Legislature(2003 - 2004)

04/03/2003 08:03 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 3, 2003                                                                                          
                           8:03 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bruce Weyhrauch, Chair                                                                                           
Representative Jim Holm, Vice Chair                                                                                             
Representative Nancy Dahlstrom                                                                                                  
Representative Bob Lynn                                                                                                         
Representative Paul Seaton                                                                                                      
Representative Ethan Berkowitz                                                                                                  
Representative Max Gruenberg                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
HOUSE BILL NO. 205                                                                                                              
"An Act  relating to service in  the peace corps as  an allowable                                                               
absence from the state for  purposes of eligibility for permanent                                                               
fund dividends and to the period  for filing an application for a                                                               
permanent fund  dividend; authorizing  the Department  of Revenue                                                               
to  issue administrative  orders imposing  sanctions for  certain                                                               
misrepresentations or other actions  concerning eligibility for a                                                               
permanent fund  dividend and providing for  administrative appeal                                                               
of those orders; and providing for an effective date."                                                                          
                                                                                                                                
     - MOVED HB 205 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 161                                                                                                              
"An Act allowing expenses of  the correctional industries program                                                               
that may  be financed  from the  correctional industries  fund to                                                               
include the salaries and benefits of state employees."                                                                          
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 183                                                                                                              
"An Act  relating to retirement contributions  and benefits under                                                               
the  public  employees'  retirement system  of  certain  juvenile                                                               
detention   employees  and   juvenile  correctional   institution                                                               
employees."                                                                                                                     
                                                                                                                                
     - MOVED HB 183 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 93                                                                                                               
"An Act relating to boating safety; repealing secs. 3, 5, 7, 9,                                                                 
11, 14, 16, 18, 20, 23, 26, 27, and 30, ch. 28, SLA 2000; and                                                                   
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 215                                                                                                              
"An Act repealing statutes that relate to art works in public                                                                   
buildings and facilities and that require a set percentage of                                                                   
construction costs to be spent on art."                                                                                         
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 202                                                                                                              
"An Act relating to false information or report."                                                                               
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
HOUSE BILL NO. 50                                                                                                               
"An Act relating to the size of national flag to be displayed at                                                                
polling places."                                                                                                                
                                                                                                                                
     - BILL HEARING POSTPONED                                                                                                   
                                                                                                                                
HOUSE BILL NO. 60                                                                                                               
"An Act relating to construction of a legislative hall."                                                                        
                                                                                                                                
     - BILL HEARING POSTPONED                                                                                                   
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                              
BILL: HB 205                                                                                                                  
SHORT TITLE:PFD: PEACE CORPS VOLUNTEERS & MISC                                                                                  
SPONSOR(S): REPRESENTATIVE(S)MCGUIRE                                                                                            
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/19/03     0586       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/19/03     0586       (H)        STA                                                                                          
04/03/03                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
                                                                                                                                
BILL: HB 161                                                                                                                  
SHORT TITLE:CORRECTIONAL INDUSTRIES PROGRAM EXPENSES                                                                            
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR                                                                                      
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/05/03     0431       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/05/03     0431       (H)        STA, FIN                                                                                     
03/05/03     0432       (H)        FN1: (COR)                                                                                   
03/05/03     0432       (H)        GOVERNOR'S TRANSMITTAL LETTER                                                                
03/05/03     0432       (H)        REFERRED TO STATE AFFAIRS                                                                    
03/11/03                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
03/11/03                (H)        Scheduled But Not Heard                                                                      
04/01/03                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
04/01/03                (H)        Heard & Held                                                                                 
                                   MINUTE(STA)                                                                                  
04/03/03                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
                                                                                                                                
BILL: HB 183                                                                                                                  
SHORT TITLE:PERS BENEFITS FOR JUV INSTIT EMPLOYEES                                                                              
SPONSOR(S): REPRESENTATIVE(S)WEYHRAUCH                                                                                          
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/10/03     0491       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/10/03     0491       (H)        STA, FIN                                                                                     
04/01/03                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
04/01/03                (H)        Heard & Held                                                                                 
                                   MINUTE(STA)                                                                                  
04/03/03                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
                                                                                                                                
BILL: HB 93                                                                                                                   
SHORT TITLE:REPEAL BOATING SAFETY SUNSET                                                                                        
SPONSOR(S): REPRESENTATIVE(S)WEYHRAUCH                                                                                          
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
02/12/03     0186       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
02/12/03     0186       (H)        TRA, STA                                                                                     
02/18/03                (H)        TRA AT 1:30 PM CAPITOL 17                                                                    
02/18/03                (H)        <Bill Hearing Postponed to                                                                   
                                   2/25/03> -- Meeting Canceled                                                                 
02/25/03                (H)        TRA AT 1:30 PM CAPITOL 17                                                                    
02/25/03                (H)        Heard & Held                                                                                 
                                   MINUTE(TRA)                                                                                  
03/27/03                (H)        TRA AT 1:30 PM CAPITOL 17                                                                    
03/27/03                (H)        Scheduled But Not Heard                                                                      
04/01/03                (H)        TRA AT 1:30 PM CAPITOL 17                                                                    
04/01/03                (H)        Moved CSHB 93(TRA) Out of                                                                    
                                   Committee                                                                                    
                                   MINUTE(TRA)                                                                                  
04/02/03     0730       (H)        TRA RPT CS(TRA) NT 1DP 2DNP                                                                  
                                   2NR                                                                                          
04/02/03     0730       (H)        DP: HOLM; DNP: KOHRING,                                                                      
                                   MASEK;                                                                                       
04/02/03     0730       (H)        NR: OGG, FATE                                                                                
04/02/03     0730       (H)        FN1: ZERO(DNR)                                                                               
04/02/03     0730       (H)        REFERRED TO STATE AFFAIRS                                                                    
04/02/03     0750       (H)        COSPONSOR(S): OGG                                                                            
04/03/03                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
                                                                                                                                
BILL: HB 215                                                                                                                  
SHORT TITLE:REPEAL ONE PERCENT FOR ART                                                                                          
SPONSOR(S): REPRESENTATIVE(S)STOLTZE                                                                                            
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
03/26/03     0640       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
03/26/03     0640       (H)        STA, FIN                                                                                     
03/26/03     0640       (H)        REFERRED TO STATE AFFAIRS                                                                    
04/03/03                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE LESIL McGUIRE                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as sponsor of HB 205.                                                                            
                                                                                                                                
LARRY PERSILY, Deputy Commissioner                                                                                              
Office of the Commissioner                                                                                                      
Department of Revenue                                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions from the committee                                                                      
during the hearing on HB 205.                                                                                                   
                                                                                                                                
JERRY BURNETT, Director                                                                                                         
Administrative Services                                                                                                         
Department of Corrections (DOC)                                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Commented on the proposed committee                                                                        
substitute, Version D, during the hearing on HB 161.                                                                            
                                                                                                                                
LINDA SYLVESTER, Staff                                                                                                          
to Representative Bruce Weyhrauch                                                                                               
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 93 on behalf of Representative                                                                
Weyhrauch, sponsor.                                                                                                             
                                                                                                                                
MIKE FOLKERTS, Recreational Boating Safety Specialist                                                                           
District 17                                                                                                                     
United States Coast Guard                                                                                                       
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 93.                                                                             
                                                                                                                                
CAPTAIN JOHN SCHOTT, Chief of Operations                                                                                        
District 17                                                                                                                     
United States Coast Guard                                                                                                       
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on behalf of the United States                                                                   
Coast Guard in support of the State of Alaska's Safe Boating                                                                    
program, during the hearing on HB 93.                                                                                           
                                                                                                                                
MARTHA MOORE, Injury Surveillance and Prevention Program Manager                                                                
Community Health & Emergency Medical Services                                                                                   
Division of Public Health                                                                                                       
Department of Health & Social Services (DHSS)                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on behalf of DHSS in support of                                                                  
HB 93.                                                                                                                          
                                                                                                                                
CHARLES R. HOSACK, Deputy Director                                                                                              
Director's Office                                                                                                               
Division of Motor Vehicles                                                                                                      
Department of Administration (DOA)                                                                                              
POSITION STATEMENT:  Testified on behalf of DOA in support of                                                                   
continuing the boating registration program, during the hearing                                                                 
on HB 93.                                                                                                                       
                                                                                                                                
REPRESENTATIVE BILL STOLTZE                                                                                                     
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as sponsor of HB 215.                                                                            
                                                                                                                                
BARBARA BITNEY, Staff                                                                                                           
to Representative Bill Stoltze                                                                                                  
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions regarding HB 215.                                                                       
                                                                                                                                
CHARLOTTE FOX, Executive Director                                                                                               
Alaska State Council on the Arts (ASCA)                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Testified regarding  1 percent for  art and                                                               
art in public places programs during the hearing on HB 215.                                                                     
                                                                                                                                
SYBIL DAVIS, Executive Director                                                                                                 
Juneau Arts & Humanities Council (JAHC)                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified regarding  the effects that HB 215                                                               
would  have  on  an  [art-related]  program  in  schools  and  to                                                               
emphasize the importance of an esthetic environment.                                                                            
                                                                                                                                
JUNE ROGERS, Director                                                                                                           
Fairbanks Art Association (FAA)                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified regarding  the importance of [art-                                                               
related]  programs   that  address   youth  and  the   health  of                                                               
communities, during the hearing on HB 215.                                                                                      
                                                                                                                                
KENNETH DeROUX                                                                                                                  
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Testified  on behalf of  himself, regarding                                                               
the issues of the cost of 1  percent for art and quality of life,                                                               
during the hearing on HB 215.                                                                                                   
                                                                                                                                
JOCELYN YOUNG, Curator                                                                                                          
1 percent for art program                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Testified  on behalf of  herself, regarding                                                               
some  of the  history of  1 percent  for art  and its  benefit to                                                               
artists,   and  explaining   "1   percent"  as   it  relates   to                                                               
construction costs, during the hearing on HB 215.                                                                               
                                                                                                                                
DUKE RUSSELL                                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:    Testified  regarding the  benefits  of  1                                                               
percent for art during the hearing on HB 215.                                                                                   
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 03-36, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
CHAIR  BRUCE WEYHRAUCH  called the  House State  Affairs Standing                                                             
Committee meeting  to order at  8:03 a.m.   Representatives Holm,                                                               
Seaton, Lynn,  and Weyhrauch were  present at the call  to order.                                                               
Representatives  Dahlstrom, Berkowitz,  and Gruenberg  arrived as                                                               
the meeting was in progress.                                                                                                    
                                                                                                                                
[Due  to  technical difficulty,  the  first  few minutes  of  the                                                               
meeting were  not taped;  during that  time, the  chair discussed                                                               
the calendar.]                                                                                                                  
                                                                                                                                
HB 205-PFD: PEACE CORPS VOLUNTEERS & MISC                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  announced that the  first order of  business was                                                               
HOUSE BILL  NO. 205,  "An Act  relating to  service in  the peace                                                               
corps  as an  allowable absence  from the  state for  purposes of                                                               
eligibility for  permanent fund dividends  and to the  period for                                                               
filing an application for a  permanent fund dividend; authorizing                                                               
the  Department   of  Revenue  to  issue   administrative  orders                                                               
imposing  sanctions  for   certain  misrepresentations  or  other                                                               
actions concerning eligibility for  a permanent fund dividend and                                                               
providing  for   administrative  appeal  of  those   orders;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
Number 0038                                                                                                                     
                                                                                                                                
REPRESENTATIVE LESIL  McGUIRE, Alaska State  Legislature, sponsor                                                               
of HB 205,  told the committee that "the exact  form" of the bill                                                               
was heard  [in 2002]  and passed the  House unanimously,  but did                                                               
not pass  the Senate.   She stated that  in 1982, when  the first                                                               
permanent  fund dividend  (PFD)  was given  out, the  legislature                                                               
"took  up  a  list  of  exemptions  that  they  would  allow  for                                                               
permanent  fund  dividend  applications" or  allowable  absences.                                                               
The Peace Corp was one of those allowable absences, she noted.                                                                  
                                                                                                                                
REPRESENTATIVE  McGUIRE clarified  that  the bill  was passed  in                                                               
1983,  but was  retroactive to  1982.   For 16  years, she  said,                                                               
Peace Corp  volunteers enjoyed  an allowable  absence to  go work                                                               
oversees to help stabilize nations.   She noted that, in 1998, in                                                               
"a  mysterious  eleventh-hour  political   shuffle  over  in  the                                                               
Senate," Peace  Corp volunteers  were removed  [from the  list of                                                               
exemptions].  Representative  McGuire said that HB  205 would put                                                               
Peace  Corp  volunteers   back  on  the  exemption   list.    She                                                               
emphasized  that  it  would  not   be  a  new  exemption,  but  a                                                               
restoration of "a very good, allowable absence."                                                                                
                                                                                                                                
REPRESENTATIVE   McGUIRE   noted   that   there   currently   are                                                               
approximately  26  Peace  Corp volunteers  in  Alaska  who  would                                                               
qualify  [for the  PFD].   [If  those 26  volunteers  are paid  a                                                               
dividend],  the  difference to  each  dividend  [issued to  every                                                               
Alaskan who receives one] would be 4-8 cents.                                                                                   
                                                                                                                                
REPRESENTATIVE  McGUIRE stated  that  she thinks  the Peace  Corp                                                               
volunteer  program  is one  that  works  hand  in hand  with  the                                                               
military service.   She noted  the current situation in  Iraq and                                                               
said, "We  all have  an incredibly high  regard for  our military                                                               
and what they do  for us."  She posited that the  Peace Corp is a                                                               
different way  to serve  the country; it's  a way  to proactively                                                               
help countries  build water and  sewer systems, and  provide food                                                               
sources,  for example.    She added  that  it is  a  way to  help                                                               
stabilize  nations so  that groups  like the  Taliban [don't  use                                                               
food and water,  for example, as a means  of controlling people].                                                               
Representative McGuire referred to  Maslow's [hierarchy of needs]                                                               
and said  that people can't  get to "higher degrees  of thinking"                                                               
until  they have  the basics  of  shelter, food,  and water,  for                                                               
example.                                                                                                                        
                                                                                                                                
Number 0387                                                                                                                     
                                                                                                                                
REPRESENTATIVE McGUIRE told the committee  that the men and women                                                               
who volunteer  for the Peace  Corp do so  for a small  stipend of                                                               
approximately $300  a month and for  a period of two  years.  She                                                               
said that one of her constituents  who was a Peace Corp volunteer                                                               
said that she would have been  able to come home for Christmas to                                                               
see her family  [if she had received  a PFD].  She  said that the                                                               
application process to  join the Peace Corp is  involved.  People                                                               
don't enter  into [the Peace Corp]  lightly.  She noted  that the                                                               
only  outstanding  debt  allowed  a Peace  Corp  volunteer  is  a                                                               
student loan.  She stated that  people who enter into the program                                                               
are making a huge commitment to the nation and to Alaska.                                                                       
                                                                                                                                
Number 0496                                                                                                                     
                                                                                                                                
REPRESENTATIVE McGUIRE, referring to  another aspect of the bill,                                                               
said  that  Larry  Persily,  from   the  Department  of  Revenue,                                                               
informed  her  that  there  is   a  great  amount  of  fraud  [in                                                               
applications] occurring in the PFD  program.  She explained that,                                                               
in  almost every  circumstance  where fraud  is  suspected and  a                                                               
sanction  is  brought about,  a  trial  is  required.   When  the                                                               
question is  asked whether  it is  worth the cost  of a  trial to                                                               
pursue  [a fraudulent  application], the  answer is  no in  every                                                               
case, she stated.   The PFD, at its highest  [is still much lower                                                               
than] the minimum cost of $10,000 for a jury trial.                                                                             
                                                                                                                                
REPRESENTATIVE  McGUIRE referred  to page  3, Section  4, of  the                                                               
bill, which read as follows:                                                                                                    
                                                                                                                                
     * Sec.4. AS 43.23.035(c) is amended to read:                                                                             
                                                                                                                                
          (c)  In addition to any criminal penalties                                                                        
     imposed by state  law, if the department  finds that an                                                                
     [AN]  individual [WHO],  in claiming  a permanent  fund                                                                    
     dividend,  or   an  individual  [WHO],   in  certifying                                                                    
     another person's  eligibility, willfully misrepresents,                                                                    
     exercises   gross  negligence   with  respect   to,  or                                                                
     recklessly  disregards a  material  fact pertaining  to                                                                    
     eligibility, the department may  issue an order against                                                                
     the individual for the                                                                                                 
               (1) forfeiture of [FORFEITS] the dividend;                                                               
               (2) imposition of [, IS SUBJECT TO] a civil                                                                  
     fine of up to $3,000; [$5,000,] and                                                                                    
               (3) loss of [LOSES] eligibility to receive                                                                   
     the  next   five  dividends  following   the  forfeited                                                                    
     dividend  [DIVIDENDS.   THE  COMMISSIONER MAY  COMMENCE                                                                
     PROCEEDINGS IN COURT TO ENFORCE THIS SUBSECTION].                                                                          
                                                                                                                                
REPRESENTATIVE  McGUIRE explained  that  the  section allows  for                                                               
forfeiture of  the dividend  and an imposition  of a  civil fine,                                                               
which would be  lowered to $3,000.  She said  that the reason the                                                               
amount is being lowered is "so we  don't have to allow for a jury                                                               
trial."   She  explained that  "once you  start getting  up above                                                               
that  $5,000  threshold,  plus  your  dividend,  ...  you're  now                                                               
getting into an  area where a person would be  entitled to a jury                                                               
trial."   She  mentioned  [lines 25-26],  regarding  the loss  of                                                               
eligibility to receive the next five dividends.                                                                                 
                                                                                                                                
REPRESENTATIVE McGUIRE,  referring again to Section  4, said that                                                               
"willfully   misrepresents,  exercises   gross  negligence   with                                                           
respect to,  or recklessly disregards a  material fact pertaining                                                           
to,  eligibility" means  serious misrepresentation;  it does  not                                                           
mean someone who forgets that one trip taken, for example.                                                                      
                                                                                                                                
Number 0715                                                                                                                     
                                                                                                                                
REPRESENTATIVE  McGUIRE  mentioned  estimated  recovery  figures.                                                               
She noted,  "Last year, it  was around $100,000 to  $200,000, but                                                               
it may  even be higher."   She said  that it is  unfortunate, but                                                               
when there  is "free money out  there," there will be  people who                                                               
abuse [the dividend program].                                                                                                   
                                                                                                                                
REPRESENTATIVE McGUIRE,  in conclusion, said she  thinks [HB 205]                                                               
is a good  statement for the Twenty Third Legislature  to make to                                                               
all the young  men and women who would commit  two years of their                                                               
lives to  live oversees, especially  in a time  when to do  so is                                                               
dangerous  and  when the  future  is  uncertain.   She  said  she                                                               
conducted a survey  last year to find out  where former [Alaskan]                                                               
Peace Corp  volunteers are  and what  they are  doing.   She said                                                               
that  some  are coming  back  to  Alaska's school  districts  and                                                               
[teaching about]  life overseas, for  example.  Often  the skills                                                               
learned overseas are brought back  to the state and "transferred"                                                               
to the young people of Alaska.                                                                                                  
                                                                                                                                
REPRESENTATIVE  McGUIRE noted  that President  Bush continues  to                                                               
support the Peace Corp and  deemed it important enough to mention                                                               
in his inaugural address.                                                                                                       
                                                                                                                                
Number 0882                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DAHLSTROM asked  Representative  McGuire for  her                                                               
thoughts regarding those people who  leave the state to volunteer                                                               
on religious missions.                                                                                                          
                                                                                                                                
REPRESENTATIVE   McGUIRE   responded   that   if   Representative                                                               
Dahlstrom were  to introduce a  bill "of that nature,"  she would                                                               
be happy to co-sponsor it; however,  she wants to focus HB 205 on                                                               
the one  original exemption  that was  already allowed,  to avoid                                                               
"the  Christmas tree  effect."   She stated  that the  Peace Corp                                                               
program  is  a  federally   recognized  program  with  definitive                                                               
boundaries and  applications, whereas  missionary work  is harder                                                               
to define and  its organization varies from group to  group.  The                                                               
challenge would be  "trying to put a definition  on that program,                                                               
so that you don't have everybody claiming it."                                                                                  
                                                                                                                                
Number 1031                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON asked  if  the bill  is  identical in  all                                                               
aspects to the form it was in the previous year.                                                                                
                                                                                                                                
REPRESENTATIVE McGUIRE answered yes.                                                                                            
                                                                                                                                
Number 1065                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG  referred to  page 3,  lines 23-24.   He                                                               
said that  those lines actually  take the bill a  step backwards.                                                               
He suggested  that what the sponsor  intended to do was  to allow                                                               
the [Department  of Revenue] either to  administratively issue an                                                               
order up to the maximum of  $3,000, or to allow the department to                                                               
go  into court  to  seek  a higher  amount.    Under the  current                                                               
language of the  bill, only the former choice  would be possible.                                                               
He noted that,  in some cases, people have  perpetrated frauds on                                                               
the PFDs that  are really large, and only allowing  a $3,000 fine                                                               
won't  be as  meaningful a  punishment as  if the  department was                                                               
allowed to seek  the higher amount in court.   He gave an example                                                               
of a  family who has  perpetrated fraud and has  gotten thousands                                                               
of dollars  from the  state.   He said  that if  [the department]                                                               
does "go  the court  route," [the sponsor]  may want  to consider                                                               
letting [the department] seek a higher civil fine.                                                                              
                                                                                                                                
Number 1216                                                                                                                     
                                                                                                                                
REPRESENTATIVE  McGUIRE told  Representative  Gruenberg that  Mr.                                                               
Persily  drafted  the language  of  the  bill.   She  stated  her                                                               
understanding  that  it  doesn't  take  away  [the  department's]                                                               
ability  "to  do that,"  but  is  "in  addition to  any  criminal                                                               
penalties imposed by  state law."  She  recommended deferring any                                                               
additional comments regarding that issue to Mr. Persily.                                                                        
                                                                                                                                
REPRESENTATIVE GRUENBERG added, "And  clearly they could still go                                                               
criminally.  I'm not -- that's totally aside."                                                                                  
                                                                                                                                
Number 1278                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  said he had  heard about a problem  where people                                                               
are receiving the PFD year after  year without even being [in the                                                               
state].  He said  he thinks that there has to be  "some sort of a                                                               
signal where if you're going to get  a PFD, you have to be in the                                                               
state."  He  said that [the state] does not  want to be exporting                                                               
[the PFD].   He noted  that the  University [of Alaska]  wants to                                                               
attract  local people,  but students  are given  a dividend  "for                                                               
going out  of state."   He asked  Representative McGuire  for her                                                               
philosophical  views  regarding   continually  granting  numerous                                                               
exceptions to so many people for all different reasons.                                                                         
                                                                                                                                
REPRESENTATIVE  McGUIRE said  she  had  anticipated the  argument                                                               
that  Chair Weyhrauch  made.   She  said that  she  thinks it  is                                                               
appropriate to  constantly analyze what  is being done  with [the                                                               
PFD] program, and  whether or not [the  legislature] is providing                                                               
enough incentive for  people to live, work, and  attend school in                                                               
Alaska.   That is why, she  explained, she felt compelled  to put                                                               
the  penalties  for misrepresentation  in  HB  205, to  give  the                                                               
department  more tools  [to  use].   She  referred  again to  the                                                               
original  policy in  1983,  which allowed  the  PFD exemption  to                                                               
Peace Corp volunteers.  She said,  "If you really are an Alaskan,                                                               
[who] chooses  to live and work  in the state, but  wants to take                                                               
advantage of  an opportunity that  will benefit your  country and                                                               
your state  - I think those  are the kinds of  exemptions that we                                                               
really ought to be allowing."                                                                                                   
                                                                                                                                
REPRESENTATIVE  McGUIRE noted  that  an estimated  83 percent  of                                                               
[Peace  Corp volunteers]  have  come  back to  live  and work  in                                                               
Alaska.   She  said that  there  may be  a broader  philosophical                                                               
question  to  analyze   later,  but  she  doesn't   think  it  is                                                               
appropriate to single out Peace Corp as "the place to start."                                                                   
                                                                                                                                
Number 1500                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  agreed and hinted  that he may be  introducing a                                                               
bill to address [that broader philosophical] issue.                                                                             
                                                                                                                                
Number 1544                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ asked  if [the  Department of  Revenue]                                                               
tracks the number of people  who are receiving out-of-state PFDs,                                                               
and for how  many years each of those people  have been receiving                                                               
a PFD.                                                                                                                          
                                                                                                                                
LARRY PERSILY,  Deputy Commissioner, Office of  the Commissioner,                                                               
Department of  Revenue, answered the previously  stated questions                                                               
of the  committee as follows:   First, he  said that HB  205 does                                                               
not  change state  criminal  statutes.   He  indicated that  [the                                                               
department]  could  still  prosecute  someone  for  fraud,  under                                                               
criminal  statutes.   He  explained that  [the  bill] would  just                                                               
change  the  dividend  statute  to  allow  [the  department]  the                                                               
option,  within dividend  laws,  to penalize  someone for  fraud,                                                               
administratively.                                                                                                               
                                                                                                                                
REPRESENTATIVE  GRUENBERG referred  to  the  current language  on                                                               
page 3, lines 16-24, that read  "[$5,000]".  He said that the way                                                               
he interprets  that, legally, is  that the department can  file a                                                               
civil case  against the  person.   He said he  thinks that  is an                                                               
extremely important option,  whether or not it is  exercised.  He                                                               
continued as follows:                                                                                                           
                                                                                                                                
     In a criminal  case, you have to prove  the case beyond                                                                    
     a reasonable  doubt, and all  sorts of  criminal rights                                                                    
     attach.  In  this case, you could simply  go into small                                                                    
     claims  court   and  go  after   the  person,   with  a                                                                    
     preponderance of  the evidence,  and get up  to $5,000.                                                                    
     [A] simple  procedure, relatively.  And  legally, under                                                                    
     the current language, you have that option.                                                                                
                                                                                                                                
REPRESENTATIVE GRUENBERG  stated that  he would hesitate  to take                                                               
away [the  department's] right  to pursue the  other option.   He                                                               
suggested one  way to  retain that  option would  be to  keep the                                                               
original  language   with  the  new   language,  and  to   add  a                                                               
subjunctive "or".                                                                                                               
                                                                                                                                
MR. PERSILY responded that [the  department] worked on [the bill]                                                               
with the attorney general's office  and the collective wisdom was                                                               
to keep the  value of the fine, plus the  dividend, under $5,000,                                                               
so [the department]  could deal with it administratively.   If it                                                               
was  a serious  case  involving a  lot of  money,  he said,  [the                                                               
department] would still have the option [of a criminal trial].                                                                  
                                                                                                                                
REPRESENTATIVE GRUENBERG  asked, "So,  you don't want  the option                                                               
of being able to go civilly for a higher amount in to court."                                                                   
                                                                                                                                
MR. PERSILY answered as follows:                                                                                                
                                                                                                                                
     We don't use  it now.  I guess the  feeling is, looking                                                                    
     at a  more efficient  government, ...  we can  keep the                                                                    
     fines  a little  smaller, do  it administratively,  and                                                                    
     when we get a really bad  case, we can go criminal with                                                                    
     it.                                                                                                                        
                                                                                                                                
Number 1785                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  asked if it  wouldn't make sense, in  Section 4,                                                               
[line 22],  to have a "death  penalty for dividends" if  there is                                                               
fraud or criminal intent to deceive.                                                                                            
                                                                                                                                
REPRESENTATIVE McGUIRE  referred to [page 3],  line 25, regarding                                                               
the loss of eligibility to receive  the next five dividends.  She                                                               
said that there was discussion  regarding whether to make it five                                                               
or ten  years.  She  said, "Again, it  came back to  the attorney                                                               
general's  opinion  that we  had  to  keep the  overall  punitive                                                               
impact low enough that you could do it administratively.                                                                        
                                                                                                                                
CHAIR WEYHRAUCH asked, "What's the threshold on this?"                                                                          
                                                                                                                                
MR.  PERSILY  explained  that  [the  department]  was  trying  to                                                               
balance  what's  reasonable,  versus  what  could  be  considered                                                               
excessively punitive,  and it  thought that  five years  would be                                                               
best.   He added that  the legislature  could make it  a lifetime                                                               
ban, if it wanted to.                                                                                                           
                                                                                                                                
Number 1900                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH asked  what the  legal reason  would be  for not                                                               
including the forfeiture of the  dividend or all future dividends                                                               
- to have the discretion of having the dividend death penalty.                                                                  
                                                                                                                                
Number 1920                                                                                                                     
                                                                                                                                
REPRESENTATIVE McGUIRE mentioned a  case from "our" supreme court                                                               
that seemed to indicate that  when sanctions are imposed that are                                                               
serious enough to rise to the  level of a criminal sanction, when                                                               
they do  so, [the person involved]  is entitled to a  jury trial.                                                               
She added,  "And that's the problem."   She said that  weeks were                                                               
spent  trying for  the right  language  in the  bill and  someone                                                               
could  still challenge  it; however,  she said  that she  thinks,                                                               
"We're  sticking   within  a  reasonable   realm  here,   for  an                                                               
administrative action."                                                                                                         
                                                                                                                                
CHAIR WEYHRAUCH  noted that "the  statute says in  the amendment"                                                               
that, in  addition to  any criminal  penalties enforced  by state                                                               
law, the legislature  could impose a dividend death  penalty.  It                                                               
could allow that  discretion, he added.  He  opined, "If somebody                                                               
wants to steal  the people's dividend, then  maybe they shouldn't                                                               
receive it again."                                                                                                              
                                                                                                                                
REPRESENTATIVE  McGUIRE noted  that [Section  4, subsection  (c)]                                                               
only deals  with those actions  that are  taken administratively,                                                               
within the  dividend program.   She  added, "Criminally,  I don't                                                               
know that that couldn't be imposed."                                                                                            
                                                                                                                                
MR. PERSILY offered  to speak with the  attorney general's office                                                               
and report back to the committee.                                                                                               
                                                                                                                                
Number 1954                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ  suggested making the penalty  a loss of                                                               
five dividends,  rather than a  loss of five  [consecutive] years                                                               
of dividends,  because he said there  might be a year  when there                                                               
is  no dividend.   In  response to  Representative Weyhrauch,  he                                                               
clarified that  five dividends could  extend for a period  far in                                                               
excess of five years.                                                                                                           
                                                                                                                                
Number 2025                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG  noted that  the aforementioned  case to                                                               
which Representative McGuire referred  is Baker v. Fairbanks, 471                                                             
P.2d 386 (Alaska 1970).  He continued as follows:                                                                             
                                                                                                                                
     It  says,   "If  you're  faced  with   imprisonment,  a                                                                    
     substantial  fine,  or  loss  of  a  valuable  license,                                                                    
     you're  entitled  to  a  jury trial."    That  was  the                                                                    
     seminal  case  and there  have  been  some cases  since                                                                    
     that.                                                                                                                      
                                                                                                                                
REPRESENTATIVE GRUENBERG said  he thought there could  be a civil                                                               
penalty, with only a preponderance  of the evidence and, perhaps,                                                               
without a  jury trial, although  a jury trial would  be warranted                                                               
for a  penalty forfeiture of  the dividend  forever.  He  said he                                                               
thought that would  be possible, because he  doesn't believe that                                                               
the  dividend is  a  right;  it's an  entitlement.    In a  civil                                                               
context, he  added, the  constitutional protections  required are                                                               
different.   Regarding a civil  penalty, he stated that  it would                                                               
be much easier,  with the preponderance of the  evidence, to make                                                               
the case.                                                                                                                       
                                                                                                                                
Number 2107                                                                                                                     
                                                                                                                                
MR. PERSILY  told the committee that  he has been around  for six                                                               
years  and  it  was  before   that  that  anyone  was  prosecuted                                                               
criminally.   He suggested  that the  committee consider  that it                                                               
might make  more sense to err  on the side of  caution, adopt the                                                               
bill,  give the  dividend division  a few  years to  see how  the                                                               
administrative  penalties  work  and how  the  district  attorney                                                               
responds  to  any  criminal  cases  which  might  be  found,  and                                                               
reconsider the  legislation in a  few years.  He  added, "Because                                                               
we have no experience to report to you on fraud."                                                                               
                                                                                                                                
Number 2152                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH referred  to Section 2, on page 3.   He said that                                                               
that section  "amends to incorporate  the Peace  Corp provision."                                                               
He added  that it  also states that  [the Peace  Corp volunteers]                                                               
have  to have  been a  resident  of the  state for  at least  six                                                               
consecutive months.   He asked  what the policy problem  would be                                                               
if that were increased to 12 consecutive months.                                                                                
                                                                                                                                
REPRESENTATIVE  McGUIRE  responded  that   she  doesn't  have  [a                                                               
problem with that].                                                                                                             
                                                                                                                                
MR. PERSILY offered the following example:                                                                                      
                                                                                                                                
     If  you   moved  here  and  established   residency  on                                                                    
     December  31,  2001, then  2002  is  going to  be  your                                                                    
     eligibility year  for the  2003 dividend.   So,  if you                                                                    
     established residency  in ...  December 2001,  you have                                                                    
     to  then  have remained  in  Alaska  for at  least  six                                                                    
     months in 2002,  before you leave for  military, or for                                                                    
     school, to  retain your  eligibility.   You have  to be                                                                    
     here for  at least  six months before  you leave  on an                                                                    
     allowable absence.   If you're  here, you've got  to be                                                                    
     here  the  whole  year,  but  you  can't  leave  on  an                                                                    
     allowable absence,  before you've been here  six months                                                                    
     in that year.                                                                                                              
                                                                                                                                
MR.   PERSILY,   in   response    to   follow-up   questions   by                                                               
Representative Weyhrauch, stated the following:                                                                                 
                                                                                                                                
     The "six-month"  only applies to the  dividend and only                                                                    
     applies  to  that  first  year  of  eligibility.    For                                                                    
     example,  if a  new family  moves here  in the  fall of                                                                    
     2001, ...  buys a home,  registers to vote,  [and] does                                                                    
     everything  to establish  residency, ...  then 2002  is                                                                    
     their eligibility  year, [and] they'll get  their first                                                                    
     check in 2003.                                                                                                             
                                                                                                                                
     They  have a  son  who transferred  here  as a  senior,                                                                    
     graduated  high school  in  May of  2002,  and went  to                                                                    
     college.    That six  months  allows  that high  school                                                                    
     senior to  start qualifying  for the  dividend, because                                                                    
     he or she left on an  allowable absence.  If you didn't                                                                    
     have that six-month ... rule,  ... that college student                                                                    
     would never get a dividend,  because he or she would be                                                                    
     gone all the time, until he or she returned.                                                                               
                                                                                                                                
     So,  it applies  only to  people who  then leave  on an                                                                    
     allowable  absence, where  they're  still considered  a                                                                    
     resident, they're just not physically residing here.                                                                       
                                                                                                                                
Number 2291                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG   mentioned  that   there  is   a  case                                                               
regarding  divorce  that  states  that  a  person  can  become  a                                                               
resident if  he/she touches down with  the intent to remain.   He                                                               
asked  if  the  term  resident,  "in this  body  of  law,"  means                                                               
"physically present as  a resident," or can people  come into the                                                               
state,  touch  down,  claim  residency, and  then  "go  off"  and                                                               
continue to claim residency?                                                                                                    
                                                                                                                                
MR.  PERSILY answered  no.    He explained  that  people have  to                                                               
physically be  [in the  State of Alaska],  not only  to establish                                                               
residency the  day they touch  down, but  also for at  least half                                                               
the next calendar year if they  leave on an allowable absence and                                                               
retain  ties to  the state  - for  example, their  families still                                                               
live in the state, or they have belongings in storage.                                                                          
                                                                                                                                
MR.  PERSILY,  in  regard  to a  previously  stated  question  by                                                               
Representative Berkowitz,  said that  the department  includes in                                                               
its annual report how many of  those people who apply for the PFD                                                               
are  claiming an  allowable  absence.   He  listed the  following                                                               
people  claiming exemptions  on the  2002 dividend  applications:                                                               
50 members of congressional delegation  or staff, 200 who left to                                                               
settle the  estate of  a deceased direct  relative, 300  who were                                                               
out  caring  for  a  direct   relative  with  a  life-threatening                                                               
illness,  500  caring for  a  terminally  ill relative,  700  who                                                               
received  continuous medical  treatment,  6,000 military  service                                                               
personnel,  almost 9,000  full-time college  university students,                                                               
and  approximately 10,000  who were  accompanying a  resident who                                                               
was  eligible,  such  as  the  spouse  or  children  of  military                                                               
personnel.  In response to  Representative Berkowitz, Mr. Persily                                                               
estimated that the  total was approximately 26,000,  or 4 percent                                                               
of the state's population.                                                                                                      
                                                                                                                                
CHAIR  WEYHRAUCH  commented  that  he  thinks  this  is  a  "huge                                                               
symbolic problem."                                                                                                              
                                                                                                                                
MR. PERSILY  stated that [the  department's] concern is  that the                                                               
policy is clearly defined and  easily administered.  For example,                                                               
he noted  that according to  statute, it is an  allowable absence                                                               
for  a  person  to attend  [an  out-of-state]  college/university                                                               
full-time.   Fifteen  years ago,  the legislature  defined "full-                                                               
time" as  attending a college  or university that  is accredited.                                                               
He noted  that there  are several  religious universities  in the                                                               
country  that  are not  accredited,  by  choice.   He  said  [the                                                               
department]  looked for  a means  to change  that by  regulation,                                                               
which he  added, "I just signed  today, in fact."   He noted that                                                               
the  change  would  include  a  college  or  university  that  is                                                               
eligible for certain federal student loan programs.                                                                             
                                                                                                                                
MR.   PERSILY,  in   response  to   [Representative  Dahlstrom's]                                                               
previously   stated  question   regarding  people   on  religious                                                               
missions, recommended  that, if the legislature  wants to include                                                               
those people,  it does  so in  such a  way that  [the department]                                                               
knows "what it  means" and can administer it.   The Peace Corp is                                                               
clearly definable, he added.                                                                                                    
                                                                                                                                
Number 2475                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ stated  that  there  is no  "catch-all"                                                               
exception  that  allows the  division  to  use discretion  as  to                                                               
whether  people  [qualify for  the  dividend  under an  allowable                                                               
absence].   He emphasized  that that  is problematic.   Regarding                                                               
the  26,000 people  who are  Outside, he  said that  he would  be                                                               
curious to  know what  the average period  of absence  is, within                                                               
each of the [aforementioned] categories.                                                                                        
                                                                                                                                
MR. PERSILY clarified that the  people [he previously listed] are                                                               
those who claim an allowable  absence during the year; it doesn't                                                               
mean that  they resided Outside the  entire year.  The  number of                                                               
payments actually mailed  out of state "last year,"  he said, was                                                               
approximately 16,000, or 2 percent.                                                                                             
                                                                                                                                
REPRESENTATIVE BERKOWITZ asked  if [the department] has  a way of                                                               
tracking how long those 16,000 people have been gone.                                                                           
                                                                                                                                
MR.  PERSILY replied  that  he does  not know,  but  can ask  the                                                               
people in Data Processing.   He indicated limiting factors in the                                                               
law.   For example, no matter  what reason someone is  out of the                                                               
state,  he/she must  return  for at  least  72 consecutive  hours                                                               
every other  year.  Before  that law,  he said that  people would                                                               
book a  flight into  the state,  stay long  enough to  wash their                                                               
hands in  the Anchorage  International Airport,  and get  back on                                                               
another plane.                                                                                                                  
                                                                                                                                
REPRESENTATIVE McGUIRE  indicated her willingness to  work on the                                                               
issue in another bill.                                                                                                          
                                                                                                                                
REPRESENTATIVE GRUENBERG stated  that he dealt with  the issue in                                                               
past legislative  sessions, and it  is called the "touch  and go"                                                               
provision.                                                                                                                      
                                                                                                                                
Number 2580                                                                                                                     
                                                                                                                                
MR.   PERSILY  noted   that  the   72-hour  rule   is  under   AS                                                               
43.23.005(a)(4).   He said  that [the  department] is  allowed to                                                               
waive  that  statute  in  one  exception found  in  (f)  in  that                                                               
statute,  which is  in  a time  of  national military  emergency.                                                               
[That  exception] was  invoked  within the  last  month, for  the                                                               
2002,  2003,  and  2004  dividends,  he  revealed,  because  some                                                               
military personnel  and their  families will not  be able  to get                                                               
back on the 72-hour rule.                                                                                                       
                                                                                                                                
MR. PERSILY noted  that other than the  72-hour requirement every                                                               
two years,  there's a  presumption in  statute whereby  if people                                                               
are gone more than 5  years, have not maintained sufficient ties,                                                               
and have  not returned for  at least  30 days during  that 5-year                                                               
period, they're  out.   He added, "And  then there's  a hard-and-                                                               
fast 10 years;  no matter why you're out, no  matter how long you                                                               
come back for - how frequently - you're out after ten."                                                                         
                                                                                                                                
Number 2637                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ opined that if  people are "just sort of                                                               
disappearing off the end of  a five-year or ten-year period," and                                                               
they've  been collecting  dividends all  that time,  they are  in                                                               
violation  of   the  "intent  to  remain   component,"  and  [the                                                               
legislature] ought to be able to "recover something from them."                                                                 
                                                                                                                                
MR. PERSILY,  prefacing that what  he was  about to say  would be                                                               
more of  a political issue  for the legislature, stated  that the                                                               
vast  majority  of  the people  that  [the  department]  observes                                                               
"running  into  problems  on  the  five-year  rule"  are  in  the                                                               
military.    He said  that  [the  department] receives  reams  of                                                               
letters  from [military  personnel]  explaining  why they  cannot                                                               
return or why "there is a problem."  He continued as follows:                                                                   
                                                                                                                                
     I'll be honest, some of  the letters I find bordering a                                                                    
     little  bit  on  offensive,  because  they  accuse  the                                                                    
     dividend   division  of   discriminating  against   the                                                                    
     military,  not understanding  the situation,  and being                                                                    
     un-American, and that's not the  fact.  We're trying to                                                                    
     enforce the  laws and the  rules, and we don't  pick on                                                                    
     anyone in particular.                                                                                                      
                                                                                                                                
     But, the presumption is, if  you're not back 30 days in                                                                    
     5  years, you  obviously  must not  have  an intent  to                                                                    
     return,  unless  you can  show  why:   serious  medical                                                                    
     problems, or, if you were  stationed somewhere that you                                                                    
     were not allowed  leave time.  But that  5-year rule is                                                                    
     very  controversial   within  the  ranks   of  military                                                                    
     applicants, so I guess I'm just warning you.                                                                               
                                                                                                                                
Number 2700                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON  asked  if  there is  a  requirement  that                                                               
military personnel [claiming Alaska  residency] select Alaska "on                                                               
their  transfer," as  their number  one priority  for their  next                                                               
assignment.                                                                                                                     
                                                                                                                                
MR.  PERSILY  answered  that  they  must  have  Alaska  as  their                                                               
official  residence on  their leave  and  earnings statement  and                                                               
list Alaska  as their  first choice  [for transfer];  however, in                                                               
many cases,  the career  options are  not [available  in Alaska].                                                               
He said, "So then what they say  is they plan to retire here, and                                                               
they  search  for property  in  Talkeetna."   He  stated,  "Those                                                               
become statements  where we're trying to  judge someone's intent,                                                               
which is difficult."                                                                                                            
                                                                                                                                
Number 2739                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM moved to report  HB 205 out of committee with                                                               
individual  recommendations  and  the accompanying  fiscal  note.                                                               
There being  no objection, HB 205  was reported out of  the House                                                               
State Affairs Standing Committee.                                                                                               
                                                                                                                                
HB 161-CORRECTIONAL INDUSTRIES PROGRAM EXPENSES                                                                               
                                                                                                                                
Number 2751                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  announced that  the next  order of  business was                                                               
HOUSE  BILL   NO.  161,   "An  Act   allowing  expenses   of  the                                                               
correctional  industries program  that may  be financed  from the                                                               
correctional  industries   fund  to  include  the   salaries  and                                                               
benefits of state employees."                                                                                                   
                                                                                                                                
[In  committee packets  was a  new proposed  committee substitute                                                               
(CS), Version D, labeled 23-GH1104\D, Luckhaupt, 4/2/03.]                                                                       
                                                                                                                                
Number 2775                                                                                                                     
                                                                                                                                
JERRY BURNETT,  Director, Administrative Services,  Department of                                                               
Corrections,   stated  his   understanding   that  the   proposed                                                               
Version D would  make it easier  for the  correctional industries                                                               
to make sales to private entities.   He also noted that Version D                                                               
would change the  words "have minimal negative impact  on" to "be                                                               
of  benefit to",  as it  pertains  to judging  whether a  program                                                               
works with private sector companies in  the work force.  He noted                                                               
that Version D has an effective date of [July 1] 2004.                                                                          
                                                                                                                                
MR.  BURNETT  stated that  the  department  views the  [proposed]                                                               
changes as positive.   He told the committee  that the department                                                               
does have some concerns regarding  the effective date, because it                                                               
doesn't allow the  funding to pay state employee  salaries in the                                                               
next  fiscal  year;  however,  he said  that  the  department  is                                                               
willing to work with the legislature on that issue.                                                                             
                                                                                                                                
MR. BURNETT,  in response to  a question asked  by Representative                                                               
Berkowitz  at a  previous hearing  on HB  161 regarding  how much                                                               
furniture the state buys, noted that  in fiscal year 2002 (FY 02)                                                               
the   state  bought   $828,000-worth   of   furniture  from   the                                                               
correctional industry,  which equaled 96 percent  of the revenue.                                                               
To  date in  FY 03,  the state  has spent  just over  $300,000 on                                                               
furniture, which  is right  on track with  the amount  [spent by]                                                               
the  same time  last year.   He  commented that  the majority  of                                                               
furniture purchases are made in May and June.                                                                                   
                                                                                                                                
Number 2869                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ asked  what the  comparable cost  would                                                               
have been if that furniture had been commercially purchased.                                                                    
                                                                                                                                
MR. BURNETT  replied that [finding  the answer to  that question]                                                               
is one of the assignments  that the department's internal auditor                                                               
is working  on presently.   In response to a  follow-up question,                                                               
he  said  he believes  that  prison  industry furniture  is  less                                                               
expensive than  commercially available  furniture.   He indicated                                                               
that  there are  opportunities for  change regarding  pricing and                                                               
marketing.                                                                                                                      
                                                                                                                                
REPRESENTATIVE BERKOWITZ  said, "But that's not  reflected in the                                                               
fiscal note."                                                                                                                   
                                                                                                                                
MR. BURNETT said, "Right."                                                                                                      
                                                                                                                                
Number 2900                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH  noted  that  there is  some  concern  from  the                                                               
private sector that  it has to compete with  the prison industry.                                                               
He  commented  that there  is  a  wage differential  between  the                                                               
private sector and prison industries.                                                                                           
                                                                                                                                
MR. BURNETT responded as follows:                                                                                               
                                                                                                                                
     Well, there  is a  correctional industries  board which                                                                    
     is  required  to  make the  finding.    Currently,  the                                                                    
     correctional  industries  have  minimal impact  on  the                                                                    
     private sector.   And, with  the passage of  this bill,                                                                    
     you would have to make the  finding that it would be of                                                                    
     benefit to the private sector or to a labor force.                                                                         
                                                                                                                                
     For ... free venture  cooperative arrangements with the                                                                    
     Department  of Corrections  and prison  industries, the                                                                    
     requirement is that the ...  private sector company who                                                                    
     benefits  from prison  labor pays  minimum wage  to the                                                                    
     department.    And  the  difference  between  what  the                                                                    
     department  receives and  the  actual  payments to  the                                                                    
     inmates is used to offset program expenses.                                                                                
                                                                                                                                
Number 2966                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM  asked, "Did you not  just say $828,000-worth                                                               
of furniture was purchased locally, through this program?"                                                                      
                                                                                                                                
MR. BURNETT indicated that [that was the amount] in FY 02.                                                                      
                                                                                                                                
TAPE 03-36, SIDE B                                                                                                            
                                                                                                                                
MR. BURNETT [listed  some of the] system's plants.   He mentioned                                                               
wood furniture.                                                                                                                 
                                                                                                                                
REPRESENTATIVE HOLM  said, "It seems  like an awful lot  of money                                                               
to me.   I don't know about you,  but it's a lot more  than I get                                                               
on a  yearly basis as a  salary.  So  I just think that  that's a                                                               
significant number,  so we need to  be very cautious."   He asked                                                               
about the laundry business.                                                                                                     
                                                                                                                                
MR. BURNETT  said he does not  have the figures for  [the laundry                                                               
business];  however, he  noted that  it  generates a  significant                                                               
amount of income.                                                                                                               
                                                                                                                                
Number 2944                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ  said that Mr. Burnett  had indicated at                                                               
the last hearing on HB 161  that the commissioner is working on a                                                               
plan to  "manage this transition."   He  asked Mr. Burnett  if he                                                               
has that plan.                                                                                                                  
                                                                                                                                
MR. BURNETT  answered no.  He  explained that it is  in progress.                                                               
He  reminded the  committee that  he  had mentioned  at the  last                                                               
hearing that  the current program  manager is due to  retire this                                                               
month.   He indicated that  the department is  determining "where                                                               
to do the recruitment and how to do that."                                                                                      
                                                                                                                                
Number 2915                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON  moved  to adopt  the  proposed  committee                                                               
substitute  (CS), Version  23-GH1104\D, Luckhaupt,  4/2/03, as  a                                                               
work draft.   There being no objection, Version D  was before the                                                               
committee.                                                                                                                      
                                                                                                                                
Number 2900                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ noted  that there  are 2  employees for                                                               
"each site," which totals 14 employees for 7 locations.                                                                         
                                                                                                                                
MR. BURNETT said, "Right - approximately."                                                                                      
                                                                                                                                
REPRESENTATIVE BERKOWITZ stated  that he would like  to know what                                                               
those  individuals  are  doing,  and what  would  happen  to  the                                                               
revenue that  the state is  generating if those  individuals were                                                               
not employed.                                                                                                                   
                                                                                                                                
MR. BURNETT responded  that [those are] good  questions that will                                                               
be included in the department's [considerations].                                                                               
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  said,  "It  seems to  me  that  that's                                                               
something  that we're  looking at  right  now, and  that if  this                                                               
legislation is before us, the appropriate  time for us to look at                                                               
it is right now."                                                                                                               
                                                                                                                                
MR. BURNETT  said, "Right."   In response to a  follow-up comment                                                               
by Representative  Berkowitz, he  reminded the committee  that he                                                               
had stated at the  previous hearing on HB 161 that  it is not the                                                               
intent of  the department to  eliminate "these programs  or these                                                               
positions."                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ  stated, "That seems the  consequence of                                                               
moving  forward with  this legislation  when there's  no plan  in                                                               
place."   He  said that  perhaps the  legislation might  be good;                                                               
however,  it seems  premature to  bring it  before the  committee                                                               
without  being able  to  provide the  answers  to the  legitimate                                                               
policy questions that are being raised by the committee.                                                                        
                                                                                                                                
Number 2837                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  said that  he still does  not see  what he                                                               
had hoped  for in the  proposed legislation.   He noted  that his                                                               
concern relates  to the budget.   He  remarked that the  way that                                                               
[Version D] reads,  if the program does not  increase its revenue                                                               
sufficiently to  be able to pay  the salaries, there is  no other                                                               
source  identified for  those salaries.   The  result, he  noted,                                                               
would  be that  prison industries  would disappear  because there                                                               
would  be no  managers.   Therefore, he  said, if  it is  not the                                                               
intent of the  administration to only fund  salaries and benefits                                                               
to  state  employees  out  of  this  program,  with  no  fallback                                                               
position for maintaining that funding,  then he would like to see                                                               
the committee  offer a letter  of intent  that it is  passing the                                                               
legislation   along,   only   with   the   intention   that   the                                                               
administration  will  maintain  the program.    Furthermore,  the                                                               
administration may  use any revenues  for salaries  and benefits,                                                               
but it  will not, for lack  of those revenues from  this program,                                                               
terminate the program.                                                                                                          
                                                                                                                                
Number 2759                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH asked Representative Seaton  to draft a letter of                                                               
intent  for the  committee to  include with  the bill  and fiscal                                                               
note before moving  the proposed legislation out  of committee at                                                               
the next hearing on HB 161.                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ  stated that  [regardless of  the letter                                                               
of  intent] he  will object  [to  moving the  legislation out  of                                                               
committee] if there is not a plan in place by [DOC].  He opined:                                                                
                                                                                                                                
     It  seems  precipitous  of  us   to  be  making  policy                                                                    
     decisions  when   the  administration   hasn't  brought                                                                    
     forward  to  us  adequate   information  to  make  good                                                                    
     decisions.  I  realize this is a  transitional period -                                                                    
     there's  a new  administration [and  a] steep  learning                                                                    
     curve - but when ideas  are presented, they ought to be                                                                    
     presented in  such a way  that the legislature  has the                                                                    
     information  necessary  to  make quality  decisions  on                                                                    
     them, whether we agree or disagree.                                                                                        
                                                                                                                                
Number 2734                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH told  Mr. Burnett that it would  be beneficial to                                                               
the committee if he would include  in the letter of intent any of                                                               
his statements regarding the administration's planning process.                                                                 
                                                                                                                                
CHAIR WEYHRAUCH announced that HB 161 would be held over.                                                                       
                                                                                                                                
HB 183-PERS BENEFITS FOR JUV INSTIT EMPLOYEES                                                                                 
                                                                                                                                
Number 2700                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  announced that  the next  order of  business was                                                               
HOUSE BILL NO. 183, "An  Act relating to retirement contributions                                                               
and  benefits under  the public  employees' retirement  system of                                                               
certain  juvenile detention  employees and  juvenile correctional                                                               
institution employees."                                                                                                         
                                                                                                                                
CHAIR WEYHRAUCH reviewed  the highlights of the bill  and said he                                                               
wants to move the bill out of committee.                                                                                        
                                                                                                                                
Number 2645                                                                                                                     
                                                                                                                                
REPRESENTATIVE   HOLM  observed   that   he   doesn't  know   how                                                               
appropriate it is  to go from a 30-year  [retirement for juvenile                                                               
institution  employees]  to a  20-year  retirement,  in one  fell                                                               
swoop.  He  indicated the committee should perhaps  suggest a 25-                                                               
year retirement.                                                                                                                
                                                                                                                                
CHAIR WEYHRAUCH  announced that he  would consider that  a motion                                                               
by  Representative  Holm  to adopt  Amendment  [1],  which  would                                                               
change the 20-year retirement to a 25-year retirement.                                                                          
                                                                                                                                
Number 2620                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ objected.   He  said all  the testimony                                                               
that   the   committee   has   heard   [supports]   the   20-year                                                               
[retirement].  He  suggested that if Amendment 1 is  an effort to                                                               
reconcile some of  the financial impact, then  perhaps that issue                                                               
should be  taken up in the  [House Finance Committee].   He noted                                                               
that the committee is hearing  that juvenile justice officers are                                                               
subject to the same conditions  that peace officers in harm's way                                                               
are, for example.                                                                                                               
                                                                                                                                
Number 2580                                                                                                                     
                                                                                                                                
REPRESENTATIVE LYNN concurred with  Representative Berkowitz.  He                                                               
stated, "This is a dangerous  occupation and a 20-year retirement                                                               
for dangerous occupations  is not that uncommon."   He noted that                                                               
the military  has a  20-year retirement,  "going up  to 30."   He                                                               
said he  would [support]  the 20-year  retirement.   He commented                                                               
that people need to be younger [in those dangerous occupations].                                                                
                                                                                                                                
Number 2525                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLM said  he just  wanted to  bring the  subject                                                               
forward and  put it on  the record,  because "we can't  afford to                                                               
have people double- and triple-dipping like we have so much of."                                                                
                                                                                                                                
Number 2509                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM withdrew [his motion to adopt Amendment 1].                                                                 
                                                                                                                                
Number 2494                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  moved to  report HB  183 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
note.  [No  objection was stated, and HB 183  was reported out of                                                               
the House State Affairs Standing Committee.]                                                                                    
                                                                                                                                
HB  93-REPEAL BOATING SAFETY SUNSET                                                                                           
                                                                                                                                
[Contains discussion of HB 49]                                                                                                  
                                                                                                                                
Number 2428                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  announced that  the next  order of  business was                                                               
HOUSE BILL NO. 93, "An  Act relating to boating safety; repealing                                                               
secs. 3,  5, 7, 9, 11,  14, 16, 18, 20,  23, 26, 27, and  30, ch.                                                               
28, SLA 2000; and providing for an effective date."                                                                             
                                                                                                                                
[Before the committee was CSHB 93(TRA), Version 23-LS0230\Q.]                                                                   
                                                                                                                                
Number 2400                                                                                                                     
                                                                                                                                
LINDA SYLVESTER, Staff to  Representative Bruce Weyhrauch, Alaska                                                               
State  Legislature,   told  the   committee  that   the  proposed                                                               
legislation  is a  continuation of  work  done in  2001 by  then-                                                               
Representative Bill Hudson,  at the request of  the United States                                                               
Coast  Guard.   She  said  [that previous  work]  brought a  fine                                                               
boating safety program  to the State of Alaska.   The funding for                                                               
[the program]  is provided in  large part by  Wallop-Breaux trust                                                               
fund  monies, which  she explained  is  federal fund  money.   By                                                               
having a  boating safety  program in Alaska  "on the  books," the                                                               
state was able to access a marine  motor fuel tax, she said.  Ms.                                                               
Sylvester  noted that  [the state]  has a  program that  provides                                                               
boater education, as well as programs like "Kids Don't Float."                                                                  
                                                                                                                                
MS. SYLVESTER  noted that  one of  the legislature's  concerns in                                                               
the year 2000 was that the  funding would "dry up" on the federal                                                               
level, and  the state would have  an unfunded program.   She said                                                               
that the bill  was crafted "with repealers all through  it."  The                                                               
proposed  legislation would  eliminate the  repealers, she  said,                                                               
with  the   exception  of   an  amendment   made  in   the  House                                                               
Transportation  Standing Committee.   She  explained that  one of                                                               
the most  problematic portions  of the  [boating] safety  law was                                                               
that it required non-motor boats 10  feet and over - for example,                                                               
paddle boats  and kayaks  - to be  registered.   That requirement                                                               
has been  eliminated from HB 93,  she said.  Now,  she added, the                                                               
proposed  legislation   applies  only  to  the   registration  of                                                               
motorboats.   In conclusion, she  noted that the Coast  Guard has                                                               
been relentless in this issue.                                                                                                  
                                                                                                                                
Number 2189                                                                                                                     
                                                                                                                                
MIKE FOLKERTS,  Recreational Boating Safety  Specialist, District                                                               
17, United States Coast Guard, read his testimony as follows:                                                                   
                                                                                                                                
     The   Coast    Guard,   through   the    Secretary   of                                                                    
     Transportation,  is directed  to carry  out a  national                                                                    
     Recreational  Boating Safety  program under  Chapter 31                                                                    
     of  Title 46,  United States  Code.   The  goal of  the                                                                    
     program is to encourage the  states to assume the major                                                                    
     role in carrying out the boating safety mission.                                                                           
                                                                                                                                
     Federal financial assistance to  the states is provided                                                                    
     through  the  boating  safety account  of  the  Aquatic                                                                    
     Resources Trust  Fund, also known as  the Wallop-Breaux                                                                    
     Trust Fund.   Part  of that eligibility  requirement to                                                                    
     receive  the funding  was achieved  when Alaska  passed                                                                    
     House Bill 108,  an Act Relating to  Boating Safety, in                                                                    
     the year 2000.                                                                                                             
                                                                                                                                
     House Bill  108 was  passed with  a sunset  clause that                                                                    
     would  allow  the  legislature   to  revisit  the  law,                                                                    
     primarily  to  ensure   that  consistent  and  adequate                                                                    
     funding  was in  place.   House  Bill  93 repeals  that                                                                    
     sunset,  allowing  the  law  to  become  permanent  and                                                                    
     helping build  a long-term  program that  will continue                                                                    
     to reduce recreational boating fatalities.                                                                                 
                                                                                                                                
     The United  States Coast Guard  supports House  Bill 93                                                                    
     and will  maintain the relationship  with the  State of                                                                    
     Alaska  as outlined  in a  Memorandum of  Understanding                                                                    
     between the state and the Coast Guard.                                                                                     
                                                                                                                                
Number 2157                                                                                                                     
                                                                                                                                
CAPTAIN JOHN SCHOTT, Chief of Operations, District 17, United                                                                   
States Coast Guard, read his testimony as follows:                                                                              
                                                                                                                                
     The Coast Guard enthusiastically  supports the State of                                                                    
     Alaska's Safe  Boating program.  This  program provides                                                                    
     vital boating  safety education for  Alaskans, reducing                                                                    
     the  number of  accidents, saving  lives, and  reducing                                                                    
     the need for costly search and rescue.                                                                                     
                                                                                                                                
     The accurate vessel  registration information available                                                                    
     to us  from the state  is also essential to  our search                                                                    
     and rescue efforts.                                                                                                        
                                                                                                                                
     Currently, with  the homeland security concerns  we all                                                                    
     share, it's  more important than  ever that  we educate                                                                    
     boaters so they  operate safely.  This  helps the Coast                                                                    
     Guard  and other  public  safety  agencies maintain  an                                                                    
     appropriate homeland security posture with our limited                                                                     
     surface and air assets.                                                                                                    
                                                                                                                                
Number 2121                                                                                                                     
                                                                                                                                
MARTHA   MOORE,  Injury   Surveillance  and   Prevention  Program                                                               
Manager, Community Health &  Emergency Medical Services, Division                                                               
of Public Health, Department of  Health & Social Services (DHSS),                                                               
told  the  committee  the  department  enthusiastically  supports                                                               
HB 93.   She  stated that  drowning has  been a  huge problem  in                                                               
Alaska  for many  decades.   She said  that she  has been  in the                                                               
state for  24 years and  knows approximately half a  dozen people                                                               
who were victims of drowning.   Furthermore, she said she is sure                                                               
that everyone  in the room at  present knows "a number  of people                                                               
who have  drowned in this state."   She said that  it reaches the                                                               
point where  people start to  think, "Well, this is  just Alaska,                                                               
this is  the way  it has  to be."   Conversely, Ms.  Moore stated                                                               
that, with  her experience in  injury prevention, she  knows that                                                               
it doesn't have to  be this way.  She noted  that drowning is one                                                               
of  the most  predictable  and preventable  causes of  accidental                                                               
death.                                                                                                                          
                                                                                                                                
MS.  MOORE told  the committee  that she  collaborates with  [Mr.                                                               
Folkerts] and the Boating Safety  Office regarding the Kids Don't                                                               
Float program.   She stated that she and [Mr.  Folkerts] are also                                                               
on the  board of the  Alaska Marine Safety  Education Association                                                               
(AMSEA) organization.   Ms.  Moore said  that the  boating safety                                                               
programs that the federal money  supports have been evaluated and                                                               
proven to be  effective.  In conclusion, she said  that last year                                                               
there  were   16  boating  fatalities,   the  lowest   number  of                                                               
fatalities in one year [for the  past] decade.  She added, "And I                                                               
think that  with these programs  in place, it will  just continue                                                               
to go down."                                                                                                                    
                                                                                                                                
Number 2003                                                                                                                     
                                                                                                                                
CHARLES R.  HOSACK, Deputy Director, Director's  Office, Division                                                               
of Motor  Vehicles, Department of Administration  (DOA), told the                                                               
committee  that  he  was  available  to  answer  questions.    In                                                               
response to  a question  by Chair Weyhrauch,  he stated  that the                                                               
department supports the continuation  of the boating registration                                                               
program.   He stated  that the  department thinks  that -  as the                                                               
witnesses  from the  United States  Coast  Guard have  previously                                                               
stated  - "it  is an  important safety  aspect."   He said,  "The                                                               
committee  substitute  before  you  does eliminate  the  need  to                                                               
register  the  non-powered  boats,  so there  will  be  a  slight                                                               
decrease  in  revenue."    He said  that  the  non-powered  boats                                                               
require a  $10 fee for  a three-year registration, as  opposed to                                                               
the $24  fee for  the powered  boats.   [The department]  will be                                                               
submitting  a  fiscal  note  that  will  show  that  decrease  in                                                               
revenues.                                                                                                                       
                                                                                                                                
[Chair Weyhrauch  passed around the complete  registration record                                                               
for his 16-foot Boston Whaler.]                                                                                                 
                                                                                                                                
Number 1891                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG  asked  if the  Department  of  Natural                                                               
Resources (DNR) would administer this.                                                                                          
                                                                                                                                
Number 1886                                                                                                                     
                                                                                                                                
JEFF  JOHNSON,  Boating  Law  Administrator,  Office  of  Boating                                                               
Safety,  Division of  Parks &  Outdoor Recreation,  Department of                                                               
Natural Resources  (DNR), answered  that yes, the  Alaska Boating                                                               
Safety  program  is currently  administered  by  DNR through  the                                                               
Division of Parks & Outdoor Recreation.                                                                                         
                                                                                                                                
MR.  HOSACK,  in  response  to  a  question  from  Representative                                                               
Gruenberg,  said  there  is  a   fiscal  note  missing  from  the                                                               
committee packet.  He stated  that because [of] "the amendment to                                                               
eliminate the  requirement to register non-powered  boats," there                                                               
would  be a  decrease  in  revenue, estimated  to  drop from  the                                                               
$39,000 currently collected to approximately $35,000 a year.                                                                    
                                                                                                                                
MR.  FOLKERTS,  in  response  to  a  question  by  Representative                                                               
Gruenberg, reiterated that  the program is federally  funded.  He                                                               
added  that  it  is  almost exclusively  [supported  by]  federal                                                               
funding  and registration  receipts;  "there's  no money  out-of-                                                               
pocket  for the  state  on this."   In  response  to a  follow-up                                                               
question from  Representative Gruenberg, he said  that the amount                                                               
of federal  funding varies.   He explained  that it  [involves] a                                                               
three-part   program,   which  is   based   on   the  number   of                                                               
registrations  "last  year."    He stated  that  he  thinks  "the                                                               
federal  funding  portion  of  it   was  slightly  in  excess  of                                                               
$400,000."                                                                                                                      
                                                                                                                                
REPRESENTATIVE GRUENBERG said, "I gather  ... that there was some                                                               
concern about  ... taking  this over,  because what  happens when                                                               
the federal funding goes away?"                                                                                                 
                                                                                                                                
MR. FOLKERTS answered yes, there  was concern that there would be                                                               
an unfunded  mandate to  the state; however,  in this  case, when                                                               
there's no state money being applied  to the program, "if the law                                                               
were to go away, so would the program and so would the money."                                                                  
                                                                                                                                
Number 1705                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG noted that  the House Judiciary Standing                                                               
Committee  was  faced  with  a   similar  question  over  a  bill                                                               
regarding  federal  money  for DNA  identification  for  criminal                                                               
justice [HB 49].   He noted that he offered  an amendment adopted                                                               
by [the House Judiciary Standing  Committee] that stated, in that                                                               
case, that  "the Commissioner of  Public Safety shall  notify the                                                               
president  of  the  Senate  and  the  speaker  of  the  House  of                                                               
Representatives if, at  any time after the effective  date of the                                                               
bill, the  federal government fails  to pay  the cost of  the DNA                                                               
identification  registration system."    He  suggested that  that                                                               
amendment could be tailored  to fit [HB 93] and may  be a way for                                                               
the  legislature to  know if  the government  stops funding  [the                                                               
boating safety program].                                                                                                        
                                                                                                                                
Number 1639                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH stated  that the  bill  would have  to be  held,                                                               
pending the missing fiscal note.                                                                                                
                                                                                                                                
REPRESENTATIVE  GRUENBERG  said,  "That  was Section  14  of  the                                                               
bill."                                                                                                                          
                                                                                                                                
Number 1621                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ referred  to part  of Section  2, which                                                               
read  as  follows   [on  page  2,  lines  13-20,   of  the  House                                                               
Transportation  Standing   Committee  CS,   original  punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
              (4) a boat that is not equipped with                                                                              
     mechanical propulsion [, THAT IS EXCLUSIVELY PADDLED,                                                                      
     POLED, ROWED, OR POWERED BY WIND, AND THAT IS                                                                              
                    (A) UNDER 10 FEET IN LENGTH; OR                                                                             
                    (B) OPERATED IN THIS STATE FOR A PERIOD                                                                     
          NOT EXCEEDING 30 DAYS IN A CALENDAR YEAR BY A                                                                         
          PERSON WHO HAS NOT ESTABLISHED RESIDENCY AS                                                                           
          DESCRIBED UNDER AS 01.10.055];                                                                                        
                                                                                                                                
REPRESENTATIVE BERKOWITZ, regarding "a  boat that is not equipped                                                               
with  mechanical propulsion",  said,  "It seems  to  me that  you                                                               
could read that in such a  way that you're excluding boats - that                                                               
might be  equipped with outboards,  but currently  don't actually                                                               
have the outboards mounted -  from registration, which would have                                                               
an impact on the fiscal note."                                                                                                  
                                                                                                                                
MR. FOLKERTS  replied that if a  vessel, such as a  rowboat, does                                                               
not have an outboard motor attached  to it, and it is exclusively                                                               
rowed or  pulled, then it  would be exempt under  "this committee                                                               
substitute" from the registration process.                                                                                      
                                                                                                                                
Number 1555                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ stated  his understanding  that the  CS                                                               
from  the House  Transportation  Standing  Committee amended  the                                                               
section regarding "THAT IS EXCLUSIVELY  PADDLED, POLED, ROWED, OR                                                               
POWERED BY WIND",  which he said leaves the  following boats that                                                               
are  exempt:   "a  boat  that  is  not equipped  with  mechanical                                                               
propulsion".    He  explained  that  a Lund,  or  a  Whaler,  for                                                               
example,  without the  outboard  mounted, is  "not equipped  with                                                               
mechanical  propulsion"; therefore  it  would not  be subject  to                                                               
registration requirements.                                                                                                      
                                                                                                                                
MR. FOLKERTS responded that, if  [Representative Berkowitz] had a                                                               
22-  or 24-foot  Boston Whaler,  without any  type of  mechanical                                                               
propulsion,  it would  be exempt  from registration.   He  added,                                                               
"And I would love to watch you dock in a wind, sir."                                                                            
                                                                                                                                
CHAIR WEYHRAUCH ask  Mr. Folkerts if there will or  will not be a                                                               
fiscal note.                                                                                                                    
                                                                                                                                
Number 1507                                                                                                                     
                                                                                                                                
MR. FOLKERTS, referring  to the previous comments  of Mr. Hosack,                                                               
stated his  belief that the  original HB  93 would not  require a                                                               
fiscal note  because there  would be  no fiscal  impact; however,                                                               
the CS would  reduce the amount of  registration monies available                                                               
to the  state by removing  the registration requirement  for non-                                                               
powered boats.                                                                                                                  
                                                                                                                                
Number 1480                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  asked what percentage of  the registration                                                               
applies to non-powered boats.                                                                                                   
                                                                                                                                
Number 1452                                                                                                                     
                                                                                                                                
MR. HOSACK answered that, currently,  there are 56,900 registered                                                               
boats.   Of those, 7,100 are  non-powered boats.  He  said, "Last                                                               
year, we had  about 17,900 transactions from  motorized boats and                                                               
[3,500] transactions from  non-powered boats."  In  response to a                                                               
request for clarification from  Representative Seaton, Mr. Hosack                                                               
explained  that  the registrations  are  valid  for a  three-year                                                               
period.   He added,  "So, of  those total  boats, we'll  see them                                                               
once every three years, unless they change ownership."                                                                          
                                                                                                                                
Number 1384                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLM asked  Mr. Hosack,  "If you  don't have  the                                                               
$35,000,  you have  no access  to the  general fund  to get  that                                                               
money back any place.  Is that correct?"                                                                                        
                                                                                                                                
MR. HOSACK answered that is correct.                                                                                            
                                                                                                                                
REPRESENTATIVE  HOLM stated,  "If that  were true  ... sir,  then                                                               
there is no  negative impact to your operating budget,  or to the                                                               
revenue stream of  the State of Alaska.  There's  only a negative                                                               
impact to how  much money that you  have to spend."   He asked if                                                               
that is correct.                                                                                                                
                                                                                                                                
MR. HOSACK answered, "I don't believe  so."  He stated that "last                                                               
year," the  total collected was  $456,600 in  boat registrations,                                                               
which  included  both  motorized  and non-motorized  boats.    He                                                               
reiterated that $35,000 of that  was from the non-motorized boats                                                               
and [that  money would  not be  collected if  the proposed  CS is                                                               
passed],  which  decrease  the revenue  going  into  the  state's                                                               
general  fund.   That's  what  a fiscal  note  would reflect,  he                                                               
explained.                                                                                                                      
                                                                                                                                
Number 1302                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM  asked Mr.  Hosack if  it was  his assessment                                                               
that, by  decreasing the  workload, there would  be no  effect on                                                               
the cost of the operation.                                                                                                      
                                                                                                                                
MR. HOSACK answered  that there will be associated  costs for the                                                               
tabs  and mailing,  for example,  as well  as "about  ... half  a                                                               
position," based on the previously stated transaction numbers.                                                                  
                                                                                                                                
REPRESENTATIVE  HOLM asked  how that  would then  translate to  a                                                               
positive impact on the cash flow of the department.                                                                             
                                                                                                                                
MR. HOSACK responded  that he does not believe that  it will be a                                                               
positive cash  flow.   He said,  "My fiscal  note will  reflect a                                                               
reduction  in  the  revenue  due  to  not  registering  the  non-                                                               
motorized boats;  it will reflect  a decrease in costs  for those                                                               
3,500 transactions, which we'll no longer have to do."                                                                          
                                                                                                                                
REPRESENTATIVE  HOLM  asked if  Mr.  Hosack  was stating  to  the                                                               
committee that the cost of those  transactions is less than $10 a                                                               
piece.   In response to  a comment by Mr.  Hosack, Representative                                                               
Holm clarified that  he was asking if the cost  to the department                                                               
of providing those registrations is less than $10 per unit.                                                                     
                                                                                                                                
MR. HOSACK answered yes.  He continued as follows:                                                                              
                                                                                                                                
     Our total fiscal  note for the boating bill,  as it was                                                                    
     originally passed - in the  current fiscal year - is, I                                                                    
     believe, $378,000.   We took in $456,600  in revenue in                                                                    
     fiscal year 2002.                                                                                                          
                                                                                                                                
Number 1165                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH requested  that  Mr. Hosack  produce the  fiscal                                                               
note by tomorrow.                                                                                                               
                                                                                                                                
MR. HOSACK agreed to do so.                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON  asked that  the  fiscal  note reflect  an                                                               
estimate of the "half position" previously mentioned.                                                                           
                                                                                                                                
REPRESENTATIVE GRUENBERG asked, "If  there's federal money coming                                                               
in, and  there's revenue  from the  sale of  these registrations,                                                               
isn't there a considerable profit to the state?"                                                                                
                                                                                                                                
Number 1090                                                                                                                     
                                                                                                                                
MR. FOLKERTS explained  that there is a benefit to  the state, in                                                               
that, by  law, 75 percent of  the monies coming in  is designated                                                               
for  education,  which  he  said is  "what  the  state's  boating                                                               
program does."   He suggested that  Mr. Johnson may have  more to                                                               
add  to the  answer.   In  response to  a  follow-up question  by                                                               
Representative  Gruenberg,  he said  that  he  believes that  the                                                               
other 25  percent is used  administratively, perhaps to  help the                                                               
Department of Public  Safety "do the enforcement  portion of it,"                                                               
for example.                                                                                                                    
                                                                                                                                
Number 1040                                                                                                                     
                                                                                                                                
MR. JOHNSON noted  that there are several qualifiers  that all 56                                                               
states  and territories  must  satisfy in  order  to qualify  for                                                               
federal [funding].   Boat registration is one of  those, he said.                                                               
If  [Alaska]   fulfills  those  requirements,   the  registration                                                               
receipts  that used  to be  paid to  the federal  government, and                                                               
therefore went  into the U.S.  Treasury, now remain in  the State                                                               
of  Alaska.   Furthermore, the  state qualifies  for the  federal                                                               
grant  money,  which it  didn't  qualify  for  before.   The  net                                                               
benefit to the state, estimated in FY 03, totals $490,000.                                                                      
                                                                                                                                
CHAIR  WEYHRAUCH  asked  Mr.  Johnson  and  Mr.  Hosack  to  work                                                               
together  to prepare  the fiscal  note  previously requested,  so                                                               
that they are "both on the same page."                                                                                          
                                                                                                                                
[HB 93 was held over.]                                                                                                          
                                                                                                                                
HB 215-REPEAL ONE PERCENT FOR ART                                                                                             
                                                                                                                                
[Contains brief mention of HB 134]                                                                                              
                                                                                                                                
CHAIR WEYHRAUCH  announced that  the next  order of  business was                                                               
HOUSE BILL  NO. 215,  "An Act repealing  statutes that  relate to                                                               
art works in  public buildings and facilities and  that require a                                                               
set percentage of construction costs to be spent on art."                                                                       
                                                                                                                                
Number 0991                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BILL STOLTZE,  Alaska State  Legislature, sponsor                                                               
of HB 215,  told the committee the bill was  not new, noting that                                                               
his  "colleague  from  District   20"  probably  had  a  previous                                                               
opportunity  to vote  on some  permutation  of this  bill in  the                                                               
past.     He  indicated  that   he  was  the  beneficiary   of  a                                                               
considerable amount of research on  this issue that had been done                                                               
by  [former]   Representative  [Mark]  Hanley.     Representative                                                               
Stoltze said  that he would  be approaching  the merits of  the 1                                                               
percent  for  art  from  the fiscal  rather  than  the  aesthetic                                                               
perspective.                                                                                                                    
                                                                                                                                
Number 0833                                                                                                                     
                                                                                                                                
REPRESENTATIVE STOLTZE  said that  with more  school construction                                                               
and more  new projects, each dollar  would need to be  spent more                                                               
intelligently  by  weighing  all  of  the  costs  involved.    He                                                               
referred  to his  presentation a  few days  ago of  [HB 134],  "a                                                               
prison  bill,"  during  which  he had  asked  the  Department  of                                                               
Corrections [how  much] 1  percent [for] art  would amount  to on                                                               
the  "Sutton  proportion"  [a   proposed  prison  facility  under                                                               
HB 134].   He  was given  the estimated  amount of  $1.3 million,                                                               
which  he  said  he  found  to  be  staggering.    He  said  that                                                               
Representative  Holm  was  concerned  about the  cost  of  public                                                               
facilities.  He added, "That  really brought that to home, that's                                                               
why  I asked  him that  question."   Regarding prisons,  he said,                                                               
given the choice, he'd rather  allocate towards officer safety or                                                               
more beds.  He  said he expected that there would  be quite a bit                                                               
of testimony on  HB 215, adding that he respects  a divergence of                                                               
opinion and  also that  he comes  from a  family involved  in the                                                               
arts, with his  grandmother [Margaret G. Mielke]  being the first                                                               
poet laureate [of Alaska].                                                                                                      
                                                                                                                                
Number 0656                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON asked Representative  Stoltz to explain the                                                               
zero fiscal note.                                                                                                               
                                                                                                                                
REPRESENTATIVE  STOLTZE responded  that it  was probably  because                                                               
the  Department of  Transportation &  Public Facilities  (DOT&PF)                                                               
didn't  have any  major facilities  being constructed  this year.                                                               
He said  that obviously there was  a cost involved, but  this was                                                               
difficult  to  quantify.   He  told  the committee  that  getting                                                               
information from state  agencies can be difficult  and that "this                                                               
probably hasn't been  the best-run program that  the state's ever                                                               
put out."  He noted that there have been innumerable audits.                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  mentioned  that   the  fiscal  note  goes                                                               
through [2009],  shows a  zero amount, and  does not  include any                                                               
analysis.                                                                                                                       
                                                                                                                                
Number 0509                                                                                                                     
                                                                                                                                
BARBARA  BITNEY, Staff  to  Representative  Bill Stoltze,  Alaska                                                               
State  Legislature, said  it  was very  difficult  to obtain  the                                                               
funding analysis.   She  explained this was  because in  1975 all                                                               
construction  projects were  under  [DOT&PF]  and were  gradually                                                               
released so  that eventually,  for example,  responsibilities for                                                               
school  construction projects  were  transferred  from DOT&PF  to                                                               
[the Department  of Education and  Early Development].   She said                                                               
there  are  other instances  such  as  the Alaska  Court  System,                                                               
wherein policies  and procedures  have been developed  similar to                                                               
DOT&PF's.  With  this being split out among  agencies, one source                                                               
doesn't have the  information as to cost savings.   She said that                                                               
DOT&PF can authorize the purchase  of art during the construction                                                               
phase.   She said that the  costs aren't being tracked,  so it is                                                               
not easy to obtain information in a simple format.                                                                              
                                                                                                                                
Number 0423                                                                                                                     
                                                                                                                                
MS.  BITNEY referred  to  an audit  of January  4,  1999, by  the                                                               
Legislative  Audit   Division  explaining   that  there   are  13                                                               
Department of  Law memorandums detailing  the discussion  on what                                                               
is and what is not applicable.                                                                                                  
                                                                                                                                
Number 0400                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH asked if DOT&PF  could develop a fiscal note that                                                               
would reflect  the fiscal impact, if  it were given more  time to                                                               
do so.                                                                                                                          
                                                                                                                                
Number 0352                                                                                                                     
                                                                                                                                
MS.  BITNEY replied  that  she  didn't know  the  answer to  that                                                               
question.  She added that  after attempting to gather information                                                               
for several  weeks, all she ended  up with was the  art in public                                                               
places  fund, and  instead of  people depositing  money into  the                                                               
fund  and  then   purchasing  art,  it  was   done  "directly  at                                                               
construction";  therefore, the  fund  doesn't accurately  reflect                                                               
the percentage of money being spent.                                                                                            
                                                                                                                                
Number 0330                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLM referred  to  an  earlier conversation  with                                                               
Representative  Stoltze  in  which  it  was  intimated  that  the                                                               
percentage was  1 percent for  state projects but less  than that                                                               
for other projects within the state.                                                                                            
                                                                                                                                
REPRESENTATIVE STOLTZE said he believed  it was in the late 1970s                                                               
that there was a statutory change  for schools in rural Alaska in                                                               
which the  percentage was reduced to  0.5 percent.  He  said this                                                               
isn't  new  -  value  judgments  have  been  made  in  the  past,                                                               
depending  upon such  things as  intrinsic value  or construction                                                               
costs.                                                                                                                          
                                                                                                                                
REPRESENTATIVE HOLM asked why the number used was 1 percent.                                                                    
                                                                                                                                
REPRESENTATIVE  STOLTZE  surmised  that  it  mirrored  a  federal                                                               
program and said he suspected it was modeled after federal law.                                                                 
                                                                                                                                
Number 0170                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM asked if it  made sense to have a requirement                                                               
without   having  a   way   to  audit,   track,   or  to   ensure                                                               
accountability.                                                                                                                 
                                                                                                                                
REPRESENTATIVE STOLTZE  replied that this was  a multi-committee,                                                               
bicameral  process  and   that  this  may  evolve   to  a  lesser                                                               
percentage.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLM  suggested   that  whether  the  institution                                                               
involved  was a  jail  or  a school  would  indicate a  different                                                               
necessity for art.                                                                                                              
                                                                                                                                
REPRESENTATIVE  STOLTZE agreed  that these  were valid  points to                                                               
consider.                                                                                                                       
                                                                                                                                
Number 0079                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ  interjected that  this only  relates to                                                               
art in  public places, so  regarding prison facilities,  it would                                                               
not  be art  within  the  entire institution,  it  would just  be                                                               
within the public sections of that  facility.  It would not go to                                                               
areas  like  bridges  or  sewer facilities  but  just  to  public                                                               
facilities.                                                                                                                     
                                                                                                                                
REPRESENTATIVE STOLTZE  indicated that the prisons  are included,                                                               
noting  that the  commissioner is  struggling to  incorporate the                                                               
art costs into construction.                                                                                                    
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  asked  if  the  audit  could  be  made                                                               
available.                                                                                                                      
                                                                                                                                
The committee took an at-ease from 9:38 a.m. to 9:41 a.m.                                                                       
                                                                                                                                
TAPE 03-37, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH referred to page 2,  Section 3 of the bill, which                                                               
allows  the construction  of memorials  to Alaska  veterans.   He                                                               
said, "I'm just  wondering, if we're doing away  [with] 1 percent                                                               
[for] art, should  we do away with the  construction of memorials                                                               
[to Alaska  veterans]?"  He  told Representative Stoltz  that the                                                               
question is more or less rhetorical.                                                                                            
                                                                                                                                
Number 0076                                                                                                                     
                                                                                                                                
REPRESENTATIVE  STOLTZ responded  that  there  certainly isn't  a                                                               
mandate "by percentage for those."   He said he thinks that "this                                                               
actually  refers to  the  1  percent [for]  art  not applying  to                                                               
that."  He opined  that the way the 1 percent  [for] art has been                                                               
structured through  a committee  process; the  committee wouldn't                                                               
want  to create  that clash  between the  arts community  and the                                                               
veterans  community.    He  said  that  Representative  Gruenberg                                                               
probably remembers  the visual arts center  in Anchorage, Alaska.                                                               
He  added,  "It's  probably  very  intelligent  that  those  that                                                               
proceeded  us  didn't  apply  the  1 percent  [for]  art  to  the                                                               
veterans'  memorial and  probably  prevented a  lot of  political                                                               
animosity."                                                                                                                     
                                                                                                                                
Number 0151                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG stated his  understanding that there are                                                               
so many  legal opinions because  the art projects are  spread out                                                               
among "the  departments," and when  "they did this  audit," legal                                                               
opinions [were necessary for each project].                                                                                     
                                                                                                                                
Number 0266                                                                                                                     
                                                                                                                                
CHARLOTTE FOX,  Executive Director,  Alaska State Council  on the                                                               
Arts (ASCA),  stated that  she thinks  that when  the legislation                                                               
was written in 1975, it was  pretty clear that the state took its                                                               
responsibility seriously to ensure  that all Alaskans have access                                                               
to the arts.   She said that she likes to think  of art in public                                                               
places as  "art in surprising  places," because it is  outside of                                                               
the normal galleries and museums.                                                                                               
                                                                                                                                
MS. FOX said  that Representative Stoltz had  previously stated a                                                               
good point  - an issue that  the people who work  at "the agency"                                                               
struggle with  - that there's really  no clear method of  how the                                                               
art in  public places  fund works.   The  two statutes  that deal                                                               
with  "percent for  art" and  "art in  public places"  were well-                                                               
intentioned, but  didn't give anyone  real authority  to "oversee                                                               
the program or have any enforcements."                                                                                          
                                                                                                                                
MS. FOX stated  that [ASCA] is concerned and  interested that the                                                               
program be  a success, but  has not  been given any  authority to                                                               
make  sure that  1  percent  for art  is  always  set aside,  for                                                               
example.  She  said that a lot of times  [ASCA] doesn't even know                                                               
that a project  is going on.   She said that she  agrees and that                                                               
the audit shows that something needs  to be done, but she doesn't                                                               
want [the program]  abolished, because it's very  important.  She                                                               
told committee members  that she thinks they  will hear [through]                                                               
other  testimony that  the  program is  vital,  provides jobs  to                                                               
Alaskans, and,  basically, doesn't cost  the State of  Alaska any                                                               
money out of  its operating budget.  She added,  "So, it's a win-                                                               
win program," and it needs to be operated efficiently.                                                                          
                                                                                                                                
REPRESENTATIVE STOLTZ thanked Ms. Fox  for the help she has given                                                               
to him and his staff.                                                                                                           
                                                                                                                                
Number 0583                                                                                                                     
                                                                                                                                
SYBIL  DAVIS,  Executive  Director,   Juneau  Arts  &  Humanities                                                               
Council (JAHC), told  the committee that she has  been a resident                                                               
of  Alaska since  statehood  and  is a  concerned  citizen.   She                                                               
continued as follows:                                                                                                           
                                                                                                                                
     What struck me  first and foremost is  that ... because                                                                    
     they have to  meet Alaska standards in  art, [the state                                                                    
     requires]   our   Alaskan   students  to   develop   an                                                                    
     understanding and  appreciation of  art, and  yet House                                                                    
     Bill  215 would  eliminate a  program that  feeds right                                                                    
     into that.                                                                                                                 
                                                                                                                                
MS.  DAVIS  opined that  Alaska  is  a "magnificently  beautiful"                                                               
state.   Furthermore,  she stated  that it  is critical  that the                                                               
imprint and  physical mark that  is made  in the state  should be                                                               
esthetic.   She  said, "Our  environment is  extremely critical."                                                               
She told the committee that the  first thing she noticed when she                                                               
walked  into  the  committee room  was  its  "colorful  backdrop"                                                               
[referring to a  textile "northern lights" piece,  created by the                                                               
Auke Bay Elementary students].                                                                                                  
                                                                                                                                
MS.  DAVIS  told the  committee  that  Lieutenant Governor  Loren                                                               
Leman's  staff came  into the  Juneau Arts  & Humanities  Council                                                               
office in need of art for their  walls and was able to borrow art                                                               
from the council.   She said, "It just  reinforces how critically                                                               
important our  environment is.   What we  live with, what  we see                                                               
every day, and what we nourish our students with is critical."                                                                  
                                                                                                                                
Number 0737                                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ  shared a  comment he had  received from                                                               
an artist.   He  said, "Apparently,  someone had  asked [Winston]                                                               
Churchill why  they were continuing  funding for the  arts during                                                               
the war,  and [Mr. Churchill]  said, 'That's what  we're fighting                                                               
for'."                                                                                                                          
                                                                                                                                
Number 0815                                                                                                                     
                                                                                                                                
JUNE ROGERS, Director, Fairbanks  Art Association (FAA), told the                                                               
committee that she agrees with  the previously stated points made                                                               
by both Ms.  Davis and Ms. Fox.  She  indicated the bill's fiscal                                                               
intent language stating that other  needs more important than the                                                               
1 percent for  art expenditure are being considered.   She stated                                                               
that she takes exception to that.                                                                                               
                                                                                                                                
MS. ROGERS  said that  she finds  that the  best value  is gained                                                               
from working with  programs that address youth and  the health of                                                               
communities, to make  certain that jails are  less filled, rather                                                               
than  more filled.   She  said she  hopes that  youth who  are in                                                               
[juvenile  detention] facilities  have access  to art  materials,                                                               
"so that we  can continue to try to reach  them, to address their                                                               
relationship to the  community in a way that's  most positive for                                                               
all of us."                                                                                                                     
                                                                                                                                
MS.  ROGERS said  that FAA  works with  the school  district, the                                                               
state arts council, and [other]  organizations in the state.  She                                                               
mentioned a  recent arts  conference attended  by representatives                                                               
from major arts  organizations.  She told the  committee that she                                                               
spoke  at length  with a  woman from  Seldovia, [Alaska],  who is                                                               
working  desperately  to  address   problems  of  "a  variety  of                                                               
community  ills  through the  arts,"  such  as alcoholism.    She                                                               
stated  that art  in  public  places is  "the  one  way that  can                                                               
address this across the board  for all (indisc.)."  She indicated                                                               
working in a positive way to address the issues.                                                                                
                                                                                                                                
Number 1002                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLM thanked  Ms. Rogers  for all  the work  that                                                               
she's done for the arts community in Fairbanks, Alaska.                                                                         
                                                                                                                                
Number 1000                                                                                                                     
                                                                                                                                
MS.  ROGERS mentioned  libraries.   She  stated  that she  thinks                                                               
public art  is a  public museum.   Every  community in  the state                                                               
does not have the  funds for a museum, and the  1 percent for art                                                               
projects  provide  public access  to  art.    She referred  to  a                                                               
previously stated  point made by  Ms. Fox that this  doesn't save                                                               
money,  but just  reallocates money.   She  said, "I  don't think                                                               
that there is  a possibility of finding a better  value for those                                                               
dollars."                                                                                                                       
                                                                                                                                
Number 1120                                                                                                                     
                                                                                                                                
KENNETH DeROUX  told the  committee that  he is  an artist  and a                                                               
resident of Juneau,  Alaska.  He noted that he  created one piece                                                               
of  public  art   for  the  state  in  the  1980s,   as  well  as                                                               
participated on "a number of panels,  back in the 1980s, when the                                                               
program had more  life to it."   He said that he is  a curator at                                                               
the Alaska  State Museum, [Juneau];  however, he is on  leave and                                                               
testifying on behalf of himself.                                                                                                
                                                                                                                                
MR. DeROUX said that [the  issues surrounding] the bill have been                                                               
discussed repeatedly,  back in the  1980s.  He stated  his belief                                                               
that the 1  percent for art program  is a model of  the federal 1                                                               
percent for  art program.  Art  in public places is  a feature of                                                               
civilized countries  all over  the world.   Mr. DeRoux  said that                                                               
probably one  of the  more notable federal  programs was  the WPA                                                               
program [part  of the U.S.  Work Progress  Administration Federal                                                               
Writers'  Project  and Historical  Records  Survey]  back in  the                                                               
1930s, which [not  only] made work for artists,  but also created                                                               
beautiful works  of art throughout  the country, which  are still                                                               
appreciated today.                                                                                                              
                                                                                                                                
Number 1218                                                                                                                     
                                                                                                                                
MR. DeROUX  noted two issues:   the cost of the  program, and the                                                               
quality of  life issue.   Regarding the  cost of the  program, he                                                               
said  that  he  thinks  the public  frequently  perceives  the  1                                                               
percent as  [an additional  cost] to  construction programs.   He                                                               
stated that  it is 1 percent  of the construction cost,  which is                                                               
"arrived at independently."  He  explained that the 1 percent for                                                               
art is  built into the  project as a  feature of it,  but doesn't                                                               
really  detract from  the specifications  of that  project.   The                                                               
cost  of a  [construction] project  can change  significantly, he                                                               
said, depending on who is doing  the specs.  Mr. DeRoux said that                                                               
a  small project  is  currently underway  at  the [Alaska  State]                                                               
Museum.   He said, "If  somebody is not watch-dogging  every step                                                               
of the way, there's a lot of  money in any given project that can                                                               
go into one thing or another thing."                                                                                            
                                                                                                                                
Number 1337                                                                                                                     
                                                                                                                                
MR.  DeROUX  said  he  knows  that  (DOT&PF)  does  not  like  to                                                               
administer the program,  [because] it is not a  familiar area and                                                               
is,  perhaps, extra  work that  can  create administrative  costs                                                               
within personnel  budgets.  He  said that the arts  council would                                                               
like to see the program  administered better, but frequently does                                                               
not have the money to "watch-dog it."                                                                                           
                                                                                                                                
Number 1390                                                                                                                     
                                                                                                                                
MR. DeROUX  stated his  belief that  the money  goes into  a fund                                                               
that can  be used  to purchase  artwork for  the state  art bank,                                                               
which then  can be used in  public buildings.  He  noted that the                                                               
art  bank is  another related  program.   He  told the  committee                                                               
members that if they saw what is  in the art bank and where it is                                                               
[displayed], they would  be impressed at how well  Alaska does at                                                               
"getting its art around and really dressing up its buildings."                                                                  
                                                                                                                                
Number 1411                                                                                                                     
                                                                                                                                
MR. DeROUX  returned to the quality  of life issue.   He told the                                                               
committee  that  he  had  attended  a  conference  in  Anchorage,                                                               
Alaska.  The  keynote speaker was a school  administrator from an                                                               
inner city  district in a  big East  Coast city who  testified to                                                               
the importance  of the environment  of schools.  Mr.  DeRoux said                                                               
that  the speaker  talked about  a school  in an  industrial zone                                                               
that was  designed by a good  architect and cost more  money than                                                               
normal, in  order to  be a  facility that  the students  could be                                                               
proud of.   The students were  proud of the school  and vandalism                                                               
dropped dramatically.   Furthermore, the school  became a magnate                                                               
for events and, as more  people used the school, the neighborhood                                                               
blossomed as  well.  Mr. DeRoux  posited that the end  result was                                                               
because of the concern for the quality of the environment.                                                                      
                                                                                                                                
Number 1509                                                                                                                     
                                                                                                                                
REPRESENTATIVE LYNN asked Mr. DeRoux  to explain how 1 percent of                                                               
the construction cost is not an additional cost to the project.                                                                 
                                                                                                                                
MR.  DeROUX stated  that  it  is his  understanding  that [the  1                                                               
percent] does not actually increase the cost of the project.                                                                    
                                                                                                                                
REPRESENTATIVE  LYNN  indicated  the   1  percent  is  built  in;                                                               
however, if there  was no 1 percent, wouldn't that  make the cost                                                               
of the project 1 percent less?                                                                                                  
                                                                                                                                
MR.  DeROUX  said  that  he  does not  "cost  out"  projects  and                                                               
therefore  does  not  understand  the  process  completely.    In                                                               
response  to  a follow-up  question  by  Representative Lynn,  he                                                               
suggested that [DOT&PF] could perhaps explain the issue.                                                                        
                                                                                                                                
Number 1610                                                                                                                     
                                                                                                                                
JOCELYN YOUNG, Curator,  1 percent for art  program in Anchorage,                                                               
Alaska,  testifying  as  a  private   citizen,  stated  that  the                                                               
municipality  [of Anchorage]  passed its  own ordinance  in 1978,                                                               
after  the   state  law  was   passed  in  1975,   because  major                                                               
construction  projects were  beginning  and  Anchorage wanted  to                                                               
have control  over the funds and  make decisions on a  very local                                                               
level.   The people who  work in the  buildings are the  ones who                                                               
are making the decisions about  the artwork, she said; therefore,                                                               
the artwork chosen will be different from place to place.                                                                       
                                                                                                                                
MS. YOUNG  noted that Alaska was  the tenth state in  the country                                                               
to pass a  1 percent for art statute, and  now there are hundreds                                                               
of programs  throughout the country,  supporting the  addition of                                                               
artwork for private and public  buildings.  The program in Alaska                                                               
is seen  as one of  the best in the  country, she said.   Artists                                                               
within the state, and those  who have lived in Alaska previously,                                                               
are proud  to claim that  they have  work in the  collection, she                                                               
said.                                                                                                                           
                                                                                                                                
MS. YOUNG  said that,  in Anchorage,  1 percent  is the  cost set                                                               
aside for  the artwork in its  buildings.  When projects  are bid                                                               
upon,  she said,  15-20  percent  of the  budget  is usually  for                                                               
contingency alone.  The 1  percent funds would not translate into                                                               
better  building  material  if  the  program  was  no  longer  in                                                               
existence; it  wouldn't be used  for stronger  structural support                                                               
or  better flooring,  for  example, because  there  are codes  in                                                               
place that "already  address these things."  Ms.  Young said that                                                               
those funds would  be lost to the artists and  to the structures,                                                               
and would be reabsorbed into the construction of the project.                                                                   
                                                                                                                                
MS. YOUNG  said that  the artists benefit  from the  challenge of                                                               
creating designs and  projects "at this scale."   She said, "This                                                               
is a  way to treat  our artists in  our state and  community like                                                               
professionals, on a  par with architects and  designers and other                                                               
project personnel."   She stated that  1 percent may look  like a                                                               
large amount of  money, but a lot of artists  are not making very                                                               
much money  on these projects.   She  explained that there  are a                                                               
lot of expenses that go into  building public art.  Many artists,                                                               
she said,  "do this" because they  love to see their  artwork out                                                               
there for the  general public to enjoy, and they  want to enhance                                                               
the buildings.                                                                                                                  
                                                                                                                                
MS.  YOUNG  noted  that  she  is very  familiar  with  the  state                                                               
program,  because the  program in  Anchorage, Alaska  was modeled                                                               
after it.   She told the  committee that she hopes  it finds lots                                                               
of reasons to  support public art and "few reasons  to support HB
215."                                                                                                                           
                                                                                                                                
Number 1842                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG asked  if  Ms. Young  is  aware of  any                                                               
other  states  that  have  chosen to  balance  their  budgets  by                                                               
repealing "this kind of a program."                                                                                             
                                                                                                                                
MS. YOUNG answered  no.  She said she has  been hearing that more                                                               
codes are  being passed in  municipalities [within  other] states                                                               
that require private development to also include public art.                                                                    
                                                                                                                                
Number 1888                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON  referred to  an  article  from the  Homer                                                             
Daily  News  that  speaks  to  [the  issue  of  public  art]  and                                                             
addresses the  Alaska Center for  the Performing Arts  (ACPA), in                                                               
Anchorage, Alaska,  regarding ACPA's use  of 1 percent  [for] art                                                               
money  towards  design elements  of  the  carpets, railings,  and                                                               
lighting.  He  asked if elements [that are  incorporated into the                                                               
building, such as carpets] count  as those that don't necessarily                                                               
increase the cost of the project by 1 percent.                                                                                  
                                                                                                                                
MS. YOUNG explained that, for  example, an artist is selected out                                                               
of proposals submitted to develop  a design for the upholstery in                                                               
one  of the  theatres,  and  is paid  a  nominal  design fee  of,                                                               
perhaps, $5,000 to oversee "the running  of the mill of ... their                                                               
design and installation."  The  upholstery was going to be milled                                                               
anyway, she said, "so this is a  way to stretch the 1 percent for                                                               
art dollars."                                                                                                                   
                                                                                                                                
Number 1990                                                                                                                     
                                                                                                                                
DUKE RUSSELL testified  that he is a veteran artist  and a "super                                                               
voter" who has lived in [Anchorage]  for over 30 years.  He said,                                                               
"I can't  help but think this  is kind of a  'Nimbus' thing, that                                                               
it's more not  liking some of the products of  this project."  He                                                               
opined that the  benefits of the 1 percent for  art go far beyond                                                               
the  obvious.    He  said   its  "soul  food";  it's  "contagious                                                               
creativity."  He  explained that people spur ideas  off of ideas.                                                               
He said,  "The art  and the artists  are not  just subcontractors                                                               
laying pipe."   He stated  that the presence  of public art  is a                                                               
unique component  of the city  that delineates it from  any other                                                               
place.  He  mentioned imagining Chicago having  problems with its                                                               
Picassos, or  its large public  art.   He said that  [Chicago] is                                                               
certainly "a model for us all."                                                                                                 
                                                                                                                                
MR. RUSSELL said [Anchorage] is  suffering from homogenization of                                                               
the Outside  - the franchises and  the "super stores."   He said,                                                               
"Don't further  impact this  blight by  rescinding the  1 percent                                                               
for the arts."   He said that he has lived  "here" for his entire                                                               
adult  life and  has  never  "experienced the  level  of so  much                                                               
spastic legislation."  Mr.  Russell expressed his dissatisfaction                                                               
with  the current  administration.   In response  to a  remark by                                                               
Chair Weyhrauch, he said that  [the legislature] is [also] trying                                                               
to save  money and  "all it takes  is income tax."   He  said the                                                               
ideas  [of  the legislature]  don't  make  sense or  reflect  the                                                               
values of Alaskans and that he expects more from [the                                                                           
legislature].                                                                                                                   
                                                                                                                                
Number 2120                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH responded, "Well, we expect a lot from                                                                          
ourselves, Mr. Russell."                                                                                                        
                                                                                                                                
[HB 215 was held over.]                                                                                                         
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
Number 2126                                                                                                                     
                                                                                                                                
There being no further business before the committee, the House                                                                 
State Affairs Standing Committee meeting was adjourned at                                                                       
10:10 a.m.                                                                                                                      

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