tell me it's not out there.  It is being done."            
                                                                               
 Number 1800                                                                   
                                                                               
 MR. WELLER replied - generically - park fees funded only a small              
 portion of its total cost, therefore, they were not included in the           
 bill.  The Division of Motor Vehicles was another example.  It was            
 not in statute that the collected revenues would be appropriated              
 back to the program, yet it raised some $31 million.  The examples            
 in the spreadsheet were programs with a one-to-one relationship.              
 He cited the Alaska Tourism Marketing Council whereby the                     
 legislature appropriated a certain amount of general funds and the            
 industry was mandated to raise at least 25 percent.  Therefore, if            
 the budget was cut in this area, the receipts that were being                 
 matched would also be cut from the industry.  There were no                   
 receipts that were deposited into the General Fund that could be              
 used for something else or to close the fiscal gap.  Some programs            
 received funds from the federal government that could only be used            
 for that particular program, and if the receipts were cut, it would           
 violate the federal law.                                                      
                                                                               
 Number 1882                                                                   
                                                                               
 CHAIR JAMES replied the state did not cut those programs because              
 there were other funds.                                                       
                                                                               
 MR. WELLER responded because - currently - they were general fund             
 program receipts.  He reiterated they were unique receipts, they              
 were not the same as general fund program receipts and should be              
 treated differently.  The intent was not to let those with money              
 "go to the head of the line" per se.  The intent was to separate              
 the line and treat all those involved the same, except for the                
 private parties that were willing to pay for their programs.                  
                                                                               
 Number 1986                                                                   
                                                                               
 CHAIR JAMES replied it did not seem like the way government should            
 be doing business.  The government was here to provide a service.             
 If something extra was needed to be paid for it seemed unfair that            
 the government was the only place to get the service.  In addition,           
 she believed it was already being accounted for so she did not see            
 how the bill would make it any easier.  Mr. Weller first said that            
 the budget process would reduce the amount of general funds and now           
 he said that they would all be counted as general funds.  The issue           
 here was whether or not it should be a legislative decision as                
 opposed to an agency decision; a designation allowed to make these            
 types of deals and to collect funds without authorization of the              
 legislature.                                                                  
                                                                               
 Number 2112                                                                   
                                                                               
 MR. WELLER replied, if the bill passed, the program receipts would            
 be treated as non-general fund program receipts.                              
                                                                               
 Number 2119                                                                   
                                                                               
 CHAIR JAMES asked Mr. Weller if the $53 million reduction was                 
 actual?                                                                       
                                                                               
 MR. WELLER replied it was actual as a General Fund reduction.  It             
 would not be calculated as part of the FY 97 to FY 98 reduction;              
 but, it would be calculated as part of the overall spending.  In              
 other words, there would not be a $53 million drop in total                   
 spending.                                                                     
                                                                               
 CHAIR JAMES wondered how the public would understand a reduction in           
 the General Fund and a corresponding increase in other general                
 funds.                                                                        
                                                                               
 MR. WELLER stated the budget plan as submitted showed general                 
 funds, general funds with designated program receipts, and other              
 funds.  Therefore, a person could see the total expenditures.  The            
 program receipts would not be hidden, and that would not change               
 with the passage of HB 78.                                                    
                                                                               
 CHAIR JAMES asked Mr. Weller if this was the first year that there            
 was a column that indicated the designated program receipts?                  
                                                                               
 MR. WELLER replied it was used last year as well.  Last year, he              
 explained, was the first year that there were designated program              
 receipts as an account.                                                       
                                                                               
 Number 2188                                                                   
                                                                               
 CHAIR JAMES wondered, therefore, why a statute was needed because             
 it was already being done.                                                    
                                                                               
 Number 2196                                                                   
                                                                               
 MR. WELLER replied a statute was needed for budgeting and                     
 accounting purposes.  Thus, a budget could be submitted that                  
 pointed to the accounting code and no matter what was done on the             
 accounting side it could not be made a non-general fund, without              
 the approval of the legislature.                                              
                                                                               
 Number 2236                                                                   
                                                                               
 REPRESENTATIVE ELTON stated to change or clarify what in practice             
 was happening gave a certain sense of comfort to those who were               
 paying for a fee.  If the oil industry, for example, wanted to give           
 $2 million to help on the Badami Project, it would be comforting to           
 know that the money was designated by statute.  It would also help            
 the legislators explain to the public what was going on.  He did              
 not want to be in a position to explain how the $2 million from the           
 oil company affected the budget.                                              
                                                                               
 Number 2321                                                                   
                                                                               
 CHAIR JAMES replied HB 78 would not change that process.                      
                                                                               
 REPRESENTATIVE ELTON further stated that the bill provided an                 
 education for the legislators and the public because there was a              
 large segment of the population that believed there was too much              
 government so "let's cut it."  But, even that portion would not say           
 "let's cut government that the industry was willing to pay extra              
 for."                                                                         
                                                                               
 Number 2365                                                                   
                                                                               
 CHAIR JAMES replied, if she was an oil company, she would not give            
 the state $2 million dollars without a contract that said how the             
 state would spent the money.  She asked Mr. Weller if there was a             
 written contract?                                                             
                                                                               
 Number 2410                                                                   
                                                                               
 MR. WELLER replied the spreadsheet broke the program receipts by              
 their type:  contract, assessment, restricted fee, legal, third               
 party billing, and test fishery.                                              
                                                                               
 CHAIR JAMES asked Mr. Weller how a contract was measured?                     
                                                                               
 Number 2451                                                                   
                                                                               
 MR. WELLER replied he could not answer the question.  A contract              
 was entered into by two parties and he assumed that the parties               
 worked out the conditions.                                                    
                                                                               
 TAPE 97-31, SIDE B                                                            
 Number 0001                                                                   
                                                                               
 MR. WELLER further stated that the money did not just go to the               
 General Fund to help close the fiscal gap.  There was a contract              
 that backed up the service.  He reiterated there were fees that               
 were restricted by:  contract, federal law, state law, and third              
 party travel situations.                                                      
                                                                               
 Number 0021                                                                   
                                                                               
 CHAIR JAMES wondered if there would be a profit associated with the           
 $2 million charged for the Badami Project as an example mentioned             
 earlier.  She asked Mr. Weller if the department would use existing           
 personnel already authorized in the budget, or if the department              
 would hire new personnel in addition to the already authorized                
 budget to spend the money?                                                    
                                                                               
 Number 0061                                                                   
                                                                               
 MR. WELLER replied he did not know every case, but he did know that           
 new people were not hired in other cases.  There could be                     
 subcontracting with the university, for example, if the project was           
 highly scientific.  In addition, there were only situations where             
 the state had the data base, such as, labor statistics (Department            
 of Labor).  He was not sure, however, if it was similar in the                
 resource development agencies as well.                                        
                                                                               
 Number 0112                                                                   
 REPRESENTATIVE VEZEY replied the data from the Department of Labor            
 was available to anyone who wanted it for $100 - the Geographical             
 Information Management System (GIS).  There was also a big private            
 sector that was providing GIS services.                                       
                                                                               
 Number 0135                                                                   
                                                                               
 CHAIR JAMES stated the issue of not hiring new personnel bothered             
 her.  It appeared that the customer would be paying extra if the              
 state used its existing personnel to provide the service rather               
 than hiring new personnel to work on the contract.                            
                                                                               
 Number 0180                                                                   
                                                                               
 REPRESENTATIVE DYSON stated that it would be wise to outline a path           
 for a solution to this issue because there were some programs that            
 everybody would agree on, there were a few programs where assurance           
 would be needed, and for some programs more information would be              
 needed.  He suggested moving forward after deciding a course of               
 action.                                                                       
                                                                               
 Number 0231                                                                   
                                                                               
 REPRESENTATIVE ELTON stated he also believed that extra program               
 receipts meant additional resources applied to the project and,               
 that the strongest argument to accept the extra receipts was to not           
 hurt the little guy.  He assumed that extra personnel would be                
 hired with the money to accomplish the specific purpose.                      
                                                                               
 Number 0264                                                                   
                                                                               
 CHAIR JAMES stated it would be a good idea if the Legislative                 
 Finance Division would be here to answer some questions.                      
                                                                               
 Number 0285                                                                   
                                                                               
 REPRESENTATIVE VEZEY asked Mr. Weller what did HB 78 enable the               
 legislature to do that it could not do without it?                            
                                                                               
 Number 0295                                                                   
                                                                               
 MR. WELLER replied HB 78 would clearly define that program receipts           
 were different and unique from general funds; that the program                
 receipts would not close the fiscal gap; and that if the budget was           
 cut for these programs, the receipts would also be cut.                       
                                                                               
 Number 0319                                                                   
                                                                               
 REPRESENTATIVE VEZEY wondered if that was an answer to his                    
 question.                                                                     
                                                                               
 CHAIR JAMES replied, "No."                                                    
 REPRESENTATIVE ELTON stated, actually, it was a good answer.                  
                                                                               
 Number 0335                                                                   
                                                                               
 REPRESENTATIVE VEZEY asked Mr. Weller what did the statute enable             
 the legislature to do that it could not do - now - with internal              
 procedures?                                                                   
                                                                               
 Number 0344                                                                   
                                                                               
 MR. WELLER replied the statute - AS Sec. 37.05.146 - stated that              
 program receipts were presumed to be for the general fund, minus              
 the programs identified in statute as the exceptions.  The bill,              
 therefore, amended the statute to add the children's trust fund,              
 for example.  He reiterated that the program receipts for the                 
 exceptions should not be considered as general funds when                     
 addressing the budget because they were unique receipts and should            
 be treated differently.                                                       
                                                                               
 CHAIR JAMES asked Mr. Weller if the budget was presented like this            
 last year?                                                                    
                                                                               
 MR. WELLER replied, "No."                                                     
                                                                               
 CHAIR JAMES asked Mr. Weller if the Administration accounted for              
 the program receipts like this last year?                                     
                                                                               
 MR. WELLER replied, "Yes."  They were presented in the budget as              
 designated program receipts, but they were the general fund                   
 designated receipts.  House Bill 78 would amend the statute so that           
 the funds from the programs would be designated as program receipts           
 and not as general fund program receipts.                                     
                                                                               
 Number 0413                                                                   
                                                                               
 CHAIR JAMES replied it would then affect the bottom-line spending             
 of the General Fund.                                                          
                                                                               
 Number 0419                                                                   
                                                                               
 MR. WELLER replied, "Correct."  It would affect the bottom line.              
 The budget plan presented would show everything - total state                 
 spending.  It would show all of the revenue sources and receipts              
 which would still be subject to the committee and appropriation               
 processes.  They would also be subject to reduction.  He reiterated           
 the bill tried to identify them as unique, and that they did not              
 impact the fiscal gap.                                                        
                                                                               
 Number 0447                                                                   
                                                                               
 CHAIR JAMES asked Mr. Weller where the $53 million would be                   
 reflected?                                                                    
 Number 0499                                                                   
                                                                               
 MR. WELLER replied, if the bill passed, the program receipts would            
 not show as general funds.  The total spending of FY 97 to FY 98              
 would show the total expenditures.  The program receipts would not            
 be taken off of the books.  The programs would be reflected                   
 separately as:  general fund program receipts and designated                  
 program receipts for FY 97 and FY 98.  It was clear that there                
 would not be a $53 million reduction in FY 98.  That was not the              
 intent of the bill at all.                                                    
                                                                               
 Number 0555                                                                   
                                                                               
 CHAIR JAMES explained the bill would be rolled over to Tuesday,               
 March 25, 1997.                                                               
                                                                               
 Number 0558                                                                   
                                                                               
 MR. WELLER replied that the Legislative Finance Division had a                
 listing of the program receipts and how they rolled up in the back            
 of the budget either as a general fund, a federal fund, or another            
 fund.                                                                         
                                                                               
 Number 0584                                                                   
                                                                               
 CHAIR JAMES replied that the rolling over of the money bothered               
 her.  She asked Mr. Weller, if the legislature authorized                     
 something, would it continue to be authorized into the next year?             
                                                                               
 Number 0593                                                                   
                                                                               
 MR. WELLER replied, "No."  They were operating expenditures,                  
 therefore, subject to an annual appropriation.  The Auke licensing            
 mentioned earlier contained carry-forward provisions in the                   
 operating budget so that the balance of one year was appropriated             
 into the next year.  That required legislative approval, there was            
 no automatic carry forward.                                                   
                                                                               
 CHAIR JAMES reiterated the bill would be held over to Tuesday,                
 March 25, 1997.                                                               
                                                                               
 HB 84 - PULL-TABS LIMITED TO 501(C)(3) OR (19)                              
                                                                               
 The next order of business to come before the House State Affairs             
 Standing Committee was HB 84, "An Act limiting the authority to               
 conduct pull-tab charitable gaming to qualified organizations that            
 are exempt from taxation under 26 U.S.C. 501(c)(3) or (19); and               
 providing for an effective date."                                             
                                                                               
 Number 0793                                                                   
                                                                               
 ARNOLD BROWER, JR., President, Native Village of Barrow, was the              
 first person to testify via the telephone in Barrow.  He explained            
 from time to time the Native Village of Barrow requested a permit             
 from the state for pull-tabs.  It was required to disband the                 
 permit, however, because it could not exceed a $1 million payout.             
 The Native Village of Barrow had worked with the Charitable Gaming            
 Division to increase the payout.  In addition, there were groups,             
 such as, dance groups that had to create their own things to get a            
 permit.  Therefore, he saw the bill as restrictive.  The tribal               
 governments that operated under a 638 Contract had been gutted and            
 the appropriations had been cut so badly that it only paid for                
 staff and oversight.  He asked for a higher payout rate to provide            
 better service.                                                               
                                                                               
 Number 1046                                                                   
                                                                               
 CHAIR JAMES stated that some of the concerns of Mr. Brower, Jr.               
 were not affected by HB 84.  The only entity that would be affected           
 by the bill currently was Barrow Search and Rescue, Inc.  However,            
 if the bill was to pass any other entity in Barrow would not be               
 able to have a permit to sell pull-tabs.                                      
                                                                               
 Number 1092                                                                   
                                                                               
 MR. BROWER, JR. replied he was not speaking for the Barrow Search             
 and Rescue, Inc.  He was speaking for the Native Village of Barrow.           
                                                                               
 CHAIR JAMES replied she understood and suggested that Mr. Brower,             
 Jr. contact Mr. Dennis Poshard from the Charitable Gaming Division            
 to discuss his concerns further.                                              
                                                                               
 Number 1135                                                                   
                                                                               
 REPRESENTATIVE TERRY MARTIN, Alaska State Legislature, stated there           
 were six permits in Barrow that pooled together.  If they could               
 prove to the committee what they did was charitable then they                 
 should be added to the bill.  The concern of Mr. Brower, Jr. was of           
 gross receipts and net receipts.  His second bill addressed gross             
 receipts.  He wondered if the payoff mentioned was to increase                
 gambling or to raise money for charitable purposes, however.                  
                                                                               
 CHAIR JAMES replied Mr. Brower, Jr. needed to talk to Mr. Poshard             
 or to testify again when the other bill was before the committee.             
 She did not want to muddy the water today.  She was also not                  
 interested in adding any people to the bill; it would be too                  
 complicated.                                                                  
                                                                               
 Number 1215                                                                   
                                                                               
 MR. BROWER, JR. stated he appreciated the comments of                         
 Representative Martin and he would be in contact with Mr. Poshard.            
                                                                               
 Number 1255                                                                   
                                                                               
 ALFREDA LORD was the next person to testify via the telephone in              
 Barrow.  She just wanted to track the bill so that no other changes           
 were made to affect the 501(c)(3)'s.                                          
                                                                               
 CHAIR JAMES asked Ms. Lord if she had a 501(c)(3) that she wanted             
 to protect?                                                                   
                                                                               
 MS. LORD replied, "Yes."  She reiterated that she wanted to make              
 sure that if there were any changes in the wording, such as,                  
 "and/or", it would not throw the whole thing out.                             
                                                                               
 Number 1370                                                                   
                                                                               
 DENNIS POSHARD, Director, Charitable Gaming Division, Department of           
 Revenue, was the next person to testify in Juneau.  He distributed            
 to the committee members three lists titled:  "Pull-Tab Permittees            
 that were 501(c)(3) or (19)", "Pull-Tab Permittees that were not              
 501(c)(3) or (19)", and "501(c)(19) and (3) Organizations Without             
 Pull-Tab Permits".  They were not easy to compile because they were           
 prepared by hand.  There was no compatibility between the data base           
 from the IRS and the data base from the division.  The list of                
 "Pull-tab Permittees that are 501(c)(3) or (19)" was five pages of            
 organizations that currently had pull-tab permits and would qualify           
 because of their status with the IRS.  The list of "Pull-tab                  
 permittees that are not 501(c)(3) or (19)" was 11 pages of                    
 organizations that currently had pull-tab permits that were not               
 listed with the IRS as 501(c)(3) or (19).  Their current IRS status           
 was also included.  The list of "501(c)(19) and (3) Organizations             
 Without Pull-Tab Permits" was substantial compared to the other two           
 lists.  The financial data was not included.                                  
                                                                               
 CHAIR JAMES replied the lists were very helpful.  She wondered how            
 many exactly would be excluded if the bill was to pass.                       
                                                                               
 Number 1524                                                                   
                                                                               
 MR. POSHARD further stated that he had talked to Mr. Brower, Jr.              
 already regarding his concerns.  He explained that the Native                 
 Village of Barrow did not have a permit and conducted illegal                 
 gambling activities by bringing in pull-tabs from out of the state            
 and from non-licensed distributors.  The division had encouraged              
 him to get a permit.  But, he did not want to do it because he                
 would be limited to awarding $1 million in prizes annually.  The              
 Native Village of Barrow typically reached that limit within four             
 to five months so a permit would significantly reduce the amount of           
 money it made.  He was able to get around this because it claimed             
 sovereignty and no one had challenged the claim.  The Department of           
 Public Safety had chosen not to place illegal gambling as a                   
 priority.  He reiterated Mr. Brower, Jr. was concerned about the              
 limit on the amount of activity raised.  He would gladly come under           
 state jurisdiction if the limit was raised.                                   
                                                                               
 Number 1655                                                                   
                                                                               
 REPRESENTATIVE VEZEY thanked Mr. Poshard for providing the lists              
 and pointing out the size of the businesses involved.  "Sometimes             
 we think of these as nickel and dime operations."                             
                                                                               
 Number 1671                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ referred to AS Sec. 05.15.150, "Limitation           
 on use of proceeds", and asked Mr. Poshard how the section would be           
 impacted by the bill?                                                         
                                                                               
 Number 1687                                                                   
                                                                               
 MR. POSHARD replied the bill did not make any statutory change to             
 the section.  It affected it, however, in that 501(c)(3) and (19)             
 organizations were limited by the IRS as to how they spent their              
 funds and that the IRS could narrow the section and then the state            
 would have to enforce it.                                                     
                                                                               
 Number 1737                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ asked Mr. Poshard if 501(c)(3)                       
 organizations were the only ones authorized for pull-tabs?                    
                                                                               
 MR. POSHARD replied, "No."  A 501(c) status had nothing to do with            
 who was or who was not qualified for a permit - currently.  Alaska            
 Statute Sec. 05.15.690 defined a qualifying organization; it did              
 not have to be incorporated, however.                                         
                                                                               
 REPRESENTATIVE BERKOWITZ asked Mr. Poshard if an organization did             
 not go through its 501(c) paperwork it would be precluded from                
 running a charitable game.                                                    
                                                                               
 MR. POSHARD replied, "Correct."                                               
                                                                               
 REPRESENTATIVE BERKOWITZ asked Mr. Poshard if the bill required               
 that the federal government dictate who would be allowed to do                
 charitable gaming in Alaska?                                                  
                                                                               
 MR. POSHARD replied essentially that was correct because nobody               
 could make a 501(c)(3) or (19) designation except the IRS.                    
                                                                               
 Number 1846                                                                   
                                                                               
 REPRESENTATIVE ELTON explained a Juneau Montessori and a Fairbanks            
 Montessori schools were on different lists.  He asked Mr. Poshard             
 if the Juneau Montessori, for example, would have to apply for a              
 501(c)(3) status if the bill passed?                                          
                                                                               
 MR. POSHARD replied it could apply and receive a 501(c)(3) status.            
 He declared a conflict of interest in answering the question,                 
 however, because his daughter attended the Juneau Montessori                  
 school.                                                                       
                                                                               
 REPRESENTATIVE ELTON declared a conflict of interest because he was           
 a members of the House Democratic Campaign Committee that had a               
 pull-tab permit which would be disallowed if the bill passed.                 
                                                                               
 REPRESENTATIVE BERKOWITZ declared a conflict because he had                   
 received funds from the House Democratic Campaign Committee.                  
                                                                               
 REPRESENTATIVE ELTON replied that he had not receive any funds but            
 he did help determine who received them.                                      
                                                                               
 CHAIR JAMES stated that she did know if she had a conflict of                 
 interest.                                                                     
                                                                               
 Number 1973                                                                   
                                                                               
 REPRESENTATIVE IVAN IVAN declared a huge conflict of interest                 
 because most of his communities that he represented were on the               
 lists.  The bill would impact a lot of good work that was being               
 done in his communities.  The city of Akiak operated with a permit            
 and it was three years behind in its accounting.  He did not                  
 support the bill.                                                             
                                                                               
 Number 2073                                                                   
                                                                               
 REPRESENTATIVE ELTON stated the testimony indicated that charitable           
 organizations should be allowed access to a gaming permit and non-            
 charitable organizations should not be allowed access to a gaming             
 permit.  There were 11 pages of organizations that would not be               
 allowed, and 5 pages of organizations that would be allowed.  He              
 suggested changing AS Sec. 05.15.150 to ensure that charities would           
 get the money.  That would allow for 16 pages of organizations that           
 could benefit charities.  It appeared that the bill almost hurt               
 charities by limiting the number of groups.  If the goal was to               
 help charities, "Don't say who could sell, just say who could get."           
                                                                               
 Number 2190                                                                   
                                                                               
 CHAIR JAMES replied the bill tried to define what was a charity -             
 a 501(c)(3) and (19).  Generally, an organization wanted to be a              
 501(c)(3) because of the tax deduction.  She disagreed that                   
 501(c)(3)'s and (19)'s were the only charities, however.                      
                                                                               
 Number 2319                                                                   
                                                                               
 REPRESENTATIVE ELTON replied that they would be able to sell pull-            
 tabs but then give the money to a politician, for example.                    
                                                                               
 CHAIR JAMES replied a 501(c)(3) could not be involved in political            
 activities or affect legislation.                                             
                                                                               
 Number 2361                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ explained that a charitable organization             
 was already defined in statute as "an organization, not for                   
 pecuniary profit, that is operated for the relief of poverty,                 
 distress, or other condition of public concern in the state;"                 
                                                                               
 CHAIR JAMES replied Representative Martin wanted a different                  
 definition.                                                                   
                                                                               
 Number 2401                                                                   
                                                                               
 MR. POSHARD replied a charitable organization was defined in                  
 statute.  But also look at who the division was allowed to issue              
 permits to under "qualified organizations" in the same section -              
 educational, religious and political organizations.                           
                                                                               
 TAPE 97-32, SIDE A                                                            
 Number 0001                                                                   
                                                                               
 MR. POSHARD stated there was confusion amongst the charities                  
 because of the unrelated business income tax provision in Alaska.             
 The money could be used for administrative expenses or for their              
 own organizations, while other states required that the money be              
 donated to a 501(c)(3) in order not be taxed.  In other words,                
 every penny that was made was donated to a non-profit 501(c)(3)               
 organization.  In Alaska, any pull-tab money was taxable under the            
 unrelated business income tax.                                                
                                                                               
 Number 0126                                                                   
                                                                               
 REPRESENTATIVE MARTIN stated there was no doubt that many, many               
 organizations were bringing in more money than a true charitable              
 organization.  He cited the Home Builders Association.  "Man that             
 group is slick as can be in raising money - the Anchorage Home                
 Builders Association, the Fairbanks Home Builders, the Kenai Home             
 Builders, and the statewide home builders association - they've all           
 got permits and a lot of money coming in.  And I think relatively             
 little is for charity."  Charity begins at home.                              
                                                                               
 Number 0192                                                                   
                                                                               
 CHAIR JAMES replied that was where charity was supposed to begin.             
                                                                               
 REPRESENTATIVE MARTIN replied if you want that concept then fine.             
 The organizations were doing very well.  Maybe, we should change              
 the bill so that all of the money went to a designated true                   
 charity.                                                                      
                                                                               
 Number 0286                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ stated that he would hate to give the IRS            
 any more power than it already had.  He was concerned about                   
 allowing it to define the designations because "once they get in              
 your business they never get out."                                            
                                                                               
 Number 0324                                                                   
                                                                               
 REPRESENTATIVE MARTIN replied the IRS now realized how much money             
 Alaska was making on pull-tabs.  Therefore, it was going back to              
 the organizations and analyzing their accounts.  The state had                
 misled these organization into thinking that they would get away              
 with it.                                                                      
                                                                               
 Number 0356                                                                   
                                                                               
 CHAIR JAMES replied the state had not misled the organizations.               
                                                                               
 CHAIR JAMES asked the committee members if anybody was interested             
 in making a motion to move the bill forward.                                  
                                                                               
 REPRESENTATIVE VEZEY replied he would make a motion but he did not            
 want to waste the time of the committee members.                              
                                                                               
 Number 0380                                                                   
                                                                               
 REPRESENTATIVE ELTON replied the committee could put this to rest             
 by moving the bill and recommending a "no" vote.                              
                                                                               
 Number 0398                                                                   
                                                                               
 REPRESENTATIVE VEZEY moved that HB 84 move from the committee with            
 individual recommendations and the attached fiscal note(s).                   
                                                                               
 REPRESENTATIVE IVAN objected.  A roll call vote was taken.                    
 Representatives James, Dyson and Vezey voted in favor of the                  
 motion.  Representatives Berkowitz, Elton and Ivan voted against              
 the motion.  House Bill 84 failed to move from the House State                
 Affairs Standing Committee.                                                   
                                                                               
 Number 0483                                                                   
                                                                               
 CHAIR JAMES introduced from the audience, Michelle Jenkins from               
 North Pole.  She was a visiting Page in the House and the Senate.             
                                                                               
 REPRESENTATIVE ELTON stated that Ms. Jenkins was the most pleasant            
 person on the floor of the House of Representatives this week.                
                                                                               
 HB 155 - HUMAN RIGHTS COMMISSION FEES & HEARINGS                            
                                                                               
 The next order of business to come before the House State Affairs             
 Standing Committee was HB 155, "An Act relating to hearings before            
 and authorizing fees for the State Commission for Human Rights; and           
 providing for an effective date."                                             
                                                                               
 Number 0575                                                                   
                                                                               
 PAULA HALEY, Executive Director, Alaska State Commission for Human            
 Rights, was the first person to testify via the telephone in                  
 Anchorage.  The bill was part of the agency's response to increased           
 demand for services from the Alaskan public in the wake of                    
 diminished resources.  Over the past 15 years complaints of                   
 discriminations filed had nearly tripled while at the same time the           
 agency had lost 35 percent of its staff.  As a result, the agency             
 had been working to increase its efficiency but because of the                
 increase in filings it had not been able to bring its inventory               
 down.  In fact, the filings had burgeoned to an all time high.  The           
 commission realized that seeking additional resources alone was not           
 enough so to better face the work load challenge it had reviewed              
 and revised its internal processes and procedures, amended its                
 regulations, and proposed HB 155.  The bill would allow for both a            
 cost-saving measure and would give the authority to charge fees for           
 certain services.  Any fees generated or money saved, from holding            
 hearings at the agency's office, and by not transcribing every                
 hearing would be used towards the investigation and enforcement of            
 the law.  The money would allow the agency to use temporary staff,            
 for processing, investigations, pay overtime, and quicker                     
 investigations.  The public was not satisfied with the time it took           
 to complete an investigation.  At this moment, there were over 360            
 cases that were not assigned to an investigator and could stay on             
 hold for up to nine months.  Therefore, HB 155 would be an                    
 essential piece of the commission's effort to grapple with the                
 delays by saving money, streamlining its process, and allowing for            
 the collection of fees.  She and the commissioners urged the                  
 support of the committee members.                                             
                                                                               
 Number 0762                                                                   
                                                                               
 REPRESENTATIVE IVAN asked Ms. Haley if she had a breakdown of the             
 cases for the whole state?                                                    
                                                                               
 Number 0814                                                                   
                                                                               
 MS. HALEY stated that the agency would hold hearings only in                  
 instances where there was substantial evidence.  And if the                   
 employer, for example, did not wish to fly to the commission's                
 office, the hearing would be heard telephonically.  If it was                 
 important to see the chief witness, for example, he or she would be           
 brought to the hearing site.  However, often the complaining party            
 in rural Alaska moved from the area and the state.  Therefore,                
 telephonic communication would help deal with the problem.  She               
 also hoped that the impact on the non-urban areas would be very               
 limited.                                                                      
                                                                               
 CHAIR JAMES asked Ms. Haley to provide to Representative Ivan a               
 recap of where the majority of the cases came from in Alaska.                 
                                                                               
 Number 0930                                                                   
                                                                               
 REPRESENTATIVE DYSON said he could provide to Representative Ivan             
 the annual report that gave the information today.                            
                                                                               
 Number 0941                                                                   
                                                                               
 MS. HALEY replied in the annual report there was pie-shape chart of           
 the areas where the cases came from around the state.                         
                                                                               
 Number 0963                                                                   
                                                                               
 REPRESENTATIVE VEZEY asked Ms. Haley who the fees would be assessed           
 to?                                                                           
                                                                               
 Number 0971                                                                   
                                                                               
 MS. HALEY replied the commissioners had not spent a great deal of             
 time discussing the particulars of the assessment.  It would have             
 to be done by regulation.  The initial reaction was in response to            
 the educational aspect of the commission.  She did a fair amount of           
 training, as resources allowed, hoping that the training would                
 prevent complaints from being filed.  And many that approached the            
 commission were willing to pay for the seminars or the materials              
 prepared but it was unable to accept the money.  If those fees                
 could be secured, they could go to the enforcement aspect of the              
 commission.                                                                   
                                                                               
 Number 1035                                                                   
                                                                               
 REPRESENTATIVE VEZEY asked Ms. Haley if there was intent to assess            
 a fee from those that filed a complaint?                                      
                                                                               
 Number 1045                                                                   
                                                                               
 MS. HALEY replied the commissioners could look at that under the              
 bill.  However, the Equal Employment Opportunity Commission that              
 gave $100,000 to $120,000 to support its efforts strongly                     
 discouraged and had indicated by letter that it would terminate its           
 contract if the agency was to charge a fee for filing a claim.                
                                                                               
 Number 1099                                                                   
                                                                               
 REPRESENTATIVE VEZEY stated he would be even more concerned if we             
 were looking at assessing a fee for those who were required to                
 defend themselves.                                                            
                                                                               
 REPRESENTATIVE VEZEY asked Ms. Haley why the entire sentence was              
 not deleted on page 2, lines 19-21?  By deleting the entire                   
 language, it reverted to the Open Meetings Act.                               
                                                                               
 Number 1124                                                                   
                                                                               
 MS. HALEY replied the requirement for a transcript had been in the            
 statute for a long time.  The hearings were sometimes very short              
 and informal and sometimes they were like mini-trials lasting up to           
 a week.  It was very expensive to contract for those services.  The           
 agency wanted to just be able to record the hearings and to make              
 the tapes available rather than transcribing every hearing.  She              
 did not fully understand his reference to the Open Meetings Act               
 because the hearing process was already open to the public, except            
 for the deliberations.                                                        
                                                                               
 Number 1181                                                                   
                                                                               
 REPRESENTATIVE VEZEY wondered why the entire sentence was not                 
 deleted because the commission was required to follow the Open                
 Meetings Act by law anyway.                                                   
                                                                               
 Number 1203                                                                   
                                                                               
 MS. HALEY replied she was not sure about the applicability of the             
 Open Meetings Act.  In other words, these were administrative                 
 hearings on cases presented under the Human Rights Law.  They were            
 not meetings of the commissioners as public policy makers that                
 would be bound by the Open Meetings Act, for example.                         
                                                                               
 Number 1247                                                                   
                                                                               
 REPRESENTATIVE DYSON explained he had a part in getting this going            
 when he was on the Human Rights Commission.  The dilemma that the             
 commission faced was a huge back log of investigations and                    
 complaints of untimely investigations.  As a result, the                      
 commissioners found themselves directing the activity of the staff.           
 For instance, when Ms. Haley conducted a training, time was spent             
 away from the job.  He wondered, therefore, if the commission could           
 be reimbursed for her expenses.  The answer was, no, under existing           
 law.  Thus, he suggested a bill that would allow the commission to            
 be reimbursed for the out of pocket expenses incurred.                        
                                                                               
 REPRESENTATIVE DYSON further explained the second step was to                 
 eliminate the mindless obedience of the law on where the meetings             
 were held when it did not serve the purpose of justice and the                
 complainant.  This allowed for more flexibility, cost                         
 effectiveness, and effectiveness for the complainant and the                  
 defendant.                                                                    
                                                                               
 Number 1368                                                                   
                                                                               
 MS. HALEY replied she had been allowed to be reimbursed for the               
 cost of an airplane ticket but not for the time away from the                 
 agency or for the value of the training in terms of preparations              
 and materials.  It was time to look for cost effective measures and           
 if telephonic hearings would save money then that was the way to go           
 and the bill would allow for that.  It also allowed for people to             
 request a change of venue for good cause.                                     
                                                                               
 Number 1449                                                                   
                                                                               
 REPRESENTATIVE VEZEY stated he was concerned about the broad nature           
 of Section 1.  The bill would give the agency the regulatory                  
 authority to assess fees for investigations, complaints and                   
 hearings.                                                                     
                                                                               
 CHAIR JAMES asked Representative Vezey if he was proposing a change           
 to the bill?                                                                  
                                                                               
 Number 1492                                                                   
                                                                               
 MS. HALEY replied the commissioners would not be opposed to a                 
 change.  The original version had the word "educational" included             
 for clarification.                                                            
                                                                               
 Number 1524                                                                   
                                                                               
 REPRESENTATIVE IVAN explained he also had the same concern as                 
 Representative Vezey.                                                         
                                                                               
 CHAIR JAMES announced the bill would be held until Tuesday, March             
 25, 1997 in order to look at Section 1 further.                               
 ADJOURNMENT                                                                   
                                                                               
 Number 1566                                                                   
                                                                               
 CHAIR JAMES adjourned the House State Affairs Standing Committee              
 meeting at 12:07 p.m.                                                         
                                                                               

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