Legislature(2003 - 2004)

01/27/2004 08:00 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                                                                           
                        January 27, 2004                                                                                        
                           8:00 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Bruce Weyhrauch, Chair                                                                                           
Representative Jim Holm, Vice Chair                                                                                             
Representative John Coghill                                                                                                     
Representative Bob Lynn                                                                                                         
Representative Paul Seaton                                                                                                      
Representative Ethan Berkowitz                                                                                                  
Representative Max Gruenberg                                                                                                    
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 350                                                                                                              
"An Act relating to adding personal injury, death, and property                                                                 
damage from arson in the first degree to the offenses                                                                           
compensable by the Violent Crimes Compensation Board."                                                                          
     - MOVED CSHB 350(STA) OUT OF COMMITTEE                                                                                     
HOUSE BILL NO. 337                                                                                                              
"An Act relating to anatomical donor registries, to an                                                                          
anatomical gift awareness fund, to an anatomical gift awareness                                                                 
program, and to motor vehicle licenses and registrations."                                                                      
     - MOVED CSHB 337(STA) OUT OF COMMITTEE                                                                                     
HOUSE BILL NO. 241                                                                                                              
"An Act relating to optional exemptions from municipal property                                                                 
taxes on residential property."                                                                                                 
     - HEARD AND HELD                                                                                                           
PREVIOUS ACTION                                                                                                               
BILL: HB 350                                                                                                                  
SHORT TITLE: CRIME VICTIMS' COMPENSATION FOR ARSON                                                                              
SPONSORS(S): REPRESENTATIVE(S) GATTO, GRUENBERG                                                                                 
01/12/04       (H)       PREFILE RELEASED 1/2/04                                                                                
01/12/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/12/04       (H)       STA, JUD                                                                                               
01/20/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
01/20/04       (H)       <Bill Hearing Rescheduled to 1/22>                                                                     
01/22/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
01/22/04       (H)       Scheduled But Not Heard                                                                                
01/27/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
BILL: HB 337                                                                                                                  
SHORT TITLE: ANATOMICAL GIFTS REGISTRY                                                                                          
SPONSOR(S): REPRESENTATIVE(S) MCGUIRE                                                                                           
01/12/04       (H)       PREFILE RELEASED 1/2/04                                                                                
01/12/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/12/04       (H)       STA, HES, FIN                                                                                          
01/20/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
01/20/04       (H)       Heard & Held                                                                                           
01/20/04       (H)       MINUTE(STA)                                                                                            
01/27/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
BILL: HB 241                                                                                                                  
SHORT TITLE: MUNICIPAL PROPERTY TAX EXEMPTION                                                                                   
SPONSOR(S): REPRESENTATIVE(S) CHENAULT                                                                                          
04/04/03       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/04/03       (H)       CRA, STA                                                                                               
05/06/03       (H)       CRA AT 8:00 AM CAPITOL 124                                                                             
05/06/03       (H)       -- Meeting Canceled --                                                                                 
05/08/03       (H)       CRA AT 9:00 AM CAPITOL 124                                                                             
05/08/03       (H)       Moved Out of Committee                                                                                 
05/08/03       (H)       MINUTE(CRA)                                                                                            
05/12/03       (H)       CRA RPT 3DP 1NR                                                                                        
05/12/03       (H)       DP: KOTT, WOLF, MORGAN; NR: CISSNA                                                                     
01/13/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
01/13/04       (H)       <Bill Hearing Postponed>                                                                               
01/20/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
01/20/04       (H)       Heard & Held                                                                                           
01/20/04       (H)       MINUTE(STA)                                                                                            
01/27/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
WITNESS REGISTER                                                                                                              
REPRESENTATIVE CARL GATTO                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as sponsor of HB 350.                                                                            
GERAD GODFREY, Chair                                                                                                            
Violent Crimes Compensation Board                                                                                               
Department of Administration                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Told  the  committee  that the  board  has                                                               
chosen to support  [HB 350] as a piece  of legislation beneficial                                                               
particularly  to victims  of arson;  answered questions  from the                                                               
SUSAN BROWNE, Administrator                                                                                                     
Violent Crimes Compensation Board                                                                                               
Department of Administration                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions  for the committee during                                                               
the hearing on HB 350.                                                                                                          
KELLY NICOLELLO, Assistant State Fire Marshall                                                                                  
Division of Fire Prevention                                                                                                     
Department of Public Safety                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Offered statistics  regarding arson-related                                                               
deaths in Alaska;  testified that the department  is in agreement                                                               
with HB 350 "the way it's written."                                                                                             
HEATH HILYARD, Staff                                                                                                            
to Representative Lesil McGuire                                                                                                 
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION   STATEMENT:      Answered  questions   on   behalf   of                                                               
Representative McGuire, sponsor of HB 337.                                                                                      
JILL STEINHAUS, Director of Development                                                                                         
LifeCenter Northwest                                                                                                            
Bellevue, Washington                                                                                                            
POSITION STATEMENT:   Answered questions on  behalf of LifeCenter                                                               
Northwest during the hearing on HB 337.                                                                                         
DUANE BANNOCK, Director                                                                                                         
Division of Motor Vehicles (DMV)                                                                                                
Department of Administration                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions  during the hearing on HB                                                               
RANDY HOFFBECK                                                                                                                  
Petroleum Property Assessor                                                                                                     
Department of Revenue                                                                                                           
State of Alaska                                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:                                                                                                             
STEVE PORTER, Deputy Commissioner                                                                                               
Department of Revenue                                                                                                           
State of Alaska                                                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:                                                                                                             
SUE HECKS, Emergency Medical Services Chief                                                                                     
Seldovia Ambulance and Fire Department                                                                                          
City of Seldovia                                                                                                                
Seldovia, Alaska                                                                                                                
POSITION STATEMENT:  Testified against the CS version of HB 241.                                                                
SHARALYN WRIGHT                                                                                                                 
Staff to Representative Mike Chenault                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified to clarify why CSHB241 removed                                                                   
language from the original bill.                                                                                                
STEVE VAN SANT, State Assessor                                                                                                  
Central Office                                                                                                                  
Division of Community Advocacy                                                                                                  
Department of Community & Economic Development                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the hearing on HB                                                                
ACTION NARRATIVE                                                                                                              
TAPE 04-07, SIDE A                                                                                                            
Number 0001                                                                                                                     
CHAIR  BRUCE WEYHRAUCH  called the  House State  Affairs Standing                                                             
Committee meeting  to order at  8:00 a.m.   Representatives Holm,                                                               
Coghill, Lynn, and  Weyhrauch were present at the  call to order.                                                               
Representatives Gruenberg,  Seaton, and Berkowitz arrived  as the                                                               
meeting was in progress.                                                                                                        
HB 350-CRIME VICTIMS' COMPENSATION FOR ARSON                                                                                  
Number 0060                                                                                                                     
CHAIR WEYHRAUCH  announced that the  first order of  business was                                                               
HOUSE BILL NO.  350, "An Act relating to  adding personal injury,                                                               
death, and property damage from arson  in the first degree to the                                                               
offenses compensable by the Violent Crimes Compensation Board."                                                                 
Number 0117                                                                                                                     
REPRESENTATIVE  SEATON moved  to adopt  the committee  substitute                                                               
(CS) for HB  350, [Version 23-LS1324\Q, Luckhaupt,  1/21/04, as a                                                               
work draft.   There being no objection, Version Q  was before the                                                               
Number 0150                                                                                                                     
REPRESENTATIVE CARL  GATTO, Alaska State Legislature,  as sponsor                                                               
of  HB  350,  revealed  that  he  spent  25  years  in  the  fire                                                               
department  in Anchorage  and  as  a result  has  responded to  a                                                               
countless  number of  small fires,  fewer large  fires, and  many                                                               
medical runs.  He said he  has seen many of the difficulties that                                                               
people  suffer  as a  result  of  fires.   Representative  Gatto,                                                               
depicting  the   viciousness  of  arson,  recounted   a  personal                                                               
experience  in his  own community  whereby  a friend  of his  was                                                               
asleep at home and  his wife awoke at 3 a.m.  to noises and found                                                               
that the  side of  the house  was on fire.   The  fire department                                                               
said that at that hour of  the morning, the fire had clearly been                                                               
set by someone.                                                                                                                 
REPRESENTATIVE GATTO told the committee  that when [fire fighters                                                               
respond to] a fire  at 2 a.m. and find a car  in the driveway and                                                               
no smoke  alarm going  off, they are  fairly certain  that people                                                               
are inside;  therefore, a search  and rescue  must be done.   The                                                               
situation [where  his friends  awoke to find  the house  on fire]                                                               
clearly was attempted murder, he stated.                                                                                        
REPRESENTATIVE GATTO said that death  is not the only devastating                                                               
result  of  fire, but  sometimes  more  devastating are  injuries                                                               
resulting from fires.   That is why there  are special facilities                                                               
that  provide long-term  care.   He mentioned  military personnel                                                               
coming back from war with burns.  He continued as follows:                                                                      
     Because  it  is  so  ...  devastating  to  people,  and                                                                    
     because  it was  not included  in the  list of  violent                                                                    
     crimes  compensation,  Representative Gruenberg  and  I                                                                    
     looked at it,  and it just seemed apparent  that it was                                                                    
     simply an  error of omission.   And  it is our  wish to                                                                    
     simply add this to the list of violent crimes that can                                                                     
     receive compensation through the board.                                                                                    
Number 0377                                                                                                                     
CHAIR  WEYHRAUCH asked  why the  proposed legislation  limits the                                                               
addition to [the crime of] arson in the first degree.                                                                           
Number 0400                                                                                                                     
REPRESENTATIVE GRUENBERG  explained that  the reason that  he and                                                               
Representative Gatto  chose arson  in the first  degree is:   "It                                                               
requires that  somebody be placed  in immediate  physical danger;                                                               
the  other crimes  don't."    He noted  that  the Violent  Crimes                                                               
Compensation Board compensates for physical  injury or death.  He                                                               
said  he supposes  it would  be  possible to  have a  "criminally                                                               
negligent  burning with  that  result," and  he  said he  doesn't                                                               
think that  [the sponsors] would  have any objection  to amending                                                               
the bill to include "those."                                                                                                    
REPRESENTATIVE  GRUENBERG  said  there   have  been  some  recent                                                               
crimes, particularly in Anchorage,  that brought this omission to                                                               
his attention.   There didn't seem  to be any reason  not to have                                                               
arson  in the  first degree  on the  list.   He remarked  that to                                                               
prove the  crime of  murder, the  intent to  kill must  be shown;                                                               
however, with  arson in the  first degree,  all that needs  to be                                                               
shown is  that there is  an intentional or reckless  burning, and                                                               
that somebody was thereby endangered.   He added, "You don't even                                                               
have to  show that the  person knew  that the person  was inside,                                                               
just that they  negligently set the fire."  He  said, "If you had                                                               
the injury, then you'd have the [arson in the first degree]."                                                                   
Number 0600                                                                                                                     
CHAIR  WEYHRAUCH stated  for the  record,  "This has  to do  with                                                               
impacts to  individuals, not to property."   If it was  opened up                                                               
to impact  to property  in regard  to compensation  received from                                                               
[the Victims of  Crime Compensation Board], then  "you've got the                                                               
entire Title 11  to add in to  the statute."  He  added that that                                                               
would be  a policy  decision that  he is  not sure  the committee                                                               
wants to [make].                                                                                                                
REPRESENTATIVE  GRUENBERG noted  that the  original bill  version                                                               
did  include property  damage  from arson  in  the first  degree,                                                               
because  usually,  if there  is  a  fire  sufficient to  cause  a                                                               
significant  injury,  there  will also  be  significant  property                                                               
damage.   He noted that  there had  been immediate outcry  from a                                                               
number  of different  people that  "this would  soon exhaust  the                                                               
resources of that board."                                                                                                       
CHAIR  WEYHRAUCH  asked, "Why  not  have  an immediate  effective                                                               
REPRESENTATIVE  GRUENBERG explained  that,  as  a policy  matter,                                                               
whenever  he  introduces  legislation  he  doesn't  [include]  an                                                               
immediate effective date, unless there is  a reason to do so.  He                                                               
said, "The  statutes contemplate a  90-day period to  give people                                                               
time  to  gear  up."   He  stated  that  he  would not  have  any                                                               
objection [to an immediate effective  date].  He suggested asking                                                               
a  representative  of the  previously  mentioned  board what  the                                                               
impact on it would be.                                                                                                          
Number 0846                                                                                                                     
GERAD   GODFREY,  Chair,   Violent  Crimes   Compensation  Board,                                                               
Department of  Administration, told the committee  that the board                                                               
has  chosen  to  support  [HB  350] as  a  piece  of  legislation                                                               
beneficial  particularly to  victims  of arson.    He stated  his                                                               
personal belief that  the bill stands on its own  merit and sells                                                               
itself.   He said, "The  absence of  arson from the  inception of                                                               
the bill  that created the  parameters for this board  was likely                                                               
an  oversight.   Perhaps  arson,  at  the  time, didn't  fit  the                                                               
traditional   paradigm  of   the  era   for  a   violent  crime."                                                               
Ironically, he  noted, fire, in  and of  itself, may be  the most                                                               
violent natural  force on earth.   Therefore, when  an individual                                                               
sets a  fire with  or without intent,  that person  unleashes the                                                               
most  violent,  unpredictable,  and often  uncontrollable  force.                                                               
Any  personally   adverse  results  from  that   fire  should  be                                                               
compensable by  the Violent Crime Compensation  Board, he opined.                                                               
He gave  credit to both  Representatives Gatto and  Gruenberg for                                                               
addressing  this  long  overdue   and  overlooked  provision  for                                                               
victims of arson.                                                                                                               
MR.  GODFREY mentioned  current  fiscal limitations  and said  he                                                               
would  not  normally look  to  increase  the number  of  eligible                                                               
claimants.    He  indicated  that that  was  probably  his  first                                                               
reservation  upon  looking at  the  initial  draft of  the  bill.                                                               
However, regarding [Version  Q], he stated his belief  that it is                                                               
necessary  to  add Arson,  which  perhaps  "epitomizes a  violent                                                               
crime."  He  stated that the victims of arson  have the potential                                                               
to suffer  as much, or  more than  victims of gunshot  wounds and                                                               
assaults  with any  other  type  of weapon.    He encouraged  the                                                               
committee members to support HB 350.                                                                                            
Number 1022                                                                                                                     
REPRESENTATIVE LYNN  asked what the  average award is  "from this                                                               
compensation front."                                                                                                            
MR. GODFREY noted  that the maximum allowable  [award] is $40,000                                                               
and there  is no  minimum.   He surmised  that the  average falls                                                               
around  $2,000.   That  typically  would  include counseling  for                                                               
victims.  He offered more examples of how the money is awarded.                                                                 
Number 1165                                                                                                                     
REPRESENTATIVE LYNN stated, "I assume  that this doesn't preclude                                                               
any civil  liability for  the ... arsonist;  in other  words, ...                                                               
you still sue for civil damages.   Is that correct?"  In response                                                               
to a  request by Mr. Godfrey  to clarify his question,  he asked,                                                               
"They  can  still  sue  for  civil damages  in  addition  to  the                                                               
compensation from the fund?"                                                                                                    
MR. GODFREY answered that they can.   He noted that the board has                                                               
a caveat in  place that if that person  should recuperate his/her                                                               
losses through  avenues such  as insurance,  he/she does  have an                                                               
obligation  to  reimburse   the  board.    He   noted  that  that                                                               
reimbursement does  not go into  the board's coffers,  but rather                                                               
into the  general fund.  He  said that it is  the board's purpose                                                               
to help people  as soon as possible, whereas he  noted that civil                                                               
law  doesn't work  in  an  expeditious fashion.    He said  that,                                                               
occasionally,  a person's  attorney  will contact  the board  and                                                               
request that  the board waive the  person's repayment obligation,                                                               
because, even after the settlement,  that person is still in dire                                                               
REPRESENTATIVE LYNN asked,  "How much did we spend  last year for                                                               
MR. GODFREY deferred that question to the board's administrator.                                                                
Number 1330                                                                                                                     
SUSAN BROWNE,  Administrator, Violent Crimes  Compensation Board,                                                               
Department of  Administration, told the committee  that the board                                                               
awarded approximately $1.3  million to fire victims  in Alaska or                                                               
their service providers.                                                                                                        
Number 1400                                                                                                                     
CHAIR  WEYHRAUCH  mentioned  reading  about  the  board's  binary                                                               
report in  odd number  years.   He asked if  that was  the figure                                                               
given to the legislature last year.                                                                                             
MS. BROWNE said that she is  talking about fiscal year (FY) 2003.                                                               
She noted  that the  report has  not been  completed yet,  but is                                                               
almost available  on line and  will be delivered  sometime within                                                               
the next  month.  In response  to a question by  Chair Weyhrauch,                                                               
she said that the $1.3 million was  for one year.  In response to                                                               
a  follow-up questions  by  Chair Weyhrauch,  she  said that  the                                                               
limit for awards  is $40,000 per victim, per  incident, except in                                                               
the case  of homicide,  where there  are multiple  dependents and                                                               
the limit  is then  $80,000.   She added,  "And that  was raised,                                                               
effective two  years ago."  The  $40,000 used to be  $30,000, and                                                               
the $80,000 used  to be $40,000.  It is  funded through PFD funds                                                               
that are  not given to  those convicted of felonies  and multiple                                                               
misdemeanors.  Also, she said,  an application is made every year                                                               
for an office of victims of  crime fund, which is a Department of                                                               
Justice fund where the federal  convicts are fined and states can                                                               
apply for  a grant.   Before the  permanent fund, the  money came                                                               
from the general fund.                                                                                                          
CHAIR WEYHRAUCH asked  Mr. Godfrey if he has an  opinion about an                                                               
immediate effective date.                                                                                                       
MR. GODFREY replied  that he doesn't have a problem  with that at                                                               
all.  He noted  that there are not a large  number of arson cases                                                               
throughout  the state,  and he  said he  doesn't "expect  this to                                                               
really flood us with claims in  [arson in the first degree]."  He                                                               
stated that  his expectation is  that the few [claims]  the board                                                               
will get will be from those in dire need.                                                                                       
Number 1553                                                                                                                     
CHAIR  WEYHRAUCH asked  if adding  another crime  to the  list of                                                               
what  can be  compensated would  create  a fiscal  impact to  the                                                               
MR.  GODFREY  answered  that  the board's  funding  will  not  be                                                               
incrementally increased in  any way by the addition  of [arson in                                                               
the first degree]  to [statute].  He explained  that the increase                                                               
in applications will  have the effect of  ultimately reducing the                                                               
amount of funds  available for further applications.   At the end                                                               
of the fiscal year, he said,  the board may be holding applicants                                                               
off  or deferring  them  until it  gets new  funding.   He  said,                                                               
"That's unfortunate, but that's the way it is."                                                                                 
Number 1637                                                                                                                     
REPRESENTATIVE COGHILL  asked the following three  questions:  Is                                                               
there a  priority list; have other  states done this and  what is                                                               
the type  of payout that  has gone out  to the victim  because of                                                               
arson-related crime; and  has there been anything  in Alaska that                                                               
has gone wanting because of this not being in statute?                                                                          
MR.  GODFREY, addressing  the question  regarding a  hierarchy of                                                               
claims,  said  the  board  has  a  great  deal  of  latitude  and                                                               
discretion and does everything on  a case-by-case basis.  He also                                                               
noted that  the board limits  itself through  approximately seven                                                               
policies.  Regarding the question  about other states, he said he                                                               
doesn't know.  He noted that he  has been seated on the board for                                                               
only  about a  year  now.   However,  he  said  the former  board                                                               
administrator stated  that the  disparity in  the way  states "do                                                               
this" is "nothing  short of a chasm."   He noted that  there is a                                                               
person  who serves  as a  director of  a national  violent crimes                                                               
compensation  board  who is  a  wealth  of information  regarding                                                               
other states.                                                                                                                   
Number 1890                                                                                                                     
MR. GODFREY  said he would  defer Representative  Coghill's third                                                               
question to the  administrator.  He explained that  if there have                                                               
been any applications  [made by victims of arson],  the office in                                                               
Juneau would  know, but  the applications  would never  have been                                                               
sent on  to the  board to consider  in one of  its meetings.   He                                                               
added that  if such an application  had made it to  the board, it                                                               
would have been  denied as noncompensable.  He  surmised that [if                                                               
the  board  covered  compensation  for  victims  of  arson],  the                                                               
average  claim   awarded  would   be  for  personal   injury  and                                                               
psychological  counseling.    The  financial burden  for  a  burn                                                               
victim can  be astronomical,  he stated,  because the  victim may                                                               
need skin  grafts for years to  come.  That person  may come back                                                               
years later for  reconsideration by the board  after having their                                                               
first claim granted.   The board would then have  to set a policy                                                               
at that time  to decide how long it would  continue to cover that                                                               
person.  He indicated that some  claims may be awarded $15,000 to                                                               
$30,000 "a  hit."  He summarized  that it's a choice  of how many                                                               
get helped how much.                                                                                                            
Number 2075                                                                                                                     
REPRESENTATIVE  GRUENBERG,   regarding  Representative  Coghill's                                                               
previously stated  question whether  there had been  any interest                                                               
in  getting  awards from  the  board  in  the past  [for  arson],                                                               
returned  to the  subject of  the recent  events in  the Mountain                                                               
View  area [in  Anchorage].    He noted  that  he  had asked  the                                                               
constituents involved if  they had applied to  the Violent Crimes                                                               
Compensation  Board; however,  he discovered  that they  were not                                                               
eligible  for  compensation [because  arson  is  not one  of  the                                                               
crimes currently covered].                                                                                                      
REPRESENTATIVE  GRUENBERG  recalled  that  one  of  the  previous                                                               
examples offered  by Mr. Godfrey  regarding uses of the  fund was                                                               
to sometimes relocate  victims of stalking.  He  asked Ms. Browne                                                               
if Alaska  has a witness  relocation program similar to  that run                                                               
by the federal government.                                                                                                      
MS. BROWNE answered no.                                                                                                         
MR.  GODFREY interjected  that he  doesn't believe  there is  any                                                               
program like  that at all.   He remarked, "It's a  small world in                                                               
Alaska  and  people  know  people,  so  I  think  ...  if  you're                                                               
relocating, it would  have to be outside the state."   He offered                                                               
his  understanding that  there  are  no states  that  run such  a                                                               
program; the  federal marshals  are the  only ones  who [relocate                                                               
witnesses].   Mr. Godfrey indicated  that in order for  the board                                                               
to  even  consider  awarding  money  to a  person  who  wants  to                                                               
relocate [to get  away from a stalker, for  example], that person                                                               
would have to show that he/she has an entire plan in order.                                                                     
Number 2235                                                                                                                     
REPRESENTATIVE  GRUENBERG  handed   out  a  spreadsheet  [showing                                                               
deaths as a  result of arson, included in  the committee packet].                                                               
He  also read  statistics regarding  incidents of  arson and  the                                                               
resulting injuries, as  follows:  Four injuries  in two incidents                                                               
in 2001;  seven injuries in three  incidents in 2002; and,  in an                                                               
incomplete 2003 report, seven injuries in one incident.                                                                         
Number 2280                                                                                                                     
KELLY NICOLELLO, Assistant State  Fire Marshall, Division of Fire                                                               
Prevention, Department of Public  Safety, told the committee that                                                               
he had supplied those statistics,  as well as [the spread sheet].                                                               
He  stated  that  [the  State  Fire  Marshals]  are  the  primary                                                               
investigators for  the crime of  arson in determining  the origin                                                               
and cause.  The criminal aspect  is usually followed up by either                                                               
the  Alaska   State  Troopers,  or   the  police  force   in  the                                                               
jurisdiction involved.                                                                                                          
MR.  NICOLELLO said  the  impact on  family  members, both  those                                                               
injured  and  those dealing  with  the  loss  of loved  ones,  is                                                               
dramatic.  He  stated, "It's such a visible etching  ... on their                                                               
mind, that  to take the  crime of arson  in the first  degree and                                                               
not give  it the same weight  as somebody who is  injured or dies                                                               
by gunshot or  stabbing is really a misnomer."   He said, "We are                                                               
in  agreement with  this  bill  the way  it's  written, based  on                                                               
injury  and  death  versus  the property  rights  issue,  and  we                                                               
believe it's a good bill."                                                                                                      
Number 2380                                                                                                                     
REPRESENTATIVE  GATTO,  as  a  former  fire  fighter,  said  it's                                                               
certainly obvious that firemen are  often injured and burned as a                                                               
result  of arson  fires; however,  "they're compensated  in other                                                               
ways."    He added,  "So,  I'm  going to  take  it  that this  is                                                               
generally a needs-based situation when you award?"                                                                              
Number 2395                                                                                                                     
MR. GODFREY  replied, "Truth  be told,  again, that  is something                                                               
that this  current seated  board is  operating by,  or attempting                                                               
to."    Statutorily,   he  added,  "that  is   not  a  criteria."                                                               
Typically, he said, the board  does give consideration regardless                                                               
of somebody's  financial status.   He noted that the  board would                                                               
not double  an award in the  instance where a person  had already                                                               
been given money by his/her insurance company.                                                                                  
REPRESENTATIVE GATTO noted that the  existing list of things that                                                               
apply  [towards consideration  for compensation]  includes murder                                                               
and sexual assault "in any degree."   He asked Mr. Godfrey how he                                                               
feels about arson being considered only in the first degree.                                                                    
MR. GODFREY  responded that he  is "at  peace with" arson  in the                                                               
first  degree, because  it is  cut  and dry  regarding the  crime                                                               
having taken place.  He offered  the example of the fire that was                                                               
out in the Big Lake area.  If  someone had started that fire as a                                                               
campfire that got out of control  and it enveloped the whole area                                                               
to include  "a house  where people  didn't get  out in  time," he                                                               
said he  doesn't believe that  that would  be arson in  the first                                                               
degree.   He stated  that although he  personally thinks  it's an                                                               
unfortunate incident that was a  violent occurrence, he questions                                                               
whether the  intent to violence was  there.  He said  he would be                                                               
reluctant to "increase the degrees there on that."                                                                              
MR. GODFREY  noted that the  board still  has the option  and the                                                               
discretion to consider compensation for  [victims of arson in the                                                               
second  degree].    He  stated his  reluctance  has  always  been                                                               
getting people's hopes  up and making them "jump  through a bunch                                                               
of  hoops,  only  to  shoot  'em  down,"  when  it's  a  foregone                                                               
conclusion that there's nothing the board  is going to be able to                                                               
do for them.   He revealed that the board  has some severe fiscal                                                               
restraints  it has  continually faced  over  the last  year.   He                                                               
added, "It's very  difficult to see a scenario off  the top of my                                                               
head, whereby something beyond [arson  in the first degree] would                                                               
be compensated."                                                                                                                
Number 2639                                                                                                                     
MS. BROWNE noted that a few  states compensate both arson and hit                                                               
and  run;   therefore,  there  would   be  some   precedence  for                                                               
compensating  arson.   She  told  the  committee that  there  are                                                               
currently  a  couple of  claims  involving  arson that  would  be                                                               
affected when the committee decides  upon an effective date.  She                                                               
noted that  Mr. Godfrey  would not have  known that,  because the                                                               
board  has  not  received  those  claims  yet.    She  said  [the                                                               
Department of Administration] receives  two to three arson claims                                                               
each  year that  end up  "getting  closed" because  arson is  not                                                               
currently a crime that is compensated.                                                                                          
Number 2685                                                                                                                     
REPRESENTATIVE  GRUENBERG said  he hadn't  realized that  hit and                                                               
run is  not compensated.   He suggested that the  House Judiciary                                                               
Standing  Committee, the  next  committee  of referral,  consider                                                               
adding that  to the bill.   He said  there are  a lot of  hit and                                                               
runs around, which  may "bust the bank," and he  remarked that he                                                               
is very  protective of the board  and doesn't want to  see it get                                                               
too many claims that it cannot respond to.                                                                                      
REPRESENTATIVE GATTO said, "I'm with you on that."                                                                              
REPRESENTATIVE GRUENBERG  explained that  he doesn't want  to add                                                               
that in the House State  Affairs Standing Committee, because that                                                               
would be "quite a step."                                                                                                        
MR. GODFREY said he appreciates that.                                                                                           
CHAIR WEYHRAUCH asked if there  is any opposition to an immediate                                                               
effective date.                                                                                                                 
REPRESENTATIVE GRUENBERG  reiterated that  this is an  issue that                                                               
he has  not contemplated, but it  seems like it might  "help some                                                               
people" [to add an immediate effective date].                                                                                   
MS. BROWNE agreed that it would.                                                                                                
Number 2776                                                                                                                     
CHAIR WEYHRAUCH  asked if  there was any  objection to  adding an                                                               
immediate effective date to HB 350.   There being none, it was so                                                               
CHAIR WEYHRAUCH closed public testimony.                                                                                        
NUMBER 2793                                                                                                                     
REPRESENTATIVE  HOLM  moved  to  report  CSHB  350,  Version  23-                                                               
LS1324\Q, Luckhaupt,  1/21/04, as amended, out  of committee with                                                               
individual  recommendations  and  the accompanying  fiscal  note.                                                               
There  being no  objection, CSHB  350(STA) was  moved out  of the                                                               
House State Affairs Standing Committee.                                                                                         
HB 337-ANATOMICAL GIFTS REGISTRY                                                                                              
Number 2833                                                                                                                     
CHAIR WEYHRAUCH  announced that  the next  order of  business was                                                               
HOUSE  BILL  NO.  337,  "An  Act  relating  to  anatomical  donor                                                               
registries,  to   an  anatomical  gift  awareness   fund,  to  an                                                               
anatomical gift awareness program,  and to motor vehicle licenses                                                               
and registrations."                                                                                                             
Number 2846                                                                                                                     
REPRESENTATIVE HOLM moved to adopt  the committee substitute (CS)                                                               
for HB  337, Version 23-LS1257\S, as  a work draft.   There being                                                               
no objection, Version S was before the committee.                                                                               
TAPE 04-07, SIDE B                                                                                                            
Number 2955                                                                                                                     
[The   committee   aide,  in   response   to   a  question   from                                                               
Representative  Gruenberg,  said that  Version  S  is the  formal                                                               
committee substitute.]                                                                                                          
Number 2909                                                                                                                     
REPRESENTATIVE BERKOWITZ  turned to page  2, line 19,  of Version                                                               
S, which read as follows:                                                                                                       
         (b) A registry must include only residents of                                                                          
     this state.                                                                                                                
REPRESENTATIVE   BERKOWITZ   asked   if  it   is   correct   that                                                               
nonresidents can get driver's licenses [currently].                                                                             
HEATH  HILYARD, Staff  to  Representative  Lesil McGuire,  Alaska                                                               
State   Legislature,    answering   questions   on    behalf   of                                                               
Representative McGuire,  sponsor, offered his  understanding that                                                               
Representative Berkowitz is correct.                                                                                            
REPRESENTATIVE  BERKOWITZ asked,  "So, if  a nonresident  were to                                                               
fill out the donor registration card, what happens then?"                                                                       
MR.  HILYARD  replied  that  when  the  Department  of  Revenue's                                                               
Permanent Fund  Division looks  at qualifications  for residency,                                                               
obtaining  a driver's  license is  "one  measure"; therefore,  he                                                               
stated his  understanding that [applying for]  a driver's license                                                               
is a declaration of residency.                                                                                                  
REPRESENTATIVE BERKOWITZ  said his question  is not in  regard to                                                               
residents,   but  rather   to  nonresidents.     He   stated  his                                                               
understanding  that not  only can  nonresidents  get licenses  in                                                               
[Alaska], but also in some  circumstances they are required to do                                                               
so,  if they  are  working  here for  some  period  of time,  for                                                               
example.   He  asked what  the  protocol [for  issuing an]  organ                                                               
[donor]  card  would  be  when  a  nonresident  gets  a  driver's                                                               
Number 2847                                                                                                                     
JILL  STEINHAUS, Director  of Development,  LifeCenter Northwest,                                                               
responded  that  people  who  go  through  the  driver's  license                                                               
application can make their decision  about donations at that time                                                               
and will  be included in the  Alaska registry.  If  anything were                                                               
to happen  to them  while they were  in Alaska,  that information                                                               
would be used for indicating their  decision to donate.  If those                                                               
people were  to move  outside of  the state  and have  a driver's                                                               
license  issued in  a different  state, then  that newer  license                                                               
would "trump" the previous one, as  far as an indication of organ                                                               
REPRESENTATIVE BERKOWITZ  clarified that his concern  is that the                                                               
registry must include only residents of  the state.  He asked how                                                               
a nonresident who wants to register  [as an organ donor] would be                                                               
MS. STEINHAUS answered  that typically, procurement organizations                                                               
have contacted  a nonresident's state  of residency  and "ensured                                                               
that they're able to register  through their state's registration                                                               
system," and then have made note of that in their own system.                                                                   
REPRESENTATIVE  BERKOWITZ noted  that  there are,  unfortunately,                                                               
many nonresidents who  perish while on the road, and  he wants to                                                               
make  certain  that  their organs  are  available  for  donation;                                                               
otherwise they're lost to everybody.                                                                                            
MS. STEINHAUS  responded yes.   She noted that what  would happen                                                               
when  someone  dies  while  "on the  road"  is  [the  procurement                                                               
organizations]  would  revert to  following  the  statute of  the                                                               
state  that person  is from,  based on  the card  that he/she  is                                                               
Number 2747                                                                                                                     
REPRESENTATIVE BERKOWITZ  responded, "Yes  and no."   He  said he                                                               
understands what  would happen in  the instance where  someone is                                                               
[in Alaska] carrying a Minnesota  driver's license; however, when                                                               
a  Minnesota resident  has acquired  an Alaska  driver's license,                                                               
and   the  statute   specifically  precludes   them  from   being                                                               
registered [as an  organ donor in Alaska], they  may fall through                                                               
the cracks.                                                                                                                     
CHAIR WEYHRAUCH  asked if  Representative Berkowitz  is referring                                                               
to temporary driver's licenses that the state issues.                                                                           
REPRESENTATIVE BERKOWITZ responded as follows:                                                                                  
     I know  if people come up  here and work for  more than                                                                    
     30 ... or  45 days - ... I don't  recall the exact time                                                                    
     period - they're required to  get an Alaskan operator's                                                                    
     license.     ...  Truckers  who  come   up  here,  [for                                                                    
     example].   I just want  to make sure that  someone who                                                                    
     wants  to  make  a  contribution,  whether  they're  an                                                                    
     Alaska  resident  or  not,   ...  [doesn't]  just  fall                                                                    
     through  the  cracks  because our  paperwork  precludes                                                                    
     them from being involved.                                                                                                  
Number 2690                                                                                                                     
MS. STEINHAUS  responded that that  would not preclude  them from                                                               
donating.    She  said,  essentially,  HB 337  is  setting  up  a                                                               
database  system  for  information specifically  [regarding]  the                                                               
residents  of   Alaska.    She  stated   her  understanding  that                                                               
Representative Berkowitz is concerned  about those people who are                                                               
nonresidents  of Alaska  who have  documents identifying  them as                                                               
being  in Alaska  for "at  least a  period of  time."   She said,                                                               
"What  we would  do is  work with  them on  an individual  basis,                                                               
identify  their  decision  about  donation, and  ensure  that  no                                                               
individual who  may perish here in  the state of Alaska  would be                                                               
exempt from donating."  She said  that, in a sense, that would be                                                               
a  separate process  than "what  we're establishing  here."   She                                                               
mentioned federal guidelines enacted  in 1998, which require that                                                               
every individual who passes away  be considered a potential donor                                                               
at the time of death.                                                                                                           
Number 2661                                                                                                                     
REPRESENTATIVE SEATON  offered his  interpretation that  the only                                                               
people  who  can  be  in  the  registry  are  Alaskan  residents.                                                               
Therefore,  a student  who maintains  his/her voting  registry in                                                               
another state,  but gets  an Alaska  driver's license,  could get                                                               
the [donor sticker] on that  [license], but would not be included                                                               
in the registry.  He asked if that is the intent of the bill.                                                                   
Number 2626                                                                                                                     
MS. STEINHAUS responded that that is not the intent of the bill.                                                                
Number 2613                                                                                                                     
REPRESENTATIVE   GRUENBERG   said   he   thinks   Representatives                                                               
Berkowitz and Seaton share his concern,  which is the use of word                                                               
"must" on  page 2, line  19.  That  can be read  two ways:   as a                                                               
term of direction -  you must do it, or as a  term of exclusion -                                                               
you can only do it.  He asked what the sponsor's intent is.                                                                     
MR. HILYARD indicated  the original bill version  and said, "That                                                               
was  a particularly  sticky  phrase."   He  pointed  to [page  2,                                                               
beginning on line 19] of the original bill version, which read:                                                                 
       (b) A registry must include all residents of this                                                                        
        state, regardless of their residence within the                                                                         
     service area designated by the federal government.                                                                         
REPRESENTATIVE  GRUENBERG noted  that  the  language deleted  had                                                               
been the word "all" and  the phrase following the comma; however,                                                               
the term  "must" was there and  was equally ambiguous.   He asked                                                               
Mr. Hilyard  what he wants  to do in order  to be clearer  in the                                                               
MR.  HILYARD  responded by  asking  at  what point  residency  is                                                               
declared or someone is considered to  have become a resident.  He                                                               
suggested  that someone  from the  Department  of Motor  Vehicles                                                               
(DMV) [may better answer that question].                                                                                        
REPRESENTATIVE GRUENBERG asked  Mr. Hilyard to put  aside the DMV                                                               
and asked him if  he wants to "limit it to  only residents of the                                                               
MR. HILYARD answered, "Generally, no."                                                                                          
Number 2523                                                                                                                     
REPRESENTATIVE  BERKOWITZ asked  what would  happen if  that line                                                               
were just deleted.                                                                                                              
MR.  HILYARD  answered,  "Nothing,  to  my  understanding."    He                                                               
mentioned  that   [the  sponsor]  had  held   a  discussion  with                                                               
[Legislative  Legal and  Research Services]  debating the  use of                                                               
the word "only" versus "all".                                                                                                   
Number 2490                                                                                                                     
DUANE  BANNOCK,  Director,  Division  of  Motor  Vehicles  (DMV),                                                               
Department of Administration, stated that  when a person comes to                                                               
the DMV who  is not a resident and he/she  applies for a driver's                                                               
license,  the DMV  will collect  [donor registry]  data, even  if                                                               
that person is  a resident of Washington state, for  example.  He                                                               
said  that  if  Life  Alaska   gets  that  information,  it  will                                                               
disseminate  it to,  presumably, the  Washington state  registry.                                                               
He stated that the DMV tends  to ask 100 percent of its customers                                                               
to become an organ donor.                                                                                                       
REPRESENTATIVE BERKOWITZ asked  Mr. Bannock if he  would have any                                                               
heartburn if the committee were to  remove [line 19, on page 2 of                                                               
Version S].                                                                                                                     
MR.  BANNOCK  answered  no.    He  noted,  "Section  13.50  isn't                                                               
necessarily the DMV section."                                                                                                   
MS. STEINHAUS, in  response to the same question  posed this time                                                               
by Chair Weyhrauch,  replied that her only concern  is that "what                                                               
we're addressing here  is a registry that is for  the purposes of                                                               
use  in  Alaska."    She  said  that,  providing  [the  committee                                                               
members] are  okay with  striking that language,  it would  be in                                                               
the best interest of the bill.                                                                                                  
Number 2375                                                                                                                     
REPRESENTATIVE HOLM  asked how the  change being  discussed might                                                               
affect the  size of  the registry, and  if [that  decision] would                                                               
run the risk  of making [the registry] so complex  that it cannot                                                               
be accessed easily.                                                                                                             
MS. STEINHAUS  explained that  essentially it  would open  up the                                                               
registry to  be utilized by  individuals from other states.   The                                                               
downfall to  that, she said,  is that other states'  statutes may                                                               
be different  from the statutes  in Alaska,  regarding anatomical                                                               
gifts.   She said,  "In Alaska  we're able  to use  an anatomical                                                               
gift as consent for donation, so  this system allows us to access                                                               
that individual's decision."  She noted  that that may not be the                                                               
case for  somebody in another  state, where other  state statutes                                                               
would apply.   It would be the responsibility  of the procurement                                                               
organization  to be  aware of  those statutes  and to  facilitate                                                               
that donation appropriately.  She  concluded, "It won't limit the                                                               
ability to  recover organs  and tissues  from individuals  and to                                                               
allocate them to the people most in need."                                                                                      
Number 2313                                                                                                                     
REPRESENTATIVE  SEATON turned  to  the language  in the  original                                                               
bill version regarding this issue  [previously provided] and said                                                               
it  appears  there may  be  some  legal parameters  of  residency                                                               
within "this federal  service area."  He suggested  that the word                                                               
"must"  could be  replaced  by  the word  "may".    He said  that                                                               
Legislative  Legal  and Research  Services  may  be defining  the                                                               
federal  service area.    He  said that,  at  this  point, he  is                                                               
uncomfortable "expanding or contracting too much."                                                                              
CHAIR  WEYHRAUCH  summarized that  if  the  committee chooses  to                                                               
delete the language  [on page 2, line 19 of  Version S], it would                                                               
be indicating its  intent to broaden the effect  of the registry.                                                               
In regard to Representative Seaton's  concern regarding the legal                                                               
issue related to removing the language  as it may relate "to some                                                               
federal  area,"  he  noted  that  some of  the  members  on  this                                                               
committee  sit on  the bill's  next  committee of  referral.   He                                                               
suggested that they  prepare a legal analysis for  the benefit of                                                               
that next committee of referral.                                                                                                
Number 2181                                                                                                                     
MR. HILYARD  clarified that the  federal service [area]  to which                                                               
the language in the original  bill version referred, is a service                                                               
area  recognized  by the  U.S.  Department  of Health  and  Human                                                               
Services  for organ  procurement organizations.   He  offered his                                                               
understanding -  regarding the drafting of  Legislative Legal and                                                               
Research Services  and whether  or not  the language  in question                                                               
"can  remain  in or  be  removed"  -  that  the Alaska  DMV  [is]                                                               
responsible  for  collecting  and  distributing  the  information                                                               
collected from  "it's residents."   He stated that he  thinks the                                                               
committee  is getting  stuck on  the definition  of resident  and                                                               
what is residency.                                                                                                              
CHAIR  WEYHRAUCH  offered that  the  word  [being questioned]  is                                                               
Number 2147                                                                                                                     
REPRESENTATIVE BERKOWITZ  moved to  delete line 19  on page  2 of                                                               
Version S.  There being no objection, it was so ordered.                                                                        
Number 2100                                                                                                                     
CHAIR WEYHRAUCH closed public testimony.                                                                                        
Number 2087                                                                                                                     
REPRESENTATIVE SEATON  stated that he  would like the  sponsor to                                                               
get a  legal analysis of  the removal that  was just made  by the                                                               
committee, before the  bill is taken up by the  next committee of                                                               
Number 2069                                                                                                                     
REPRESENTATIVE SEATON moved  to report CSHB 337,  as amended, out                                                               
of   committee   with    individual   recommendations   and   the                                                               
accompanying  fiscal  notes.   There  being  no  objection,  CSHB                                                               
337(STA)  was  moved out  of  the  House State  Affairs  Standing                                                               
Number 2043                                                                                                                     
The committee took an at-ease from 9:06 a.m. to 9:07 a.m.                                                                       
HB 241-MUNICIPAL PROPERTY TAX EXEMPTION                                                                                       
CHAIR WEYHRAUCH  announced that  the next  order of  business was                                                               
HOUSE BILL NO. 241, "An  Act relating to optional exemptions from                                                               
municipal property taxes on residential property."                                                                              
Number 1983                                                                                                                     
REPRESENTATIVE GRUENBERG  moved to  adopt the  proposed committee                                                               
substitute (CS)  for HB 241, Version  23-LS0851\D, Cook, 1\22\04,                                                               
as a work draft.  There  being no objection, Version D was before                                                               
the committee.                                                                                                                  
Number 1947                                                                                                                     
RANDALL  HOFFBECK,  Petroleum  Property Assessor,  Tax  Division,                                                               
Department  of  Revenue,  testified regarding  the  ramifications                                                               
this  bill will  have on  the "43-56"  properties if  residential                                                               
properties  are  exempted.    If  the  municipalities  choose  to                                                               
increase  the mill  to compensate  for the  exemptions, it  could                                                               
effect the  amount of  revenue the state  would collect  on 43-56                                                               
oil and gas  properties.  Mr. Hoffbeck said  the calculation that                                                               
the Department of Revenue made was  based on a projection that if                                                               
all municipalities raise  the mill rate to  offset the exemption,                                                               
it could  have the effect  of up to  $1.6 million on  the revenue                                                               
collected on oil and gas properties.                                                                                            
Number 1888                                                                                                                     
STEVE PORTER,  Deputy Commissioner,  Office of  the Commissioner,                                                               
Department of  Revenue, addressed  the fiscal  note on  behalf of                                                               
the Department of Revenue.                                                                                                      
CHAIR  WEYHRAUCH  clarified  that   the  fiscal  note  was  dated                                                               
1/27/2004 and was prepared by Dan Dickinson.                                                                                    
MR. PORTER referred the committee  to the worksheet found on page                                                               
3 of  the fiscal note.   The Department of Revenue  examined this                                                               
legislation to determine its effects.   The maximum effect, based                                                               
on the current  information, was about $1.6 million  to the State                                                               
of Alaska.  Mr. Porter said  that if the exemption for $50,000 is                                                               
included, "we're assuming that the  boroughs have three choices":                                                               
to  reduce their  budgets, to  increase  their sales  tax, or  to                                                               
increase the  mill rate.   He said, "So  there [are] a  number of                                                               
possibilities  that the  boroughs have  before them  as tools  to                                                               
manage  their budgets.   This  is just  one tool  with a  maximum                                                               
impact being $1.6  million."  Mr. Porter emphasized  that the key                                                               
here is  to understand that it's  $1.6 million to the  state, but                                                               
for  them to  capture that  $1.6 million,  the borough  itself is                                                               
paying $12.1 million  ... to its own businesses.   He said, "It's                                                               
really seen as a tool for management."                                                                                          
CHAIR WEYHRAUCH  mentioned a  concern that  by adopting  [HB 241]                                                               
and giving  the option  to local  municipalities to  adjust their                                                               
property  taxes  for  residential  property in  this  way,  local                                                               
residents  may  be benefiting,  but  the  burden to  replace  the                                                               
revenues lost will shift to  the state legislature.  He continued                                                               
as follows:                                                                                                                     
     And they'll  say, "Well, we have  these exemptions, now                                                                    
     ...  you  pay  us  what  we're  giving  up  from  these                                                                    
     exemptions."  ...  It shifts the burden to  ..., well I                                                                    
     guess  the  oil  companies   who  are  financing  state                                                                    
MR.  PORTER  responded   that  the  burden  is   shifted  to  the                                                               
commercial property owners, not the  43-56 properties, but to all                                                               
the properties.  He continued:                                                                                                  
     In  fact,  the  residential  properties  in  excess  of                                                                    
     $150,000  - in  this  environment,  ... anything  above                                                                    
     $50,000  exemption   -  that  property   too  (indisc.)                                                                    
     increase the mill rate.   Each individual property pays                                                                    
     their proportion of part of  the mill rate.  That's why                                                                    
     the numbers show up as $12.1  million and 1.6.  So, ...                                                                    
     there is a slight shift,  but the majority shift really                                                                    
     is to the local residents and their businesses.                                                                            
Number 1665                                                                                                                     
REPRESENTATIVE  HOLM asked  if "we're"  really just  shifting the                                                               
burden  from  one  side  to  the other  side,  not  changing  the                                                               
methodology on a statewide basis.                                                                                               
MR. PORTER  responded that if  this bill  passes there will  be a                                                               
certain amount  of shift in  the 43-56  properties - the  oil and                                                               
gas  properties.   He  indicated  that  there  is "about  a  $1.6                                                               
million shift."   He explained, "The  reason for that is  the oil                                                               
and  gas property  values versus  the residential  and commercial                                                               
property  values in  any  particular borough."    He deferred  to                                                               
Randy Hoffbeck for further explanation.                                                                                         
Number 1457                                                                                                                     
REPRESENTATIVE HOLM asked why this bill is needed.                                                                              
MR. PORTER  explained that the  impact of  this bill would  be to                                                               
shift from  residential property to nonresidential  property.  He                                                               
explained  that   residential  property  is  the   exemption,  so                                                               
everything else picks  up that exemption, assuming  that the same                                                               
revenue  is  maintained.    He  noted  that  a  portion  of  that                                                               
nonresidential property  is 43-56  property and "the  state would                                                               
pick up  their proportionate  share on  that shift;  that's where                                                               
the million dollars comes from."                                                                                                
MR. HOFFBECK  explained that  the state,  by statute,  collects a                                                               
20-mill  levy on  all  oil and  gas property.    He continued  as                                                               
     The local  municipalities are  allowed to  collect that                                                                    
     portion of the  20 mills that they  tax everybody else.                                                                    
     The companies take it as  a credit against the 20 mills                                                                    
     that  they pay  the  state.   So,  for  instance, if  a                                                                    
     jurisdiction  ... had  a mill  rate of  15 mills,  they                                                                    
     would collect  15 mills of  the 20 mills and  the state                                                                    
     would get 5 mills.  If  ... they increase their levy to                                                                    
     16  mills,  the  local jurisdiction  would  collect  16                                                                    
     mills of  the tax and  the state would only  collect 4.                                                                    
     And  so, if  the local  jurisdictions raise  their mill                                                                    
     rate to  offset this exemption, effectively,  they will                                                                    
     take  a greater  proportion  of that  20-mill tax  levy                                                                    
     that the state has on oil and gas property.                                                                                
Number 1344                                                                                                                     
REPRESENTATIVE HOLM asked  Mr. Porter if there is no  limit as to                                                               
how  much a  borough can  collect within  the 20  mills on  43-56                                                               
MR. PORTER  replied that if  the borough increased its  mill rate                                                               
to 20  mills, the oil  companies could  basically take that  as a                                                               
credit against the state's 20-mill tax.                                                                                         
REPRESENTATIVE SEATON  said he understands that  several boroughs                                                               
and  cities already  do that  and this  practice isn't  something                                                               
that  is  created by  this  bill.    He asked  for  clarification                                                               
regarding the city  of Valdez and the entry on  the chart [page 3                                                               
of the fiscal note].                                                                                                            
MR.  PORTER clarified  that  the  city of  Valdez  would have  to                                                               
exceed the  20 mills in  order to pick up  the extra amount.   He                                                               
noted  there  is  an  argument  that  they  could  pick  up  that                                                               
additional  amount and  the oil  companies would  take that  full                                                               
amount as a  credit, up to a total statewide  credit of 20 mills.                                                               
He added, "That's  an evaluative process."  He said  that none of                                                               
the boroughs have  exceeded the 20 mills at the  present time, so                                                               
there's  a high  likelihood that  the  City of  Valdez would  not                                                               
raise its mill rate  above 20 mills.  He referred  to a letter in                                                               
the file from  the mayor that states there would  be no impact to                                                               
the City of Valdez.                                                                                                             
Number 1072                                                                                                                     
MR.   PORTER,   in   response  to   a   follow-up   question   by                                                               
Representative  Seaton regarding  the fiscal  note, explained  as                                                               
     This is  the absolute,  maximum, possible  ... exposure                                                                    
     that  the   state  could  receive.     There's  a  high                                                                    
     likelihood that  the City  of Valdez  will not  pick up                                                                    
     any  of that.   And  in the  Fairbanks, Kenai,  and the                                                                    
     Northslope Borough[s]  the question  is, "How  much are                                                                    
     their  businesses  willing  to accept  that  additional                                                                    
     mill rate?"                                                                                                                
MR. PORTER,  in response  to a  concern voiced  by Representative                                                               
Seaton, offered the following explanation:                                                                                      
     The  boroughs have  the right  to tax  up to  30 mills.                                                                    
     ... None  of them have gone  beyond 20.  If  Valdez ...                                                                    
     went  above  20 mills  and  picked  up that  additional                                                                    
     amount,  so long  as  the total  amount  of the  entire                                                                    
     state of 43-56 property doesn't  exceed 20 mills to the                                                                    
     oil companies  -- in  other words, ...  if you  look at                                                                    
     the state, three boroughs cover  a lot of the pipeline,                                                                    
     a lot of the 43-56 properties.   There's a piece of the                                                                    
     state  that is  not organized  into boroughs.   We  get                                                                    
     that full  20 mill.  So  there's a margin that  ... the                                                                    
     state actually picks up in  revenue.  If Valdez exceeds                                                                    
     it's  proportionate   part  of   the  20   mills,  that                                                                    
     proportionate part - as long  as it doesn't exceed that                                                                    
     extra  amount -  the oil  companies can  claim it  as a                                                                    
     credit against  the state, even  though ...  the amount                                                                    
     that Valdez is asking for exceeds the 20 mill.                                                                             
MR. PORTER  indicated that that  is hypothetical, because  it has                                                               
never been tested.                                                                                                              
Number 0985                                                                                                                     
MR. HOFFBECK said Mr. Porter  is correct that the regulations, as                                                               
they  are currently  structured, state  that there  is a  20-mill                                                               
levy against all properties within  the state.  Theoretically, he                                                               
said, the companies  could reach out into an area  where they are                                                               
not  paying 20  mills  and take  that  additional credit  against                                                               
those properties.  He offered the following example:                                                                            
     For instance,  they could reach  out into  the pipeline                                                                    
     corridor   that's  in   the  unorganized   borough  and                                                                    
     actually take  that excess  credit that  they're paying                                                                    
     in  Valdez against  that  property  in the  unorganized                                                                    
MR. HOFFBECK  noted that there  is an attorney  general's opinion                                                               
that says that that is an appropriate interpretation.                                                                           
Number 0935                                                                                                                     
REPRESENTATIVE  BERKOWITZ asked  if  there would  be anything  to                                                               
preclude  the legislature  acting as  the assembly  for the  non-                                                               
organized  boroughs  and  imposing  a  20-mill  tax  on  industry                                                               
property.  After  a brief response by  Mr. Porter, Representative                                                               
Berkowitz said,  "You're telling me  right now that there  is un-                                                               
tapped tax revenue from the  pipeline in the unorganized borough.                                                               
Is that correct?"                                                                                                               
MR.  PORTER responded  no.   He explained  that that  tax revenue                                                               
already comes to  the state; there is a statewide  20-mill tax on                                                               
the oil  and gas industry.   In response to a  follow-up question                                                               
by Representative  Berkowitz, he said,  "I would define it  as --                                                               
that it is a net zero to  the industry, and the contest is really                                                               
a proportionate part.   And that's where the $12  million and the                                                               
$1 million go."   He stated there are three  players:  the state,                                                               
local government, and local businesses.                                                                                         
REPRESENTATIVE  BERKOWITZ inquired  as to  the current  amount of                                                               
municipal  assistance   and  revenue   sharing  that   the  state                                                               
provides, that is projected in the upcoming budget.                                                                             
MR. PORTER said he did not have this information.                                                                               
REPRESENTATIVE  BERKOWITZ  stated   his  understanding  that  the                                                               
amount was  going to  be zero.   He  said he  thinks that  if the                                                               
legislature is  going to  push the  responsibility down  to local                                                               
government to  provide services, because  the state is  no longer                                                               
doing  it, it  should  give [the  local  government] the  maximum                                                               
amount of flexibility.  He  stated that the local governments are                                                               
now able  to determine if their  residents get a tax  break if it                                                               
is running a  surplus, for example.  He indicated  that this bill                                                               
is  a   tool  for  providing   increased  flexibility   to  local                                                               
government and  has no impact on  the industry.  He  said he sees                                                               
it  as a  way for  local government  to secure  what is  due them                                                               
because  the  state  has ceased  its  obligation  with  municipal                                                               
assistance and revenue sharing.                                                                                                 
Number 0710                                                                                                                     
REPRESENTATIVE SEATON noted the  difference between municipal and                                                               
borough   taxing  jurisdictions.      He   explained  that   some                                                               
municipalities   and   boroughs   have  instituted   sales   tax;                                                               
therefore,  they are  taxing their  43-56 properties  at a  lower                                                               
rate than  other boroughs  that have  opted to  have a  high mill                                                               
rate  and  no  sales  tax.    He pointed  out  that  there  is  a                                                               
differential  between the  monies  that are  being received  from                                                               
boroughs that have a sales tax versus only a property tax.                                                                      
Number 0567                                                                                                                     
REPRESENTATIVE  GRUENBERG mentioned  again  the  letter from  the                                                               
City of Valdez and the potential  $1.7 million loss to the state.                                                               
He  suggested a  "hold  harmless" amendment  be  considered.   He                                                               
proffered,  "If  a  municipality   wants  to  shift  this  around                                                               
internally, it's  up to them."   He stated that he  does not want                                                               
to see the  current fiscal gap increased by this  bill.  He asked                                                               
Mr. Porter  what he thinks  [about the  suggestion to add  a hold                                                               
harmless provision in the bill].                                                                                                
MR. PORTER replied, "That is the legislature's prerogative."                                                                    
REPRESENTATIVE GRUENBERG  noted that the CS  before the committee                                                               
shows that  "lines 6-8" and  Section 2  of the original  bill had                                                               
been deleted.   He  stated that  he would like  to know  what the                                                               
impact of  those deletions will be  before the bill is  moved out                                                               
of committee.                                                                                                                   
REPRESENTATIVE GRUENBERG  mentioned the possible  introduction of                                                               
a bill that  would allow the Alaska School Boards  and the Alaska                                                               
Municipal  League to  prepare a  fiscal note,  at their  expense,                                                               
which would "travel  along with the bill."  He  remarked that the                                                               
Alaska  Municipal  League and  a  number  of municipalities  have                                                               
supported the  idea.  He added,  "Frankly, we are seeing  in this                                                               
day and age  that a lot of legislation does  have a fiscal impact                                                               
on municipalities."   He said  he didn't  know if there  would be                                                               
any interest in putting forth that  idea as an amendment into [HB                                                               
214], or not.                                                                                                                   
Number 0278                                                                                                                     
MR. PORTER  commented that  the Department  of Revenue  and other                                                               
departments are "responsible to define  the impact to the state."                                                               
He added, "And  that's why we are very thorough  in our analysis,                                                               
so that  you understand  the total  exposure that  you're dealing                                                               
with  on ...  any  particular bill.   He  noted  that the  Alaska                                                               
Municipal  League and  many  [other]  organizations are  impacted                                                               
directly by  any piece of  legislation.  Furthermore, any  one of                                                               
them has  the opportunity to  draft "anything they want  to draft                                                               
and  provide   the  legislature  with  that   information."    He                                                               
clarified  that  it's  important   to  maintain  the  distinction                                                               
between fiscal notes that are  the responsibility of the State of                                                               
Alaska  and comments  or communications  explaining impacts  from                                                               
any  individual or  group that  is  not a  representative of  the                                                               
REPRESENTATIVE GRUENBERG indicated  that [he] "certainly wouldn't                                                               
want to impinge on that."                                                                                                       
Number 0170                                                                                                                     
SUE HECKS  told the committee  that she is the  Emergency Medical                                                               
Services  (EMS) Chief,  Seldovia Ambulance  and Fire  Department,                                                               
City of  Seldovia, as well as  the EMS coordinator for  the Kenai                                                               
area  and the  statewide  chair for  the  EMS regional  directors                                                               
coordinators'  group.    She stated  that  she  was  particularly                                                               
interested  in Section  2 that  had been  removed from  the bill.                                                               
She  expressed  curiosity as  to  the  committee's rationale  for                                                               
dropping lines 6-8 and Section 2.                                                                                               
CHAIR  WEYHRAUCH stated  his understanding  that those  deletions                                                               
were made at  the request of the sponsor and  suggested Ms. Hecks                                                               
contact the sponsor for further clarification.                                                                                  
The committee took an at-ease from 9:35 a.m. to 9:36 a.m.                                                                       
TAPE 04-8, SIDE A                                                                                                             
Number 090                                                                                                                      
MS. HECKS  testified that  the rationale  behind adding  fire and                                                               
emergency medical services to statute  for a $10,000 property tax                                                               
exemption began in 1998.  She  stated that she had worked hard on                                                               
Senate Bill 4 in 2002 to  get this language in for certified Fire                                                               
and  EMS  personnel.    She  noted  that  statewide  there  is  a                                                               
recruitment and retention issue  regarding fire and EMS personnel                                                               
in volunteer  departments.  She  said, "It was documented  in the                                                               
EMS  and  Crisis document  in  1997  and  1998."   She  said  the                                                               
committee  may  be  familiar  with  the Code  Blue  Project  -  a                                                               
partnership between Federal,  State, Denali Commission, Rasmussen                                                               
Foundation funding, and some local  dollars, to replace the aging                                                               
infrastructure  of the  equipment and  vehicles for  EMS services                                                               
throughout the  state.  She noted  that that did not  address the                                                               
recruitment and retention issues.  She continued as follows:                                                                    
     Back  in   1998,  the   Kenai  Peninsula   EMS  Council                                                                    
     identified a property tax exemption  as a high priority                                                                    
     for volunteer  departments within the  Kenai Peninsula,                                                                    
     and  we began  to work  with the  borough to  make this                                                                    
     occur.  Unfortunately, that language  is not allowed in                                                                    
     state  statutes for  municipalities or  boroughs to  be                                                                    
     able to provide  that option.  So, SB 4  ... was passed                                                                    
     that  did add  that language  to statute  for certified                                                                    
     EMS and  firefighters.  ...  That could be  an optional                                                                    
     exemption at  the municipal or borough  levels, if they                                                                    
     so chose,  ... to recognize those  personnel, to assist                                                                    
     with the recruitment and  retention issues for staffing                                                                    
     in  the volunteer  departments statewide.   It's  not a                                                                    
     huge sum  of money ...,  but it is  a way to  say thank                                                                    
     you for these folks'  commitment to their community and                                                                    
     their departments.                                                                                                         
     An EMT  I class is  a minimum  of 120 hours,  plus, you                                                                    
     add  to  that   continuing  education,  recertification                                                                    
     requirements, and responses  within their areas, that's                                                                    
     a huge time commitment for  a volunteer to face.  [The]                                                                    
     same with  firefighters - they  have a  160-hour course                                                                    
     to  become  a  Firefighter  I,  and  then  you  add  on                                                                    
     training and responses  on top of that.   So, for these                                                                    
     particular individuals there is  a huge time commitment                                                                    
     from  their  lives  and  their  families  in  order  to                                                                    
     provide  these services  within their  communities, and                                                                    
     we were looking for a way  that we could reward ... and                                                                    
     recognize  them  for  their commitment  to  service  in                                                                    
     their communities.                                                                                                         
     Fairbanks  Northstar Borough  [the] City  of Ketchikan,                                                                    
     and the  Kenai Peninsula  Borough have  taken advantage                                                                    
     of this, and within  the Kenai Peninsula Borough, three                                                                    
     of  the  six  municipalities, plus  the  borough,  have                                                                    
     taken advantage  of this  as well.   The City  of Kenai                                                                    
     has  no  volunteers,  so this  does  not  impact  them.                                                                    
     That's a  little bit of  the background as to  how this                                                                    
     did come about and why that was included in statute.                                                                       
REPRESENTATIVE  GRUENBERG,   who  represents  Mountain   View  in                                                               
Anchorage, said there  are real problems in  his district because                                                               
it is a high crime area and  there are very few police who choose                                                               
to live there.  He said he  has made efforts to attract police to                                                               
live there  because this would reduce  crime.  He thinks  that [a                                                               
property tax  exemption] is a  great idea;  he would like  to see                                                               
municipalities be  able to permit  an exemption when  police move                                                               
into designated high-crime areas.                                                                                               
Number 0499                                                                                                                     
REPRESENTATIVE  SEATON  noted that  the  CS  that eliminated  the                                                               
exclusion does  not apply to taxes  for service areas.   He asked                                                               
Ms. Hecks, "If this exclusion would  go in, and also ... bump the                                                               
property tax exemption to $50,000  on those service areas, do you                                                               
see a major impact on the service area funding?"                                                                                
MS. HICKS replied  that if the $50,000 exemption  did go through,                                                               
depending upon where people may  be receiving this exemption, she                                                               
sees a potential impact to service  area budgets.  She stated her                                                               
belief that  that's why "that  language went into  this statute."                                                               
If  the funding  for the  special service  areas is  reduced then                                                               
they  won't  be  able  to provide  those  services  within  those                                                               
specified boundaries.   She added that she has  not been educated                                                               
on the issue to be able to fully address that question.                                                                         
REPRESENTATIVE SEATON  responded that  he would  like to  hold HB                                                               
241 until the  committee can get further analysis  of the impacts                                                               
and gather comments from boroughs and service districts.                                                                        
SHARALYN WRIGHT,  Staff to  Representative Mike  Chenault, Alaska                                                               
State  Legislature,  testified  that the  language  that  created                                                               
questions - including the service  area issue, which is a borough                                                               
issue  and can  be  discussed  and decided  by  the boroughs  and                                                               
municipalities  - was  removed.   The  last  section was  removed                                                               
because of a concern that property  tax credits would be given to                                                               
groups  that should  not  qualify.   She  gave  an  example of  a                                                               
possible question  that could arise  regarding a person  who does                                                               
volunteer work once  a year:  "Would you be  qualified or are you                                                               
being discriminated against because you  are not a volunteer fire                                                               
fighter or  an EMT?"   She  said this  concern caused  removal of                                                               
that section  of the bill.   She opined that  decisions affecting                                                               
fire service areas should be  made by municipalities, not [by the                                                               
legislature] in this bill.                                                                                                      
REPRESENTATIVE  SEATON asked  Ms. Wright  if her  reading of  the                                                               
current bill is "The borough  could adopt a $50,000 tax exemption                                                               
and then exclude that exemption  from particular service areas so                                                               
that if  they didn't want  this exemption  to apply to  a library                                                               
service area, the borough has  the authority to say we're getting                                                               
a tax exemption  but we're not going to apply  that tax exemption                                                               
to service areas.  Is that your understanding?"                                                                                 
Number 0930                                                                                                                     
MS.  WRIGHT  replied that  boroughs  could  exempt in  part,  for                                                               
example, only the  exemption that would affect  that fire service                                                               
area.  She  feels that it is better that  boroughs make decisions                                                               
about   exemptions   and  how   to   apply   them  within   their                                                               
municipalities; it is better left on the local level.                                                                           
REPRESENTATIVE SEATON  replied that he  wanted to make  sure that                                                               
the committee is  clear about their intention in  CSHB 241, "That                                                               
the borough  still has  the ability to  exempt this  property tax                                                               
from  service areas,  otherwise  we are  impacting  not only  the                                                               
boroughs tax base but every service area within the borough."                                                                   
REPRESENTATIVE HOLM stated that it  is his understanding that the                                                               
CS for  HB 241  does not  impact service areas.   He  stated that                                                               
service areas,  in addition, could  choose to tax  themselves for                                                               
particular services that they want to provide for themselves.                                                                   
STEVE  VAN  SANT, State  Assessor,  Central  Office, Division  of                                                               
Community   Advocacy,   Department   of  Community   &   Economic                                                               
Development, offered the following explanation:                                                                                 
     The  statute   actually  says,   "You  may   exempt  or                                                                    
     partially exempt,"  and knowing what the  intent of the                                                                    
     committee is  on this bill, certainly  wouldn't give us                                                                    
     any heartbreak on it and  it would certainly exclude it                                                                    
     from any  major error decisions  on that.  So,  I don't                                                                    
     see  any  problem  with  it  from  our  perspective  on                                                                    
     municipality  exempting the  $50,000 from  part of  the                                                                    
     mill rate there.                                                                                                           
CHAIR  WEYHRAUCH brought  two conceptual  issues to  Ms. Wright's                                                               
attention:     One  is  in   regard  to  the   previously  stated                                                               
indications  of Mr.  Porter that  "this would  potentially affect                                                               
business,  transferring taxes  onto  businesses from  residences.                                                               
He  said he  doesn't  know  what the  response  may  be from  the                                                               
business community.   The  second issue is  in regard  to whether                                                               
there is going  to be a later impact to  the state treasury, with                                                               
municipalities  coming  to the  state  for  fiscal salvation,  if                                                               
there is  a fiscal impact  locally.   He said the  state treasury                                                               
really  can't stand  an additional  impact or  request for  funds                                                               
without some other plan in place.                                                                                               
Number 1350                                                                                                                     
MS. WRIGHT stated that the key  word in the chair's statement was                                                               
"potential" and went on to say:                                                                                                 
     As far  as the municipalities  coming back to  us after                                                                    
     they made a decision to  enact the $50,000 exemption, I                                                                    
     would assume  that - since  this was  a municipal-based                                                                    
     request  and they  would have  the authority  to either                                                                    
     enact or  not enact this  $50,000 exemption -  ... they                                                                    
     would take  the time to  think this through.   The only                                                                    
     thing that  this bill does,  at this point in  time, is                                                                    
     give the  municipality the authority.   It  doesn't say                                                                    
     they have to  do it [and] it doesn't say  how they have                                                                    
     to do  it, as long as  they remain within Title  29 and                                                                    
     other statutes that  may apply.  The only  thing we are                                                                    
     doing  now  is giving  them  the  authority to  do  it.                                                                    
     Whatever decision they make, they have to live with.                                                                       
MS. WRIGHT opined that the  potentials cannot be anticipated here                                                               
in this  meeting, "with  any variable that's  going to  come down                                                               
the line for the next five years."   She stated that it's a local                                                               
issue that needs to be addressed on the local level.                                                                            
MR.  VAN SANT  noted that  there already  exist several  optional                                                               
exemptions that many municipalities have  taken advantage of.  He                                                               
offered  examples.   He added,  "This is  just another  tool that                                                               
gives [municipalities] an option to shift their burdens around."                                                                
Number 1538                                                                                                                     
CHAIR WEYHRAUCH announced that HB 241 would be held.                                                                            
There being no  further business before the  committee, the House                                                               
State Affairs  Standing Committee  meeting was adjourned  at 9:57                                                               

Document Name Date/Time Subjects