Legislature(2001 - 2002)

04/23/2002 08:05 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                                                                           
                         April 23, 2002                                                                                         
                           8:05 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative John Coghill, Chair                                                                                              
Representative Jeannette James                                                                                                  
Representative Hugh Fate                                                                                                        
Representative Gary Stevens                                                                                                     
Representative Peggy Wilson                                                                                                     
Representative Harry Crawford                                                                                                   
Representative Joe Hayes                                                                                                        
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
SENATE JOINT RESOLUTION NO. 38                                                                                                  
Proposing amendments to the Constitution of the State of Alaska                                                                 
relating to information regarding proposed expenditures.                                                                        
     - MOVED SJR 38 OUT OF COMMITTEE                                                                                            
HOUSE BILL NO. 517                                                                                                              
"An Act relating to the disposition of surplus and obsolete                                                                     
state property."                                                                                                                
     - MOVED CSHB 517(STA) OUT OF COMMITTEE                                                                                     
HOUSE BILL NO. 493                                                                                                              
"An Act relating to assignments of permanent fund dividends; and                                                                
providing for an effective date."                                                                                               
     - HEARD AND HELD                                                                                                           
HOUSE BILL NO. 371                                                                                                              
"An  Act establishing  the  Alaska  veterans' memorial  endowment                                                               
fund  and  providing  for  credits   against  certain  taxes  for                                                               
contributions to  that fund;  relating to  other tax  credits for                                                               
certain contributions; and providing for an effective date."                                                                    
     - HEARD AND HELD                                                                                                           
PREVIOUS ACTION                                                                                                               
BILL: SJR 38                                                                                                                  
SHORT TITLE:CONST AM: PRIORITY OF EXPENDITURES                                                                                  
SPONSOR(S): SENATOR(S) KELLY                                                                                                    
Jrn-Date   Jrn-Page                     Action                                                                                  
02/19/02     2226       (S)        READ THE FIRST TIME -                                                                        
02/19/02     2226       (S)        STA, JUD, FIN                                                                                
02/26/02                (S)        STA AT 3:30 PM BELTZ 211                                                                     
02/26/02                (S)        Moved SJR 38 Out of Committee                                                                
02/26/02                (S)        MINUTE(STA)                                                                                  
02/27/02     2318       (S)        STA RPT 3DP 1NR                                                                              
02/27/02     2318       (S)        DP: THERRIAULT, HALFORD,                                                                     
02/27/02     2318       (S)        NR: STEVENS                                                                                  
02/27/02     2318       (S)        FN1: (GOV)                                                                                   
03/18/02                (S)        JUD AT 1:30 PM BELTZ 211                                                                     
03/18/02                (S)        Moved Out of Committee                                                                       
03/18/02                (S)        MINUTE(JUD)                                                                                  
03/20/02     2472       (S)        JUD RPT 3DP 1NR                                                                              
03/20/02     2472       (S)        DP: TAYLOR, COWDERY,                                                                         
03/20/02     2472       (S)        NR: ELLIS                                                                                    
03/20/02     2472       (S)        FN1: (GOV)                                                                                   
03/22/02                (S)        FIN AT 9:00 AM SENATE FINANCE                                                                
03/22/02                (S)        Moved Out of Committee                                                                       
03/22/02                (S)        MINUTE(FIN)                                                                                  
03/22/02     2501       (S)        COSPONSOR(S): DONLEY, LEMAN                                                                  
03/22/02     2496       (S)        FIN RPT 5DP 4NR                                                                              
03/22/02     2496       (S)        DP: DONLEY, KELLY, GREEN,                                                                    
                                   WARD, LEMAN;                                                                                 
03/22/02     2496       (S)        NR: AUSTERMAN, HOFFMAN,                                                                      
                                   OLSON, WILKEN                                                                                
03/22/02     2496       (S)        FN1: (GOV)                                                                                   
03/26/02                (S)        RLS AT 11:00 AM FAHRENKAMP                                                                   
03/26/02                (S)        MINUTE(RLS)                                                                                  
03/28/02     2559       (S)        ADVANCED TO THIRD READING FLD                                                                
                                   Y14 N3 E3                                                                                    
03/28/02     2556       (S)        RULES TO CALENDAR 1OR 3/28/02                                                                
03/28/02     2559       (S)        READ THE SECOND TIME                                                                         
03/28/02     2560       (S)        ADVANCED TO THIRD READING 4/2                                                                
04/02/02     2592       (S)        READ THE THIRD TIME SJR 38                                                                   
04/02/02     2592       (S)        HELD IN THIRD READING TO 4/8                                                                 
04/08/02     2664       (S)        ELTON NOTICE OF                                                                              
04/08/02     2663       (S)        BEFORE THE SENATE IN THIRD                                                                   
04/08/02     2664       (S)        PASSED Y14 N5 E1                                                                             
04/09/02     2692       (S)        RECONSIDERATION NOT TAKEN UP                                                                 
04/09/02     2693       (S)        TRANSMITTED TO (H)                                                                           
04/09/02     2693       (S)        VERSION: SJR 38                                                                              
04/10/02     2861       (H)        READ THE FIRST TIME -                                                                        
04/10/02     2861       (H)        STA, JUD, FIN                                                                                
04/16/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
04/16/02                (H)        Scheduled But Not Heard --                                                                   
                                   Recessed to Thurs. 4/18/02 --                                                                
04/18/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
04/18/02                (H)        Heard & Held                                                                                 
04/18/02                (H)        MINUTE(STA)                                                                                  
04/23/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
BILL: HB 517                                                                                                                  
SHORT TITLE:SURPLUS/OBSOLETE STATE PROPERTY                                                                                     
SPONSOR(S): COMMUNITY & REGIONAL AFFAIRS                                                                                        
Jrn-Date   Jrn-Page                     Action                                                                                  
04/12/02     2906       (H)        READ THE FIRST TIME -                                                                        
04/12/02     2906       (H)        STA                                                                                          
04/23/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
BILL: HB 493                                                                                                                  
SHORT TITLE:O.K. TO ASSIGN PFD TO NONPROFIT CORP                                                                                
SPONSOR(S): REPRESENTATIVE(S)MURKOWSKI                                                                                          
Jrn-Date   Jrn-Page                     Action                                                                                  
02/19/02     2320       (H)        READ THE FIRST TIME -                                                                        
02/19/02     2320       (H)        STA                                                                                          
02/19/02     2320       (H)        REFERRED TO STATE AFFAIRS                                                                    
02/22/02     2370       (H)        COSPONSOR(S): GUESS                                                                          
02/27/02     2419       (H)        COSPONSOR(S): KOTT, HAYES,                                                                   
03/01/02     2450       (H)        COSPONSOR(S): HALCRO                                                                         
03/15/02     2564       (H)        COSPONSOR(S): CROFT                                                                          
04/10/02     2872       (H)        COSPONSOR(S): DYSON                                                                          
04/23/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
BILL: HB 371                                                                                                                  
SHORT TITLE:ALASKA VETERANS' MEM.ENDOWMENT FUND                                                                                 
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR                                                                                      
Jrn-Date   Jrn-Page                     Action                                                                                  
02/01/02     2119       (H)        READ THE FIRST TIME -                                                                        
02/01/02     2119       (H)        MLV, STA, FIN                                                                                
02/01/02     2119       (H)        FN1: INDETERMINATE(CED)                                                                      
02/01/02     2119       (H)        FN2: INDETERMINATE(REV)                                                                      
02/01/02     2119       (H)        FN3: (MVA)                                                                                   
02/01/02     2119       (H)        GOVERNOR'S TRANSMITTAL LETTER                                                                
03/05/02                (H)        MLV AT 3:00 PM CAPITOL 124                                                                   
03/05/02                (H)        Heard & Held                                                                                 
03/05/02                (H)        MINUTE(MLV)                                                                                  
03/14/02                (H)        MLV AT 3:00 PM CAPITOL 124                                                                   
03/14/02                (H)        Scheduled But Not Heard                                                                      
03/26/02                (H)        MLV AT 3:00 PM CAPITOL 124                                                                   
03/26/02                (H)        Scheduled But Not Heard                                                                      
04/04/02                (H)        MLV AT 3:00 PM CAPITOL 124                                                                   
04/04/02                (H)        Moved Out of Committee                                                                       
04/04/02                (H)        MINUTE(MLV)                                                                                  
04/05/02     2815       (H)        MLV RPT 3DP 2NR                                                                              
04/05/02     2815       (H)        DP: GREEN, HAYES, CHENAULT;                                                                  
04/05/02     2815       (H)        NR: KOTT, MURKOWSKI                                                                          
04/05/02     2815       (H)        FN1: INDETERMINATE(CED)                                                                      
04/05/02     2815       (H)        FN2: INDETERMINATE(REV)                                                                      
04/05/02     2815       (H)        FN3: (MVA)                                                                                   
04/23/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
WITNESS REGISTER                                                                                                              
WENDY HALL, Staff                                                                                                               
to Senator Pete Kelly                                                                                                           
Alaska State Legislature                                                                                                        
Capitol Building, Room 518                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Answered questions on SJR 38 on behalf of                                                                  
the sponsor.                                                                                                                    
BILL LAWRENCE, Staff                                                                                                            
to Representative Carl Morgan                                                                                                   
Alaska State Legislature                                                                                                        
Capitol Building, Room 434                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Presented HB 517 on behalf of the House                                                                    
Community & Regional Affairs Committee, sponsor.                                                                                
CHRISTINE PARCE, Director                                                                                                       
Division of General Services                                                                                                    
Department of Administration                                                                                                    
PO Box 110210                                                                                                                   
Juneau, Alaska  99811-0210                                                                                                      
POSITION STATEMENT:  Testified on HB 517 and answered questions.                                                                
NANCY SLAGLE, Director                                                                                                          
Division of Administrative Services                                                                                             
Department of Transportation & Public Facilities                                                                                
3132 Channel Drive                                                                                                              
Juneau, Alaska  99801-7898                                                                                                      
POSITION STATEMENT:  Testified on HB 517.                                                                                       
ROBIN PHILLIPS, Staff                                                                                                           
to Representative Lisa Murkowski                                                                                                
Alaska State Legislature                                                                                                        
Capitol Building, Room 408                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Presented HB 493 on behalf of the sponsor.                                                                 
NANCI JONES, Director                                                                                                           
Permanent Fund Dividend Division                                                                                                
Department of Revenue                                                                                                           
PO Box 110460                                                                                                                   
Juneau, Alaska  99811-0460                                                                                                      
POSITION STATEMENT:  Testified on HB 493.                                                                                       
TED GIANOUTSOS                                                                                                                  
PO Box 142115                                                                                                                   
Anchorage, Alaska  99514                                                                                                        
POSITION STATEMENT:  Testified in support of HB 493.                                                                            
CAROL CARROLL, Director                                                                                                         
Central Office                                                                                                                  
Administrative Services Division                                                                                                
Department of Military & Veterans Affairs                                                                                       
400 Willoughby Avenue, Suite 500                                                                                                
Juneau, Alaska 99811                                                                                                            
POSITION STATEMENT:  Presented HB 371 and answered questions.                                                                   
BRETT FRIED, Economist                                                                                                          
Tax Division                                                                                                                    
Department of Revenue                                                                                                           
PO Box 110420                                                                                                                   
Juneau, Alaska  99811-0420                                                                                                      
POSITION STATEMENT:  Answered questions on HB 371.                                                                              
JOHN JENKS, Chief Investment Officer                                                                                            
Treasury Division                                                                                                               
Department of Revenue                                                                                                           
PO Box 110405                                                                                                                   
Juneau, Alaska 99811-0405                                                                                                       
POSITION STATEMENT:  Answered questions on HB 371.                                                                              
ACTION NARRATIVE                                                                                                              
TAPE 02-44, SIDE A                                                                                                              
Number 0001                                                                                                                     
CHAIR  JOHN  COGHILL  called the  House  State  Affairs  Standing                                                               
Committee  meeting  to  order  at   8:05  a.m.    Representatives                                                               
Coghill, Fate, Stevens, Wilson,  Crawford, and Hayes were present                                                               
at  the call  to  order.   Representative  James  arrived as  the                                                               
meeting was in progress.                                                                                                        
SJR 38 - CONST AM: PRIORITY OF EXPENDITURES                                                                                   
Number 0030                                                                                                                     
CHAIR COGHILL  announced that the  first order of  business would                                                               
be SENATE  JOINT RESOLUTION NO.  38, Proposing amendments  to the                                                               
Constitution  of  the State  of  Alaska  relating to  information                                                               
regarding proposed expenditures.                                                                                                
Number 0186                                                                                                                     
REPRESENTATIVE HAYES  acknowledged that  he missed  the testimony                                                               
on this bill  at the last meeting and wanted  some information as                                                               
to  the point  of  SJR 38,  since there  had  been some  previous                                                               
legislation on this subject.                                                                                                    
Number 0309                                                                                                                     
WENDY   HALL,  Staff   to  Senator   Pete  Kelly,   Alaska  State                                                               
Legislature,  explained that  the  reason that  Senator Kelly  is                                                               
interested  in amending  the  constitution is  to  ensure that  a                                                               
prioritized  budget  stays  this  way  and  isn't  overturned  by                                                               
statute.  She  explained that this resolution only  adds the word                                                               
"prioritized" to what  is in the constitution already.   She said                                                               
her  office  feels that  it  would  be  best if  the  departments                                                               
analyzed which services are more  needed when the budget needs to                                                               
be cut.                                                                                                                         
Number 0435                                                                                                                     
REPRESENTATIVE HAYES  said he assumed  that her office  felt that                                                               
the  executive  staff does  not  already  go through  the  budget                                                               
before the legislature sees it.                                                                                                 
MS. HALL answered that this  idea came from Governor Knowles when                                                               
he was the mayor of Anchorage.                                                                                                  
Number 0544                                                                                                                     
CHAIR  COGHILL   told  Representative  Hayes  that   the  "second                                                               
article" gives  the legislature the  opportunity to have  a joint                                                               
resolution  that  would  request  a  priority  budget  after  the                                                               
December  deadline.   This  resolution  gives  the legislature  a                                                               
communication tool that it doesn't have now.                                                                                    
Number 0605                                                                                                                     
REPRESENTATIVE  STEVENS  commented  that the  constitution  is  a                                                               
living document, but  that doesn't mean it  shouldn't be changed.                                                               
He noted  that the legislature is  not making this change;  it is                                                               
submitting it  to the people  for a  vote.  He  expressed support                                                               
for SJR 38.                                                                                                                     
REPRESENTATIVE FATE  told Representative Hayes that  missions and                                                               
measures don't  really call  for prioritization.   This  year the                                                               
agencies  and  departments were  asked  to  prioritize, and  they                                                               
neglected  to or  chose not  to.   The prioritization  helps when                                                               
things need to be cut.  He expressed support for SJR 38.                                                                        
Number 0753                                                                                                                     
REPRESENTATIVE JAMES  commented that there  are pros and  cons to                                                               
this.   She reiterated comments  from the last meeting  about how                                                               
she thought  her business experience  could make a  difference in                                                               
the  budget process.   She  said there  is some  argument that  a                                                               
priority  budget  would  be  a  good idea  and  agreed  that  the                                                               
administration should do a priority budget.                                                                                     
Number 1186                                                                                                                     
REPRESENTATIVE  HAYES  made  a  motion  to  adopt  the  following                                                               
conceptual amendment:                                                                                                           
         Page 1, line 6, following "a", add "biennial";                                                                         
     following "for the", delete "next fiscal year" and add                                                                     
     "two fiscal years"                                                                                                         
     Page 1, line 14, following "a", add "biennial"                                                                             
REPRESENTATIVE JAMES  objected.   She said  she thinks  the state                                                               
needs to  work in this  direction, but  she isn't willing  to put                                                               
that on the  ballot and then be  stuck with it next  year.  There                                                               
are year-to-year changes in Alaska,  and she is not convinced the                                                               
state is ready  to go to a  biennial budget.  She  noted that she                                                               
is not ready to mandate it.                                                                                                     
Number 1390                                                                                                                     
REPRESENTATIVE  FATE commented  that this  amendment will  change                                                               
the title.                                                                                                                      
CHAIR COGHILL noted that Representative  Hayes did say conceptual                                                               
amendment, so that could include the title amendment.                                                                           
Number 1459                                                                                                                     
REPRESENTATIVE WILSON  acknowledged that  a biennial budget  is a                                                               
good way to  go.  However, she  indicated that it would  not be a                                                               
wise  decision for  Alaska at  this time,  because there  isn't a                                                               
steady flow of revenue to base it on.                                                                                           
CHAIR  COGHILL  agreed  with   Representative  Wilson  and  spoke                                                               
against the amendment.                                                                                                          
Number 1601                                                                                                                     
REPRESENTATIVE CRAWFORD expressed support for a biennial budget.                                                                
REPRESENTATIVE JAMES cautioned the  committee because this change                                                               
might constitute  a revision and might  not be proper.   She said                                                               
that  a biennial  budget could  be done  as an  amendment in  the                                                               
future but  not as  part of  this process.   She  said she  is in                                                               
favor of a  biennial budget if all the  necessary ingredients are                                                               
in place.                                                                                                                       
REPRESENTATIVE  HAYES   concluded  with   his  reasons   for  the                                                               
amendment, which ultimately would save  the state money.  He said                                                               
that  a biennial  prioritized budget  would reduce  costs to  the                                                               
state because  the legislature  wouldn't have  to meet  as often.                                                               
There would be more accountability  and credibility in a biennial                                                               
budget  set forth  for each  department.   The incoming  governor                                                               
would be  able to see what  the two-year vision in  the budget is                                                               
for the state.   Right now the legislature is  just budgeting one                                                               
year at  a time and hasn't  any vision where the  state is going.                                                               
He also  commented that it isn't  really known if this  bill is a                                                               
revision issue or not.                                                                                                          
Number 1900                                                                                                                     
A roll  call vote  was taken.   Representatives  Crawford, Hayes,                                                               
and Stevens voted for Amendment  1.  Representatives Fate, James,                                                               
Wilson, and  Coghill voted  against it.   Therefore,  Amendment 1                                                               
failed by a vote of 3-4.                                                                                                        
Number 1935                                                                                                                     
REPRESENTATIVE  JAMES moved  to report  SJR 38  out of  committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
REPRESENTATIVE  HAYES objected  to  reiterate his  concerns.   He                                                               
then removed his objection.                                                                                                     
Number 2020                                                                                                                     
CHAIR  COGHILL asked  if there  were further  objections.   There                                                               
being none,  SJR 38 moved  from the House State  Affairs Standing                                                               
The committee took an at-ease from 8:33 a.m. to 8:34 a.m.                                                                       
HB 517 - SURPLUS/OBSOLETE STATE PROPERTY                                                                                      
Number 2043                                                                                                                     
CHAIR COGHILL announced that the  next order of business would be                                                               
HOUSE  BILL NO.  517,  "An  Act relating  to  the disposition  of                                                               
surplus  and obsolete  state property."   [He  actually announced                                                               
HB 493 but took up HB 517].]                                                                                                    
Number 2060                                                                                                                     
BILL LAWRENCE, Staff to Representative  Carl Morgan, Alaska State                                                               
Legislature, presented HB 517 on  behalf of the House Community &                                                               
Regional Affairs Committee,  sponsor, which Representative Morgan                                                               
co-chairs.   He  explained that  HB 517  fixes a  problem dealing                                                               
with surplus property.   Specifically, it was  written to address                                                               
surplus fax  machines.   Recently a  situation occurred  when the                                                               
House Community  and Regional Affairs Standing  Committee and the                                                               
House  Resources  Standing  Committee   received  faxes  from  an                                                               
advocacy   group   on  a   bill   before   them  at   the   time.                                                               
Unfortunately, the faxes  were identified as coming  from a state                                                               
MR. LAWRENCE indicated  that this caused quite a stir  and a fair                                                               
amount of  investigative work  on the part  of the  state agency.                                                               
It was finally  determined that neither the state  agency nor any                                                               
state employee was  involved in this.  The state  agency had sent                                                               
the machine to state surplus  sometime before, but the electronic                                                               
signature on top of the fax copies had not been removed.                                                                        
MR.  LAWRENCE informed  the committee  that  committee staff  had                                                               
discussions  with  staff  from  Legislative  Legal  and  Research                                                               
Services and determined it was in  the best interest of the state                                                               
to ensure  these fax headers  were removed before they  were sent                                                               
to surplus.   He had checked  with between 15 and  20 procurement                                                               
officers in state agencies and found  out that none of them had a                                                               
policy  to  remove   the  fax  header  before   the  machine  was                                                               
"surplused."  They all agreed it was a good idea.                                                                               
MR.  LAWRENCE  noted three  good  reasons  for removing  the  fax                                                               
headers.     The  first  reason   protects  the  state.     State                                                               
departments and/or employees  will not get blamed  for faxes they                                                               
didn't send.   The second reason helps prevent fraud.   It should                                                               
prevent a party from intentionally  faxing material identified as                                                               
being from the State of Alaska.                                                                                                 
Number 2211                                                                                                                     
MR.  LAWRENCE pointed  out that  the  Federal Telephone  Consumer                                                               
Protection Act specifically requires:                                                                                           
     It shall be  unlawful for any person  within the United                                                                    
     States to use a computer  or other electronic device to                                                                    
     send  any message  via  a  telephone facsimile  machine                                                                    
     unless such  message clearly contains,  in a  margin at                                                                    
     the top  or bottom of  each transmitted page or  on the                                                                    
     first page of the transmission,  the date and time it's                                                                    
     sent and  an identification  of the business,  or other                                                                    
       entity, or individual sending the message and the                                                                        
       telephone number of the sending machine or of such                                                                       
     business, other entity, or individual.                                                                                     
MR. LAWRENCE said the third  reason protects the buyer of surplus                                                               
property.   It prevents  a buyer  from inadvertently  violating a                                                               
federal law - at least from  the aspect of the state identifier's                                                               
removal.   Somebody could go back  in and put a  false identifier                                                               
on it, but that is a federal  violation.  He noted that when most                                                               
equipment is surplused,  the manuals are not included,  so it may                                                               
be difficult for  a private individual or  organization to remove                                                               
the fax header.                                                                                                                 
Number 2320                                                                                                                     
REPRESENTATIVE  JAMES said  that she  thought there  should be  a                                                               
requirement  for  the  manuals  to  be  included  with  surplused                                                               
MR. LAWRENCE agreed that that was reasonable.                                                                                   
REPRESENTATIVE  JAMES asked  what the  penalty would  be if  this                                                               
wasn't done.                                                                                                                    
MR. LAWRENCE answered that wasn't addressed.                                                                                    
Number 2493                                                                                                                     
CHRISTINE   PARCE,  Director,   Division  of   General  Services,                                                               
Department of Administration, came  forward to testify and answer                                                               
questions.    She expressed  support  for  taking the  electronic                                                               
documents  out before  the property  is surplused.   There  is an                                                               
administrative procedure for doing  that, but she acknowledged it                                                               
sometimes  gets missed.   Because  of the  recent incident,  that                                                               
process is being reemphasized to the departments.                                                                               
MS. PARCE told the members  that all the documentation is removed                                                               
from the C [hard] drive of some  equipment.  The tags are kept on                                                               
the  pieces of  equipment, so  surplus  can identify  them.   She                                                               
explained that the  tag tracks from when the  equipment was first                                                               
purchased to its disposal.  When  a citizen buys the property and                                                               
someone reports  to the  department that someone  has a  piece of                                                               
equipment  at home,  the department  can track  that sticker  and                                                               
know that  the person bought  it at surplus.   She said  that the                                                               
department  would not  support removing  the sticker  tag in  the                                                               
department before the piece of equipment gets sent to surplus.                                                                  
Number 2630                                                                                                                     
REPRESENTATIVE FATE asked about the manuals with the equipment.                                                                 
MS. PARCE  said the  trouble with manuals  for computers  and fax                                                               
machines is the equipment may come  with a manual, but the manual                                                               
is  rarely used.   Most  departments have  information technology                                                               
[IT]  groups that  manage the  computers, servers,  and networks;                                                               
there  aren't stand-alone  computers as  such.   The applications                                                               
are installed  on the servers  and accessed  that way.   It's not                                                               
like at home  where someone would have the manual  right there to                                                               
figure out  how to use  the system.   She explained that  some of                                                               
the  manuals cost  about $65  each, so  manuals aren't  purchased                                                               
with  everything.   There  is a  server manual  and  then the  IT                                                               
people are trained.   The manuals don't stay  with the equipment,                                                               
and she doesn't know how they  would be gathered together to send                                                               
out.   The  people  buying the  used equipment  need  to buy  the                                                               
manual to learn how to use it, she commented.                                                                                   
Number 2730                                                                                                                     
REPRESENTATIVE STEVENS  asked for clarification on  the permanent                                                               
and temporary identifying marks referred to on the fiscal note.                                                                 
MS. PARCE  replied that it  would be  expensive for the  state to                                                               
remove  those tags.    If  they were  removed  at a  department's                                                               
property  office  before  it  comes  to  surplus,  some  kind  of                                                               
temporary tag  would have  to be  put on it  for surplus  to know                                                               
where it  came from for the  control records.  The  permanent tag                                                               
would have to  be removed and recorded, and then  a temporary tag                                                               
would be affixed  and recorded, so when surplus got  it, it would                                                               
know what it  was and where it  came from.  If  the Department of                                                               
Administration had  to remove the permanent  stickers and replace                                                               
them  with  temporary  stickers,  it would  have  to  hire  staff                                                               
because there is  barely enough staff now to do  what needs to be                                                               
REPRESENTATIVE  JAMES asked  Ms. Parce  about a  solution to  the                                                               
manual issue.                                                                                                                   
Number 2910                                                                                                                     
MS. PARCE commented  that for the department to  provide a manual                                                               
would be labor-intensive.                                                                                                       
TAPE 02-44, SIDE B                                                                                                              
Number 2960                                                                                                                     
MS. PARCE noted  that most people who buy the  equipment know how                                                               
to use it.                                                                                                                      
REPRESENTATIVE JAMES asked if legislation  was needed to make the                                                               
department remove the state identifying information.                                                                            
MS. PARCE  answered no.   There are administrative  procedures in                                                               
place for  property control.   Those procedures  are disseminated                                                               
from  the Division  of General  Services  through the  department                                                               
property  officers,  and it  is  their  responsibility to  remove                                                               
every internal document or identifier  that says it's coming from                                                               
the state.   This incident that occurred  recently suggested that                                                               
there was  a failure in that  procedure.  She has  instructed her                                                               
property  manager in  Anchorage  to remind  property officers  of                                                               
their responsibility  to do this.   That notice will be  sent out                                                               
about every 30 days.                                                                                                            
Number 2835                                                                                                                     
MR.  LAWRENCE  reiterated  that  he  called  between  15  and  20                                                               
property officers and  was told that the state did  not have, and                                                               
never had, a written policy on the removal of the fax header.                                                                   
MR. LAWRENCE pointed out that  AS 39.25.150 speaks to the penalty                                                               
under:   "(15) the establishment of  disciplinary measures, which                                                               
may include disciplinary suspension without pay".                                                                               
CHAIR  COGHILL   made  a  motion   to  adopt  the   following  as                                                               
Amendment 1:                                                                                                                    
     Page 1, lines 9-10, delete all material.                                                                                   
There being no objection, Amendment 1 was adopted.                                                                              
Number 2665                                                                                                                     
NANCY  SLAGLE,  Director,  Division of  Administrative  Services,                                                               
Department of  Transportation &  Public Facilities,  came forward                                                               
to testify.   She  referred to Amendment  1 and  recommended that                                                               
the  Department of  Transportation &  Public Facilities  be taken                                                               
out  of the  first paragraph  of the  bill because  the remaining                                                               
part doesn't relate to the state equipment fleet.                                                                               
Number 2613                                                                                                                     
REPRESENTATIVE  JAMES made  a motion  to adopt  the following  as                                                               
Amendment 2:                                                                                                                    
     Page 1, line 6,  following "section", delete "or before                                                                    
     the Department of  Transportation and Public Facilities                                                                    
     disposes of  equipment from  the state  equipment fleet                                                                    
     under  AS   36.30.005(b),  the  state  agency   or  the                                                                    
     Department of Transportation and Public Facilities".                                                                       
There being no objection, Amendment 2 was adopted.                                                                              
Number 2544                                                                                                                     
REPRESENTATIVE JAMES moved  to report HB 517, as  amended, out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
zero fiscal notes.   There being no objection,  CSHB 517(STA) was                                                               
reported out of the House State Affairs Standing Committee.                                                                     
HB 493 - O.K. TO ASSIGN PFD TO NONPROFIT CORP                                                                                 
Number 2494                                                                                                                     
CHAIR COGHILL announced that the  next order of business would be                                                               
HOUSE BILL NO. 493, "An  Act relating to assignments of permanent                                                               
fund dividends; and providing for an effective date."                                                                           
Number 2480                                                                                                                     
ROBIN PHILLIPS,  Staff to  Representative Lisa  Murkowski, Alaska                                                               
State Legislature,  presented HB 493 on  behalf of Representative                                                               
Murkowski, sponsor.   She told the committee that  at the request                                                               
of  a  former  constituent, Representative  Murkowski  introduced                                                               
HB 493, the Good Neighbor Act,  which allows for a permanent fund                                                               
dividend (PFD) to  be assigned to an  organization that qualifies                                                               
for  nonprofit  status,  or  is  exempt  from  federal  taxation.                                                               
Currently,  permanent  fund  dividends   may  be  assigned  to  a                                                               
federal, state,  or municipal government  agency, or to  a court.                                                               
These grassroots  constituents have been updating  the members of                                                               
both  bodies regularly  requesting support  and cosponsorship  of                                                               
HB 493.  House Bill 493  promotes the spirit of charitable giving                                                               
by Alaskans, and she urged the committee's support.                                                                             
Number 2435                                                                                                                     
REPRESENTATIVE JAMES  noted that people  can and do  donate their                                                               
entire  permanent  fund dividends  to  charities,  but this  bill                                                               
would  require the  Permanent Fund  Dividend  Division to  handle                                                               
that.   She  said she  didn't know  if paying  $18.5 million  the                                                               
first  year, and  $37  million  every year  after  that, for  the                                                               
division to handle that was a  good idea.  She commented that she                                                               
didn't  know  if the  state  needs  to  get  in the  business  of                                                               
handling  people's  charities for  them.    She said  she  didn't                                                               
really support this bill.                                                                                                       
Number 2209                                                                                                                     
REPRESENTATIVE CRAWFORD asked, if the  PFD was assigned before it                                                               
was received, whether it would be  a true tax donation.  It would                                                               
seem  that there  would be  a financial  incentive to  assign the                                                               
dividend before it was received.  He asked for clarification.                                                                   
MS.  PHILLIPS replied  that she  believes that  the person  would                                                               
still be responsible for taxes.                                                                                                 
REPRESENTATIVE JAMES explained that the  PFD is income, and taxes                                                               
would  have to  be paid.   It  wouldn't matter  what someone  did                                                               
after that.                                                                                                                     
Number 2131                                                                                                                     
REPRESENTATIVE CRAWFORD  asked if  there is a  way to  assign the                                                               
PFD before it is received as income.                                                                                            
REPRESENTATIVE JAMES answered that there  isn't unless a piece of                                                               
legislation is passed.                                                                                                          
Number 2088                                                                                                                     
NANCI   JONES,  Director,   Permanent  Fund   Dividend  Division,                                                               
Department of Revenue, came forward  to testify.  She referred to                                                               
the fiscal note  and added that the path of  least resistance for                                                               
the division would be if  the donation was an assignment, meaning                                                               
that  the donor  would have  the responsibility  to fill  out the                                                               
form.   Presently, the assignment form  is used by people  to pay                                                               
debts  voluntarily,  which  is  different  from  the  garnishment                                                               
system.  She went over the numbers  on the fiscal note.  She also                                                               
noted that the  effective date would be pushed back  from 2003 to                                                               
Number 1979                                                                                                                     
REPRESENTATIVE FATE asked  what the motive was  behind this piece                                                               
of legislation.                                                                                                                 
MS.  PHILLIPS  answered  that   constituents  Ted  and  Francoise                                                               
Gianoutsos had wanted to assign  their PFDs to the Seward SeaLife                                                               
Center and were unable to give  the check directly to the center;                                                               
they had to give it to the City  of Seward to be passed on to the                                                               
center.   They asked for  this legislation and requested  that it                                                               
be  similar to  the college  savings plan  whereby someone  could                                                               
"check off"  the PFD  check to a  registered 26  U.S.C. 501(c)(3)                                                               
[Internal Revenue Code] charity.                                                                                                
Number 1890                                                                                                                     
TED GIANOUTSOS  testified via teleconference.   He explained that                                                               
his and his wife's motivation  was initially to assign their PFDs                                                               
to the  Alaska SeaLife Center  in Seward.   When they  found that                                                               
they could not do that directly,  some of the board of the Alaska                                                               
SeaLife  Center recommended  that they  give  it to  the City  of                                                               
Seward.   Once  they  realized they  could be  a  benefit to  the                                                               
state, they asked their  representatives to introduce legislation                                                               
that  would allow  Alaskans to  assign  their PFD  rights to  any                                                               
Alaskan nonprofit for  the common good.  They  feel strongly that                                                               
it  is in  the interest  of  Alaska to  encourage and  facilitate                                                               
gift-assignment philanthropy to any Alaskan 501(c)(3) charity.                                                                  
MR. GIANOUTSOS noted that they had  been aware of the cost to the                                                               
state of  this legislation.  He  said they suggested a  fee, such                                                               
as the $2 assignment fee, so there  is no cost to the state.  The                                                               
cost of the administration is borne by the donor.                                                                               
Number 1600                                                                                                                     
REPRESENTATIVE JAMES commented that  Mr. Gianoutsos could achieve                                                               
the same thing  by just writing a check without  asking the state                                                               
and the City of Seward to implement the donation.                                                                               
MR.  GIANOUTSOS answered  that there  isn't  any facilitating  or                                                               
encouraging  of permanent  fund gift  philanthropy for  others in                                                               
the state  if they don't know  about it.  On  the PFD application                                                               
there are  four pages encouraging  people to give to  the College                                                               
Savings Plan,  and he  wondered why  there couldn't  be something                                                               
there  to facilitate  and encourage  gift-assignment philanthropy                                                               
and deduct the cost of the program from the donor.                                                                              
CHAIR COGHILL  noted that this  bill includes any  nonprofit, not                                                               
just those in Alaska, and that is an issue for him.                                                                             
Number 1483                                                                                                                     
REPRESENTATIVE WILSON  commented that this might  have some merit                                                               
somewhere along the  line, but right now when  there isn't enough                                                               
money in  the budget to  pay for the  services of the  state, she                                                               
said  she wouldn't  like to  see some  of the  money spent  to do                                                               
this, when a person could just write a check.                                                                                   
CHAIR COGHILL announced that HB 493  would be held over, and that                                                               
he would ask the sponsor some more questions.                                                                                   
HB 371 - ALASKA VETERANS' MEM.ENDOWMENT FUND                                                                                  
CHAIR COGHILL  announced that the  final order of  business would                                                               
be HOUSE BILL NO. 371,  "An Act establishing the Alaska veterans'                                                               
memorial  endowment  fund  and   providing  for  credits  against                                                               
certain taxes for  contributions to that fund;  relating to other                                                               
tax  credits  for certain  contributions;  and  providing for  an                                                               
effective date."                                                                                                                
Number 1355                                                                                                                     
CAROL CARROLL, Director,  Central Office, Administrative Services                                                               
Division,  Department  of  Military   &  Veterans  Affairs,  came                                                               
forward to  present HB 371.   She  explained that HB  371 creates                                                               
the Veterans' Memorial Endowment Fund  by setting up a tax credit                                                               
similar to tax  credits already in statute.  A  taxpayer may take                                                               
advantage  of  donating  to  an   endowment  fund  for  veterans'                                                               
memorials up to $150,000 the first  year.  The fund would be used                                                               
to maintain  existing veterans' memorials or  construct new ones.                                                               
The  Department of  Revenue would  determine how  much money  was                                                               
available for appropriation  by the legislature each  year.  That                                                               
money  would  come  to  the Department  of  Military  &  Veterans                                                               
Affairs,   which  in   turn  would   grant   it  to   appropriate                                                               
organizations to maintain the monuments around the state.                                                                       
REPRESENTATIVE  JAMES  wanted to  know  who  is getting  the  tax                                                               
MS. CARROLL  answered that it's  for corporate taxpayers.   There                                                               
are  several  taxes  that  would be  available  for  the  credit:                                                               
insurance premium  tax, title insurance  premium tax,  Alaska net                                                               
income tax, oil  and gas production tax, oil  and gas exploration                                                               
tax, fisheries business tax, or mining license.                                                                                 
REPRESENTATIVE  JAMES commented  that  she liked  the  idea of  a                                                               
veterans' memorial but  said she hoped the money  could come from                                                               
other  sources, perhaps  through private  donations, rather  than                                                               
through tax credits.                                                                                                            
Number 1109                                                                                                                     
MS. CARROLL  pointed out that  individuals could donate  to this,                                                               
but there wouldn't  be a tax credit.  She  said with the addition                                                               
of this tax  credit, the limitations that are set  in statute for                                                               
those  other tax  credits are  aggregated and  the tax  credit in                                                               
those is limited to a certain amount.                                                                                           
Number 0969                                                                                                                     
REPRESENTATIVE STEVENS  commented that  it is a  great idea.   He                                                               
asked  Ms.  Carroll  if  people  could  donate  to  a  particular                                                               
community or specific site.                                                                                                     
MS. CARROLL answered that she didn't  know.  She said she thought                                                               
that if money was stipulated,  the granting process would attempt                                                               
to honor  those requests.   However, there is nothing  in statute                                                               
to bind that.                                                                                                                   
Number 0827                                                                                                                     
REPRESENTATIVE  FATE  expressed concern  about  the  cost to  the                                                               
MS. CARROLL said  she believes that the  education foundation tax                                                               
credit is built  in the same manner as this,  but she deferred to                                                               
the Department of Revenue.                                                                                                      
Number 0732                                                                                                                     
BRETT  FRIED, Economist,  Tax  Division,  Department of  Revenue,                                                               
explained  that   this  credit  mirrors  the   structure  of  the                                                               
education credit exactly.                                                                                                       
REPRESENTATIVE JAMES asked how much  the education endowment fund                                                               
gets every year and if it is  spent as part of the budget process                                                               
or is not touchable because it's an endowment.                                                                                  
MR. FRIED answered that the education  credit is not set up as an                                                               
endowment.     He  explained  that  if   corporations  contribute                                                               
$200,000,  they would  get $150,000  credit  off their  corporate                                                               
income   tax.     The  corporation   specifies  what   accredited                                                               
institution receives the credit.                                                                                                
REPRESENTATIVE  JAMES said  she was  conflicted about  giving the                                                               
Department of  Revenue an accounting  function for  these various                                                               
charities and special  interests.  There is a cost  to that.  She                                                               
asked  Mr. Fried  if  he thought  this was  the  function of  the                                                               
Department of  Revenue and  if it was  a basic  responsibility of                                                               
the department to handle these kinds of things.                                                                                 
MR. FRIED  replied that the  Department of Revenue does  manage a                                                               
lot of  different funds.   He doesn't work  on that; he's  in the                                                               
tax division.                                                                                                                   
Number 0445                                                                                                                     
JOHN   JENKS,  Chief   Investment  Officer,   Treasury  Division,                                                               
Department  of   Revenue,  explained  that  the   department  has                                                               
organized  itself so  it  can manage  these  types of  endowments                                                               
fairly   efficiently  through   the  investment   and  accounting                                                               
process.  It would be more  difficult if the funds were dedicated                                                               
to specific places.                                                                                                             
REPRESENTATIVE  JAMES asked  if Mr.  Jenks thought  that was  the                                                               
government's responsibility.                                                                                                    
MR.  JENKS  said  that  when   the  department  can  help  people                                                               
accomplish  laudable goals  efficiently  -  and this  legislation                                                               
does  have that  -  it makes  a  lot of  sense.   The  department                                                               
wouldn't support something if it couldn't do it efficiently.                                                                    
REPRESENTATIVE JAMES said  that Alaska is in a  position now such                                                               
that there  aren't enough  taxes to  cover the  basic government,                                                               
and she wondered why some of  those taxes should be given away so                                                               
that more people pay.                                                                                                           
MR. JENKS said  he had misunderstood her question  before, but he                                                               
is not  in a position  to make  the value judgment  about whether                                                               
the tax  credit is  a good  idea or not.   He  spoke only  to the                                                               
efficiency of the program.                                                                                                      
Number 0140                                                                                                                     
REPRESENTATIVE STEVENS  asked why  there isn't a  dedicated fund.                                                               
It seems like a good idea for this.   He asked Mr. Jenks what the                                                               
problems would be of a dedicated fund for the department.                                                                       
MR.  JENKS  said that  the  dedicated  fund is  a  constitutional                                                               
issue.  There  could be a problem for the  department in managing                                                               
the  records if  funds were  specified for  certain monuments  or                                                               
TAPE 02-45, SIDE A                                                                                                              
Number 0015                                                                                                                     
REPRESENTATIVE STEVENS  commented that he understood  the problem                                                               
for the  department but thought  there would be  some substantial                                                               
donations given if people knew it  would be going to a particular                                                               
MS. CARROLL  told Representative  Stevens that she  believes that                                                               
could  be  done   through  the  grant  process.     If  a  letter                                                               
accompanied  a specific  request, the  letter could  certainly be                                                               
forwarded to  the department, and  it would be  considered during                                                               
the granting process.                                                                                                           
REPRESENTATIVE  JAMES   said  she  is  excited   about  having  a                                                               
veterans'  memorial endowment  fund in  the state,  but she  just                                                               
isn't convinced that this is the way she'd like to do it.                                                                       
Number 0369                                                                                                                     
CHAIR COGHILL  agreed with  Representative James.   He  asked Ms.                                                               
Carroll how  many memorial sites  are in  the state now,  and how                                                               
they are funded.                                                                                                                
MS. CARROLL  answered that there  are 78  across the state.   She                                                               
said some  of the  projects are  funded by  state appropriations.                                                               
The upkeep  now is from  donations, which haven't been  very much                                                               
money in  the past.   She  estimated that  about $250,000  in the                                                               
fund would  result in  about $12,000  a year,  and that  would be                                                               
enough to  maintain the monuments  and maybe have some  left over                                                               
to go toward a new memorial.                                                                                                    
CHAIR  COGHILL  asked  about  the  involvement  of  some  of  the                                                               
veterans' groups.                                                                                                               
MS. CARROLL  explained that they  would be  part of the  group to                                                               
help determine where the money would be granted.                                                                                
REPRESENTATIVE  JAMES  said she  could  support  it if  just  the                                                               
endowment were created without the tax money going in it.                                                                       
Number 0600                                                                                                                     
CHAIR COGHILL wondered  if there was a way  to facilitate through                                                               
the service  organizations rather  than to create  something that                                                               
would draw away from the service organization.                                                                                  
MS.  CARROLL  indicated  that  that  has not  been  part  of  the                                                               
conversations on  this bill.   She commented that  the Department                                                               
of Revenue  has the  ability to  invest in  a much  larger amount                                                               
than  a small  service organization,  and  it has  the staff  and                                                               
professionalism to do that.  She  said as long as it doesn't cost                                                               
the department in lost efficiency, then  that is the best bet for                                                               
getting the  most earnings out of  whatever it gets.   She hasn't                                                               
talked with the service organizations.   She doesn't know if they                                                               
have an investments person.                                                                                                     
MS.  CARROLL told  the  committee that  there  already have  been                                                               
donations  of  $125,000  from private  individuals  toward  this.                                                               
That money is  being held.  She mentioned that  this idea of this                                                               
bill came forward from some veterans' groups.                                                                                   
Number 0952                                                                                                                     
REPRESENTATIVE  JAMES   commented  that  government   is  growing                                                               
because the  people are  asking it  to.  She  is here  to protect                                                               
those  who don't  want  the government  to be  so  big.   Whether                                                               
something is government's responsibility  is something that needs                                                               
to be looked at carefully.                                                                                                      
CHAIR COGHILL expressed concern about  the plethora of funds with                                                               
dedicated titles  and reiterated  his concern  to make  sure that                                                               
the service organizations are not diminished.                                                                                   
Number 1161                                                                                                                     
CHAIR COGHILL announced that HB 371 would be held over.                                                                         
There being no  further business before the  committee, the House                                                               
State  Affairs  Standing  Committee   meeting  was  adjourned  at                                                               
9:55 a.m.                                                                                                                       

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