Legislature(2003 - 2004)
04/01/2004 08:02 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
April 1, 2004
8:02 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. 476
"An Act establishing the Alaska Statehood Celebration
Commission; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 527
"An Act relating to the Alaska Securities Act, including
reports, proxies, consents, authorizations, proxy statements,
and other materials, civil penalties, refunds of proceeds from
violations, restitution, and investment adviser representatives;
and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 459
"An Act requiring an auditable paper trail for electronic voting
machines; and providing for an effective date."
- MOVED CSHB 459(STA) OUT OF COMMITTEE
HOUSE BILL NO. 460
"An Act relating to absences to provide care for certain
relatives for purposes of permanent fund dividend eligibility;
and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 331
"An Act relating to federal requirements for governmental plan
and other qualifications for the teachers' retirement system,
the public employees' retirement system, and the judicial
retirement system; and providing for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 476
SHORT TITLE: AK STATEHOOD CELEBRATION COMMISSION
SPONSOR(S): REPRESENTATIVE(S) ANDERSON
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) STA, FIN
04/01/04 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 527
SHORT TITLE: ALASKA SECURITIES ACT
SPONSOR(S): STATE AFFAIRS
03/01/04 (H) READ THE FIRST TIME - REFERRALS
03/01/04 (H) STA, JUD, FIN
03/09/04 (H) STA AT 8:00 AM CAPITOL 102
03/09/04 (H) Heard & Held
03/09/04 (H) MINUTE(STA)
03/26/04 (H) STA AT 8:00 AM CAPITOL 102
03/26/04 (H) Scheduled But Not Heard
04/01/04 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 459
SHORT TITLE: PAPER TRAIL FOR ELECTRONIC VOTING MACHINE
SPONSOR(S): REPRESENTATIVE(S) GARA
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) STA
03/09/04 (H) STA AT 8:00 AM CAPITOL 102
03/09/04 (H) Heard & Held
03/09/04 (H) MINUTE(STA)
03/18/04 (H) STA AT 8:00 AM CAPITOL 102
03/18/04 (H) Heard & Held
03/18/04 (H) MINUTE(STA)
03/30/04 (H) STA AT 8:00 AM CAPITOL 102
03/30/04 (H) Heard & Held
03/30/04 (H) MINUTE(STA)
04/01/04 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 460
SHORT TITLE: ALLOWABLE ABSENCES AND PFDS
SPONSOR(S): REPRESENTATIVE(S) KERTTULA
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) STA, FIN
04/01/04 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
JIM SHINE, Staff
to Representative Tom Anderson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Read the sponsor statement and answered
questions during the hearing on HB 476, on behalf of
Representative Anderson, sponsor.
GARY R. CONNER, 1st Deputy Bureau Chief
Investment Protection Bureau
Office of New York State Attorney General (AG) Elliot Spitzer
New York, New York
POSITION STATEMENT: Testified during the hearing on HB 527.
VINCE USERA, Senior Securities Examiner
Division of Banking, Securities & Corporations
Department of Community & Economic Development (DCED)
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions on behalf
of the division during the hearing on HB 527.
WALTER JOHNS
No address provided.
POSITION STATEMENT: Testified in opposition to HB 527.
REPRESENTATIVE GARA
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As sponsor of HB 459, introduced amendments
to a committee substitute.
LAURA GLAISER, Director
Division of Elections
Office of the Lieutenant Governor
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of the division during
the hearing on HB 459.
SANDRA ZIRNHELD
Fairbanks, Alaska
POSITION STATEMENT: Testified on behalf of herself during the
hearing on HB 459.
AURORA HAWK, Staff
to Representative Beth Kerttula
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 460 on behalf of
Representative Kerttula, sponsor.
IRIS MANYA PUNGOWIYI-REED
Juneau, Alaska
POSITION STATEMENT: Testified during the hearing on HB 460.
ACTION NARRATIVE
TAPE 04-52, SIDE A
Number 0001
CHAIR BRUCE WEYHRAUCH called the House State Affairs Standing
Committee meeting to order at 8:02 a.m. Representatives Holm,
Seaton, Coghill, Berkowitz, and Weyhrauch were present at the
call to order. Representatives Lynn and Gruenberg arrived as
the meeting was in progress.
HB 476-AK STATEHOOD CELEBRATION COMMISSION
Number 0043
CHAIR WEYHRAUCH announced that the first order of business was
HOUSE BILL NO. 476, "An Act establishing the Alaska Statehood
Celebration Commission; and providing for an effective date."
Number 0052
JIM SHINE, Staff to Representative Tom Anderson, Alaska State
Legislature, on behalf of Representative Anderson, sponsor, read
the sponsor statement as follows:
January 2009 will mark the 50th anniversary of
Alaska's admission as the 49th state of the United
States of America. It is important the State of
Alaska recognize this landmark with a celebration of
the state's magnificent heritage and to reflect upon
the opportunities that 50 years of statehood have
brought to the state.
House Bill 476 will establish the Alaska Statehood
Celebration Commission. This commission shall consist
of 17 members; 12 public members [shall be] appointed
by the governor. ... At least two shall be residents
of and be appointed from each of the four judicial
districts in Alaska. The presiding officer from the
Alaska House of Representatives and the Alaska Senate
will appoint a majority and minority member from each
body. The governor ... or a designee ... will occupy
the 17th seat.
The Alaska Statehood Celebration Commission shall plan
and administer all official state activities leading
up to the 50th anniversary of Alaska statehood. The
commission will initiate the public process to solicit
ideas about the celebration.
In addition, the commemorative quarter honoring the
State of Alaska ... will be issued in the same
calendar year in which the Alaska Statehood
Celebration occurs.
MR. SHINE told the committee that through his own research he
has discovered that other states have [drafted] similar
legislation. For example, legislators in Wyoming and Utah have
created commissions to celebrate their centennial celebrations.
In response to a question from Chair Weyhrauch, he said he
believes Alaska did something like this for its 25th
anniversary.
Number 0249
REPRESENTATIVE COGHILL asked how many years would be spanned
with the commission.
MR. SHINE answered that the effective date would be January 1,
2005, so there would be up to four years of planning. He
indicated that other states have decided it's important to plan
ahead for a 50th anniversary, and he mentioned including a
public process for initiating ideas.
REPRESENTATIVE COGHILL turned to page 2 of the proposed
legislation. He noted that there would be at least two
legislatures involved, and he asked how that would work.
MR. SHINE said he doesn't know, but suggested that it would be
left to the discretion of the governor. He stated his
assumption that two new members would be appointed to the
commission.
REPRESENTATIVE COGHILL highlighted [paragraph] (2), on page 2,
beginning on line 8, which read as follows:
(2) the speaker of the house of representatives shall
appoint one member of the house of representatives who
is a member of the majority caucus and one member of
the house of representatives who is a member of the
minority caucus, in consultation with the leadership
of that caucus;
REPRESENTATIVE COGHILL noted that the same applied to the
Senate. He said he wonders if a provision for transition from
one legislature to the other should be included.
Number 0432
CHAIR WEYHRAUCH asked Mr. Shine to take those concerns under
advisement. [HB 476 was heard and held.]
HB 527-ALASKA SECURITIES ACT
Number 0450
CHAIR WEYHRAUCH announced that the next order of business was
HOUSE BILL NO. 527, "An Act relating to the Alaska Securities
Act, including reports, proxies, consents, authorizations, proxy
statements, and other materials, civil penalties, refunds of
proceeds from violations, restitution, and investment adviser
representatives; and providing for an effective date."
CHAIR WEYHRAUCH informed the committee that he had invited
Warren Buffet, Berkshire Hathaway, Inc., to testify and Mr.
Buffet's office responded with issues related to the bill. He
indicated that the issues that were brought forth were those
relating to the tension between corporate governments, the
desire to maintain a flourishing capitalist system in [the
United States], and the role of state government in the
oversight of corporations.
CHAIR WEYHRAUCH expressed the need to ensure that Alaska
maintains a healthy oversight through its public policies
enacted by the legislature and a system of laws that invite
participation by the private sector into the state. Conversely,
he expressed the need to ensure that those corporations doing
business in Alaska do so in an honest and ethical way that
profits both the corporation and the people of Alaska. He also
indicated the need to ensure that the State of Alaska has the
appropriate tools to enforce the public policies it enacts and
exact some sort of retribution to cover the cost of state
government's action in enforcing its laws while ensuring that
those harmed by improper corporate actions are fully
compensated.
CHAIR WEYHRAUCH mentioned communicating through the office of
New York's attorney general, Elliot Spitzer. He noted that Mr.
Spitzer is known for his aggressive activities in enforcing
state policies against mutual funds and other corporations that
have charged exorbitant or hidden fees, for example, and for
attempting to recover those [fees]. He opined that some of the
actions of that attorney general's office have been admirable.
Chair Weyhrauch noted that the first person to testify was
associated with the New York attorney general's office.
Number 0689
GARY R. CONNER, 1st Deputy Bureau Chief, Investment Protection
Bureau, Office of New York State Attorney General (AG) Elliot
Spitzer, indicated he would explain the New York statutory
scheme and describe some of the approaches and corporate
responses. He revealed that he is not familiar with Alaska
statutes and would only be addressing the New York system, which
he characterized as "somewhat different than most all states."
MR. CONNER stated that New York has never adopted the "Uniform
Security Tax"; therefore, it does not hold administrative
hearings or issue orders. He noted that the State of New York's
securities laws were enacted in 1921, well before the federal
statutes. He said, "We issue the issuers of securities, not the
securities themselves." He offered examples. Mr. Conner
explained that the statute is largely an anti-fraud statute,
designed to prevent fraud in the offer of securities and
commodities. New York's definition of fraud is: "Any act
tending to deceive or mislead the purchasing public." The Act,
which is to be construed liberally, is designed to protect the
inexperienced investor.
MR. CONNER said, "One of the advantages we have in New York is
that, in any civil action we may bring - or misdemeanor
prosecution, we do not have to show intent, ... proof of a sale,
[or] ... damages. It's a per se liability statute, meaning a
violation - whether knowing or not - can get you in jeopardy in
terms of a civil action." Mr. Conner noted that the statute
also provides that any violation may result in either a criminal
or civil penalty. He explained the distinction between the two.
He said that the main tool [the New York AG's office] uses is
its ability to issue subpoenas and request information prior to
bringing any action. The penalty for refusing to respond,
testify, or show up is a misdemeanor.
MR. CONNER said that the investigations can be conducted based
on any source of information, as well as based on any allegation
of fraud or merely because it's in the public interest. He
noted that the basic investigations [the AG's office] conducts
are kept confidential. He explained, "Although we are
investigating something, we do not know at the beginning whether
or not there actually is wrongdoing, so we believe that those we
are looking at need protection there." He offered examples. At
the end of the investigation, he said, a choice can be made in
how to proceed: "One way is civil, one way is criminal, or we
can do both."
MR. CONNER noted that one of the tools [the AG's office] has is
to obtain ex parte orders from the court, prior to commencing an
action. Those orders direct the witnesses to appear and to
produce documents. He added, "And we can also get ex parte
injunctive relief, based upon a standard of what is proper and
expedient." He clarified that it's not the normal preliminary
injunction standard, but is a much lower standard. The ex parte
orders result in public testimony; the public can attend and
hear whatever is being said by the witnesses. Because it is an
investigation, there is not cross-examination.
MR. CONNER said that if the decision is made to bring a civil
action, the remedy in that civil action is a permanent
injunction from the securities business. He said, "The statute
is all or nothing; a judge has no discretion." He offered an
example. He continued, "In those actions we can also get
restitution, we can get damages, and we can have receivers
appointed, as well as other types of creative injunctive
relief." Mr. Conner noted that the criminal provisions prohibit
fraud, deception, and concealment, among other things. He
offered examples. He said, "If we have any criminal violation
that we are proceeding on, we can also use the state's penal
laws ...."
MR. CONNER stated that, besides the main securities laws, New
York has other statutes. For example, under the state's
business corporation law, directors can be removed from offices
in corporations. There is also a broad statute under the
executive law, in which any fraud or illegality in the course of
business is actionable.
Number 1098
MR. CONNER stated that he would next offer a brief overview of
analyst and IPO [initial public offering] investigations, as
well as talk about the mutual fund investigation. He noted that
30 years ago, [the New York AG's office] began an investigation
of Merrill Lynch, based upon newspaper articles indicating that
research reports by analysts for the various companies were not
really accurate. He noted that it was a difficult subject to
address, because it's a complex financial analysis that the
analysts go through. He offered two cases, both of which were
covered by a man named Henry Blodgett (ph) at Merrill Lynch. In
the first case, the stock was propped up with high ratings while
the stock prices plummeted, and the ratings were kept high until
a merger and acquisition deal was consummated. In another
instance, the ratings for the stock were downgraded on the day
it was publicly announced that Merrill Lynch would not be the
banker for the deal. Mr. Conner related that through
investigation, e-mails "revealed a corporate culture where the
analysts and many other people at Merrill Lynch were very much
aware that the ratings were not accurate." He offered further
details regarding the e-mails. He stated that the heart of the
case was that the public was told one thing about what the
ratings meant, while Merrill Lynch knew that information was
inaccurate.
MR. CONNER said that the AG could have brought a criminal
prosecution. However, the AG was clear that he did not want to
bring Merrill Lynch down. He clarified that what the AG was
trying to achieve was not so much punishment as trying to get
the system to work - to be honest. The solution was to
ultimately get Merrill Lynch to agree to certain reforms. He
said, "The company itself seemed to be dumbfounded about what we
were talking about. And one of the ways the AG got their
attention was by bringing one of these X party orders, in which
the e-mails and other documents were attached to the court
papers, and then the public became aware of what was really
going on." Mr. Conner offered details regarding some of the
reforms that resulted.
MR. CONNER said the settlement, which was $100 million, resulted
in New York giving half of the money to the North American
Securities Administrators Association. That association, he
noted, represents the 50 states, as well as Canada and Mexico.
He said, "From that moment on, we started working with all the
states, and we commenced a much larger analyst investigation,
which eventually led to the $1.4 billion Wall Street reform,
with 10 of the biggest investment banking institutions in the
country." He described the effort on the Wall Street
investigations and settlements as "a broad investor regulatory
system looking at an industry." He noted it was discovered that
"the companies themselves were very jealous about being at a
disadvantage from their competitors, and fairly early on they
took the position they would go for the reforms, but they wanted
other banking institutions involved." Mr. Conner noted that
that ultimately happened.
Number 1395
MR. CONNER stated that part of the analyst investigations
involved looking at the issue of IPOs. Regarding the inaccurate
ratings system, it was found that the executives that were being
covered with the ratings were given advantageous IPOs, more or
less as favors for turning over banking business to the
investment banking house. He said, "We then commenced an action
in which we thought to get the return of the monies that the
executives received from their IPO allocations. We felt that
those monies belonged to the corporations - that these were not
the individuals who should benefit. And ultimately the
shareholders were to benefit." He noted that part of the
settlement was funding law school arbitration clinics to help
the investors.
Number 1450
MR. CONNER noted that the current issue on the table is the
mutual fund investigation. He said it was found that many
companies were disclosing in their prospectuses that investors
could only make trades at a certain rate, and they could not
time their trades after the market closed, "or otherwise to go
in and out of the market and get an advantage over the long-term
investors, which is what the mutual fund industry was designed
for." He also noted that late trading - trading done after 4
p.m. - is prohibited by the federal U.S. Securities and Exchange
Commission (SEC).
MR. CONNER gave some examples of cases and reiterated that the
AG's policy was not to bring down the companies, but rather to
clean up the issues, make the public aware, and to [hold the
company to what it said]. He noted that the settlements in the
mutual fund cases have also brought other types of remedies.
For example, in one case, eight directors of the board are
agreeing to resign because of their conduct. He stated that
[the AG] has also addressed the fees that are being charged and,
in many of the settlements, the fees are being reduced over a
five-year period. He said the fee issue comes from the fact
that the average investor doesn't really know what the fee is
for a mutual fund. By not knowing, investors cannot fairly make
a choice between different funds, as to where to invest the
money. He stated that the issue really comes down to
disclosure. If the investor was not told what was going on then
that was wrongdoing.
Number 1559
MR. CONNER said there is an alleged perception that the federal
government and the states are at odds over some of the
investigations. That simply is not true, he stated. Except for
the first mutual fund investigation, he noted, [the New York
AG's office] has worked with the SEC and other states. The same
is true regarding the analyst investigations. He clarified as
follows:
The issues sometimes come down to the fact that we
have criminal jurisdiction in New York, which the SEC
does not have. And when you have criminal
jurisdiction, there are various safeguards that play
to the investigation. Certainly, when one is in the
grand jury, we cannot talk about that. And some of
our cases, it looks like we spring them, but really
there are certain prohibitions on us.
MR. CONNER said that the overall policy the AG has adopted is to
have honesty in the business place. He remarked that no one is
against businesses or against making profits.
Number 1628
CHAIR WEYHRAUCH told Mr. Conner that the State of Alaska manages
a $28 billion fund and is charged with following prudent
investor rules and returning investment on that fund to help
fund government, provide dividends to the people, and preserve
the fund for future generations. He asked if Mr. Conner's
office handles merger and acquisition issues.
MR. CONNER answered no, but said the office might get involved
from an anti-trust viewpoint, as opposed to a securities issue.
In response to further questions from Chair Weyhrauch, he
clarified that the Act he had previously mentioned was the
"Martin Act", which was effective in 1921. He said it did not
come about necessarily because of Wall Street, but just because
of general investments. He mentioned "boiler rooms" and "fly-
by-night" deals that occurred in the early 1920s, which prompted
the legislature to consider different bills. In response to
another question from Chair Weyhrauch, he said [the New York AG]
doesn't give out notice to all the states' AGs, but rather it
gives a heads up to the North American Securities Administrative
Association. He gave examples, including trading off cases with
other states and working with other states. An exception is
criminal cases, he said.
Number 1801
CHAIR WEYHRAUCH noted that Alaska is far removed from New York,
both in time zone and distance. He asked Mr. Conner, "What are
the ... practical impediments or benefits to ... a state like
[Alaska's] adopting such a pervasive, aggressive securities
investigation scheme ... such as New York has?"
MR. CONNER opined that the advantage that New York has is in
having the criminal jurisdiction. Criminal jurisdiction is a
powerful tool because someone coming in to give testimony or
produce documents never knows what [the New York AG's office] is
going to do. He said, "Our policy is not to make a
determination on, ultimately, how we're going to proceed until
towards the end of an investigation, when we have a handle on
the facts." He added that he thinks it's that criminal threat
and the X party order that acts as a deterrent and certainly
"moves us to settlement quicker than we might normally move."
Number 1858
REPRESENTATIVE GRUENBERG indicated that [the Alaska AG's] staff
is small compared to that of New York's.
MR. CONNER interjected that "most people don't know that we only
have about 12 lawyers working on these big Wall Street cases."
In response to a question from Representative Gruenberg
regarding the legislature's role in the current investigations,
Mr. Conner said that although the New York State Legislature has
not really been involved, it submits different bills that
attempt to improve it's statutory scheme. He offered his
understanding that the other elected official in New York who
has been very active is the state comptroller. He explained
that the state comptroller's office, which is governs the state
pensions funds, has been active in [encouraging] other states to
develop principles that companies must follow if they wish to
have the state investments. The aforementioned is a different
way of approaching the problem, he commented. In response to
Representative Gruenberg, he explained that the comptroller's
office does this by informal policy rather than by regulation.
Some of the comptrollers have put out a statement of principles,
which are guidelines for investing the state's money.
Number 1975
REPRESENTATIVE GRUENBERG noted that Alaska does not have a
comptroller, but has independent pension boards and a board of
trustees for the Alaska permanent fund. The guidelines for
those boards are statutorily general. However, Mr. Conner is
discussing detailed guidelines, he opined.
MR. CONNER clarified that they are not that detailed because the
comptroller decides where the investments go and he/she has the
authority to set conditions regarding where to put the money.
He offered his understanding that "the principles ... are only a
few pages long, but they do make certain requirements of
companies." He added, "Now, whether or not they're more
detailed guidelines and positions in other documents that have
not been made public - that I don't know."
REPRESENTATIVE GRUENBERG asked what Alaska can do to
participate.
MR. CONNER answered that one of the things that helps is when
certain companies are located in the state. In that case, often
the state securities administrators are more knowledgeable about
those companies and their activity. Still, because a lot of
trading goes through New York, he said, "we generally have
jurisdiction, somehow." He suggested, "I think one thing that
could be done is for other states to contact us to see what
assistance we can provide and help with, and just generally get
whatever knowledge we have about the industries."
REPRESENTATIVE GRUENBERG said, "We are developing, with a small
group of other states ..., a group that's very competitive state
to state in trust administration, and we are constantly revising
our trust laws to be more competitive." He added that "this
group" includes bankers and estate planning lawyers and it can
move fairly quickly; however, he offered his understanding that
there is not any oversight of the group at the state level. He
asked Mr. Conner if he has had any indication of "anything going
on there."
MR. CONNER responded that he is not really aware of that whole
area, in terms of trust administration. He stated that how New
York really works is through the North American Securities
Administrative Association.
Number 2136
REPRESENTATIVE COGHILL referred to Mr. Conner's previous remark
about holding criminal penalty over an investigation. He stated
that one of the things "we are always looking for here" is how
to keep government from being intimidating, while still being
able to produce good results. He asked Mr. Conner to give some
idea of the accountability structure "there."
MR. CONNER answered that, in terms of the accountability within
[the New York AG's office], decisions regarding whether to bring
a criminal case or not are made at the very highest levels. He
said there are many levels of supervisory review. He said, "The
accountability at the end of the day - it's the attorney general
to the public. And he has that trust of the public, and if he
misuses that trust, then the public has a way of dealing with
that during the next election."
MR. CONNER, in response to a request by Representative Coghill
to explain the process by which the New York attorney general is
selected, stated that the AG is a public official who runs for
office at the same time as the governor, lieutenant governor,
and comptroller. Each political party puts up its candidate,
and it's a statewide election separate from the presidential
election or the election for the mayor of New York. In further
response to Representative Coghill, he confirmed that has been
true since the beginning of New York's securities law.
CHAIR WEYHRAUCH noted that the House State Affairs Standing
Committee is made up of representatives from all across the
state, with a wide variety of viewpoints. He welcomed Mr.
Conner and his staff to come to Alaska some time.
Number 2237
REPRESENTATIVE SEATON asked Mr. Conner if it is his opinion that
if [New York] had adopted the Uniform Securities Act, it
wouldn't have been able to proceed in "any of these
investigations."
MR. CONNER answered that New York's Martin Act gives "us" more
power than the Uniform Securities Act, but he added that he
couldn't say whether the Uniform Securities Act would have
"absolutely precluded us from doing what we're doing."
REPRESENTATIVE SEATON noted that Mr. Conner had said that a
person who's guilty under "the civil portion" is simply barred
from further security action, instead of having a "variable
time." He asked Mr. Conner, "Do you think that that's been
important so that it's all or nothing?"
MR. CONNER replied as follows:
I think that is important, because whenever one goes
into the judicial system, quite honestly, every lawyer
thinks they have the greatest case in the world, and
someone's not going to come out happy. So, you're
always taking a chance; even though you may evaluate
your case one way, the courts can view it a different
way. So, I think the fact that if you pushed this
before a judge, the possibility that you're going to
get permanently barred from the industry, and all the
implications that has, is a great deterrent.
Of course, what I didn't explain now, and what I will
now, is that we, as an agency and institution, ... can
consent on our own to a less than permanent bar, but
if it's put to a judge, that judge is all or nothing.
Number 2329
REPRESENTATIVE HOLM recalled Mr. Conner's previous comment that
due process rights do not kick in during an investigative
process.
MR. CONNER noted that, under a U.S. Supreme Court decision, an
investigation is viewed differently than an adjudicatory
proceeding. When something is being adjudicated and a
determination is being made based upon the facts present, the
witnesses have rights to lawyers, there is a regular cross-
examination, and transcripts are provided. However, in an
investigation, those particular rights don't apply. He said:
In New York ... we generally take the position an
attorney may be present during testimony for the
purpose of advising a witness as to his or her rights
and privileges, but it's not a participatory type of
session; it's really an investigation for us to try
and determine what the facts are through the means
that we think are best available. So, that is a
distinction.
REPRESENTATIVE HOLM asked if Mr. Conner is maintaining that the
Fifth Amendment rights don't apply during an investigative
process.
MR. CONNER specified that the Fifth Amendment rights apply
during the investigative process, it's just some of the other
traditional things - such as [formal hearings in which there's
cross] examination and a determination made by the agency - that
don't apply in an investigation.
TAPE 04-52, SIDE B
Number 2375
MR. CONNER said, "If we, at the end of an investigation, believe
there's wrong doing, we can't, on our own, do anything; we have
to go to the court system. That's where the due process rights
fully kick in, and the courts will protect both parties in that
situation."
Number 2344
REPRESENTATIVE GRUENBERG, with respect to the provision that
does not give the judge the authority to issue less than a
permanent injunction, asked if that has ever been challenged on
a separation of powers basis.
MR. CONNER answered that he is not aware of that. He clarified,
"The New York Court of Appeals, which is the highest court, has
interpreted the statute in New York as being that way - that
it's an all or nothing statute - but I don't believe it's been
challenged on a separation of powers situation."
Number 2311
REPRESENTATIVE LYNN asked if a person can be forced to talk
during an investigative case; he asked what would happen if that
person said he/she didn't want to talk.
MR. CONNER replied as follows:
If a person doesn't want to talk to us, we usually
have issued a subpoena already, and our options are
two: One is to go into the civil part of the state
supreme court, which is New York's trial court, and
seek a court order directing the witness to appear and
to testify. Obviously, during the testimony they can
take the Fifth Amendment. The other route we have is
we can go in through the criminal system in state
supreme court and seek a misdemeanor determination,
and, obviously, with a misdemeanor there are certain
penalties that the judge can impose on the witness,
whether it's incarceration, fines, or whatever. And
then, under both systems, we do have the powers of
contempt that the court can use. So, that's how the
approach would go if a witness did not want to
testify.
REPRESENTATIVE GRUENBERG asked if committees in the state
legislature in New York "do any investigatory stuff like they do
in Congress," such as issue subpoenas, or put people under oath.
MR. CONNER prefaced his answer by stating that he is not the
expert in that [issue]. Notwithstanding that, he proffered that
there is some investigatory work that [the legislature] does.
He said it certainly holds hearings and questions witnesses.
Number 2200
REPRESENTATIVE HOLM moved to adopt the committee substitute (CS)
for HB 527, Version 23-LS1792\H, Bannister, 3/30/04, as a work
draft. There being no objection, Version H was before the
committee.
Number 2188
CHAIR WEYHRAUCH moved [to adopt] Conceptual Amendment 1, which
read as follows [original punctuation provided]:
The division is exempt from AS 37.10,050(a). Fees
collected by the division shall be accounted for in a
sub account used to implement the programs and
activities of the division and to maintain an
aggressive program of investigation, prosecution, and
all other actions necessary to prevent harm to persons
by violations of AS 45.55 and to seek recovery of
damages, costs, and fees for those harmed by a
violator, and to cover the costs of the division of
its programs, investigations, and proceedings.
CHAIR WEYHRAUCH turned attention to Version H. He pointed out
the changes made in Version H, including changing the number
from 500 to 250 as well as the changes in [Section 3] regarding
the penalties for single and multiple violations.
Number 2140
VINCE USERA, Senior Securities Examiner, Division of Banking,
Securities & Corporations, Department of Community & Economic
Development (DCED), noted that most of the fines [the division]
levies are in the smaller range and are meant to be corrective.
He related scenarios in which the [division] has had to find
people [who have moved] out of state and obtain a judgment. The
aforementioned takes a lot of effort and if [the division] were
to do that with every perpetrator, $1 million would be difficult
to collect. "But it would be nice to be able to assess a
penalty where that is reasonable and warranted," he added.
CHAIR WEYHRAUCH noted that changes were also made regarding the
penalties in Section 4 of Version H. Section 5, he noted, would
provide the ability to collect restitution, plus attorneys' fees
and cost. He clarified that if the division has to employ
attorneys' fees or use its own attorney general, those fees and
costs should not be borne by the general public "through its
treasury," but should be borne by the wrongdoers.
MR. USERA said that's correct. He noted that one change was
made where restitution must be doubled [page 3, line 12].
However, that may be difficult to negotiate at times.
Number 2014
CHAIR WEYHRAUCH turned to Sections 6 and 7. He noted the last
sentence in Section 6, [subsection (f), on page 3, beginning on
line 11] which read as follows:
The amount of the restitution paid to the harmed
person must be two times the amount of loss caused to
the person by the violator.
MR. USERA stated his preference would be to change the word
"must" to "may". He explained, "There are some people who,
through benign neglect, do wrong. We can get them to pay back,
but they don't warrant being punished. And this would put us in
a difficult situation there."
CHAIR WEYHRAUCH noted that [subsection (g)] in Section 6 would
also transfer the burden from the public to the perpetrator.
MR. USERA responded that he thinks the concept is fine, though
he added that he's not quite certain how that would work in
terms of the actual logistics. He explained, "Something's got
to go some place; it can't just come back into our coffers."
Number 1923
CHAIR WEYHRAUCH returned to Conceptual Amendment 1. He
explained that it would exempt the division from AS
37.10.050(a), [a statute] which limits the fees that may be
collected.
MR. USERA said [AS 37.10.050(a)] was enacted in 1990 and "sort
of laid dormant for a long time," until somebody recently
rediscovered it. The statute says that fees cannot be collected
over the actual cost of doing business. He reflected as
follows:
Quite honestly, that really limits us. We don't use
all the fees that we receive, but it costs us about
$2.5 million to do our business, and we bring in
somewhere in the range of $10-$12 million. So,
there's a generous contribution to a general fund
there that would be taken away from us if this statute
were to be adhered to. And I think an exemption is
warranted in this case, and especially if you're going
to give us back some of our fines so that we can do
the job that we're empowered to do.
CHAIR WEYHRAUCH said that was the point. He turned to the
previous comments of Mr. Conner, regarding "$15 million
settlements, the North American Securities, and efforts on Wall
Street, and money coming back - distributed to the state." He
asked Mr. Usera what Alaska's share of that has been.
MR. USERA answered that Alaska's total share of the global
settlement was about $4.6 million. In response to a follow-up
question from Chair Weyhrauch, he confirmed that was receipts to
the general fund.
Number 1835
REPRESENTATIVE GRUENBERG mentioned the Takeover Bid Disclosure
Act. He told Mr. Usera that he wants to update that Act, and he
asked for Mr. Usera's assistance in doing so. He offered a
brief history of the Act.
Number 1776
MR. USERA, in response to a question from Representative
Gruenberg, stated that in order to fix the Act it would have to
be gutted. He said there wouldn't be much harm in repealing it.
He noted that [the Act] "came in" in 1976 and has never been
invoked, so "it doesn't seem to be of any utility." He noted
that Alaska is not a hotbed of merger activity. He noted there
is the federal Williams Act, which requires certain disclosures.
He added, "And that's where ... our Act runs afoul of the
Williams Act and also runs afoul of the commerce clause."
Number 1740
CHAIR WEYHRAUCH asked the committee to return focus to HB 527.
Number 1729
CHAIR WEYHRAUCH asked if there was any objection to Conceptual
Amendment 1. There being no objection, [Conceptual] Amendment 1
was adopted.
Number 1719
REPRESENTATIVE GRUENBERG suggested that Mr. Usera's previous
recommendation to change the word "must" to "may" be considered
by the committee.
Number 1690
CHAIR WEYHRAUCH [moved to adopt Amendment 2 to Version H], as
follows:
On page 3, line 12
Between "person" and "be"
Delete "must"
Insert "may"
CHAIR WEYHRAUCH asked if there was any objection to [Amendment
2]. There being no objection, Amendment 2 was adopted.
Number 1679
REPRESENTATIVE GRUENBERG turned to page 3, line 1, and suggested
[Amendment 3], to change the word "or" to "and". In response to
a comment by Mr. Usera, he noted that the [petition by the
administrator] is discretionary, thus using the word "and" would
allow either option.
Number 1637
CHAIR WEYHRAUCH asked if there was any objection to [Amendment
3]. There being none, [Amendment 3] was adopted.
Number 1628
REPRESENTATIVE GRUENBERG turned attention to subsection (g),
regarding "actual reasonable attorney fees and actual reasonable
costs". He said he thinks the court should have discretion,
because, for example, there may be a case where it's appropriate
to award less. He suggested [Amendment 4], to change the word
"shall" to "may".
CHAIR WEYHRAUCH asked if there was any objection to [Amendment
4]. There being none, [Amendment 4] was adopted.
Number 1594
CHAIR WEYHRAUCH, in response to a comment by Representative
Gruenberg, said he added the provision in Section 7. He
reiterated that Section 7 is intended to "get all those
wrongdoers, no matter where they are, if they're doing business
in this state."
REPRESENTATIVE GRUENBERG said, "It expands the concept of
nexus."
Number 1546
WALTER JOHNS shared his Native Alaskan name with the committee
and revealed that he is a shareholder of the Sealaska
Corporation and Goldbelt, Inc, and he lives in Colorado. He
stated that he has been involved with corporations since they
first started. He admitted he has not had time yet to analyze
the proposed legislation, but he said he always gets concerned
when the state gets involved with Native companies. He noted
that he has been involved with five elections, "against Sealaska
Corporation on ... three of them." He noted that he has also
worked for the Sealaska Corporation and "during the time I
worked for them we won the election process." He stated, "I am
currently serving on a board for one of our corporations through
the election process."
MR. JOHNS stated his concern that the changes [proposed in HB
527] could have a detrimental effect on Native corporations. He
said, "I know that right now there are many ... Native people
that are against discretionary voting, because they really don't
understand the application and how you can use it for your
benefit." He offered an example. He clarified that his major
concern is not actually the wording of the bill, but its
interpretation and application. He offered another example.
Mr. Johns stated his opposition to [HB 527] and offered to
answer questions from the committee.
Number 1359
REPRESENTATIVE HOLM asked if Mr. Johns considers that
corporations in Alaska are of equal value to the state, in the
sense that they fall under an umbrella of equal laws.
MR. JOHNS responded that he guesses they do, but reiterated his
concern is in regard to the interpretation and application of
law.
REPRESENTATIVE HOLM asked Mr. Johns if he is aware of "the
number of cases that we've heard of people that have indicated
that they weren't given due process in the corporate (indisc. -
overlapping voices)."
MR. JOHNS answered yes. He stated, "I can tell you right now
that 30 percent of the people, no matter what you do, will be
against a corporation." He offered an example.
REPRESENTATIVE HOLM offered his belief that "our responsibility
is to make sure it's an even playing field for all the people
who are members of corporations."
MR. JOHNS questioned what the additional cost would be to the
corporation in the process of making [the playing field] level.
REPRESENTATIVE HOLM suggested, "It may be immaterial whether or
not you appreciate what the state is trying to do, if we
believe, as the legislature, that as a policy it's in the best
interest of all the people of Alaska to have the same rules to
live by."
MR. JOHNS responded, "As far as I can see, we have the same
rules." He reiterated that he has both run and won elections by
using the existing laws. He concluded, "If it's equally applied
to all the corporations and not just Native corporations, that
would be one thing, too."
REPRESENTATIVE HOLM clarified that that is what he is
suggesting.
Number 1161
REPRESENTATIVE SEATON asked Mr. Johns to clarify what he means
by discretionary voting.
MR. JOHNS answered that "through the election process people
can, under proxy, find discretionary voting, and then the
corporation can use that to vote and distribute the votes of
candidates." He reiterated that those who speak against
discretionary voting are those who do not know how to use it.
He added, "But it's the best tool that you could have for a
dissident, if they know how to use that tool."
REPRESENTATIVE SEATON noted the change from 500 to 250 in
Section 1 and asked Mr. Johns if he objects to that provision.
MR. JOHNS answered no. He indicated that his concern is for the
Native corporations that are struggling financially. He noted,
for example, that it cost Goldbelt, Inc., approximately $50,000
to hold an election. He concluded as follows:
If the company's struggling financially, a handful of
people could come into the state and say ..., "We want
this," and then they have to go through the process
and, you know, maybe they can't afford to distribute.
If you're broke and don't have money, what [are] you
going to do? And then what would the state do? I
mean, that's my concern right now, because there are
some companies that are in that predicament today.
Number 1061
CHAIR WEYHRAUCH suggested that it may be time to look at an
omnibus act, but, with 41 days left in the session, it wouldn't
be done this year.
Number 1038
CHAIR WEYHRAUCH closed public testimony.
[HB 527 was heard and held.]
[A fictitious HB 690 was presented as an April Fool's joke.]
HB 459-PAPER TRAIL FOR ELECTRONIC VOTING MACHINE
Number 0962
CHAIR WEYHRAUCH announced that the next order of business was
HOUSE BILL NO. 459, "An Act requiring an auditable paper trail
for electronic voting machines; and providing for an effective
date."
Number 0950
REPRESENTATIVE GARA, Alaska State Legislature, as sponsor of HB
459, told the committee that last night he spoke with
representatives of the Division of Elections in the lieutenant
governor's office. He said their concerns are addressed in
three amendments.
CHAIR WEYHRAUCH announced that before the committee was the
committee substitute (CS) for HB 459, [Version 23-LS1686\Q,
Kurtz, 3/29/04.]
REPRESENTATIVE GARA turned to Conceptual Amendment 1, which read
as follows [original punctuation provided]:
Insert at p.2 line 9:
"(15) No more than one machine that produces
electronically generated ballots may be used at a
precinct, except that the Division may utilize more
than one machine in places where it determines
additional machines are needed to accommodate the
needs of persons with disabilities, physical
limitations or visual impairments."
REPRESENTATIVE GARA stated that one of the concerns has been how
wide spread the [touch screen voting] machines are going to
become. He said the lieutenant governor's office explained that
it has no intention of using more than one of these machines in
any precinct. He said Conceptual Amendment 1 confirms that
intention. He proffered that one exception might be to have a
special polling place for people with visual impairments in
Anchorage.
Number 0890
CHAIR WEYHRAUCH moved to adopt Conceptual Amendment 1 [text
provided previously]. There being no objection, Conceptual
Amendment 1 was adopted.
Number 0857
CHAIR WEYHRAUCH moved to adopt Amendment 2, which read as
follows [original punctuation provided]:
Delete page 2 lines 14-17.
Insert at page 2 line 14 as follows:
"(b) Any software for such equipment shall be tested
and certified pursuant to AS 15.20.900."
REPRESENTATIVE GARA explained that the director of the Division
of Elections was scared that she would be given certification
duties that she wouldn't be able to undertake. He noted that
the current law, AS 15.20.900, provides that election equipment,
including software and computer equipment, needs to be certified
and tested before every election. He explained that [Amendment
2] emphasizes that that rule applies to the software of the
Direct Recording Electronic voting machines (DREs) and provides
a new subsection (b).
Number 0800
CHAIR WEYHRAUCH asked if there was any objection to Amendment 2.
There being none, Amendment 2 was adopted.
Number 0785
CHAIR WEYHRAUCH moved to adopt Amendment 3, which read as
follows [original punctuation provided]:
Delete page 2 lines 4-8.
Insert at page 2 line 3 after "only" as follows:
"by a voter who requests use of a voting machine that
produces such ballots."
REPRESENTATIVE GARA noted that Amendment 3 is the only amendment
that involves a policy call by the committee. He said the bill
is written to limit the use of DRE machines as much as possible,
until "the evidence helps us develop a better comfort level with
them." Currently, the bill states that if someone needs to use
[a touch screen machine] he/she just needs to ask. The Division
of Elections responded that if someone with a visual impairment
is made to say he/she needs to use the machine, that would be
unfair, because it would highlight the handicap. Therefore,
Amendment 3 would change the language so that the voter only has
to request the use of the machine [without proving the need to
do so]. He pointed out that this may allow the machines to be
used a little more frequently.
Number 0723
REPRESENTATIVE SEATON, in response to a request made by the
chair, objected to Amendment 3.
Number 0706
LAURA GLAISER, Director, Division of Elections, Office of the
Lieutenant Governor, stated that the division bought 100 [touch
screen voting machines] and since then, many concerns have come
to the forefront. She mentioned an intent to "back up"
implementation. She stated that the machines will be placed in
the regional supervisors' offices. She mentioned a piece of
legislation that would come before the legislature soon that
would allow the increase of "early voting," which would allow
the division to "have all 40 ballots available." With the
machines in the regional offices, anyone who needs to use them
could go vote at a regional office. However, the staff in the
division, as well as the lieutenant governor's office had a
concern about segregating a group of voters, which is why
[Amendment 3] was recommended. She clarified that the division
is not going to do voter outreach or "get everybody all excited
to use the machine," but if the machine is in the regional
office and somebody wants to use it, they will be allowed to do
so. She said the division will do the outreach to the people
that need to use it.
Number 0584
REPRESENTATIVE GRUENBERG surmised that people may just want to
try out the machines.
MS. GLAISER, in response to a question from Representative
Gruenberg, confirmed that the division doesn't want to be "in a
place of blocking someone" who really wants to use the machines.
She told the committee that [the touch screen voting machines]
won't be in polling places for the 2004 elections, with the
exception of "Access Alaska," and if there is a [request] from
the Alaska Pioneers' Home.
Number 0502
REPRESENTATIVE HOLM asked if the division would make it known to
everyone that the machines are available.
Number 0480
MS. GLAISER said the division had intended to do so. She
mentioned the concern [first discussed at a prior hearing] that
not many people use the machines, and she admitted she is a
little confused "at what direction is before me." She stated
that she has to be true to what she promised the lieutenant
governor, which is to ensure that his promise to Sandy Sanderson
and Lynn Koral, [made through] the Frank Haas legislation, is
honored. That means that the machines have to be made available
to the blind, vision impaired, and disabled. She said the
division will limit its usage if that's what the legislature
decides. Conversely, she stated that if the machine is in a
regional office, she is not going to block its use.
Number 0407
MS. GLAISER, in response to a question from Chair Weyhrauch,
reiterated that the [touch screen voting] machines are currently
located in each of the regional offices throughout the state.
In response to a comment made by Chair Weyhrauch, she confirmed
that it is the intent of the division to introduce the machines
to the legislators. She commented that the division just
recently finished its final training.
Number 0321
REPRESENTATIVE GRUENBERG suggested that in letting voters know
that the machines are available, the division should also let
them know that there is no paper trail and the machines have
been known to malfunction.
MS. GLAISER suggested that signage could be used to let the
voters know which method of voting provides a paper trail and
which does not.
Number 0277
REPRESENTATIVE GRUENBERG suggested that the signage also be in
Braille.
REPRESENTATIVE GRUENBERG turned back to Amendment 3, which would
delete subsection (a). He questioned whether the division would
want to keep subsection (b) in the bill.
MS. GLAISER said that discussion was held last night. She
reminded Representative Gruenberg that the major default in
every precinct will be a paper ballot; therefore, that language
may not be necessary.
Number 0180
CHAIR WEYHRAUCH suggested, in regard to Amendment 3, that on
page 2, line 3, after the word "ballots", the phrase "by a
voter" be added.
REPRESENTATIVE GARA responded that it would read the same with
or without that language. He pointed out that [Amendment 3
would take subparagraphs (A) and (B) out, leaving only one
sentence, so that addition wouldn't really be necessary.
Number 0109
REPRESENTATIVE SEATON said, "This goes somewhere towards solving
one of my concerns," which he said is that if there are only two
people using the machine, because of restrictions placed on
others, then the identity of the two people will be exposed.
REPRESENTATIVE SEATON suggested deleting "but only" [on page 2,
line 3].
CHAIR WEYHRAUCH asked if there was any further discussion on
Amendment 3.
Number 0040
REPRESENTATIVE GRUENBERG suggested that the committee amend
Amendment 3 to also delete on line 3, the phrase ", but only".
CHAIR WEYHRAUCH asked if there was objection [to the amendment
to Amendment 3]. Without objection it was so ordered.
Number 0029
REPRESENTATIVE SEATON removed his previously stated objection to
Amendment 3.
Number 0015
CHAIR WEYHRAUCH asked if there was further objection to
Amendment 3, as amended. There being none, Amendment 3, as
amended, was adopted.
TAPE 04-53, SIDE A
Number 0001
REPRESENTATIVE GARA indicated that the intent of HB 459 has
always been that a person would get to use the [touch screen
voting] machine by request.
CHAIR WEYHRAUCH turned to the transitional provisions and
ballots cast in 2004. He asked, "Are those all good still?"
Number 0088
MS. GLAISER mentioned "the funding source" and using federal
funds. She informed the committee that federal funds do require
a 5 percent match; therefore, there will be a limited general
fund expense on anything that's related to the Help America Vote
Act (HAVA).
Number 0161
REPRESENTATIVE GRUENBERG turned to [subsection (b)] on page 3.
He opined that language "could be potentially read to prohibit
the use of any state money, even as a match." He questioned
whether a few words should be added to say, "including any
required state match."
REPRESENTATIVE GARA replied that he doesn't think that is
necessary. He suggested that where the language currently
reads, "federal funds", the committee could choose to add
"including federal matching funds".
REPRESENTATIVE GRUENBERG said he would like to do that.
Number 0215
CHAIR WEYHRAUCH clarified that [Conceptual] Amendment 4 would
read as follows:
On page 3, line 3
After "federal funds"
Insert ", including federal matching funds,"
CHAIR WEYHRAUCH asked if there was any objection [to Conceptual
Amendment 4]. There being no objection, [Conceptual Amendment
4] was adopted.
Number 0281
SANDRA ZIRNHELD, testifying on behalf of herself, prefaced her
testimony by informing the committee that she doesn't have the
current Version Q in front of her. Notwithstanding that, she
voiced a major concern by reading an Associated Press article
from November 2002, as follows:
A Scurry County - I believe that's in Texas - election
error reversed the outcomes in two commissioner races.
A defective computer chip in the county's optical
scanner misread ballots Tuesday night and incorrectly
tallied a landslide victory for Republicans.
Democrats actually won by wide margins. "The problem
was discovered when poll workers became suspicious of
the markings of the vote," Scurry County clerk Joan
Bunch said. "A new computer chip was flown to Snyder
from Dallas," she said. By Wednesday morning, the
votes had been counted twice by hand, and once again
by scanner with the replacement chip.
MS. ZIRNHELD said she has read countless newspaper articles
regarding elections that have been compromised through the use
of leading brands of touch screen voting machines. However, she
said this is the first article that she has read that documents
the glitch with optical scanner tallying systems. She said she
thinks this is important for the committee to know about, for
two reasons: First, she turned to the fact that the state has
purchased 100 Diebold machines in order to be in compliance with
HAVA. She stated that in a conversation last week with an
employee of the Division of Elections, she learned that the [the
state's] optical scanning system uses the same tallying software
as the touch screen voting machine. She said [the touch screen
voting machine] has been studied by leading computer security
researchers at Johns Hopkins [University] and Rice [University],
who found that the security feature on the machine is extremely
lax. She indicated that the same touch screen voting machines
have been implicated in countless re-election mishaps since
2002. Currently, she said, the state Division of Elections has
no check in place for the tallying system used by its optical
scanners. She offered her understanding that the division
sometimes reruns the ballots and checks the second tally with
the first, but she said that would not catch systematic
malfunction. She opined that HB 459 needs to include language
inserted that "would mandate the prized, post-election manual
recount in some subset of precinct with votes cast equaling at
least 0.5 percent of votes cast statewide." She explained that
the manual tallies can then be compared with the electronic
tallies to verify that the entire system is functioning
correctly. She added that she thinks this should encompass all
systems, whether touch screen or optical scanning.
Number 0506
MS. ZIRNHELD expressed that, as a citizen of the state, she
wants to have confidence that the entire election system is
functioning correctly. She noted that Alaska receives high
marks [for its voting process], and she said she can understand
that, since both the legislature and the division take the
matter so seriously. "But I think my suggestion is needed to
ensure that we're not simply happily voting with a false sense
of security in our tallying software," she said.
Number 0527
CHAIR WEYHRAUCH closed public testimony.
Number 0536
REPRESENTATIVE SEATON asked Ms. Glaiser if the division has a
"dummy pack" that it knows ahead of time has "50 percent on
every ballot" that it can run through the scanner to verify that
the scanner [records] that 50 percent, or does the division just
double-check ballots, without knowing the distribution, to make
certain they have the same results.
MS. GLAISER explained that the division runs a sample ballot
through [the scanner] to ensure that it has the marks it ought.
This test is done in the director's office, she said. After
being tested by the review board, the memory cards are sent to
the regional AccuVote boards that run the same test again. Then
the machines are sealed and delivered to the precinct. She
concluded, "So, I think our chances to find something like that
happening in [an] Alaska election are minimal, at best."
Number 0886
REPRESENTATIVE GRUENBERG turned to page 2, lines 27 and 28. He
noted that language defines optically scanned ballots in AS
15.60.010. He said he doesn't have that entire statute
available and asked if "optical scanning machine" is defined
elsewhere in that statute.
MS. GLAISER indicated that it is.
Number 0709
REPRESENTATIVE HOLM moved to report CSHB 459, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes.
REPRESENTATIVE GRUENBERG, returning to the issue of the
definition of optical scanning machine, stated, "It doesn't make
... any sense to define optically scanned ballot if you don't
define optical scanning machine." He indicated that [after
looking at a copy given to him by the committee aide] that Title
15 is general and "covers the whole thing."
Number 0765
REPRESENTATIVE GARA indicated that optically scanned ballots
could only be used in optical scanning machines; therefore, he
said, "It's an amendment that I'm not sure gets us anywhere."
REPRESENTATIVE GRUENBERG suggested that this issue could be
considered on the House floor, since the House State Affairs
Standing Committee is the last committee of referral for HB 459.
Number 0832
CHAIR WEYHRAUCH reminded the committee of the previously stated
motion. He asked if there was any objection. There being none,
[CSHB 459 (STA)] was reported from the House State Affairs
Standing Committee.
HB 460-ALLOWABLE ABSENCES AND PFDS
Number 0879
CHAIR WEYHRAUCH turned to the last order of business, which was
HOUSE BILL NO. 460, "An Act relating to absences to provide care
for certain relatives for purposes of permanent fund dividend
eligibility; and providing for an effective date."
Number 0900
AURORA HAWK, Staff to Representative Beth Kerttula, Alaska State
Legislature, on behalf of Representative Kerttula, sponsor,
presented HB 460. She stated that HB 460 would make it possible
for an Alaskan to care for a critically ill or injured family
member and not lose his/her permanent fund dividend (PFD). She
noted that, currently, Alaska statute provides an allowable
absence for a person who is caring for a critically ill family
member, only if that family member has to travel out of state
for treatment. She clarified, "This means that if your child
who is living out of state, for instance, in college, is hurt or
becomes ill, you will lose your dividend if you are required to
spend a long period of time out of state to care for them." She
said when a family member is ill or injured, it is a stressful
time, and Alaskans should be able to care for a family member,
and not have to worry about receiving their dividend, regardless
of that family member's residency or where they happen to be
when they become ill.
MS. HAWK noted that there is an amendment in the committee
packet, but suggested that the committee may wish to listen
first to public testimony.
Number 0978
IRIS MANYA PUNGOWIYI-REED testified that she is proud to be a
long-time Alaskan. She related having moved to Alaska in 1970,
and she shared some of her history as an Alaskan living in
various parts of the state. She revealed that her current
husband's name is Ron Reed, and they own a home in Juneau.
MS. PUNGOWIYI-REED said her niece, a student of the University
of Alaska, Southeast, sustained a knee injury in September 2001,
while on an exchange student program in Albuquerque, New Mexico,
and needed surgery. Ms. Reed indicated that she [and her
husband] traveled to Albuquerque in December to help take care
of the niece's son while the niece had her surgery.
Concurrently, her son Bryce, who was living in Denver, Colorado,
at the time, also came to Albuquerque. On December 13, 2001,
Ms. Reed said, Bryce was involved in an accident. She related
the details of that accident and the injuries Bryce received as
a result. Bryce was in critical condition at the University of
New Mexico Hospital.
MS. PUNGOWIYI-REED stated that as a result of the complications
from Bryce's trauma, he is non-verbal, non-mobile, is fed
through a tube, and is 100 percent dependent upon others for his
care. Ms. Reed said she has explored the possibility of caring
for Bryce in Juneau, Alaska. She said she also inquired at the
VA [Department of Veterans Affairs] office in Anchorage, Alaska,
because her son is eligible to receive "100 percent service-
connected disability." She said she was told that Bryce would
have to be sent to Seattle, Washington. She stated that she is
not comfortable "taking that kind of risk," and she declared
that she - as his mother, next-of-kin, and legal guardian -
would not abandon him to return home. She related that there
has been emotional and financial stress associated with her
son's accident. She offered examples.
CHAIR WEYHRAUCH requested that Ms. Reed complete her testimony,
because committee members needed to be present at the 10:00 a.m.
House floor session. He stated that the committee would come
back to the issue. He said, "It's tough when these
circumstances happen to a family, and our hearts go out to you."
MS. PUNGOWIYI-REED stated that she is currently prohibited from
getting her PFD, and she emphasized that she has not given up
her Alaska residency.
[HB 460 was heard and held.]
ADJOURNMENT
Number 1464
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 10:03
a.m.
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