Legislature(1997 - 1998)

04/08/1997 08:04 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
             HOUSE STATE AFFAIRS STANDING COMMITTEE                            
                         April 8, 1997                                         
                            8:04 a.m.                                          
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Jeannette James, Chair                                         
 Representative Ethan Berkowitz                                                
 Representative Fred Dyson                                                     
 Representative Kim Elton                                                      
 Representative Mark Hodgins                                                   
 Representative Ivan Ivan                                                      
 Representative Al Vezey                                                       
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 All members present.                                                          
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 *HOUSE BILL NO. 188                                                           
 "An Act relating to calculation of compensation for the public                
 employees' retirement system."                                                
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 HOUSE BILL NO. 200                                                            
 "An Act relating to subpoenas of the Administrative Regulation                
 Review Committee; and providing for an effective date."                       
                                                                               
      - PASSED CSHB 200(STA), as amended, OUT OF COMMITTEE                     
                                                                               
 HOUSE BILL NO. 79                                                             
 "An Act relating to the offense of possession of tobacco by a                 
 person under 19 years of age."                                                
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 HOUSE JOINT RESOLUTION NO. 21                                                 
 Relating to amendment of Title VIII of the Alaska National Interest           
 Lands Conservation Act.                                                       
                                                                               
      - SCHEDULED BUT NOT HEARD                                                
 (* First public hearing)                                                      
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 188                                                               
 SHORT TITLE: DEFINITION OF COMPENSATION IN PERS                               
 SPONSOR(S): REPRESENTATIVE(S) COWDERY                                         
                                                                               
 JRN-DATE      JRN-PG             ACTION                                       
 03/12/97       640    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/12/97       640    (H)   STATE AFFAIRS, FINANCE                            
 04/08/97              (H)   STA AT  8:00 AM CAPITOL 102                       
                                                                               
 BILL:  HB 200                                                               
 SHORT TITLE: SUBPOENA POWER: ADMIN. REG. REVIEW COMMIT                        
 SPONSOR(S): REPRESENTATIVE(S) JAMES                                           
                                                                               
 JRN-DATE      JRN-PG             ACTION                                       
 03/18/97       737    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/18/97       737    (H)   STATE AFFAIRS                                     
 03/25/97              (H)   STA AT  8:00 AM CAPITOL 102                       
 03/25/97              (H)   MINUTE(STA)                                       
 04/03/97              (H)   STA AT  8:00 AM CAPITOL 102                       
 04/03/97              (H)   MINUTE(STA)                                       
 04/08/97              (H)   STA AT  8:00 AM CAPITOL 102                       
                                                                               
 BILL:  HB  79                                                               
 SHORT TITLE: MINOR IN POSSESSION OF TOBACCO                                   
 SPONSOR(S): REPRESENTATIVE(S) BUNDE, James                                    
                                                                               
 JRN-DATE      JRN-PG             ACTION                                       
 01/16/97        90    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/97        90    (H)   STA, JUDICIARY, FINANCE                           
 04/03/97              (H)   STA AT  8:00 AM CAPITOL 102                       
 04/03/97       978    (H)   COSPONSOR(S): JAMES                               
 04/08/97              (H)   STA AT  8:00 AM CAPITOL 102                       
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 REPRESENTATIVE JOHN COWDERY                                                   
 Alaska State Legislature                                                      
 State Capitol, Room 416                                                       
 Juneau, Alaska 99801-1182                                                     
 Telephone:  (907) 465-3897                                                    
 POSITION STATEMENT:  Sponsor of HB 188.                                       
                                                                               
 MIKE McMULLEN, Personnel Manager                                              
 Division of Personnel                                                         
 Department of Administration                                                  
 P.O. Box 110201                                                               
 Juneau, Alaska 99811-0201                                                     
 Telephone:  (907) 465-4431                                                    
 POSITION STATEMENT:  Provided testimony on HB 188.                            
                                                                               
 DON ETHERIDGE, Jr., Lobbyist                                                  
 Alaska State District Council Laborers                                        
 710 West 9th Street                                                           
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 586-3707                                                    
 POSITION STATEMENT:  Provided testimony in opposition to HB 188.              
                                                                               
 KEVIN C. RITCHIE, Executive Director                                          
 Alaska Municipal League                                                       
 217 Second Street, Suite 200                                                  
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 586-1325                                                    
 POSITION STATEMENT:  Provided testimony in support of HB 188.                 
                                                                               
 CRAIG PERSSON, Vice President                                                 
 Public Safety Employees Association                                           
 6450 Airport Way, Suite 1                                                     
 Fairbanks, Alaska 99709                                                       
 Telephone:  (907) 474-2536                                                    
 POSITION STATEMENT:  Provided testimony in opposition to HB 188.              
                                                                               
 WALTER WILCOX, Legislative Assistant                                          
    to Representative Jeannette James                                          
 State Capitol, Room 102                                                       
 Juneau, Alaska 99801-1182                                                     
 Telephone:  (907) 465-3743                                                    
 POSITION STATEMENT:  Provided testimony on HB 200.                            
                                                                               
 REPRESENTATIVE CON BUNDE                                                      
 Alaska State Legislature                                                      
 State Capitol, Room 104                                                       
 Juneau, Alaska 99801-1182                                                     
 Telephone:  (907) 465-4843                                                    
 POSITION STATEMENT:  Sponsor of HB 200.                                       
                                                                               
 PATRICIA SWENSON, Legislative Assistant                                       
    to Representative Con Bunde                                                
 State Capitol, Room 104                                                       
 Juneau, Alaska 99801-1182                                                     
 Telephone:  (907) 465-4843                                                    
 POSITION STATEMENT:  Provided testimony on HB 200.                            
                                                                               
 LOREN JONES, Director                                                         
 Division of Alcoholism and Drug Abuse                                         
 Department of Health and Social Services                                      
 P.O. Box 110607                                                               
 Juneau, Alaska 99811-0607                                                     
 Telephone:  (907) 465-2071                                                    
 POSITION STATEMENT:  Provided testimony in support of CSHB 79(STA).           
                                                                               
 CATHERINE REARDON, Director                                                   
 Division of Occupational Licensing                                            
 Department of Commerce and Economic Development                               
 P.O. Box 110806                                                               
 Juneau, Alaska 99811-0806                                                     
 Telephone:  (907) 465-2534                                                    
 POSITION STATEMENT:  Provided testimony on CSHB 79(STA).                      
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 97-37, SIDE A                                                            
 Number 0001                                                                   
                                                                               
 The House State Affairs Standing Committee was called to order by             
 Chair Jeannette James at 8:04 a.m.  Members present at the call to            
 order were Representatives James, Elton, Hodgins, Ivan and Vezey.             
 Members absent were Berkowitz and Dyson.  Representative Berkowitz            
 arrived at 8:05 a.m.; and Representative Dyson at 8:06 a.m.                   
                                                                               
 HB 188 - DEFINITION OF COMPENSATION IN PERS                                 
                                                                               
 The first order of business to come before the House State Affairs            
 Standing Committee was HB 188, "An Act relating to calculation of             
 compensation for the public employees' retirement system."                    
                                                                               
 CHAIR JEANNETTE JAMES called on Representative John Cowdery,                  
 sponsor of HB 188, to present the bill.                                       
                                                                               
 Number 0080                                                                   
                                                                               
 REPRESENTATIVE JOHN COWDERY, Alaska State Legislature, read the               
 following sponsor statement into the record:                                  
                                                                               
 "HB 188 was introduced at the request of Anchorage Mayor Rick                 
 Mystrom.                                                                      
                                                                               
 "The current definition of compensation for the Public Employees              
 Retirement System allows for the use of overtime in the calculation           
 of pension benefits.                                                          
                                                                               
 "This definition invites abuse of the system through the use of               
 overtime loading to inflate an employee's high three years.                   
 Salaries have been inflated by as much as $40,000 to $50,000 per              
 year in extreme cases through the use of overtime.  This increases            
 the long term liability to the State in its retirement systems.               
                                                                               
 "HB 188 amends AS 39.35.680(8) to exclude overtime from the                   
 definition of "Compensation" for all new employees."                          
                                                                               
 REPRESENTATIVE COWDERY explained the Public Employee Retirement               
 System (PERS) was calculated on an employees' highest three years             
 consisting of the following:  base pay, employee contribution,                
 cost-of-living differential, leave, and overtime.  The Municipality           
 of Anchorage had been experiencing an increasing amount of                    
 "overtime padding" where some retiring employees maximized the                
 amount of overtime to maximize their pensions.  In the past year              
 alone, the municipality had reported overtime payments as high as             
 $76,000 a year.  The bill would simply exclude overtime from the              
 calculation of the benefit.                                                   
                                                                               
 Number 0221                                                                   
                                                                               
 CHAIR JAMES asked Representative Cowdery if overtime was time and             
 a half or premium pay?                                                        
                                                                               
 REPRESENTATIVE COWDERY replied overtime was anything above the                
 salary base pay.  In addition, the bill would only affect new                 
 hires; it would not be retroactive.                                           
                                                                               
 Number 0246                                                                   
                                                                               
 REPRESENTATIVE AL VEZEY said overtime was pay at the overtime rate,           
 and premium time was pay above the normal hourly rate.  The point             
 that Chair James raised was a good one, however; it was not defined           
 anywhere.                                                                     
                                                                               
 Number 0281                                                                   
                                                                               
 REPRESENTATIVE ETHAN BERKOWITZ asked Representative Cowdery if the            
 best three years were adjusted for inflation or were just flat                
 dollars?                                                                      
                                                                               
 Number 0296                                                                   
                                                                               
 REPRESENTATIVE COWDERY replied flat dollars.  Any three high years            
 could be calculated.                                                          
                                                                               
 Number 0318                                                                   
                                                                               
 CHAIR JAMES wondered, if a person's base pay required him to work             
 six days a week, would the sixth day be counted because it would              
 receive a time-and-a-half rate of pay.                                        
                                                                               
 Number 0343                                                                   
                                                                               
 REPRESENTATIVE COWDERY replied, "Yes."  It was overtime.                      
                                                                               
 CHAIR JAMES responded then only the premium was overtime as far as            
 she was concerned.                                                            
                                                                               
 REPRESENTATIVE COWDERY replied there was the occasional overtime              
 worked beyond the 37.5 hours a week for state employees.  The bill,           
 he reiterated, was based on the base salary.                                  
                                                                               
 Number 0393                                                                   
                                                                               
 REPRESENTATIVE IVAN IVAN asked Representative Cowdery if this was             
 a problem in Anchorage?                                                       
                                                                               
 Number 0405                                                                   
                                                                               
 REPRESENTATIVE COWDERY replied, "Yes."  In the police and fire                
 departments there had been as high as $1,500 of overtime used for             
 the purpose of retiring.  He reiterated the bill was not                      
 retroactive; it was perceived as an abuse of the past and the                 
 purpose was to deal with the problem in the future.                           
                                                                               
 Number 0454                                                                   
                                                                               
 REPRESENTATIVE FRED DYSON commented on the part-time and seasonal             
 professions, such as, firefighting.  The nature of the work                   
 required lots and lots of overtime, not by choice, but by demand.             
 Therefore, was the case of a firefighter more valid because it was            
 seasonal? he asked.                                                           
                                                                               
 REPRESENTATIVE COWDERY replied he did not know if it would be more            
 valid.  He reiterated the bill was not talking about the past; it             
 was talking about the future.  If the bill was to pass, the law               
 would be in place and the firefighters would have to live by it.              
 He understood, however, that there were emergency situations that             
 demanded a lot of overtime.                                                   
                                                                               
 Number 0557                                                                   
                                                                               
 REPRESENTATIVE VEZEY said state employees who worked seasonally did           
 not accrue a year's pay in a calendar year.  They could have to               
 work three years to accrue one calendar year of retirement credit,            
 for example.                                                                  
                                                                               
 Number 0581                                                                   
                                                                               
 REPRESENTATIVE KIM ELTON stated the presentation made by                      
 Representative Cowdery indicated this was an employee problem.  He            
 defined this issue as a management or political problem.  For                 
 example, in the case of the police officers, it could be argued               
 that there were not enough police officers to reduce the amount of            
 overtime needed.  He was concerned that the police officers would             
 lose out because of a management problem.  Furthermore, overtime              
 was approved by management.                                                   
                                                                               
 Number 0667                                                                   
                                                                               
 REPRESENTATIVE COWDERY replied there was a problem.  He did not               
 know if it was a management or an employee problem, however.  Maybe           
 the bill would solve the problem.  In addition, the debate in                 
 Anchorage was to create all new hires in PERS rather than the                 
 existing system.                                                              
                                                                               
 Number 0737                                                                   
                                                                               
 REPRESENTATIVE MARK HODGINS agreed with the bill.  He suggested               
 changing Sec. 2, however, to make it equal for everybody.  There              
 could be changes made in another committee to prevent two tiers,              
 for example.                                                                  
                                                                               
 Number 0784                                                                   
                                                                               
 REPRESENTATIVE COWDERY replied the act would take effect on the               
 effective date.                                                               
                                                                               
 REPRESENTATIVE HODGINS stated this was a good fix for a mounting              
 problem.                                                                      
                                                                               
 Number 0821                                                                   
                                                                               
 REPRESENTATIVE COWDERY explained there were many things included in           
 the definition of "compensation" and the bill just added one more             
 thing to the definition - overtime.  If there was better language             
 to clarify Sec. 2, he would not have a problem changing it.                   
                                                                               
 Number 0846                                                                   
                                                                               
 REPRESENTATIVE ELTON stated retirement and benefits could not be              
 reduced which was why the multiple tier system had been created for           
 the state.                                                                    
                                                                               
 Number 0865                                                                   
                                                                               
 REPRESENTATIVE DYSON asked Representative Cowdery where the bill              
 went next?                                                                    
                                                                               
 REPRESENTATIVE COWDERY replied the House Finance Committee.                   
                                                                               
 REPRESENTATIVE DYSON asked Representative Cowdery where had the               
 bill been?                                                                    
                                                                               
 REPRESENTATIVE COWDERY replied the House State Affairs Standing               
 Committee was the first committee of referral.                                
                                                                               
 REPRESENTATIVE DYSON asked Representative Cowdery if there was a              
 fiscal note attached?                                                         
                                                                               
 REPRESENTATIVE COWDERY replied there was a zero fiscal note.                  
                                                                               
 Number 0902                                                                   
                                                                               
 CHAIR JAMES stated she did not understand the zero fiscal note                
 because the state would save money.                                           
                                                                               
 Number 0918                                                                   
                                                                               
 REPRESENTATIVE COWDERY replied the state would not save any money             
 until it happened.  The state would not undo anything.                        
 CHAIR JAMES stated she understood it was the operations that were             
 measured and not the liabilities for the funding ratio of the                 
 General Fund.  However, it had been a cause for concern in the past           
 that the funding ratio stay constant and sufficient.  It was hard             
 to realize that there would not be a fiscal note attached to the              
 bill.  A positive fiscal note would be from communities that would            
 take advantage of this.                                                       
                                                                               
 Number 0975                                                                   
                                                                               
 MIKE McMULLEN, Personnel Manager, Division of Personnel, Department           
 of Administration, was the first person to testify in Juneau.  The            
 retirement benefit was now based on the average of the high five              
 instead of the high three as a result of the passage of Tier III              
 last year.  It would be more difficult for an employee to build up            
 and sustain his overtime for retirement over a five year period               
 compared to a three year period.  Therefore, Tier III already had             
 addressed this issue.                                                         
                                                                               
 MR. McMULLEN further stated that Representative Elton was correct.            
 Overtime was a management decision.  In addition, upon passage of             
 the bill, it would be necessary to identify the new hires and                 
 forever thereafter track them as a separate group in order not to             
 calculate their overtime creating a two tier system for the                   
 employer.  In the past, when Tier II and Tier III were enacted, the           
 new rates applied to everybody.  Moreover, there were prohibitions            
 in statute against reducing retirement benefits for employees.                
 Therefore, Sec. 2 would apply to those hired after the effective              
 date of the bill.  There were employees who moved to a high cost-             
 of-living area for their final three years so that the overtime               
 would be based on the higher differential rate and the combination            
 would go into their retirement calculation.  The Tier II program              
 provided that the geographic differential could only be counted if            
 over half of an employee's service was at the higher differential.            
                                                                               
 Number 1241                                                                   
                                                                               
 CHAIR JAMES asked Mr. McMullen what was in Tier I, II and III that            
 allowed for the retirement compensation to be calculated the same?            
                                                                               
 Number 1265                                                                   
                                                                               
 MR. McMULLEN replied the difference was in the tracking.  Tier II             
 changed the geographic differential provision so that the employer            
 deducted the full percentage from the employee, but upon                      
 retirement, the record was reviewed to determine if the majority of           
 the service was at the higher level or not.  Tier III changed the             
 benefit calculation from three years to five years.  For Tier II              
 and III, the employer did not have to distinguish between its                 
 employees; it continued to make the same deductions.  Tier IV, on             
 the other hand, affected the calculation determination and required           
 a distinction between employees.                                              
 Number 1352                                                                   
                                                                               
 CHAIR JAMES stated there was no other way to reduce benefits.                 
                                                                               
 Number 1367                                                                   
                                                                               
 MR. McMULLEN stated the way to keep them the same was to off-set              
 the difference.                                                               
                                                                               
 Number 1394                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ asked Mr. McMullen if the segregation for            
 the different tiers of employees was done on a computer?                      
                                                                               
 MR. McMULLEN replied, "Yes."  The system was computerized.  Mr.               
 Bill Church, Division of Retirement and Benefits, was also here               
 today.  He could answer the question better.  The bill required               
 that the employer make the distinction rather than the retirement             
 system.                                                                       
                                                                               
 Number 1394                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ asked Mr. McMullen if this would be a                
 difficult technical step to take for the state?                               
                                                                               
 MR. McMULLEN replied it would take work to make the distinction               
 because all of the hiring offices in the departments would have to            
 get the right information from the new hire to determine the tier             
 he or she was under.                                                          
                                                                               
 REPRESENTATIVE BERKOWITZ stated that information would already be             
 part of the employee record.                                                  
                                                                               
 MR. McMULLEN replied, "Not necessarily."  A person could have                 
 worked for the Municipality of Anchorage in the past which would              
 not be part of the record.  There were dozens of steps in the                 
 enrollment process, and this was a minor burden that would not be             
 looked at for the next 20 years.                                              
                                                                               
 Number 1506                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ asked Mr. McMullen which state employees             
 would this bill impact?                                                       
                                                                               
 Number 1511                                                                   
                                                                               
 MR. McMULLEN replied there were state employees who worked overtime           
 as a matter of course, such as, firefighters.  Airport safety                 
 officers worked a schedule where there was a quarter of an hour of            
 overtime per day because they did not get a real break.  Therefore,           
 someone hired after the effective date of the bill would be treated           
 differently.                                                                  
 Number 1567                                                                   
                                                                               
 CHAIR JAMES asked Mr. McMullen if the employees under a collective            
 bargaining unit could make a different deal than state law?                   
                                                                               
 MR. McMULLEN replied retirement was outside the scope of collective           
 bargaining.  But, rates to accommodate the same thing, for example,           
 could be collectively bargained.  At some point, an employer would            
 note that this would be an employment and recruitment problem.                
                                                                               
 Number 1620                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ asked Mr. McMullen if it was possible for            
 seasonal workers to negotiate overtime pay away from the contract?            
                                                                               
 MR. McMULLEN replied the state was subject to the Fair Labor                  
 Standards Act (FLSA) which mandated overtime pay for time over 40             
 hours in a week.                                                              
                                                                               
 REPRESENTATIVE BERKOWITZ asked Mr. McMullen if it was possible for            
 seasonal workers to negotiate overtime pay away from the contract             
 in terms of PERS?                                                             
                                                                               
 MR. McMULLEN replied, "No."  Workers could negotiate for a 20                 
 percent higher rate of pay for those hired after the effective date           
 of the bill, for example, to take care of the difference.                     
                                                                               
 Number 1669                                                                   
                                                                               
 REPRESENTATIVE ELTON asked if a seasonal employee would loose                 
 status in the retirement tier if he was hired in another tier?                
                                                                               
 MR. McMULLEN replied employees were in whatever tier they were                
 first hired into, even if they left the work force for 10 years.              
                                                                               
 Number 1702                                                                   
                                                                               
 REPRESENTATIVE ELTON stated there could be costs outside of the               
 retirement and benefit system, if every PERS unit had to track its            
 employees differently.  He asked Mr. McMullen if that would be a              
 minor or a major cost?                                                        
                                                                               
 Number 1725                                                                   
                                                                               
 MR. McMULLEN replied it was a matter of the Division of Finance               
 making computer changes, training, and departments following the              
 provision for the next 20 years.  The division was not asking for             
 a fiscal note because it made changes to the payroll system all of            
 the time.  In addition, there were 20 questions as part of the new            
 hire process so this would be question 21.  It was just one more              
 cog in the process.                                                           
                                                                               
 Number 1725                                                                   
                                                                               
 DON ETHERIDGE, Jr., Lobbyist, Alaska State District Council,                  
 Laborers, was the next person to testify in Juneau.  The council              
 opposed the bill.  It recognized that there were problems in some             
 cases, but it was a management problem.  The council was trying to            
 help management take care of the problem to protect those that                
 justified their overtime work.  He worked 22 years for the Alaska             
 Marine Highway System averaging 1,000 hours of overtime per year.             
 It was not by choice; the job had to be done.  He stuck with it               
 because it would help his retirement.  If that incentive was cut              
 out, it would create a recruitment problem because there were a lot           
 of areas that troopers would not move to, for example.  It was                
 unfair to blanket everybody with those who abused the system to               
 correct the problem.  There must be a way to handle the abuses                
 without hurting everybody.                                                    
                                                                               
 Number 1890                                                                   
                                                                               
 CHAIR JAMES stated that earnings were how much a person made in a             
 year, not necessarily what a person made in a day or an hour.  In             
 Fairbanks, the fire and policemen worked a lot of overtime, and               
 their salaries reflected that.  She agreed it was a management                
 decision; management approved overtime.  She also understood that             
 overtime was necessary.  She questioned the concept of counting the           
 extra hours in the week as overtime rather than calling it premium            
 time.  "It seems to me if you have the people working just for the            
 straight time, and you counted the straight time but not the                  
 overtime premium, then you would be at the same place based on the            
 value of the work that you need done - whether you have new                   
 employees or the same employees."  It would create a more level               
 playing field because more people would be working more overtime              
 rather than new people being hired as a way to cut down on the cost           
 of retirement.                                                                
                                                                               
 Number 1991                                                                   
                                                                               
 MR. ETHERIDGE replied in his situation his overtime was the same              
 just about ever year.  The department figured it was cheaper,                 
 overall, to pay the overtime for two men than it was to hire a                
 third man.  The same amount of work was accomplished for less                 
 dollars.  He worked on average of 6 days a week, 12 hours a day.              
 A lot of people would be better off in the scenario Chair James               
 presented.  The Local 71 folks usually worked scheduled overtime -            
 seven days a week all summer, for example.  And the hours did not             
 count towards vested time, but the dollars that they did earn                 
 helped build up the overtime earnings when they were vested.                  
                                                                               
 Number 2104                                                                   
                                                                               
 REPRESENTATIVE DYSON asked Mr. Etheridge how long a person had to             
 work in the state system before being eligible for retirement?                
 MR. ETHERIDGE replied five years.                                             
                                                                               
 REPRESENTATIVE DYSON asked Mr. Etheridge if a person could retire             
 at a certain age?                                                             
                                                                               
 MR. ETHERIDGE replied a person could retire after 30 years; or 55             
 years of age under Tier I; and 60 years of age under Tier II.                 
                                                                               
 REPRESENTATIVE DYSON asked Mr. Etheridge, if a person could retire            
 after 30 years or at 55 or 60 years of age, whichever came first or           
 last?                                                                         
                                                                               
 MR. ETHERIDGE replied whichever came first.                                   
                                                                               
 Number 2142                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ commented that there did not appear to be            
 a definition of overtime in statute.  Maybe, this issue could be              
 resolved by developing a definition of overtime.                              
                                                                               
 Number 2153                                                                   
                                                                               
 CHAIR JAMES responded that would be a big issue to fix because                
 overtime and premium time were not separated.  She did not think it           
 could be done in this bill.                                                   
                                                                               
 Number 2172                                                                   
                                                                               
 REPRESENTATIVE ELTON stated that a definition was not needed before           
 because we did not put it in statute.  Now that we were putting it            
 in statute, it was time for a definition.                                     
                                                                               
 CHAIR JAMES stated she was not convinced that a definition was                
 needed; it was a different issue than what was before us now.                 
                                                                               
 Number 2204                                                                   
                                                                               
 KEVIN C. RITCHIE, Executive Director, Alaska Municipal League                 
 (AML), was the next person to testify in Juneau.  In November of              
 1996 at its annual conference, the AML membership passed a policy             
 statement which include the following section:                                
                                                                               
 "3.  Basis for Computation of PERS Benefits:  The League supports             
 changes to the computation of PERS benefit to exclude overtime pay            
 and leave cash-in from the calculation of retirement benefits."               
                                                                               
 Number 2230                                                                   
                                                                               
 CHAIR JAMES stated this appeared to be a good deal for the                    
 municipalities but not necessarily the state.  She wondered if it             
 was possible to sort out the municipal employees, such as, the                
 firefighters.                                                                 
 Number 2259                                                                   
                                                                               
 MR. RITCHIE asked Chair James if she was talking about firefighters           
 mainly?                                                                       
                                                                               
 CHAIR JAMES replied firefighters and others who worked seasonally.            
 Seasonal employees did not work a full year so if their overtime              
 was taken away they would get even less.  A person's expenses                 
 lasted for 12 months even if he or she did not work a full year.              
 She would prefer to look at an annual wage as opposed to an hourly            
 or weekly wage.  In addition, some took a job because it could be             
 extended.  It seemed proper to include the straight-time hours as             
 opposed to the premium pay in a retirement plan.  But she also                
 understood that the municipalities were asking the state for                  
 relief.  She agreed with Representative Elton that the issue could            
 be managed differently without changing the retirement computation,           
 especially since it was such a generous and costly retirement                 
 system.  She wondered if this could be done for the municipalities            
 as well.                                                                      
                                                                               
 Number 2341                                                                   
                                                                               
 MR. RITCHIE replied the Fair Labor Standards Act was passed in 1938           
 but it was not mandated until 1986 which kicked hundreds of state             
 employees into the overtime categories that were not there before.            
 The FLSA was designed for a post-depression, back-to-work,                    
 industrial society.  Firefighters at the local level were affected            
 by this because of their rigid shifts.  Rigid shifts had not been             
 factored into the FLSA.                                                       
                                                                               
 Number 2395                                                                   
                                                                               
 REPRESENTATIVE ELTON stated there were the following three ways to            
 address the problem:  hire enough people to do the work, manage the           
 departments better, or adopt HB 188.  He asked Mr. Ritchie if all             
 three options had been discussed by the AML before adopting the               
 recommendation?                                                               
                                                                               
 Number 2436                                                                   
                                                                               
 MR. RITCHIE replied the recommendation was done by a finance sub-             
 committee of the AML.  He was not familiar with all of its                    
 discussion.  In some cases management worked, and in some cases it            
 did not.  For example, in the case of snow removal, sometimes there           
 were dry years requiring no overtime.                                         
                                                                               
 TAPE 97-37, SIDE B                                                            
 Number 0020                                                                   
                                                                               
 REPRESENTATIVE ELTON stated he was concerned that by adopting the             
 bill, the first two options were taken off of the table.  There               
 would not be incentive to hire enough people, for example.  He was            
 sympathetic to the snow removal example, but in reality strong                
 mayors often made a low-ball decision to be seen as a thrifty                 
 manager.  And, the employees had to bear the brunt of the low-ball            
 decision if the mayor was wrong.  For example:  they were on the              
 road for 24 hours a day, away from their families, and missing                
 their kid's school play.  Now, their overtime would not count                 
 towards retirement.  "It seems to me that the only person losing in           
 this is the person that has to bear the brunt of decisions that we            
 make as elected political officials or city department heads."  He            
 was more in favor of a rigid management style.                                
                                                                               
 Number 0094                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ stated police officers ran up big overtime           
 because they were either working undercover or waiting in court.              
 This type of inefficiency had not been addressed anywhere in the              
 system.  The bill seemed to be driven by police overtime and there            
 was a different way of "skinning the cat."  He asked Mr. Ritchie              
 what other alternatives had been used to reduce overtime?                     
                                                                               
 Number 0127                                                                   
                                                                               
 MR. RITCHIE replied any time overtime could be reduced, money would           
 be saved.  And sometimes hiring more people to reduce overtime was            
 not efficient.  If a municipal government did not try to limit                
 overtime, it would not be fulfilling its management obligation to             
 the public.                                                                   
                                                                               
 Number 0160                                                                   
                                                                               
 CRAIG PERSSON, Vice President, Public Safety Employees Association,           
 was the first person to testify via teleconference in Fairbanks.              
 He represented the State Troopers, the Juneau Police Department and           
 several other law enforcement agencies.  The association opposed              
 the bill because it was a management problem.  In Fairbanks, the              
 airport had a severe overtime problem because of short staffing.              
 But through negotiations and a change in the work schedule it                 
 reduced the overtime greatly.  There were clauses in the bargained            
 agreements with the state troopers that management could call                 
 anybody for overtime; it was not based on seniority.  The padding             
 of overtime was a problem within the collective bargaining                    
 agreement itself which could be solved by management and the union.           
 The association did not believe in penalizing everybody in the                
 state for a problem that could be occurring in several                        
 municipalities.  This was a slap in the face of the men and women             
 who helped keep the streets safe.                                             
                                                                               
 Number 0248                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ asked Mr. Pearson if he knew much about              
 the problem with the Anchorage Police Department?  He wondered if             
 the municipality had explored ways of reducing overtime.                      
 MR. PEARSON replied he could not answer the question because he was           
 not familiar with the agreement in Anchorage and the problems.  He            
 did know that Fairbanks had worked with its state personnel and had           
 been able to solve a lot of the overtime problems; not all of them,           
 but a great portion of them.  Under staffing for the state troopers           
 was necessitated by budget cuts.  The bill penalized the folks for            
 what had happened through the legislature.                                    
                                                                               
 Number 0290                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ asked Mr. Pearson if there was anything              
 that would preclude a municipality from negotiating separately on             
 this issue with a police department?                                          
                                                                               
 MR. PEARSON replied, "No."  A municipality could work on a separate           
 letter of agreement, for example, on the overtime problem.                    
                                                                               
 Number 0344                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ commented there were definitions of                  
 overtime in statute, but he had not had a chance to review them.              
 A definition was crucial before it could be amended; it was unfair            
 to push an interpretation down to the courts and bargaining units.            
                                                                               
 Number 0373                                                                   
                                                                               
 CHAIR JAMES stated the intent of overtime in the bill was all of              
 the hours at whatever rate over and above the regularly scheduled             
 work time including time and a half and double time.  A definition            
 could be made in terms of the bill, as opposed to changing the                
 definition throughout the statutes - the typical way the statutes             
 were messed up.  She was open to discussing such an amendment.                
                                                                               
 Number 0406                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said he was interested in providing a                
 conceptual amendment.                                                         
                                                                               
 Number 0436                                                                   
                                                                               
 CHAIR JAMES asked Representative Cowdery what did he expect                   
 overtime to mean in HB 188?                                                   
                                                                               
 Number 0443                                                                   
                                                                               
 REPRESENTATIVE COWDERY replied anything over the base pay that was            
 paid at an overtime pay - time and a half and double time.                    
 Moreover, in Anchorage, the police and fire departments had their             
 own separate retirement system consisting of four tiers.  Now, all            
 new hires were under PERS.  The bill talked about future hires                
 only.                                                                         
                                                                               
 Number 0546                                                                   
                                                                               
 REPRESENTATIVE COWDERY further stated the present police chief                
 opted out of the local police retirement system and opted for PERS            
 instead.                                                                      
                                                                               
 Number 0570                                                                   
                                                                               
 CHAIR JAMES stated, historically, a person maintained his existing            
 benefits despite changes to the system.                                       
                                                                               
 CHAIR JAMES asked the committee members if they wanted to adopt a             
 conceptual amendment today or hold the bill over to prepare an                
 actual amendment to be discussed later?                                       
                                                                               
 Number 0621                                                                   
                                                                               
 REPRESENTATIVE ELTON replied he wanted to hold the bill over.  The            
 bill created a fourth tier which was a big step.  In the last                 
 several decades only three tiers had been created; the speed                  
 appeared to be picking up.  In addition, this was the only                    
 committee of referral where substantive issues could be debated.              
 He suggested holding the bill beyond Thursday even.                           
                                                                               
 Number 0661                                                                   
                                                                               
 CHAIR JAMES replied she did not intend to hold the bill beyond                
 Thursday.  In addition, the House Finance Committee - the next                
 committee of referral - did more substantive changes to bills than            
 any other committee.  It behooved the House State Affairs Standing            
 Committee to fix things as good as it could before reaching the               
 House Finance Committee.                                                      
                                                                               
 CHAIR JAMES announced she would hold the bill over until Thursday,            
 April 10, 1997, to look at the overtime definition issue further.             
                                                                               
 HB 200 - SUBPOENA POWER: ADMIN. REG. REVIEW COMMIT                          
                                                                               
 The next order of business to come before the House State Affairs             
 Standing Committee was HB 200, "An Act relating to subpoenas of the           
 Administrative Regulation Review Committee; and providing for an              
 effective date."                                                              
                                                                               
 CHAIR JAMES called on Walter Wilcox, Legislative Assistant to                 
 Representative Jeannette James, to present the bill.                          
                                                                               
 Number 0730                                                                   
                                                                               
 WALTER WILCOX, Legislative Assistant to Representative Jeannette              
 James, explained that Sarah Felix, Department of Law, pointed out             
 some problems with the bill at the last hearing.  Upon review, and            
 learning that the attorney's general office would represent the               
 committee if sued, we took her advise.                                        
                                                                               
 MR. WILCOX explained the portion dealing with the arrest was                  
 dropped so that a denied subpena would go to the superior court for           
 action.                                                                       
                                                                               
 MR. WILCOX explained the language in Section 1 (5) was changed to             
 read:                                                                         
                                                                               
 "(5) is signed by the chair of the committee."                                
                                                                               
 MR. WILCOX explained the language "or the chair's designee"  needed           
 to be deleted.                                                                
                                                                               
 Number 0811                                                                   
                                                                               
 REPRESENTATIVE ELTON moved that the committee substitute (0-                  
 LS0777/B, Cook, 4/4/97) be adopted.  There was no objection, the              
 committee substitute was so adopted.                                          
                                                                               
 Number 0824                                                                   
                                                                               
 REPRESENTATIVE IVAN asked Mr. Wilcox to explain the changes again.            
                                                                               
 Number 0837                                                                   
                                                                               
 MR. WILCOX explained in Section 1 (c) the original language read:             
                                                                               
 "(c) A witness who is under subpoena and neglects or refuses to               
 attend a meeting of the Administrative Regulation Review Committee            
 may be arrested and brought before the committee by any person                
 charged with the enforcement of state law.  The only warrant of               
 authority necessary to authorize an arrest under this subsection is           
                                                                               
 (1) a copy of the subpoena;                                                   
 (2) a copy of proof of service of the subpoena; and                           
 (3) a written direction for the arrest of the witness signed by the           
     chair and by a majority of the members of the committee."                 
                                                                               
 MR. WILCOX explained the attorney's general office did not think              
 that was a good way to handle the situation.  It should be a court            
 action in lieu of a committee action.  Therefore, the following               
 language was adopted:                                                         
                                                                               
 "(c) If a witness who is under subpoena neglects or refuses to                
 attend a meeting of the Administrative Regulation Review Committee,           
 the committee may bring an action in superior court to enforce the            
 subpoena."                                                                    
                                                                               
 MR. WILCOX further explained the second change was in Section 1               
 (5), of which, the last four words needed to be stricken from the             
 committee substitute.                                                         
                                                                               
 CHAIR JAMES announced an amendment was needed to delete the last              
 four words on page 2, line 5.                                                 
                                                                               
 Number 0946                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ moved that the language "or the chair's              
 designee" be deleted on page 2, line 5.  There was no objection,              
 Amendment 1 was approved.                                                     
                                                                               
 REPRESENTATIVE ELTON asked, for clarification, if the attorney's              
 general office would bring action to the superior court?                      
                                                                               
 MR. WILCOX replied if the committee was sued the attorney's general           
 office would defend it.  And if the committee went out and arrested           
 people there would be a greater chance of running afoul of the law.           
                                                                               
 Number 0990                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ asked if there was anticipation about                
 spending too much money on the reimbursement of expenses for food             
 and lodging in (3).                                                           
                                                                               
 CHAIR JAMES replied the anticipation for the expenses would be                
 negligible.                                                                   
                                                                               
 Number 1021                                                                   
                                                                               
 MR. WILCOX replied the individuals that would be affected by a                
 subpena resided here in Juneau.  They would be on the state payroll           
 so there would not be a need for any reimbursement.                           
                                                                               
 REPRESENTATIVE BERKOWITZ explained he asked the question because he           
 wanted to be sure that people would not be pulled from across the             
 state.                                                                        
                                                                               
 MR. WILCOX replied that was not the intent.                                   
                                                                               
 Number 1047                                                                   
                                                                               
 REPRESENTATIVE VEZEY moved that CSHB 200(STA), as amended, move               
 from the committee with individual recommendations and the attached           
 fiscal note(s).                                                               
                                                                               
 REPRESENTATIVE ELTON objected.  A roll call vote was taken.                   
 Representatives James, Dyson, Ivan and Vezey voted in favor of the            
 motion.  Representatives Berkowitz and Elton voted against the                
 motion.  The CSHB 200(STA), as amended, was so moved from the House           
 State Affairs Standing Committee.                                             
                                                                               
 HB 79 - MINOR IN POSSESSION OF TOBACCO                                      
                                                                               
 The next order of business to come before the House State Affairs             
 Standing Committee was HB 79, "An Act relating to the offense of              
 possession of tobacco by a person under 19 years of age."                     
                                                                               
 CHAIR JAMES called on Representative Con Bunde, sponsor of HB 79,             
 to present the bill.                                                          
                                                                               
 Number 1125                                                                   
                                                                               
 REPRESENTATIVE CON BUNDE, Alaska State Legislature, stated the goal           
 of HB 79 was to strength existing access laws for the use and                 
 purchase of tobacco.                                                          
                                                                               
 REPRESENTATIVE BUNDE announced there was a committee substitute (0-           
 LS0348/H, Chenoweth, 4/7/97) based on the last hearing of the bill            
 and explained the sections.                                                   
                                                                               
 REPRESENTATIVE BUNDE explained Section 1 (A) changed the location             
 of the vending machines to at least 10 feet away from any entrance            
 to the premises that the public may use, or as far as possible for            
 smaller stores.                                                               
                                                                               
 REPRESENTATIVE BUNDE explained Sec. 2 dealt with persons under 19             
 years of age and the use of false identification as a violation.              
                                                                               
 REPRESENTATIVE BUNDE explained Sec. 3 added new language to exempt            
 a person under the age of 19, to comply with the Synar Amendment,             
 who made a controlled buy under the auspices of a police officer or           
 law enforcement agency.                                                       
                                                                               
 REPRESENTATIVE BUNDE explained Sec. 4 defined proof of age, tobacco           
 product, and vending machine.                                                 
                                                                               
 REPRESENTATIVE BUNDE explained Sec. 5 prevented anybody from                  
 preempting a local government's right to pass a local tobacco tax.            
                                                                               
 REPRESENTATIVE BUNDE explained Sec. 6 caused the revocation of a              
 license for people selling tobacco illegally.                                 
                                                                               
 REPRESENTATIVE BUNDE explained Sec. 7 added new language that                 
 prevented a person from selling tobacco unless a business license             
 endorsement was purchased.                                                    
                                                                               
 REPRESENTATIVE BUNDE explained Sec. 8 raised the fee for the                  
 business license endorsement from $25 to $100.                                
                                                                               
 REPRESENTATIVE BUNDE explained Sec. 9 added new language to change            
 the time a business license could be suspended or revoked to 90               
 days for the first offense; to 180 days, if there was a previous              
 conviction in the past 24 months; and to 1 year, if there were two            
 or more convictions within the past 24 months.                                
                                                                               
 REPRESENTATIVE BUNDE explained Sec. 10 limited the business license           
 endorsement suspension to the retail outlet where the violation               
 occurred; not system wide.                                                    
                                                                               
 REPRESENTATIVE BUNDE explained Sec. 11 added new language that                
 required tobacco products to be in a secure place that was                    
 accessible only by authorized employees.  It also defined the term            
 "defined place".                                                              
                                                                               
 REPRESENTATIVE BUNDE explained Sec. 12 added a new subsection  that           
 required retailers to notify all employees that state law                     
 prohibited the sell of tobacco.  It also required carding all                 
 persons under the age of 27 to comply with federal law.                       
                                                                               
 REPRESENTATIVE BUNDE explained Sec. 13 provided for the disposal of           
 money collected into the General Fund.                                        
                                                                               
 REPRESENTATIVE BUNDE explained Sec. 14 allowed for the separate               
 accounting of the money for a training program for the clerks.                
                                                                               
 REPRESENTATIVE BUNDE explained Sec. 15 required that an accused               
 minor be charged, prosecuted, and sentenced in the district court             
 in the same manner as an adult while a parent, guardian, or                   
 custodian was present.                                                        
                                                                               
 Number 1420                                                                   
                                                                               
 PATRICIA SWENSON, Legislative Assistant to Representative Con                 
 Bunde, explained Sec. 7 was tied to Sec. 12 (i).  Section 12 (i)              
 required all those that sold tobacco products to take a class every           
 other year that provided information about the federal/state laws             
 and regulations.  The subsection also prevented the sell of single            
 cigarettes unless they met all the federal labeling requirements              
 and warnings.                                                                 
                                                                               
 REPRESENTATIVE BUNDE stated this was a federal requirement.                   
                                                                               
 CHAIR JAMES replied she understood that.                                      
                                                                               
 MS. SWENSON further explained Sec. 7 was also tied to Sec. 13 and             
 14.  Section 13 provided that the money collected from the                    
 increased endorsement fees be deposited to the General Fund.                  
 Section 14 deposited the money into the General Fund and accounted            
 for it separately so that the legislature could make appropriations           
 for the training program.  The funds were not dedicated, however.             
                                                                               
 Number 1512                                                                   
                                                                               
 CHAIR JAMES stated the fiscal note did not show an impact.                    
                                                                               
 MS. SWENSON replied there was not a fiscal note for the new                   
 committee substitute yet.                                                     
                                                                               
 CHAIR JAMES stated a new fiscal note would be needed before the               
 bill could be moved out of the committee.                                     
                                                                               
 CHAIR JAMES referred the committee members to page 2, line 18, "(1)         
 who is a prisoner at an adult correctional facility; or".  The              
 language was discussed at the last hearing but a conclusion had yet           
 to be reached.                                                                
                                                                               
 Number 1568                                                                   
                                                                               
 REPRESENTATIVE VEZEY announced he had a lot of problems with                  
 Section 1.  Section 1 (b) (2) said that employers could not put               
 vending machines that sold tobacco products in a break room, or not           
 to hire any person under 19 years of age.  It left an employer no             
 other option.                                                                 
                                                                               
 Number 1614                                                                   
                                                                               
 REPRESENTATIVE BUNDE replied that was accurate, if a person under             
 19 years of age had access to a vending machine unsupervised.                 
                                                                               
 Number 1625                                                                   
                                                                               
 CHAIR JAMES wondered if the exemption could be taken out to remove            
 that option; it was hard to define a break room.                              
                                                                               
 Number 1669                                                                   
                                                                               
 REPRESENTATIVE BUNDE replied the bill itself limited where a                  
 vending machine could be and that it had to be under supervision.             
 Thus, by de facto, if it was in a locked break room, it would not             
 meet the other requirements of the law.                                       
                                                                               
 Number 1710                                                                   
                                                                               
 CHAIR JAMES agreed with Representative Vezey.  The bill said a                
 vending machine could not be in a break room.                                 
                                                                               
 MS. SWENSON said the provision had to do with the new Food and Drug           
 Administration's (FDA) regulations.                                           
                                                                               
 Number 1735                                                                   
                                                                               
 REPRESENTATIVE VEZEY further said he understood the intent of Sec.            
 3, but believed it was very unnecessary.  The police currently                
 conducted their own sting operations without a statute that                   
 authorized them to possess drugs, for example.  He always believed            
 it was an affirmative defense for breaking the law.  He also knew             
 that the police departments had limited resources and they probably           
 used that as an excuse not to enforce the tobacco law.  He could              
 appreciate that given the rate of violent crimes.  He did not                 
 really object to the provision; it was just a response to a very              
 poor excuse.                                                                  
                                                                               
 Number 1802                                                                   
                                                                               
 CHAIR JAMES wondered if minors even needed to be used given the new           
 law of carding everybody under 27 years of age.                               
                                                                               
 Number 1837                                                                   
                                                                               
 REPRESENTATIVE BUNDE replied there were two different types of                
 violations - carding and purchasing.  Therefore, somebody under 19            
 years of age would be needed for the purchase violation.                      
                                                                               
 Number 1855                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ stated not everybody was carded.  That was           
 the problem.  In addition, in response to Representative Vezey, the           
 provision did cut the affirmative defense of entrapment.                      
                                                                               
 Number 1877                                                                   
                                                                               
 REPRESENTATIVE VEZEY stated he was concerned about the defense                
 aspect of an affirmative defense position.  "Somebody would claim             
 a defense that the police did not have the authority to do this               
 because we didn't give it to them in statute.  I think we're maybe            
 narrowing their authority."                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ replied affirmative defense was defined in           
 statute under Title 11.                                                       
                                                                               
 REPRESENTATIVE VEZEY asked why was the provision needed then?                 
                                                                               
 REPRESENTATIVE BERKOWITZ replied this was not an affirmative                  
 defense, but a response to a vendor claiming entrapment.                      
                                                                               
 Number 1959                                                                   
                                                                               
 REPRESENTATIVE IVAN asked Representative Bunde if the licensing was           
 part of federal law or state law?                                             
                                                                               
 REPRESENTATIVE BUNDE replied it was an endorsement to a business              
 license for the state.                                                        
                                                                               
 Number 2085                                                                   
                                                                               
 REPRESENTATIVE IVAN asked about the Department of Commerce and                
 Economic Development's (DCED) training program.                               
                                                                               
 MS. SWENSON replied the intent was to have a course that would go             
 over the federal and state laws, as well as, the applicable                   
 regulations.  It would be a condition of renewing an endorsement              
 every other year.  The retailers would pay for the class                      
 themselves, and part of the money would be allocated from the raise           
 in the endorsement fee from $25 to $100.                                      
                                                                               
 REPRESENTATIVE IVAN wondered if all small retailers would have to             
 go through the class.                                                         
                                                                               
 MS. SWENSON replied, "Yes."  Everybody that sold tobacco products             
 would have to go through the class to be brought up to speed on the           
 new regulations at least every other year.                                    
                                                                               
 Number 2107                                                                   
                                                                               
 CHAIR JAMES wondered if this could be done without going to Juneau,           
 Anchorage or Fairbanks, for example.                                          
                                                                               
 MS. SWENSON replied it would depend on how the department set the             
 class up.                                                                     
                                                                               
 Number 2132                                                                   
                                                                               
 REPRESENTATIVE ELTON asked the following:  What was a retailer?               
 The owner?  The manager?  Would the clerks have to take the class?            
                                                                               
 Number 2152                                                                   
                                                                               
 MS. SWENSON replied the owner:  the person responsible for running            
 or maintaining the establishment.                                             
                                                                               
 Number 2166                                                                   
                                                                               
 REPRESENTATIVE ELTON said this could create a problem because the             
 owners of 7-Eleven, for example, were different than the managers,            
 yet the managers would be responsible.  He suggested a definition             
 of retailer was needed.                                                       
                                                                               
 MS. SWENSON replied, "Okay."                                                  
                                                                               
 REPRESENTATIVE BUNDE stated the intent was the local manager of the           
 retail outlet; not the Chief Executive Officer of 7-Eleven, for               
 example.                                                                      
                                                                               
 CHAIR JAMES agreed that it needed to be defined.                              
                                                                               
 Number 2223                                                                   
                                                                               
 REPRESENTATIVE IVAN stated he was concerned about the small                   
 retailers throughout the state and how they would get together with           
 the DCED for the class.  It would be cost prohibitive to fly from             
 Akiak to wherever the DCED folks would be, for example.                       
 Number 2269                                                                   
                                                                               
 REPRESENTATIVE BUNDE said he could not imagine that this type of              
 schooling would require somebody to fly from Akiak to Anchorage,              
 for example.  It would probably only require correspondence.                  
                                                                               
 Number 2292                                                                   
                                                                               
 CHAIR JAMES replied education was necessary.  It was not as simple            
 as signing a waiver that indicated a person had read the                      
 information.                                                                  
                                                                               
 Number 2372                                                                   
                                                                               
 LOREN JONES, Director, Division of Alcoholism and Drug Abuse,                 
 Department of Health and Social Services, was the next person to              
 testify in Juneau.  The department supported the previous committee           
 substitute and he did not see a lot in the current committee                  
 substitute that would change its position.                                    
                                                                               
 MR. JONES stated the department was pleased to see the change to              
 age 27 to comply with the proposed FDA regulations.                           
                                                                               
 TAPE 97-38, SIDE A                                                            
 Number 0001                                                                   
                                                                               
 MR. JONES further stated the limit in Sec. 3 (b) of "not less than            
 $300" was of concern to the department.  Other bills were setting             
 a limit of "up to $250" to avoid potential jury trials.  He                   
 suggested putting a period at the end of the word "violation" on              
 page 2, line 28 and deleting the remaining language.  The normal              
 punishment for a violation was a penalty of up to $250 anyway.                
 There had been discussions with the Department of Law regarding               
 this issue.                                                                   
                                                                               
 Number 0104                                                                   
                                                                               
 CHAIR JAMES replied the provision in Sec. 3 (b) was different.  The           
 provision established a floor as opposed to a ceiling for the fine.           
                                                                               
 Number 0126                                                                   
                                                                               
 MR. JONES responded the department did not have a problem with                
 establishing a floor.  The courts had ruled that if there was a               
 floor of $300 there had to be a jury trial.                                   
                                                                               
 CHAIR JAMES said she understood.  She was wondering about moving              
 the floor down.                                                               
                                                                               
 MR. JONES replied the department would not have a problem with                
 moving the floor below $300.                                                  
                                                                               
 Number 0167                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ explained the courts tended to set a bail            
 schedule for the various violations.  The courts adopted a set                
 amount so that there would be uniformity in the court system.                 
                                                                               
 CHAIR JAMES stated if the bill set a fee at $250 that was the                 
 amount the courts would adopt.                                                
                                                                               
 REPRESENTATIVE BERKOWITZ replied, "That's true."                              
                                                                               
 Number 0219                                                                   
                                                                               
 MR. JONES explained that Ms. Swenson just talked to the Department            
 of Law yesterday and it was okay with the amount of $300.  The                
 language needed to be cleaned up so that the fine was $300 and not            
 less than, however.                                                           
                                                                               
 MR. JONES further explained that the department liked the new Sec.            
 7 prohibiting the sale of single cigarettes.  It was in line with             
 the new FDA regulations.                                                      
                                                                               
 Number 0281                                                                   
                                                                               
 REPRESENTATIVE ELTON said Sec. 7 (3) did not outlaw the sale of               
 single cigarettes.  It only said one could not sell single                    
 cigarettes unless the container from which they came from displayed           
 a warning.                                                                    
                                                                               
 CHAIR JAMES replied Representative Elton misread the provision.  A            
 person could not open a box and sell single cigarettes from the               
 box.                                                                          
                                                                               
 REPRESENTATIVE ELTON replied, "Thanks."  He had misread it.                   
                                                                               
 Number 0344                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ wondered about the provision of the stamp            
 discussed earlier in the House State Affairs Standing Committee.              
                                                                               
 CHAIR JAMES replied that was a problem for the state surrounding              
 the tobacco tax.  We were not talking about taxes.  We were talking           
 about a warning.                                                              
                                                                               
 Number 0383                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ said he was wondering if there would be              
 any disturbance to the stamp.                                                 
                                                                               
 Number 0410                                                                   
                                                                               
 REPRESENTATIVE DYSON asked Chair James if the committee was going             
 to vote on the bill today?                                                    
                                                                               
 CHAIR JAMES replied she would like to move it out today, but we               
 would probably run out of time.                                               
                                                                               
 REPRESENTATIVE DYSON asked to be excused from the meeting.  He had            
 something important to do before 10:00 a.m.                                   
                                                                               
 CHAIR JAMES replied he might want to ask his minority friends to              
 see if they could fill his spot as a vote to move the bill before             
 he left.                                                                      
                                                                               
 REPRESENTATIVE ELTON said he would be here until 10:00 a.m.                   
                                                                               
 REPRESENTATIVE BERKOWITZ said he would be happy to fill Mr. Dyson's           
 slot.                                                                         
                                                                               
 Number 0469                                                                   
                                                                               
 MR. JONES further said on page 5, lines 1-8, the department                   
 questioned the wording in (C) of "two or more times" and in (2) of            
 "three or more times".  Was "two or more times" needed in (C) if it           
 was going to be permanently revoked in (2)? he asked.                         
                                                                               
 MR. JONES further stated that in Title 4 there were requirements              
 for servers, bartenders and waitresses who served alcohol.  He                
 suggested looking there for language surrounding the training                 
 course required in the bill from the Department of Commerce and               
 Economic Development.                                                         
                                                                               
 Number 0614                                                                   
                                                                               
 REPRESENTATIVE IVAN stated he was still concerned about the                   
 training.                                                                     
                                                                               
 Number 0628                                                                   
                                                                               
 CATHERINE REARDON, Director, Division of Occupational Licensing,              
 Department of Commerce and Economic Development, was the next                 
 person to testify in Juneau.  The division administered the                   
 business license program for the state.  A business license was               
 needed to conduct business in the state and every two years a $25             
 fee was paid for a special tobacco endorsement.  The provisions               
 concerning education were new in version "H" so she had yet to                
 familiarized herself with the changes and had not given much                  
 thought to how the department would conduct the training courses              
 and/or the cost associated with it.                                           
                                                                               
 MS. REARDON further stated the division supported the efforts and             
 intent of the bill to strengthen enforcement of the tobacco laws.             
 Thus, she did not want to stand in the way of any effort.                     
 Enforcement had been the biggest issue between the departments.  In           
 version "H" it appeared that the Division of Occupational Licensing           
 was the department that would receive the complaints, investigate             
 them, and deal with the Department of Law for prosecution.  That              
 was an activity that the division did not engage in at all right              
 now.  It did not have enforcement staff for the business license              
 program.  It was a tax collection system, and no one had been                 
 convicted of practicing without a business license up to this time.           
 Therefore, enforcement was something that the division would have             
 to gear towards.  She would like to have some conversations with              
 the Department of Health and Social Services and the alcohol board            
 to see who could most effectively do it for the cheapest.  It was             
 important that the state enforce this.                                        
                                                                               
 MS. REARDON further stated that the business license and tobacco              
 endorsement had been a revenue generating system rather than a                
 regulatory system.  It was very easy to get multiple business                 
 licenses and tobacco endorsements.  Therefore, she would like to              
 address the issue of a business, with a revoked tobacco                       
 endorsement, getting a new license, with a new name, the next day,            
 for example.                                                                  
                                                                               
 CHAIR JAMES said it appeared that whoever got the endorsement could           
 control the enforcement.  She assumed that would be the Department            
 of Public Safety.  It could, however, be the Department of Health             
 and Social Services.  It needed to be identified.  Whoever it was             
 should also authorize the endorsement.                                        
                                                                               
 CHAIR JAMES announced the bill would not be moved out of the                  
 committee today.  It needed to be improved before going to the                
 House Judiciary Standing Committee.                                           
                                                                               
 CHAIR JAMES suggested a diagram was needed to see how the bill                
 would work.                                                                   
                                                                               
 Number 1070                                                                   
                                                                               
 REPRESENTATIVE ELTON stated a new fiscal note would probably be               
 needed as well because there would be a cost associated with                  
 enforcement and control.                                                      
                                                                               
 CHAIR JAMES replied a positive fiscal note would be needed because            
 the state would be taking in more fees.                                       
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 Number 1150                                                                   
                                                                               
 CHAIR JAMES adjourned the House State Affairs Standing Committee              
 meeting at 9:55 a.m.                                                          
                                                                               

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