Legislature(2001 - 2002)

02/21/2002 08:02 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
             HOUSE STATE AFFAIRS STANDING COMMITTEE                                                                           
                       February 21, 2002                                                                                        
                           8:02 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative John Coghill, Chair                                                                                              
Representative Hugh Fate                                                                                                        
Representative Gary Stevens                                                                                                     
Representative Peggy Wilson                                                                                                     
Representative Harry Crawford                                                                                                   
Representative Joe Hayes                                                                                                        
MEMBERS ABSENT                                                                                                                
Representative Jeannette James                                                                                                  
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 344                                                                                                              
"An  Act  increasing  fees  for  driver's  licenses,  instruction                                                               
permits,  and   identification  cards;   and  providing   for  an                                                               
effective date."                                                                                                                
     - MOVED CSHB 344(STA) OUT OF COMMITTEE                                                                                     
HOUSE BILL NO. 346                                                                                                              
"An Act relating to concealed handgun permittees."                                                                              
     - MOVED HB 346 OUT OF COMMITTEE                                                                                            
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 254                                                                                       
"An  Act  relating  to  the   teachers'  retirement  system,  the                                                               
judicial retirement system, and  the public employees' retirement                                                               
system and  to the tax  qualification under the  Internal Revenue                                                               
Code  of those  systems;  amending the  definition of  'actuarial                                                               
adjustment'  in the  teachers' retirement  system and  the public                                                               
employees'  retirement system;  repealing  certain provisions  of                                                               
the  teachers'  retirement  system   and  the  public  employees'                                                               
retirement system; and providing for an effective date."                                                                        
     - MOVED SSHB 254 OUT OF COMMITTEE                                                                                          
HOUSE BILL NO. 300                                                                                                              
"An Act relating to the procurement of certain travel services."                                                                
     - MOVED HB 300 OUT OF COMMITTEE                                                                                            
HOUSE BILL NO. 314                                                                                                              
"An Act relating to service in the peace corps as an allowable                                                                  
absence from the state for purposes of eligibility for permanent                                                                
fund dividends; and providing for an effective date."                                                                           
     - BILL HEARING POSTPONED TO 2/28/02                                                                                        
PREVIOUS ACTION                                                                                                               
BILL: HB 344                                                                                                                  
SHORT TITLE:INCREASE DRIVER'S LICENSE FEES                                                                                      
SPONSOR(S): RLS                                                                                                                 
Jrn-Date   Jrn-Page                     Action                                                                                  
01/18/02     2008       (H)        READ THE FIRST TIME -                                                                        
01/18/02     2008       (H)        STA, FIN                                                                                     
02/05/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
02/05/02                (H)        Heard & Held                                                                                 
02/21/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
BILL: HB 346                                                                                                                  
SHORT TITLE:CONCEALED HANDGUN PERMITTEES                                                                                        
SPONSOR(S): REPRESENTATIVE(S)MASEK                                                                                              
Jrn-Date   Jrn-Page                     Action                                                                                  
01/22/02     2029       (H)        READ THE FIRST TIME -                                                                        
01/22/02     2029       (H)        STA, JUD                                                                                     
02/04/02     2152       (H)        COSPONSOR(S): CROFT                                                                          
02/21/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
BILL: HB 254                                                                                                                  
SHORT TITLE:TAX-QUALIFIED STATE RETIREMENT SYSTEMS                                                                              
SPONSOR(S): REPRESENTATIVE(S)JAMES BY REQUEST                                                                                   
Jrn-Date   Jrn-Page                     Action                                                                                  
04/24/01     1162       (H)        READ THE FIRST TIME -                                                                        
04/24/01     1162       (H)        STA, FIN                                                                                     
02/15/02     2281       (H)        SPONSOR SUBSTITUTE INTRODUCED                                                                
02/15/02     2281       (H)        READ THE FIRST TIME -                                                                        
02/15/02     2281       (H)        STA, FIN                                                                                     
02/21/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
BILL: HB 300                                                                                                                  
SHORT TITLE:PROCUREMENT OF TRAVEL SERVICES                                                                                      
SPONSOR(S): REPRESENTATIVE(S)HAYES                                                                                              
Jrn-Date   Jrn-Page                     Action                                                                                  
01/14/02     1953       (H)        PREFILE RELEASED 1/4/02                                                                      
01/14/02     1953       (H)        READ THE FIRST TIME -                                                                        
01/14/02     1953       (H)        STA, FIN                                                                                     
02/14/02                (H)        STA AT 8:00 AM BUTROVICH 205                                                                 
02/14/02                (H)        <Bill Postponed to 2/21/02> -                                                                
                                   - Location Change --                                                                         
02/21/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
WITNESS REGISTER                                                                                                              
LINDA SYLVESTER, Staff                                                                                                          
to Representative Pete Kott                                                                                                     
Alaska State Legislature                                                                                                        
Capitol Building, Room 204                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Testified on behalf of Representative Kott,                                                                
chair of the House Rules Standing Committee, sponsor of HB 344.                                                                 
JENNIFER YUHAS, Staff                                                                                                           
to Representative Beverly Masek                                                                                                 
Alaska State Legislature                                                                                                        
Capitol Building, Room 128                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Testified on behalf of Representative                                                                      
Masek, sponsor of HB 346.                                                                                                       
JULIA GRIMES, Lieutenant                                                                                                        
Division Operations Unit                                                                                                        
Alaska State Troopers                                                                                                           
5700 East Tudor Road                                                                                                            
Anchorage, Alaska  99507-1225                                                                                                   
POSITION STATEMENT:  Testified regarding reciprocity and                                                                        
answered questions during the hearing on HB 346.                                                                                
PATTY OWEN, Alaska Chapter                                                                                                      
Million Mom March                                                                                                               
7677 North Douglas Highway                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Testified on HB 346.                                                                                       
BRIAN JUDY, Northwestern Government Affairs Manager                                                                             
National Rifle Association (NRA)                                                                                                
555 Capitol Mall, Suite 625                                                                                                     
Sacramento, California  95814                                                                                                   
POSITION STATEMENT:  Testified in support of HB 346.                                                                            
JESSE VANDERZANDEN, Executive Director                                                                                          
Alaska Outdoor Council (AOC)                                                                                                    
PO Box 73902                                                                                                                    
Fairbanks, Alaska  99709                                                                                                        
POSITION STATEMENT:  Testified in support of HB 346.                                                                            
EDDIE GRASSER                                                                                                                   
(No address provided)                                                                                                           
POSITION STATEMENT:  Testified in support of HB 346.                                                                            
BARBARA COTTING, Staff                                                                                                          
to Representative Jeannette James                                                                                               
Alaska State Legislature                                                                                                        
Capitol Building, Room 214                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Testified on behalf of Representative                                                                      
James, sponsor of SSHB 254 by request.                                                                                          
GUY BELL, Director                                                                                                              
Division of Retirement & Benefits                                                                                               
Department of Administration (DOA)                                                                                              
PO Box 110203                                                                                                                   
Juneau, Alaska  99811-0203                                                                                                      
POSITION STATEMENT:  Answered questions regarding SSHB 254.                                                                     
GAYLE PAUL JANECEK, Accounting Supervisor                                                                                       
ABC Travel Time, Inc.                                                                                                           
PO Box 878825                                                                                                                   
Wasilla, Alaska  99687                                                                                                          
POSITION STATEMENT:  Testified on HB 300 regarding what the                                                                     
travel agencies do for state agencies and urged enactment of the                                                                
DAVID BERG, Representative                                                                                                      
Viking Travel                                                                                                                   
PO Box 787                                                                                                                      
Petersburg, Alaska  99833                                                                                                       
POSITION STATEMENT:  Testified concerning service fees and                                                                      
contracting in regard to HB 300.                                                                                                
KIM GARNERO, Director                                                                                                           
Division of Finance                                                                                                             
Department of Administration                                                                                                    
PO Box 110204                                                                                                                   
Juneau, Alaska  99811-0204                                                                                                      
POSITION STATEMENT:  Testified on behalf of the department and                                                                  
answered question in regard to HB 300.                                                                                          
KARA ALTMAN, Owner                                                                                                              
Kara's Cruise and Travel                                                                                                        
6590 Glacier Highway Number 280                                                                                                 
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  During testimony on HB 300, testified                                                                      
regarding the effects of the commission decreases on the travel                                                                 
CYNDI ISAAK, Owner                                                                                                              
Cyndi's Cruise and Travel                                                                                                       
415 Fifth Street                                                                                                                
Douglas, Alaska  99824                                                                                                          
POSITION STATEMENT:  During the hearing on HB 300, testified                                                                    
essentially on behalf of the state-worker clientele who want to                                                                 
use her services.                                                                                                               
RAMONA OXENDINE                                                                                                                 
Vagabond Travel                                                                                                                 
805 Airport Way                                                                                                                 
Fairbanks, Alaska  99701                                                                                                        
POSITION STATEMENT:  Testified regarding HB 300.                                                                                
YULANDA JOHANSEN                                                                                                                
Northern Lights Travel                                                                                                          
505 Old Steese Highway, Suite 117                                                                                               
Fairbanks, Alaska  99701                                                                                                        
POSITION STATEMENT:  Asked the committee to give consideration                                                                  
to HB 300.                                                                                                                      
SHANNON WILEY, Manager                                                                                                          
Goldbelt Family Travel                                                                                                          
9097 Glacier Highway, Suite 100                                                                                                 
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Testified regarding HB 300.                                                                                
ACTION NARRATIVE                                                                                                              
TAPE 02-14, SIDE A                                                                                                              
Number 0001                                                                                                                     
CHAIR  JOHN  COGHILL  called the  House  State  Affairs  Standing                                                               
Committee meeting  to order at  8:02 a.m.   Representatives Fate,                                                               
Stevens,  Wilson, Crawford,  Hayes, and  Coghill were  present at                                                               
the call to order.                                                                                                              
HB 344-INCREASE DRIVER'S LICENSE FEES                                                                                         
CHAIR COGHILL  announced that the  first order of  business would                                                               
be  HOUSE BILL  NO. 344,  "An  Act increasing  fees for  driver's                                                               
licenses,  instruction  permits,  and identification  cards;  and                                                               
providing for an effective date."                                                                                               
Number 0175                                                                                                                     
REPRESENTATIVE  WILSON  moved  to adopt  the  proposed  committee                                                               
substitute  (CS),  version  22-LS1301\F, Ford,  2/16/02,  as  the                                                               
working  document.   There  being  no  objection, Version  F  was                                                               
before the committee.                                                                                                           
CHAIR COGHILL indicated there was a fiscal note for Version F.                                                                  
Number 0231                                                                                                                     
LINDA SYLVESTER, Staff to Representative  Pete Kott, Alaska State                                                               
Legislature, testified  on behalf  of Representative  Kott, chair                                                               
of the  House Rules Standing Committee,  sponsor of HB 344.   Ms.                                                               
Sylvester  pointed out  that Version  F reflects  intent language                                                               
and  findings.   Those [changes]  were done  in order  to draw  a                                                               
fiscal  note.   She  recognized the  concerns regarding  privacy.                                                               
The  need to  convert to  a  digital driver's  license system  is                                                               
practical,  she told  members.   Currently, Alaska  uses Polaroid                                                               
technology for the driver's license  system; however, the cameras                                                               
aren't available  anymore.  Furthermore,  Polaroid has  filed for                                                               
[bankruptcy], which means  it is selling off its  assets and [its                                                               
technology] won't be available.                                                                                                 
CHAIR COGHILL  referred to a national  identification (ID) system                                                               
and  indicated his  concern is  that  this might  become "the  de                                                               
facto  national ID."   He  said  the Division  of Motor  Vehicles                                                               
(DMV) has  offered assurance  that the coding  would only  be for                                                               
those things [listed] on the face  of the card.  He cautioned DMV                                                               
to make sure it stays that way.                                                                                                 
Number 0430                                                                                                                     
REPRESENTATIVE  FATE  moved  to  report  CSHB  344,  version  22-                                                               
LS1301\F,  Ford,  2/16/02,  out   of  committee  with  individual                                                               
recommendations and  the accompanying  fiscal note.   There being                                                               
no  objection, CSHB  344(STA) was  moved out  of the  House State                                                               
Affairs Standing Committee.                                                                                                     
CHAIR  COGHILL announced  that he  would be  requesting a  [House                                                               
Finance Standing Committee] referral.                                                                                           
HB 346-CONCEALED HANDGUN PERMITTEES                                                                                           
Number 0520                                                                                                                     
CHAIR COGHILL  announced the next  order of business,  HOUSE BILL                                                               
NO. 346, "An Act relating to concealed handgun permittees."                                                                     
CHAIR COGHILL called a brief at-ease  at 8:07 a.m.  He called the                                                               
meeting back to order at 8:09 a.m.                                                                                              
Number 0545                                                                                                                     
JENNIFER  YUHAS, Staff  to Representative  Beverly Masek,  Alaska                                                               
State Legislature,  testified on behalf of  Representative Masek,                                                               
sponsor of HB 346.  She read from the sponsor statement:                                                                        
     A statutory  revision is needed to  further clarify the                                                                    
     recognition  of concealed  handgun  permits from  other                                                                    
     states.   The 21st  legislature passed ...  Senate Bill                                                                    
     294,  which provides  for the  recognition of  permits:                                                                    
     (1) from  the states  with permit  requirements similar                                                                    
     to  Alaska;   and  (2)  from  states   which  recognize                                                                    
     Alaska's permits.   Senate Bill  294 also  directed the                                                                    
     Department of  Public Safety to determine  which states                                                                    
     and political subdivisions  grant reciprocity to Alaska                                                                    
     permit  holders and  distribute  the list  to each  law                                                                    
     enforcement agency  in this state.   The department has                                                                    
     yet  to  fully  implement this  statutory  requirement,                                                                    
     some 16 months later.                                                                                                      
     This legislation  will simplify the process  by plainly                                                                    
     recognizing all permits issued by  other states.  In so                                                                    
     doing,  the  burden  on the  department  of  having  to                                                                    
     evaluate all the other state's  laws to determine which                                                                    
     ones  recognize Alaska's  permits and  the subjectivity                                                                    
     on  the part  of  the department  in determining  which                                                                    
     other states'  statutes are similar to  Alaska law will                                                                    
       be removed.  House Bill 346 will better serve the                                                                        
     public and permit holders.                                                                                                 
MS. YUHAS noted  that Brian Judy was available  from the National                                                               
Rifle Association (NRA) to  testify regarding statutory revisions                                                               
and impacts.                                                                                                                    
Number 0773                                                                                                                     
JULIA GRIMES, Lieutenant, Division  Operations Unit, Alaska State                                                               
Troopers,  testified  via teleconference.    She  noted that  the                                                               
proposed  legislation doesn't  specify a  time period  similar to                                                               
that  imposed  for  vehicle registration  and  driver  licensing,                                                               
after which  a person would  be required  to apply for  an Alaska                                                               
permit.  She said current  statute provides for a 120-day period,                                                               
after which out-of-state  permit holders who are  in Alaska would                                                               
be required to obtain an Alaska permit.                                                                                         
MS  GRIMES  indicated  a  concern  that  the  legislation,  while                                                               
allowing permit holders  from other states to come  up to Alaska,                                                               
does not back  its Alaska permit holders.   She mentioned efforts                                                               
made to get reciprocity for  Alaska permit holders to go Outside,                                                               
but acknowledged  that the  legislation doesn't  necessarily help                                                               
with that.                                                                                                                      
Number 0899                                                                                                                     
MS. GRIMES  offered an update  regarding reciprocity.   She said,                                                               
"We now have 11  states listed on our web site  that offer what I                                                               
will call  'true reciprocity,' and  that's based on  the statute,                                                               
paragraph  (2),  that if  they  recognize  our permits,  we  will                                                               
recognize their  permits."  She called  Georgia, Connecticut, and                                                               
Indiana  "reciprocity-able"  -  once those  states  give  written                                                               
confirmation of  an agreement, they  will be included on  the web                                                               
site list.                                                                                                                      
MS.  GRIMES  indicated there  are  ten  states, under  "paragraph                                                               
(1),"  whose permits  [Alaska] will  honor; however,  because the                                                               
requirements  of   their  permit   programs  are   dissimilar  to                                                               
Alaska's, true reciprocity  is not currently possible.   She said                                                               
she is in the process of  changing that limitation.  She told the                                                               
committee  this  is  an  ongoing process,  because  the  laws  in                                                               
various states change frequently.                                                                                               
Number 1034                                                                                                                     
MS. GRIMES  named the  following difficulties  regarding attempts                                                               
to provided reciprocity:   some states have  no concealed handgun                                                               
permit  programs, and  two states,  to her  belief, cannot  abide                                                               
Alaska's 120-day rule because their own limits are much shorter.                                                                
CHAIR COGHILL asked:  "Is that 2  out of the 25 possible that are                                                               
MS. GRIMES  answered yes.  She  said New Hampshire is  one of the                                                               
states that had a problem with the 120-day limit.                                                                               
CHAIR COGHILL related  his understanding, then, that  at least 23                                                               
states are similar, although the list only contains 11 states.                                                                  
MS.  GRIMES agreed,  but pointed  out that  paragraph (1),  which                                                               
lists  the similar  requirements, merely  says Alaska  will honor                                                               
permits  from  other states  that  are  similar.   However,  that                                                               
paragraph  doesn't provide  for  those states  to honor  Alaska's                                                               
permittees in  the other state.   Therefore, she  reiterated that                                                               
she has been negotiating in  regard to whether these states could                                                               
offer  Alaska's  permittees  reciprocity.   Under  paragraph  (2)                                                               
there is true reciprocity.                                                                                                      
CHAIR COGHILL asked if there  has been some notification to these                                                               
other states in regard to Alaska's qualifications.                                                                              
MS. GRIMES answered yes.   She explained that although all states                                                               
have  been   contacted,  not  all  have   returned  the  contact.                                                               
Furthermore,  letters have  been sent  to Arkansas  and Louisiana                                                               
because  there   has  been  indication  that   reciprocity  could                                                               
probably be arranged through a  letter to the attorney general or                                                               
department of public safety in  those states.  The possibility of                                                               
reciprocity from quite a few states is pending.                                                                                 
CHAIR  COGHILL  related  his understanding,  then,  that  HB  346                                                               
merely recognizes the  permits from other states  and thus allows                                                               
those permittees to carry [concealed handguns] in Alaska.                                                                       
MS. GRIMES  agreed.   In further response  to Chair  Coghill, Ms.                                                               
Grimes agreed  that those permit  holders from other  states have                                                               
gone  through that  state's  requirements  for a  concealed-carry                                                               
permit.   She  specified that  permit holders  from other  states                                                               
have been subject to only  their state's background requirements.                                                               
She related  her belief that almost  all of the states  have some                                                               
background check.                                                                                                               
CHAIR  COGHILL commented,  "I think  we're talking  about a  very                                                               
safe  segment of  society here."   He  further commented  that he                                                               
believes this refers to a small segment of society.                                                                             
MS. GRIMES agreed.                                                                                                              
Number 1469                                                                                                                     
PATTY  OWEN,  Alaska Chapter,  Million  Mom  March, informed  the                                                               
committee   that  the   Million   Mom  March   is  a   grassroots                                                               
organization  that  advocates  for  sensible gun  laws  and  safe                                                               
children.   The Million  Mom March has  recently united  with the                                                               
National  Brady Campaign,  which recently  released report  cards                                                               
for safe  gun laws  and assigned  Alaska a  "D-minus."   Ms. Owen                                                               
expressed her  fear that HB  346 will bring Alaska's  rating down                                                               
to an all-time low.                                                                                                             
MS.  OWENS said  it  appears  HB 346  eliminates  all the  safety                                                               
standards  that   were  kept  as  safeguards   for  dealing  with                                                               
reciprocity of  permits for concealed weapons  from other states.                                                               
Therefore,  she expressed  concern that  [HB 346]  would make  it                                                               
easier for strangers or nonresidents  with unknown backgrounds to                                                               
carry   guns  in   Alaska.     Although  she   acknowledged  that                                                               
negotiations  are  taking   place  regarding  standardization  of                                                               
training and background checks, Ms.  Owen said she didn't get the                                                               
feeling those  were in place.   She concluded, "I just  think the                                                               
impatience here  isn't worth throwing everything  out the window.                                                               
... I  would hope that  Alaska -  the Alaska legislature  - would                                                               
want to  be in control  of its own  laws and  not leave it  up to                                                               
other states to set those standards for us."                                                                                    
REPRESENTATIVE WILSON inquired as to the rating of other states.                                                                
MS.  OWEN  said  she  could   provide  the  committee  with  that                                                               
information, and  noted that  there are  some states  with higher                                                               
ratings and others  with lower ratings.  She  specified that this                                                               
rating is  not only in  reference to the concealed  handgun laws,                                                               
but to other laws as well.                                                                                                      
Number 1648                                                                                                                     
REPRESENTATIVE  FATE  inquired  as  to the  criteria  the  rating                                                               
system uses.                                                                                                                    
MS. OWEN  replied that some of  the [areas reviewed] are  the age                                                               
at  which  a firearm  can  be  purchased  and  the age  at  which                                                               
juveniles  can  be in  possession  of  a  firearm.   The  [rating                                                               
system] places heavy emphasis on  the safety of children, such as                                                               
[the  requirement that]  guns  which are  sold  must have  safety                                                               
REPRESENTATIVE FATE  asked if the  criteria include  the injuries                                                               
or fatalities of youth.                                                                                                         
MS. OWEN replied no.                                                                                                            
CHAIR  COGHILL surmised  that  part of  the  Million Mom  March's                                                               
[goal] is to promote gun control at many levels.                                                                                
MS. OWEN clarified that  the organization [promotes] common-sense                                                               
gun laws.  "It's not to  take away people's rights to have guns,"                                                               
she specified.                                                                                                                  
Number 1753                                                                                                                     
REPRESENTATIVE  WILSON asked  if [the  rating system]  takes into                                                               
consideration the fact that Alaskans carry guns for safety.                                                                     
MS. OWEN said she would have to show the committee the criteria.                                                                
CHAIR COGHILL asked if Ms. Owen had a concealed-carry permit.                                                                   
MS. OWEN replied  no.  In further response to  Chair Coghill, Ms.                                                               
Owen said  she had a  basic understanding of  [the requirements],                                                               
although she  recognized that there  have been changes  since the                                                               
law's inception.                                                                                                                
CHAIR COGHILL  remarked that by  the time an individual  has gone                                                               
through screening, the individual is fairly well known.                                                                         
MS. OWEN  said she understood that,  which is why she  would want                                                               
Alaska to maintain  its standard rather than  allow another state                                                               
to dictate those criteria.                                                                                                      
Number 1860                                                                                                                     
BRIAN  JUDY, Northwestern  Government  Affairs Manager,  National                                                               
Rifle Association  (NRA), began  by informing the  committee that                                                               
in  1994 the  Department of  Public Safety  (DPS) issued  a white                                                               
paper  entitled  "To Conceal  or  Not  to  Conceal, That  is  the                                                               
Question,"   in   response   to   the   original   right-to-carry                                                               
legislation.   That  [report] was  full  of alarmist  suggestions                                                               
that  there would  be more  guns at  grocery stores  and on  ball                                                               
fields, and  that fender-benders  would become shootouts.   These                                                               
were  the same  warnings  heard  in every  other  state that  has                                                               
passed concealed-carry legislation.                                                                                             
MR.  JUDY  noted  that  DPS, during  a  recent  Senate  Judiciary                                                               
Committee hearing, said  there haven't been any  problems, as has                                                               
been the  case in every other  state, regardless of the  level of                                                               
qualification and training  standards.  The outcome  is that law-                                                               
abiding  citizens   becoming  licensed  by  the   government  are                                                               
exercising  their constitutional  right  to bear  arms and  their                                                               
natural   right   to   defend    themselves   with   the   utmost                                                               
MR. JUDY commented that self-defense  is a fundamental right that                                                               
doesn't stop  at state borders.   Just as people have  a driver's                                                               
license,  right-to-carry  permit  holders should  be  allowed  to                                                               
carry a firearm for self-defense  during travel.  He said studies                                                               
have shown that  crime rates drop when  law-abiding citizens have                                                               
the  means  to  provide  self-defense   and  are  able  to  carry                                                               
Number 2015                                                                                                                     
MR. JUDY said  the newly named National  Brady Campaign, formerly                                                               
named Handgun  Control, Inc.,  is attempting  to ban  handguns in                                                               
other  states.   He  announced that  banning  handguns in  Alaska                                                               
won't be  attempted in Alaska yet.   In regard to  the ratings of                                                               
the states, Mr.  Judy said those ratings don't  take into account                                                               
statistics  relating to  death and  crime, and  that most  states                                                               
receiving  "D-minus"  and  "F"  have  extraordinarily  low  crime                                                               
rates.   He surmised  that those  states receiving  "D-minus" and                                                               
"F" would receive  "A-plus" when ranked according  to their crime                                                               
rate.   Mr. Judy said the  states with the most  gun control laws                                                               
have the highest crime rates.                                                                                                   
MR. JUDY recalled  that the warnings of 1994 were  heard again in                                                               
1998  in  regard to  SB  141.   The  outcome  was  the same  when                                                               
nonresidents were  allowed to  carry firearms  in Alaska  as when                                                               
Alaskans were licensed, and that  was, nothing happened.  "Lo and                                                               
behold,  law-abiding  citizens  who  go through  the  process  in                                                               
whatever  state, whatever  the process  is, and  get that  permit                                                               
come to  Alaska, they carry, they  go home, and they  don't cause                                                               
problems," he said.                                                                                                             
MR. JUDY  suggested that legislation  to clarify and  broaden the                                                               
number of  states Alaska would  recognize was passed in  2000 due                                                               
to inactivity  on the part of  DPS to comply with  the provisions                                                               
of  the law  and  provide the  listing.   There  was very  little                                                               
opposition  to  that bill.    However,  DPS  has been  unable  to                                                               
provide a complete  and accurate listing of all  the states which                                                               
Alaska recognizes.   As the department stated  earlier, there are                                                               
two types of states that  Alaska recognizes:  states with similar                                                               
laws,  as  defined in  the  statute,  and states  that  recognize                                                               
Alaska permits.                                                                                                                 
Number 2149                                                                                                                     
MR. JUDY recalled that the  department had indicated there are 25                                                               
states  that Alaska  recognizes,  and therefore  he wondered  why                                                               
those states  are listed.   He also  wondered whether  Alaska law                                                               
enforcement has been notified which  25 states Alaska recognizes,                                                               
which  is   critical  because  it's   important  for   local  law                                                               
enforcement to  know which permits  from other states  are valid.                                                               
Mr. Judy  guessed that  there has been  no notification  to local                                                               
law enforcement regarding  those 25 states with  valid permits in                                                               
MR. JUDY offered  that by recognizing permits  from other states,                                                               
HB 346 will  relieve DPS of the burden of  having to evaluate all                                                               
the other  states' laws.   Furthermore, it  will place  local law                                                               
enforcement  on notice  that any  law-abiding  citizen with  that                                                               
permit  from  another state  [has  a  permit  that] is  valid  in                                                               
Alaska.  With  regard to the concern that [HB  346] would require                                                               
Alaska  to recognize  permits from  states with  lower standards,                                                               
Mr. Judy highlighted that every state  law is different.  He said                                                               
44 states  issue concealed-weapon permits, and  consistent across                                                               
those 44 states is that  law-abiding citizens in those states are                                                               
exercising  their  rights with  the  utmost  responsibility.   He                                                               
remarked, "The  State of Alaska  should not have any  concerns or                                                               
reservations about  welcoming the  law-abiding citizens  of other                                                               
states, and honoring their permits."                                                                                            
MR. JUDY  returned attention to  the 1994 DPS white  paper, which                                                               
pointed  out that  in Alaska  anyone who  can lawfully  possess a                                                               
firearm  can  carry openly  practically  anywhere  in the  state.                                                               
This can  occur now.  Therefore,  it makes no sense  not to allow                                                               
those  who  have gone  through  the  process to  carry  concealed                                                               
[firearms]  if  they  can  [already]  carry  openly.    Mr.  Judy                                                               
     Law-abiding citizens  should be able to  choose whether                                                                    
     or  not they  have  a  need to  provide  for their  own                                                                    
     protection.   They  should be  able to  choose if  they                                                                    
     want to  carry, and  the manner in  which they  carry -                                                                    
     whether  it be  open or  concealed.   So, the  National                                                                    
     Rifle Association, our 20,000 members in Alaska, urge                                                                      
     your support for HB 346.                                                                                                   
Number 2319                                                                                                                     
CHAIR COGHILL asked if Mr. Judy  has discussed with DPS the issue                                                               
of getting reciprocity under the present agreement.                                                                             
MR. JUDY  replied yes.   Although the  discussions with  DPS have                                                               
been cordial, he  said, they have been totally  unproductive.  He                                                               
pointed out that  immediately after the passage of  the 1998 law,                                                               
DPS published a  list of 17 states that would  be recognized.  At                                                               
that time,  [NRA] felt  that was  about right.   Within  the next                                                               
year,  however,  DPS  repealed  that list  and  decided  that  no                                                               
permits from other states would  be recognized.  Beginning in May                                                               
1999, Mr.  Judy said  he has  been in contact  with DPS,  and the                                                               
department hasn't gotten to it.   However, in the last week and a                                                               
half, the list has increased from 7  to 11.  He surmised that the                                                               
movement  on the  list  is due  to  HB 346.    He reiterated  his                                                               
preference to  just recognize permits  from all other  states and                                                               
thus he urged the committee's support for HB 346.                                                                               
MR. JUDY, in response to Chair  Coghill, pointed out that he only                                                               
knew  of one  other  state,  Utah, that  provides  a time  limit;                                                               
Utah's time  limit is 60 days.   He related his  belief that what                                                               
DPS testified  to [in  regard to the  time limit]  isn't correct.                                                               
He stressed  his belief that  Texas would recognize Alaska  if HB                                                               
346 passes because  it eliminates the 120-day time  limit.  Texas                                                               
has no  time limit,  as is  the case  in most  states.   Mr. Judy                                                               
related his  [firsthand] knowledge that Texas  will not recognize                                                               
permits  from  Utah  or  Alaska   because  of  the  time  limits.                                                               
Therefore,  elimination  of  the  time limit  will  increase  the                                                               
number of  states that will  recognize Alaskan permits.   He also                                                               
predicted that  with passage of  HB 346, Georgia  would recognize                                                               
permits from Alaska.                                                                                                            
Number 2530                                                                                                                     
CHAIR  COGHILL related  his  understanding,  then, that  Alaska's                                                               
permittees would  benefit from the  passage of  HB 346 as  it is.                                                               
Chair Coghill asked whether the  [existing] rule of requiring the                                                               
permittees to announce they are  [carrying a handgun] is standard                                                               
MR.  JUDY  reiterated  that the  existing  law  recognizes  those                                                               
states with  similar laws, which is  defined in Alaska code.   He                                                               
specified that currently permittees from  other states have to be                                                               
21  years  of  age,  go through  a  fingerprint-based  background                                                               
check,  go  through a  course,  and  be  eligible to  possess  [a                                                               
firearm] under state  and federal law.   Those requirements would                                                               
be  repealed by  HB  346, and  therefore  Alaska would  recognize                                                               
permits from  all other states.   In regard to  notifying police,                                                               
many  states have  that  same requirement.    Anyone carrying  in                                                               
Alaska with an out-of-state permit  would still be required under                                                               
Alaska law,  and under this  law, to notify law  enforcement that                                                               
he/she is carrying a firearm.                                                                                                   
CHAIR COGHILL  again expressed his  assumption that  these permit                                                               
holders  are  a  very  conscientious  and  disciplined  group  of                                                               
people.   He said he would  be inquiring as to  the problems that                                                               
have been experienced with permitted carriers.                                                                                  
Number 2685                                                                                                                     
JESSE  VANDERZANDEN, Executive  Director, Alaska  Outdoor Council                                                               
(AOC),  testified in  support  of the  passage of  HB  346.   Mr.                                                               
VanderZanden informed  the committee  that the  AOC has  about 50                                                               
clubs statewide and is the state  affiliate of NRA in Alaska.  He                                                               
pointed  out  that  AOC's  policies,   bylaws,  and  articles  of                                                               
incorporation  clearly state  the  organization's  belief in  the                                                               
right to  keep and bear  arms as guaranteed by  the constitution.                                                               
The member clubs and individual  memberships comprise over 12,000                                                               
in  the  state.   Many  members  have  encouraged AOC  to  assist                                                               
passage of HB  346.  He highlighted that many  of the members are                                                               
responsible,  law-abiding  citizens   who  actually  teach  these                                                               
concealed-carry  permits [classes].   Mr.  VanderZanden concluded                                                               
by reiterating AOC's support of HB 346.                                                                                         
Number 2800                                                                                                                     
REPRESENTATIVE STEVENS  asked if Mr. VanderZanden  saw any reason                                                               
to be  concerned with the criteria  used by other states  in that                                                               
some   states  may   have   a   less  stringent   concealed-carry                                                               
requirement than Alaska.                                                                                                        
MR.  VANDERZANDEN  acknowledged  that   it  varies,  although  he                                                               
stressed that it doesn't vary  significantly.  He recognized that                                                               
Alaska's requirements are very thorough  and take time and money.                                                               
He expressed  the need for  local law enforcement to  [know] what                                                               
states Alaska recognizes.                                                                                                       
REPRESENTATIVE  STEVENS asked  whether  there  should be  concern                                                               
that  allowing  people  from  other  states  to  carry  concealed                                                               
weapons in Alaska lowers [Alaska's] standards.                                                                                  
MR.  VANDERZANDEN said  he didn't  think so.   He  echoed earlier                                                               
testimony that  those going  through the  concealed-carry process                                                               
are upstanding citizens.  The  data doesn't show that these folks                                                               
are the ones who might do something detrimental to society.                                                                     
Number 2930                                                                                                                     
EDDIE GRASSER  informed the  committee that  he is  a Native-born                                                               
Alaskan who grew up in a family business involving guiding.                                                                     
TAPE 02-14, SIDE B                                                                                                              
Number 2961                                                                                                                     
MR. GRASSER acknowledged that there  are concerns that the Second                                                               
Amendment may  not provide an  individual right to keep  and bear                                                               
arms.   However, he  said the documents  of the  Founding Fathers                                                               
make  it  clear  that  the  Second  Amendment  was  intended  for                                                               
individuals.   The Alaska constitution  is also quite  clear that                                                               
the  right  to  keep  and  bear  arms  is  an  individual  right.                                                               
Therefore, this  discussion is  surrounding a  fundamental right,                                                               
not a privilege.                                                                                                                
MR. GRASSER  discussed his belief  that the government's  duty is                                                               
to protect those fundamental rights  rather than look for ways to                                                               
take  them  away.   He  charged  that governmental  agencies  and                                                               
legislative bodies discuss  how these rights can be  eroded.  Mr.                                                               
Grasser  stressed  his  belief that  it  isn't  the  government's                                                               
business  to tell  him where  and when  he can  carry a  firearm,                                                               
although he recognized the need  to regulate it [to some degree].                                                               
Therefore,  he  related his  belief  that  it is  incumbent  upon                                                               
legislative bodies to  act in the spirit of  the Founding Fathers                                                               
and ensure that  those rights [relating to the right  to keep and                                                               
bear  arms]  are  protected  to the  extent  possible,  which  he                                                               
believes HB 346 does.  He urged the committee to pass HB 346.                                                                   
Number 2835                                                                                                                     
REPRESENTATIVE STEVENS asked if Mr.  Grasser has any concern with                                                               
allowing people from other states  to carry concealed firearms in                                                               
MR. GRASSER  replied no;  these are Americans,  and he  views the                                                               
right to  carry [firearms]  as one  that extends  beyond borders.                                                               
Mr.  Grasser   specified  that  he  wasn't   concerned  with  the                                                               
requirements   of   other   states  because   he   believes   the                                                               
constitution  provides the  right  [to carry  firearms] to  these                                                               
individuals beyond the scope of  the state's authority to specify                                                               
the exact rules.                                                                                                                
REPRESENTATIVE  WILSON  informed the  committee  that  she has  a                                                               
permit to carry a concealed firearm  and feels that she is a much                                                               
safer person [in regard to handling firearms].                                                                                  
CHAIR  COGHILL reminded  the  committee that  HB  346 allows  for                                                               
reciprocity  for  those who  have  gone  through some  background                                                               
check.   Although there  are dissimilarities  in laws  across the                                                               
nation,  there  is  a   heightened  awareness  of  responsibility                                                               
compared with Alaska's ability to  carry openly without regard to                                                               
responsibility.    Chair  Coghill  acknowledged  that  there  are                                                               
constitutional issues.                                                                                                          
Number 2656                                                                                                                     
MS. GRIMES  informed the  committee that  her research  has found                                                               
that  five  states  don't require  a  fingerprint-based  criminal                                                               
history  for  permittees;  six states  don't  require  a  handgun                                                               
safety  course of  any kind.    Ms. Grimes  maintained that  this                                                               
research should  be accurate.   She  highlighted that  the Alaska                                                               
concealed-handgun permit  program is responsible for  making sure                                                               
that  permits aren't  issued to  folks who  are prohibited  under                                                               
federal firearm  laws, for  which the  fingerprint-based criminal                                                               
history  is the  best method  to  avoid issuing  permits to  such                                                               
persons.   Therefore, states not requiring  that background check                                                               
could issue  permits to  citizens who aren't  eligible to  own or                                                               
possess firearms under federal law.                                                                                             
MR. JUDY  reiterated his  position that  evidence has  shown that                                                               
regardless of  the standards,  those who  go through  the process                                                               
don't cause problems.   He also reiterated that  every person who                                                               
can lawfully possess a firearm in  the other 49 states can openly                                                               
carry a  firearm in Alaska.   Therefore,  he felt it  didn't make                                                               
sense  to  allow  everyone  to  carry  openly,  while  the  small                                                               
percentage  of the  population who  goes  through the  permitting                                                               
process [can't carry a concealed firearm].                                                                                      
Number 2520                                                                                                                     
CHAIR  COGHILL pointed  out that  [HB  346] deletes  a lot  [from                                                               
statute]; he requested that the rationale be explained.                                                                         
MR. YUHAS  responded that the  deleted language is  language that                                                               
[the sponsor] believes encumbers DPS  in its process for granting                                                               
CHAIR  COGHILL  noted  that  [HB   346]  does  maintain  language                                                               
regarding notification when stopped by a police officer.                                                                        
REPRESENTATIVE FATE informed the  committee that in reviewing the                                                               
rating of the  states by [the National Brady  Campaign], he found                                                               
that every state  with a "D" or  lower - except for  two states -                                                               
is a hunting  state.  Twenty-nine of the fifty  states received a                                                               
"D" or less.  Representative Fate commented:                                                                                    
     Something's wrong here.  Basically,  it looks as though                                                                    
     the  states that  are hunting  states have  been graded                                                                    
     the lowest, and you'd have  thought that because of the                                                                    
     amount  of  hunting,  and the  gun  activity  in  those                                                                    
     states,  and  the  protection,  and  the  knowledge  of                                                                    
     carrying weapons,  that they would've been  the highest                                                                    
Number 2405                                                                                                                     
REPRESENTATIVE STEVENS  ascertained from the [the  National Brady                                                               
Campaign] rating that 31 states had  received a "D" [or lower] in                                                               
regard  to  concealed-carry laws.    He  pointed out  that  those                                                               
states that prohibit concealed-carry [permits] received an "A."                                                                 
REPRESENTATIVE  WILSON pointed  out  that those  states with  low                                                               
scores  from [the  National Brady  Campaign]  rating are  [states                                                               
with low crime rates].                                                                                                          
MS. YUHAS addressed concerns stated  in regard to permittees with                                                               
unknown backgrounds.  To that,  she echoed earlier testimony that                                                               
those  [permittees  from  other   states]  have  gone  through  a                                                               
background  check,  although  it  may  not  be  as  extensive  as                                                               
MS. YUHAS offered the following  statistics regarding people with                                                               
concealed-carry permits:   licensees are 5.7  percent less likely                                                               
to be  arrested for  violent offenses;  licensees are  13.5 times                                                               
less  likely to  be  arrested for  nonviolent  offenses; and  the                                                               
general  public is  1.4  times  more likely  to  be arrested  for                                                               
murder.   Furthermore, states  that allow  people to  conceal and                                                               
carry firearms have an average  of 24 percent lower total violent                                                               
crimes, 26  percent lower homicides, 39  percent lower robberies,                                                               
and 19 percent  lower aggravated assaults.   She also highlighted                                                               
that concealed-handgun  laws reduce  murder by 8.5  percent, rape                                                               
by  5 percent,  and  severe  assault by  7  percent.   Ms.  Yuhas                                                               
related that  she personally took the  concealed-carry class, but                                                               
refused to  do the paperwork because  she felt the only  piece of                                                               
paper she needed [to carry a  firearm] was the constitution.  Ms.                                                               
Yuhas concluded by urging the committee to pass HB 346.                                                                         
Number 2230                                                                                                                     
REPRESENTATIVE FATE moved to report  HB 346 out of committee with                                                               
individual  recommendations  and  the  accompanying  zero  fiscal                                                               
note.   There being  no objection,  HB 346 was  moved out  of the                                                               
House State Affairs Standing Committee.                                                                                         
The committee took an at-ease from 9:07 a.m. to 9:09 a.m.                                                                       
HB 254-TAX-QUALIFIED STATE RETIREMENT SYSTEMS                                                                                 
Number 2198                                                                                                                     
CHAIR  COGHILL  announced the  next  order  of business,  SPONSOR                                                               
SUBSTITUTE  FOR HOUSE  BILL  NO.  254, "An  Act  relating to  the                                                               
teachers' retirement system, the  judicial retirement system, and                                                               
the  public   employees'  retirement   system  and  to   the  tax                                                               
qualification under  the Internal Revenue Code  of those systems;                                                               
amending  the   definition  of  'actuarial  adjustment'   in  the                                                               
teachers' retirement system and  the public employees' retirement                                                               
system; repealing certain provisions  of the teachers' retirement                                                               
system  and   the  public   employees'  retirement   system;  and                                                               
providing for an effective date."                                                                                               
Number 2176                                                                                                                     
BARBARA COTTING, Staff to  Representative Jeannette James, Alaska                                                               
State   Legislature,   presented   SSHB    254   on   behalf   of                                                               
Representative  James,  sponsor.    She said  Chair  Coghill  had                                                               
described [SSHB  254] aptly when  he called it  complex; however,                                                               
its purpose is simple.   Ms. Cotting emphasized the importance of                                                               
passing the  bill this year.   Developed over the past  year, the                                                               
bill would keep  the retirement system of the  state employees in                                                               
compliance  with  the  Internal   Revenue  Service  (IRS).    She                                                               
deferred  to  Guy  Bell,  who was  responsible  for  writing  the                                                               
sectional analysis, to address technical aspects.                                                                               
Number 2142                                                                                                                     
GUY   BELL,  Director,   Division  of   Retirement  &   Benefits,                                                               
Department of Administration  (DOA), thanked Representative James                                                               
for sponsoring  SSHB 254.   He said  the legislation  would bring                                                               
the  statutes for  public employees,  teachers, and  the judicial                                                               
retirement  system up-to-date  with  the  Internal Revenue  Code,                                                               
which is important  for the continued tax  qualification plans of                                                               
the division.   He explained:   "Basically, it means that  we can                                                               
take  employee contributions,  pretaxed,  and  that ...  taxation                                                               
doesn't  occur until  the benefits  are received."   He  said the                                                               
legislation  would not  increase  or  reduce retirement  benefits                                                               
under any  provisions of  the aforementioned  systems.   Simply a                                                               
compliance  bill,  [SSHB  254]  would  bring  the  statutes  into                                                               
compliance with the Internal Revenue Code.                                                                                      
MR.  BELL  noted that  the  legislation  would allow  [retirement                                                               
system] members to take advantage of recent federal pension-                                                                    
reform  legislation  that is  beneficial  to  teachers and  other                                                               
public  employees.   It  would allow  those  members to  purchase                                                               
service credit  using pretax  dollars.   He listed  the following                                                               
service credit  options:  military  time, Outside  teaching time,                                                               
and temporary  time.  Currently,  members may buy that  time, but                                                               
only with post-tax dollars.                                                                                                     
MR.  BELL  told the  committee  this  proposed legislation  would                                                               
allow  members  to  buy  that time  either  with  pretax  payroll                                                               
deductions  or  with  tax-deferred   savings  allowed  under  the                                                               
Internal  Revenue   Code,  including   the  following:     public                                                               
employees; deferred  compensation 457-plan monies offered  by the                                                               
state and  many political subdivisions to  employees; or, offered                                                               
by  most  school districts  to  teachers,  403(b) money,  a  tax-                                                               
deferred savings.   He said,  "This will  be a direct  benefit to                                                               
those folks who want to  purchase time, which effectively adds to                                                               
their defined benefit  at retirement."  He added  that it reduces                                                               
the cost of purchasing that service.                                                                                            
CHAIR COGHILL  asked Mr. Bell  to clarify the meaning  of "buying                                                               
MR. BELL offered the following explanation:                                                                                     
     Alaska Statutes  allow ... members  to buy  [a] certain                                                                    
     kind of  time, which effectively adds  to their defined                                                                    
     benefit.  For instance, a  person who has military time                                                                    
     can buy  up to  five years of  military time  by paying                                                                    
     the  actuarial cost.   ...  What  that means  is ...  a                                                                    
     person  who  has  ... military  service  can  claim  an                                                                    
     additional  ... five  years of  service toward  ... the                                                                    
     retirement  benefit.    And  remember  that  retirement                                                                    
     benefits are  calculated using a  formula, and  part of                                                                    
     that formula includes years of service. ...                                                                                
     Let's  say, ...  depending on  your multiplier,  ... if                                                                    
     you  were retiring  after  30 years  that  would be  an                                                                    
     extra 12.5  percent retirement benefit, and  that costs                                                                    
     something.   [The]  individual has  to  pay to  receive                                                                    
     that.  They  pay to receive that for the  rest of their                                                                    
     life through the defined  benefit, currently, either by                                                                    
     taking an  actuarial reduction to  their benefit  or by                                                                    
     paying cash  or taking  payroll deductions  - post-tax.                                                                    
     With  the change  in the  federal pension  reform, they                                                                    
     can  now  do that,  ...  subject  to [the]  legislature                                                                    
     incorporating  the  new  provision,  by  taking  pretax                                                                    
     payroll  deductions or  using their  457-plan money  or                                                                    
     403(b)-plan money.                                                                                                         
CHAIR COGHILL indicated  he thought that aspect of  the issue was                                                               
important,  because  the committee  would  be  addressing it  "in                                                               
another venue, in a little different angle."                                                                                    
MR.  BELL  added  that  this   legislation  would  not  cost  the                                                               
employers   or  change   employer  contribution   rates  to   the                                                               
retirement system, because it is  the member who would be paying.                                                               
The difference,  he highlighted, would  be that the  member would                                                               
be paying with pretax dollars, versus post-tax dollars.                                                                         
Number 1773                                                                                                                     
REPRESENTATIVE  WILSON  asked  Mr.  Bell  to  confirm  that  [the                                                               
proposed legislation]  would not  add a cost  to the  employer or                                                               
state and  would not jeopardize  the retirement plan  for anybody                                                               
MR. BELL said, "That's correct."                                                                                                
Number 1745                                                                                                                     
REPRESENTATIVE  STEVENS, having  retired from  the university  in                                                               
TRS  [Teachers'   Retirement  System],  said  he   was  paying  a                                                               
substantial amount  of money  to "buy  in" his  military service.                                                               
He asked Mr. Bell if there would be any retroactive provisions.                                                                 
MR. BELL  replied that  there are  retroactive provisions  in the                                                               
bill; however,  once a person  is receiving a benefit,  he didn't                                                               
think a retroactive adjustment could be made.                                                                                   
CHAIR   COGHILL  concurred   that  retroactive   provisions  were                                                               
provided in  the bill  for those  "buying in"  to get  the pretax                                                               
benefit for  previous time  [worked].  He  said he  believed this                                                               
issue to be important.                                                                                                          
MR. BELL said  he would follow up  on the topic to  be certain of                                                               
the answer.                                                                                                                     
MR.  BELL  told  the  committee  the  Alaska  Government  Finance                                                               
Officers  Association -  a  group of  finance  officers from  the                                                               
political  subdivisions around  the  state -  has endorsed  [SSHB                                                               
254].   He noted  that the  retirement systems  are not  only for                                                               
state employees, but  also for teachers and employees  of most of                                                               
the political subdivisions in the state.                                                                                        
Number 1646                                                                                                                     
CHAIR COGHILL  stated, "Certainly, there are  practices that have                                                               
pushed the limits  of our ability of the law  to respond to [the]                                                               
IRS."  He asked  if there had ever been any  penalty to the State                                                               
of Alaska  for "doing  a practice  that wasn't  necessarily lined                                                               
out in statute."                                                                                                                
Number 1632                                                                                                                     
MR. BELL answered no.  He  said letter rulings had been submitted                                                               
to  the   IRS,  asking  for   its  approval  of  the   plan  [for                                                               
legislation],  and [the  IRS] was  in  the final  stages of  that                                                               
process.  He explained that  one reason for the repeated drafting                                                               
of the bill  is that there has been some  "give and take" between                                                               
the tax  consultants and the  IRS regarding specific  language in                                                               
the bill.  He said there  have been no penalties; furthermore, he                                                               
stated  his belief  that  the IRS  may  appreciate the  continued                                                               
efforts of [the  division] to bring the statutes  up-to-date.  He                                                               
clarified that  the division  has not been  out of  compliance in                                                               
terms of its practice; rather,  the law doesn't match the current                                                               
requirements  of  the  IRS.    He concluded  that  [the  IRS]  is                                                               
"happily accepting our  request for that letter  ruling, and that                                                               
letter ruling effectively incorporates this legislation."                                                                       
Number 1555                                                                                                                     
CHAIR COGHILL  confessed that  the language of  the bill  was, at                                                               
times,  difficult  to comprehend.    His  study of  the  proposed                                                               
legislation did  raise a question  regarding flexibility  and new                                                               
IRS rulings.  He said there  would be changes in various benefits                                                               
programs  in the  future,  and  he asked  Mr.  Bell  if there  is                                                               
flexibility in [the language of SSHB 254] to allow for that.                                                                    
MR.  BELL  responded,  "There is  some  flexibility,  because  it                                                               
doesn't  make  indication to  ...  the  broad provisions  of  the                                                               
Internal Revenue Code."   He clarified that  those provisions may                                                               
change,  but  "we" would  still  be  in compliance,  because  the                                                               
changes are made by reference.   He noted that the IRS requires a                                                               
plan document and that [the  division's] plan document is [Alaska                                                               
Statute],   which    specifies   benefits,    requirements,   and                                                               
MR. BELL  said he thinks some  states give broader leeway  to the                                                               
"retirement entity" to  develop those rules or  plan documents by                                                               
regulation,  or by  some other  means, through  a board  process.                                                               
Because  the  division's plan  document  is  the state  statutes,                                                               
however,  it  is subject  to  legislative  oversight and  review.                                                               
Although  he surmised  the division  could, alternatively,  add a                                                               
one-line provision  in statute to  change that, he noted  that it                                                               
was not doing so with this legislation.                                                                                         
CHAIR COGHILL  asked if the  actuarial adjustments  were designed                                                               
by the IRS or [the division].                                                                                                   
MR.  BELL answered  that [the  division]  designed the  actuarial                                                               
adjustments.   Provisions  of Alaska  law determine  the cost  of                                                               
purchasing certain types  of service.  Although  laws relating to                                                               
purchasing military  service have  changed over time  through the                                                               
legislative  process,  for  example,  that isn't  what  is  being                                                               
changed [in  this legislation].   Mr. Bell clarified that  how it                                                               
is purchased is the issue, not how it is calculated.                                                                            
CHAIR COGHILL stated  his intention a little later  on to discuss                                                               
the  actuarial  "makeup"  [as  it   pertains  to  the  retirement                                                               
system]; however,  he clarified  that the present  discussion was                                                               
regarding the "pre-post-tax trigger."                                                                                           
Number 1350                                                                                                                     
REPRESENTATIVE FATE  moved to  report SSHB  254 out  of committee                                                               
with individual recommendations and  the accompanying zero fiscal                                                               
note.   There being no objection,  SSHB 254 was moved  out of the                                                               
House State Affairs Standing Committee.                                                                                         
HB 300-PROCUREMENT OF TRAVEL SERVICES                                                                                         
Number 1305                                                                                                                     
CHAIR COGHILL  announced the next  order of business,  HOUSE BILL                                                               
NO. 300,  "An Act relating  to the procurement of  certain travel                                                               
Number 1296                                                                                                                     
REPRESENTATIVE  HAYES,  sponsor of  HB  300,  explained that  the                                                               
proposed legislation would allow businesses  in the state to have                                                               
equity.   Currently,  the state  executive  branch doesn't  allow                                                               
travel agencies to  charge a fee to certain entities  such as the                                                               
court, transportation, and administration.                                                                                      
REPRESENTATIVE  HAYES  explained  that [prior  to  the  terrorist                                                               
activities] of  September 11, 2001,  airlines were  paying travel                                                               
agencies approximately  5 percent  for each  ticket sold.   After                                                               
September  11, 2001,  that price  [was capped  at] $10-$20  for a                                                               
one-way or roundtrip airfare, respectively.   Because of the cap,                                                               
it became  necessary to request  that the state actually  pay for                                                               
the services it receives.                                                                                                       
REPRESENTATIVE  HAYES noted  that currently  the travel  agencies                                                               
have to sign  a waiver saying they won't charge  the state a fee,                                                               
in   order   for   state  agencies   to   use   their   services.                                                               
Representative  Hayes said  it  seemed  unacceptable because  the                                                               
agencies  are providing  a service  to the  State of  Alaska and,                                                               
therefore, should be paid for those services.                                                                                   
Number 1145                                                                                                                     
REPRESENTATIVE HAYES  indicated two letters.   The first,  from a                                                               
travel agency in Fairbanks, read in part:                                                                                       
     The  state  should  not  be   exempt  from  paying  for                                                                    
     services  from any  business.   We  provide a  valuable                                                                    
     service.   I  do not  want to  see our  public servants                                                                    
     wasting  time and  money trying  to  be travel  agents,                                                                    
     when a call to professional  and efficient travel agent                                                                    
     can  have  a  state  employee off  the  phone  and  the                                                                    
     Internet in minutes.                                                                                                       
     Currently,  the state  does not  pay for  a service  of                                                                    
     ticket  deliveries,  or  the  additional  cost  if  the                                                                    
     ticket has to be changed and reissued.                                                                                     
REPRESENTATIVE HAYES pointed out the  final paragraph of a letter                                                               
[dated August 29, 1991] from  [then-Representative] Fran Ulmer to                                                               
then-Governor  Walter  Hickel,  which  read  in  part,  "While  I                                                               
applaud your  efforts to find  efficiencies, it is no  benefit to                                                               
Alaskans   to   pinch   pennies    while   taking   away   jobs."                                                               
Representative Hayes said while he  also applauds efforts to find                                                               
efficiencies, the result  has been to hurt  the [travel] industry                                                               
in Alaska.  He stated his  belief that [the legislature] needs to                                                               
find ways to  pay for the services that the  industry provides to                                                               
the state and its citizens.                                                                                                     
Number 1045                                                                                                                     
REPRESENTATIVE WILSON  mentioned "that waiver that  they signed."                                                               
She said in  [Wrangell] the agency gets paid.   She asked why the                                                               
agency would get paid in one town and not another.                                                                              
REPRESENTATIVE  HAYES replied  that  the  university, the  Alaska                                                               
Railroad [Corporation],  and the  state legislature can  pick and                                                               
choose which agencies to use.  He continued:                                                                                    
     We,  in  effect,  subsidize the  other  part  of  state                                                                    
     government, because  we pay for those  services and the                                                                    
     State of Alaska  executive [branch] does not.  ... I do                                                                    
     believe  in  1988,  when this  was  actually  put  into                                                                    
     place,  ... all  the officers  received a  memo stating                                                                    
     that we should  use travel agencies that  do not charge                                                                    
     the  State of  Alaska.   And a  lot of  our legislators                                                                    
     were upset by  this, and they'd say, "I  will prefer to                                                                    
     ... use whatever travel agency  I've always used."  So,                                                                    
     they couldn't enforce the provision  on us, so we could                                                                    
     use  whatever  travel  agency  we   choose  to  use  as                                                                    
     legislators.   But for the  executive branch  - courts,                                                                    
     administration,  corrections -  (indisc.) they  did not                                                                    
     have that purpose.                                                                                                         
Number 0925                                                                                                                     
REPRESENTATIVE WILSON referred to  the fiscal note and questioned                                                               
whether the amount paid will be  only $8 a ticket, instead of the                                                               
$10, $15, or $20 being charged.  She requested an explanation.                                                                  
Number 0882                                                                                                                     
REPRESENTATIVE HAYES said that was  the amount the administration                                                               
determined would be fair and equitable.                                                                                         
CHAIR  COGHILL  suggested  that  there  were  people  present  to                                                               
testify who might be able to  answer the question [of whether the                                                               
$8 on the fiscal note is for a one-way or roundtrip ticket].                                                                    
Number 0752                                                                                                                     
REPRESENTATIVE FATE  asked Representative  Hayes to  clarify that                                                               
this  doesn't speak  to  the  charges of  the  travel agent,  but                                                               
solely to the availability.                                                                                                     
REPRESENTATIVE HAYES  replied that he  didn't think that  was the                                                               
case.   He  stated  that the  purpose of  the  legislation is  to                                                               
exempt  travel  agencies  from  the  procurement  code,  so  that                                                               
individual agencies  can choose which [travel]  agency they would                                                               
like to use.   By doing so, he explained,  those [state] agencies                                                               
would have to pay a [fee]  to those travel agents.  Currently, he                                                               
reminded the  committee, the  work done  is subsidized  by "other                                                               
portions of state government."                                                                                                  
REPRESENTATIVE  FATE  remarked  that  his  interest  in  this  is                                                               
because over the  last several years there has  been a "pullback"                                                               
on the  amount of travel  agents' commissions from  the airlines.                                                               
He asked if that commission  would be standardized throughout the                                                               
entire industry,  including the  State of  Alaska administration,                                                               
for  example, or  whether there  will be  a surcharge  on top  of                                                               
that.  He suggested it is  a huge question because of the current                                                               
charging practices of the agencies.                                                                                             
REPRESENTATIVE  HAYES suggested  that  question  might be  better                                                               
answered by the representatives from travel agency.                                                                             
Number 0660                                                                                                                     
REPRESENTATIVE STEVENS  asked Representative  Hayes if  "we" were                                                               
experiencing  any difficulty  finding  travel  agents willing  to                                                               
take on the responsibilities of  making arrangement for the State                                                               
of Alaska.                                                                                                                      
REPRESENTATIVE  HAYES  responded that  he  did  not know  of  any                                                               
[difficulties in  that regard] previous [to  September 11, 2001];                                                               
however, after  that date, and  after the airlines  reduced their                                                               
fees  from 5  percent of  the total  ticket to  [$10 to  $20], he                                                               
said, "You're looking at businesses  that ... are working on very                                                               
thin margins."  He continued:                                                                                                   
      By the airlines' reducing that margin even more, ...                                                                      
     what I fear is that we're going to run businesses out                                                                      
     of business in ... Alaska,  all over the point that ...                                                                    
     [there  is]  $285,000  that   travel  agents  would  be                                                                    
     receiving  from the  State of  Alaska  for providing  a                                                                    
     service  that  they  currently provide  to  the  state.                                                                    
     And, again, my  ultimate problem with this is:   If you                                                                    
     receive a service, you should  ... pay for that service                                                                    
     that  you're receiving.   And  that's ultimately  why I                                                                    
     brought this forward.                                                                                                      
Number 0554                                                                                                                     
GAYLE  PAUL  JANECEK,  Accounting Supervisor,  ABC  Travel  Time,                                                               
Inc.,  testifying via  teleconference,  told  the committee  that                                                               
company has  been serving  Alaska for 24  years, with  offices in                                                               
Palmer  and  Wasilla.   She  surmised  that  the days  of  travel                                                               
agents' being paid airline commissions  will soon be over, partly                                                               
because    airlines   are    "operating    on    the   edge    of                                                               
[impoverishment]."   Ms. Janecek told  the committee that  on the                                                               
national  level,  almost  all  remaining  agencies  are  charging                                                               
service fees or  reservation processing fees to  their clients in                                                               
order  to continue  providing "a  reliable,  nonbiased source  of                                                               
travel information."                                                                                                            
MS. JANECEK  noted that in  her 14  years with [ABC  Travel Time]                                                               
she has tracked several loyal,  local Alaskan state employees who                                                               
rely on  the agency to "go  the extra distance" for  their travel                                                               
arrangements and who  pay the agency's service fees  out of their                                                               
own pockets.  She said, "Doing  business on a local level assures                                                               
them  that   they  are  trusted   people  who  can   quickly  and                                                               
efficiently handle the state's routine or problem travel."                                                                      
MS.  JANECEK   said  she  could  understand   the  difficulty  in                                                               
reconciling the  state's travel-credit-card account  to determine                                                               
which charges align with which  state employees for what dates of                                                               
travel, for example.  She  suggested perhaps the process could be                                                               
streamlined by  e-mailing the information as  transactions occur,                                                               
thereby  alerting   the  "finance  department"  of   the  pending                                                               
charges.   Denying  economic opportunity  to serve  the State  of                                                               
Alaska  because  of  "reconciling   problems,"  she  said,  seems                                                               
discriminatory  against small,  local  businesses.   Ms.  Janecek                                                               
urged enactment of  this legislation.  She indicated  this is not                                                               
a handout or  monetary relief as a result of  September 11, 2001,                                                               
but  is  about  being  paid   for  work  performed  and  services                                                               
CHAIR COGHILL told Ms. Janecek he appreciated her testimony.                                                                    
Number 0325                                                                                                                     
DAVID BERG, Representative,  Viking Travel, Petersburg, testified                                                               
via  teleconference.    He informed  the  committee  that  Viking                                                               
Travel has represented  the State of Alaska  for approximately 20                                                               
years and  presently has  a contract  to provide  travel services                                                               
for  state  agencies in  Petersburg.    The contract  allows  the                                                               
agency  to charge  modest service  charges to  cover its  cost of                                                               
doing  business, "in  light of  reduced  airline commissions  and                                                               
caps."  Mr.  Berg said the experience of [Viking  Travel] is that                                                               
many state agencies refuse to  pay service charges.  He remarked,                                                               
"When  agency employees  use our  services,  the agency  requires                                                               
that the employee pay services charges out of their own pocket."                                                                
MR.  BERG  explained that  under  its  existing contract  [Viking                                                               
Travel] is  paid by the  state to provide the  lowest-cost travel                                                               
arrangements for  the employee.   He said, "If the  traveler does                                                               
not decide to use the contract  agent, the state has no guarantee                                                               
or impartial source of information  that travel is being obtained                                                               
at  the  lowest cost  to  the  state."   He  opined  that a  bill                                                               
proposing  that state  agencies  procure  travel services  should                                                               
contain language requiring state  agencies to use contractors for                                                               
travel where contracts are in place,  to ensure that the state is                                                               
getting the lowest-cost travel services in the market.                                                                          
CHAIR COGHILL said he thought  the state would be considering how                                                               
it might take advantage of Internet  bookings.  He asked Mr. Berg                                                               
whether that  is an issue  of concern  for travel agents  and, if                                                               
so, how it is being addressed.                                                                                                  
MR. BERG replied  that he sees almost daily  examples of airlines                                                               
"telling you  what they want  to" on their  web sites.   He noted                                                               
that there are  mistakes in pricing of transactions.   He said he                                                               
has known individuals who have  bought tickets from Petersburg to                                                               
Sitka, for  example, and  the airline  system will  not (indisc.)                                                               
the connections  that are necessary; consequently,  the ticket is                                                               
issued at  twice the  value of  the appropriate  pair.   Mr. Berg                                                               
stated his  belief that until  these problems are  addressed, the                                                               
state needs an  impartial judge, which is what  the travel agents                                                               
can provide.                                                                                                                    
Number 0085                                                                                                                     
KIM  GARNERO,  Director,  Division   of  Finance,  Department  of                                                               
Administration, told  the committee that  while she is  no expert                                                               
on  procurement  issues,  she   is  familiar  with  the  business                                                               
relationships between the State of Alaska and travel agencies.                                                                  
She testified as follows:                                                                                                       
     State government  has a  long history  of relying  on a                                                                    
     private  sector   for  professional   travel  services.                                                                    
     Until  a few  years ago,  these services  were provided                                                                    
     for free  to travelers, because travel  agencies relied                                                                    
     on commissions  from travel providers such  as airlines                                                                    
     and hotels.   Because  no public  funds were  spent for                                                                    
     these services,  each state  office was  able to  use a                                                                    
     travel  agent of  their  choice,  and strong  loyalties                                                                    
     In October 1999, airlines  cut travel agent commissions                                                                    
     from 8 to  5 percent.  This 37.5  percent reduction was                                                                    
     an  early  step in  a  trend  that continues  to  place                                                                    
     severe economic pressure on travel  agents.  With ever-                                                                    
     declining  commissions  from  airlines, more  and  more                                                                    
     travel agencies  are responding by initiating  fees for                                                                    
     their services.                                                                                                            
     When fees are introduced  to travel services, the issue                                                                    
     of  competitive  procurement  arises.    The  State  of                                                                    
     Alaska  spends  over  $16 million  a  year  on  airline                                                                    
     tickets,  so a  fee  as  low as  1  percent results  in                                                                    
     $160,000 a year spent for these services.                                                                                  
[The  end  of  the  tape  cut off  a  portion  of  Ms.  Garnero's                                                               
testimony;  however,  the  content  was  later  provided  to  the                                                               
secretary  and  read  as  follows:     "Current  procurement  law                                                               
requires  formal competitive  bids  for purchases  of this  size.                                                               
The result is that all state  travel purchases are then made from                                                               
the successful bidder."]                                                                                                        
TAPE 02-15, SIDE A                                                                                                              
Number 0001                                                                                                                     
MS. GARNERO continued as follows:                                                                                               
     Our  policy has  been to  obtain travel  agent services                                                                    
     without  paying fees  wherever possible.   Toward  that                                                                    
     end, the Department of  Administration has maintained a                                                                    
     web  site  listing  travel agents  willing  to  provide                                                                    
     services  free  of charge  to  state  agencies.   State                                                                    
     agencies may use any of  the listed travel agencies, or                                                                    
     any  other  travel agency  willing  to  waive fees  for                                                                    
     their service.                                                                                                             
     But  in  communities  where   no  travel  agencies  are                                                                    
     willing  to  provide  free services,  we  competitively                                                                    
     established a travel agent  contract in accordance with                                                                    
     the  procurement code.   This  has resulted  in single-                                                                    
     award   contracts  for   the  communities   of  Juneau,                                                                    
     Wrangell,  Petersburg,  Haines,  Cordova,  Seward,  and                                                                    
     Dillingham.   Fees  paid  under  these contracts  range                                                                    
     from $5 to $20 for an airline ticket.                                                                                      
Number 0098                                                                                                                     
MS.  GARNERO  informed  members  that  she  was  responsible  for                                                               
writing  the fiscal  note.   She  explained that  the  $8 is  not                                                               
necessarily "reasonable" amount, but  rather an assumption "based                                                               
on what we've  seen in these contracts we've picked  out so far."                                                               
She continued as follows:                                                                                                       
     If  the  legislation  passes,  travel-related  services                                                                    
     would be exempted  from the procurement code.   In that                                                                    
     case, the  Department of Administration will  meet with                                                                    
     industry representatives to  establish a reasonable fee                                                                    
     schedule, which  would become  the benchmark  for doing                                                                    
     business with the state.   Any travel agency willing to                                                                    
     provide  services at  or below  the benchmark  would be                                                                    
     eligible  to  do business  with  the  state, and  state                                                                    
     employees could then choose to  use any eligible travel                                                                    
     But to  sum up,  passage of HB  300 will  eliminate the                                                                    
     requirement  for competitive  procurement  in order  to                                                                    
     pay  fees, but  it would  not prevent  establishing [a]                                                                    
     future  travel  agency  contract  when  that's  in  the                                                                    
     state's best interest.  It  also will have no effect on                                                                    
     our existing  ... travel  agency contracts,  since they                                                                    
     are preexisting and legally binding.                                                                                       
MS. GARNERO offered to answer questions.                                                                                        
Number 0207                                                                                                                     
REPRESENTATIVE  STEVENS  asked  what  benefits  exist  to  travel                                                               
agents to provide services free of charge to the state.                                                                         
MS.  GARNERO answered  that  the travel  agents  still receive  5                                                               
percent from the  airlines; she mentioned that  she thinks hotels                                                               
and rental car  agencies are paying them.  She  admitted that she                                                               
doesn't  fully understand  the travel  agency revenue  structure.                                                               
She said there are still  commissions left; however, she referred                                                               
to previous testimony regarding  the inevitable trend of reducing                                                               
REPRESENTATIVE  STEVENS   asked  if   Ms.  Garnero   was  finding                                                               
disinclination  on the  part of  travel agents  to continue  this                                                               
arrangement with [the state] at no charge.                                                                                      
CHAIR  COGHILL commented,  "I think  the testimony  to a  bill is                                                               
pretty resounding."                                                                                                             
MS.  GARNERO mentioned  the  October 1999  reduction.   She  said                                                               
after  that  reduction, [the  department]  wrote  letters to  170                                                               
travel agencies around the state,  asking if they were willing to                                                               
waive fees for  their service, "after we first put  that web site                                                               
together."   Noting  that perhaps  more than  80 travel  agencies                                                               
were  listed  at that  time,  she  said  many  have gone  out  of                                                               
business, and the number is now  40.  She mentioned the following                                                               
numbers of  travel agents currently  listed:  13 in  Anchorage, 9                                                               
in Fairbanks, and "1 or 2 shops around the state."                                                                              
Number 0344                                                                                                                     
REPRESENTATIVE  WILSON indicated  the  fiscal note  and asked  if                                                               
[the $8] reflected [a fee] for one-way or roundtrip travel.                                                                     
MS. GARNERO  answered that  her intention at  the time  she wrote                                                               
the fiscal  note was that  [the $8]  was for a  roundtrip ticket.                                                               
She reiterated that she didn't know  if that was reasonable.  She                                                               
said  [the determination]  would  come from  discussion with  the                                                               
travel industry representatives.                                                                                                
Number 0400                                                                                                                     
REPRESENTATIVE FATE asked if his  understanding - that this would                                                               
take out  procurement and open  the door to agency  competition -                                                               
was correct.                                                                                                                    
MS. GARNERO  replied, "I'm  not sure  that it  opens the  door to                                                               
agency  competition,  because what  we're  speaking  of doing  is                                                               
setting some  benchmark at which we  would pay, and I  don't know                                                               
that we would get many that would charge us less than that."                                                                    
REPRESENTATIVE FATE noted  that there are many  factors which are                                                               
hurting  the   [travel]  agencies,   including  the   cutback  of                                                               
commissions and  the increasing acceptance of  Internet ticketing                                                               
and  electronic ticketing.   He  asked what  would happen  to the                                                               
system when, inevitability,  several of these agencies  go out of                                                               
business for one reason or another.                                                                                             
MS. GARNERO responded  that her mother owned a  travel agency for                                                               
20 years,  which closed 2 years  ago; so she herself  is aware of                                                               
what is  going on in the  industry.  She explained  that when she                                                               
procured the information  for the fiscal note, 23  percent of the                                                               
tickets  bought last  year were  purchased  directly from  Alaska                                                               
Airlines.   She added  that she  was certain  many of  those were                                                               
purchased over the  Internet.  She said she didn't  have data for                                                               
early years,  but was  sure the  numbers for  next year  would be                                                               
higher than 23 percent.                                                                                                         
MS. GARNERO noted  that the macroeconomics of  travel agencies is                                                               
changing because  of the consolidation  of smaller  agencies into                                                               
bigger ones, for  example, and because many  agencies are closing                                                               
their doors.                                                                                                                    
REPRESENTATIVE FATE  asked if  that would  make ticketing  by the                                                               
state more difficult.                                                                                                           
MS. GARNERO answered as follows:                                                                                                
     Last year in Juneau, our  last few travel agencies that                                                                    
     were waiving fees  for us said they could  no longer do                                                                    
     it.  We did a procurement.   We had several bidders and                                                                    
     ended  up  with  a  contract  with  a  large  statewide                                                                    
     agency.  We're paying ...  $5 for a ticket to Anchorage                                                                    
     roundtrip,   and  $8   for  a   ticket  anywhere   else                                                                    
     roundtrip, on  that contract.   I would imagine  in our                                                                    
     larger  urban areas,  procurements would  yield similar                                                                    
MS. GARNERO noted, "The only community  we were not able to get a                                                               
contract in - that wouldn't waive fees - was Bethel."                                                                           
CHAIR COGHILL commented,  "With this law, it would  allow us some                                                               
flexibility  in discussing  things with  travel agencies,  but it                                                               
would not mandate it.  I mean,  we could look for other areas for                                                               
cost savings if we had to."                                                                                                     
MS.  GARNERO said  yes.   She added  that it  would also  put the                                                               
choice back in state agencies, which she said they like.                                                                        
Number 0758                                                                                                                     
KARA ALTMAN, Owner, Kara's Cruise  and Travel, told the committee                                                               
she is  a lifelong Alaskan and  a Juneau resident who  has worked                                                               
for  most of  the  last 15  years  of her  career  in the  travel                                                               
industry  at Southeast  Executravel.   She  noted that  Southeast                                                               
Executravel was  forced to close  its doors on December  8, 2000;                                                               
eight employees  lost their jobs  that day, with about  two days'                                                               
notice.   She  said  this  was a  direct  result  of the  state's                                                               
refusal  to compensate  the travel  agency for  work done  on its                                                               
MS.  ALTMAN said  no agency  in  town could  absorb eight  agents                                                               
suddenly out  of work;  some of those  out-of-work agents  had to                                                               
rely upon state  public assistance to provide  for their families                                                               
- yet another cost to the state.   She recounted that she and her                                                               
colleague [Cyndi Isaak] had set  up home-based travel agencies at                                                               
their own  expense.   Not charging  a fee would  be the  death of                                                               
their businesses and livelihood, she emphasized.                                                                                
MS. ALTMAN said  she knows of no other professional  in the world                                                               
that  offers services  at no  charge.   She  explained that  [the                                                               
travel  agency] was  able to  do  that when  commissions were  10                                                               
percent, but  they have  been cut  to 5  percent over  the years,                                                               
which  means a  50 percent  cut  in pay.   In  regard to  capping                                                               
tickets  at   a  $20  maximum,   she  said  it  costs   an  agent                                                               
approximately $35  in overhead costs; therefore,  the agents lose                                                               
$15 minimum for each ticket issued.                                                                                             
MS.  ALTMAN  referred  to  an  aforementioned  comment  regarding                                                               
[commissions paid] on  cars and hotels.  She  told the committee,                                                               
"Cars generally do pay us 10  percent, but not for the state; for                                                               
the state, we only get 5  percent."  Hotels, she said, will often                                                               
say  that  government  fees  are  non-commissionable,  after  the                                                               
travel agent has  made a long-distance phone call  at his/her own                                                               
expense to book the reservation.                                                                                                
MS.  ALTMAN  said  the  $8  charge  is  per  ticket,  whether  "a                                                               
roundtrip to Timbuktu  or a one-way to Anchorage,"  no matter how                                                               
many segments are in the itinerary.   She noted that when booking                                                               
travel for "regular citizens," many  agencies charge $20, but she                                                               
said, "Our fee is $10."  She  pointed out that charging $8 to the                                                               
state would  be, in  effect, giving  the state  a discount.   She                                                               
added  that [travel  agents] can  and  always have  been able  to                                                               
issue electronic tickets, so that is not an issue of concern.                                                                   
Number 1020                                                                                                                     
CHAIR COGHILL asked  Ms. Altman to describe some of  the areas in                                                               
which her work can "overrule the e-ticket world."                                                                               
MS.  ALTMAN  replied  that  a  travel agent  has  access  to  all                                                               
airlines, cars,  and hotels at once,  and can get the  client the                                                               
best rates.  A person can  e-mail the travel agent and spend very                                                               
little time working on travel plans.   She said all [agents] know                                                               
that for  the State  of Alaska,  Avis Car  Rental Agency  has the                                                               
contract, for example.  If an  employee has to go on the Internet                                                               
or hold on the phone with  an airline, the airline will give that                                                               
person  its rates,  but not  the rates  of other  airlines.   She                                                               
mentioned  the time  involved in  making  one's own  reservation.                                                               
She said,  "You're going to pay  your state employees for  one or                                                               
two hours booking  their own travel, when you could  pay a travel                                                               
professional a -  in my opinion -  miniscule $8 to do  it for you                                                               
and have it done."                                                                                                              
CHAIR COGHILL  said he was looking  for that answer and  told Ms.                                                               
Altman she'd done a good job in representing her industry.                                                                      
Number 1103                                                                                                                     
CYNDI  ISAAK,   Owner,  Cyndi's  Cruise  and   Travel,  told  the                                                               
committee she'd  previously worked for 12  years with [Southeast]                                                               
Executravel and "saw  what happened with that agency."   A mother                                                               
of two who'd worked  out of her home for the  last six years, she                                                               
said  that   when  her  employer's   business  folded,   she  was                                                               
encouraged by her large clientele to open her own business.                                                                     
MS.  ISAAK noted  that she  has run  her own  agency since  April                                                               
2001.  When  she opened her business, she offered  to make travel                                                               
arrangements  for the  state at  no charge  because she  knew the                                                               
state wouldn't pay  a fee for the large clientele  who wanted her                                                               
to continue  her services.   She  added that  she did  charge her                                                               
"other"  customers fees  [to  avoid the  same  fate as  Southeast                                                               
Executravel].    She  remarked,  "When  the  state  went  out  to                                                               
contract, I actually  was not included on  that contract, because                                                               
the person  who put out  the bid used the  old phone book."   She                                                               
clarified  that it  wasn't  to say  that she'd  have  bid on  the                                                               
entire  State of  Alaska, because  she'd  have had  to hire  more                                                               
employees and probably have a storefront agency.                                                                                
MS. ISAAK said she has "extended  that" to a few other agents who                                                               
want  to work  out  of their  homes  in order  to  be with  their                                                               
children.    She  noted  that  although  she  doesn't  have  high                                                               
overhead, rents, and  salaries, the fee is still  necessary.  She                                                               
told  members, "If  you read  all the  travel agency  trade, they                                                               
will eventually  go to zero.   I mean,  we have been  forced into                                                               
this position."                                                                                                                 
MS.  ISAAK said  she  guessed  she was  before  the committee  on                                                               
behalf of  her clients who  don't like  being in a  contract with                                                               
one agency in town and don't have a choice.  She continued:                                                                     
     I have some who say,  "I'm a little rebellious; I don't                                                                    
     want to use them, I want  to use you."  They can't even                                                                    
     use  me if  they  want  to pay  the  fee  out of  their                                                                    
     pocket.   I  had  somebody try  yesterday, and  because                                                                    
     they have a contract with  another agency in town, they                                                                    
     can't, even  if they  want to  pay the  fee themselves.                                                                    
     So,  what  they're  doing  is   using  state  time  and                                                                    
     spending  hours on  the Internet  trying to  figure out                                                                    
     their own travel.                                                                                                          
MS. ISAAK  recalled that one of  her clients had booked  the same                                                               
flight  that  she  herself  was   booking,  while  on  the  phone                                                               
together, and  the price quoted  to the  client was higher.   She                                                               
said [a travel  agent's] job is to search for  the greatest rates                                                               
[from immediately  available sources]  and that it  is imperative                                                               
to charge "the little fee."                                                                                                     
MS. ISAAK said  because the airlines have capped  "us," she would                                                               
agree to the  state's saying, "Okay, we will use  you if you only                                                               
charge us  $8, or $10,  or whatever it turns  out to be."   Then,                                                               
she noted, there would be the  flexibility to say "yes" to taking                                                               
on the state.   She told members it isn't fair  for one agency to                                                               
be able to  "have the entire State of Alaska."   Furthermore, not                                                               
all  the little  agencies that  exist now  can handle  the entire                                                               
state.   In conclusion,  she said,  "I'd love  to have  my people                                                               
back, and I know that they would like their choice, as well."                                                                   
Number 1317                                                                                                                     
RAMONA OXENDINE, Vagabond  Travel, testifying via teleconference,                                                               
told  the committee  she thought  [travel agents]  had been  well                                                               
represented [by the previous testimony].   She said all she could                                                               
add  is, "Ditto,  ditto, ditto,  ditto."   Stating her  hope that                                                               
[the committee] could see the  writing on the wall, she remarked,                                                               
"I do not think the Internet is  your friend."  If the time comes                                                               
when [travel  agents] are gone  - which will happen  unless there                                                               
is a realization  that the fees are necessary -  people will be a                                                               
captive  audience  with  the airlines,  Ms.  Oxendine  said,  and                                                               
airlines  will give  people [only]  the  information online  that                                                               
they want people to see.                                                                                                        
Number 1409                                                                                                                     
YULANDA   JOHANSEN,  Northern   Lights  Travel,   testifying  via                                                               
teleconference,  concurred that  everyone had  spoken well.   She                                                               
said, "I  do hope  the state realizes  the valuable  service that                                                               
we, as travel agents - professionals  - do offer."  She asked the                                                               
committee to consider the bill.                                                                                                 
Number 1447                                                                                                                     
SHANNON  WILEY,   Manager,  Goldbelt  Family  Travel,   told  the                                                               
committee  she  has   worked  in  the  industry   in  Juneau  for                                                               
approximately  15 years,  formerly  with American  Express.   She                                                               
pointed  out that  the  airlines' move  to  cut commissions  has,                                                               
basically, "put the  consumer on peg there, to have  to carry the                                                               
cost  of the  distribution,"  which she  explained,  is "what  is                                                               
happening with  the fee structure  that most companies  have come                                                               
up with."   Ms.  Wiley noted that  travel agencies  don't provide                                                               
services solely  to the  State of Alaska  and its  employees; the                                                               
wide range of  services includes those for  the tourism industry,                                                               
"the third-largest economic  factor" in the state.   It hurts the                                                               
entire industry when so many  agencies are going out of business,                                                               
she concluded.                                                                                                                  
Number 1622                                                                                                                     
REPRESENTATIVE HAYES moved  to report HB 300  from committee with                                                               
individual  recommendations  and  the accompanying  fiscal  note.                                                               
There being  no objection, HB  300 moved  out of the  House State                                                               
Affairs Standing Committee.                                                                                                     
Number 1657                                                                                                                     
There being no  further business before the  committee, the House                                                               
State Affairs  Standing Committee meeting was  adjourned at 10:01                                                               

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