Legislature(1995 - 1996)
04/11/1995 10:05 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 11, 1995
10:05 a.m.
TAPES
SFC-95, #28, Side 1 (100-575)
SFC-95, #28, Side 2 (580-end)
CALL TO ORDER
Senator Rick Halford, Co-chair, convened the meeting at
approximately 10:05 a.m.
PRESENT
Co-chairs Halford and Frank, Senators Phillips, Sharp,
Donley and Rieger were present. Senator Zharoff was not
present
Also Attending: Robert Cole, Director, Administrative
Services, Dept. of Corrections; Deborah Vogt, Deputy
Commissioner, Dept. of Revenue; Loren Jones, Director,
Division of Alcoholism and Drug Abuse, Dept. of Health &
Social Services, and Wilda Whitaker, Legislative Aid to
Representative Therriault.
Teleconference: Teresa Williams, Dept. of Law, Anchorage
SUMMARY INFORMATION
SB 87 ALCOHOLIC BEVERAGES: LOCAL OPTION & MISC.
Discussion was had on SB 87 (JUD). Amendments 1, 2, 3,
and 5
were ADOPTED. Amendment 4 FAILED. Amendment to
Amendment #1
was ADOPTED. A Friendly Amendment to Amendment #1 was
ADOPTED. Co-chair Halford moved to adopt deletion
of Section 30. The deletion was ADOPTED. CSSB 87
(FIN) was REPORTED OUT of committee with individual
recommendations and a zero fiscal note from the Dept.
of Revenue. Senator Phillips MOVED to rescind the
action of PASSING OUT OF COMMITTEE CSSB 87 (JUD). No
objection having been heard, CSSB 87 (FIN) was RESCINDED
and brought back before the committee. Senator Phillips
MOVED to delete Section 30. No objection having been
heard, deletion of Section 30 was ADOPTED. Co-
chair Halford and Senators Phillips and Sharp
signed "do pass". Co-chair Frank and Senators Rieger
and Donley signed "no recommendations".
HB 9 DAMAGE TO PROPERTY BY MINORS
Wilda Whitaker testified to HB 9. Amendment #1 with
language change with a deletion was ADOPTED. SCSCSHB 9
(FIN) was REPORTED OUT of committee with individual
recommendations and 7 fiscal notes (see page 5 of
minutes for details). Co-chairs Halford and Frank
along with Senators Rieger, Phillips and Sharp
signed "do pass". Senator Donley signed
"no recommendation".
SB 135 PFD NOTICES AND ELIGIBILITY
Testimony by Deborah Vogt and Loren Jones was given. SB
135
was REPORTED OUT of committee with 5 fiscal notes (see
page
8 in minutes for details). Co-chairs Halford and Frank
and
Senators Rieger, Phillips and Sharp recommended "do
pass".
Senator Donley signed "no recommendation".
SENATE BILL NO. 87
"An Act relating to community local options for control
of alcoholic beverages; relating to the control of
alcoholic beverages; relating to the definition of
'alcoholic beverage'; relating to purchase and sale of
alcoholic beverages; relating to alcohol server
education courses; and providing for an effective
date."
Senator Donley spoke to Amendment K.7. He stated that it
deals with making it a violation to frequent an illegal
gambling establishment. He said that it is difficult for
the owners of the legal establishments because they are
frequently accused of the improper activity that goes on at
the illegal establishments where they are serving alcohol.
After bar hours, people will continue to find a place to
drink. When they find an establishment that is not legal,
they are not subject to the same kinds of controls as the
legal establishments exhibit. This is a tool to help the
law enforcement keep people out of these places, by way of
issuing a citation, which is a violation to frequent the
illegal establishments. The bill did pass the House in the
1988 session, but did not make it through the Senate.
Senator Donley MOVED Amendment #2 and it was ADOPTED.
Senator Donley stated that he has been in conversation with
the Department of Law, the Department of Revenue, and Mr.
Sharrock, who is available in Anchorage for teleconference,
regarding Amendment #1. In response to the questions brought
up at the last committee meeting, Senator Donley pointed out
the packet sent by Teresa Williams, Assistant Attorney
General in Anchorage, who is handling the illegal gambling
cases that involve licensed premises. The information
provides a list of 5 cases which have occurred since July of
1990 regarding liquor licensees who were convicted of
criminal violations of the gambling laws. The Division of
Gaming does not enforce illegal gambling activities, because
their charge is to regulate legal gambling activities.
Illegal gambling activities are regulated by the troopers or
Department of Law. The activity in the 5 cases consisted of
slot machines, which is clearly prohibited by statute.
These were the particular sanctions they were given by the
ABC Board. The ABC Board is free to sanction them from zero
to full revocation of their licenses. There are provisions
of violations of Title 4, which are more restrictive than
that, but these are criminal law violations and they have a
general provision in the code that allows them to pursue
sanctions which are in the public interest that do not have
specific guidelines. He modified Amendment #1, to change 3
months to 6 months for suspension of license. On a
subsequent offense, there would be a revocation of the
license." He stressed that this is not for violation of our
legalized gaming statutes, but only for criminal gambling.
He indicated that he wanted to add a new subparagraph C that
would read, "if the Board receives notice from the
Department of Revenue, that a licensee or permittee has
violated a provision of AS 05.15,(the charitable gaming
provisions relating to gaming), the Board may suspend a
license or permit, and shall suspend for at least 30 days,
if the offense is the person's second violation.
Senator Donley introduced Amendment #3. This would
restructure the ABC Board. Currently there is a mandated
requirement of two members of the Board to be involved in
industry. The amendment would make it clear that three
members of the Board should represent the general public.
Currently, two members have to be from industry, but there
is no limit. The amendment adds an ethics provision stating
that of those two persons who represent the general public,
immediate family members could not be directly involved in
the industry. The provision would also state that to make a
quorum, at least two of the members would have to be from
the general public. Currently, the quorum can be made up of
two members from the industry and one member from the
general public. Senator Donley MOVED Amendment #3. Senator
Frank inquired as to the language regarding "immediate
family".
Senator Sharp indicated his concerns regarding Section 1, in
that it does not restrict the number of people involved in
counseling on the Board. It could be all three. He stated
he did not mind that exclusion, as long as there is a limit
as to those represented from industry, he would want a limit
on other interests groups.
Senator Sharp MOVED a Conceptual Amendment to Amendment #3.
Beginning on page 1, line 19, after the words "alcohol
beverage industry.", eliminate the period and state, "not
more than two members shall represent counseling or related
services". No objection having been raised, it was ADOPTED.
Senator Rieger inquired as to the clause on line 16 which
reads, "engaged in any aspect of". Senator Donley stated
that it would be anyone having a financial interest in the
industry, either ownership or employed by the industry. Co-
chair Frank asked if there are alcohol counselors on the
Board? Senator Donley stated that in the past there was a
counselor. Senator Phillips MOVED a Friendly Amendment. On
page 1, line 16, delete the word "aspect", and after the
word "any" add "financial interest in". No objection having
been raised, it was ADOPTED.
Co-chair Halford asked for a show of hands in moving
Amendment #3. By a show of hands Amendment #3 was ADOPTED.
Senator Donley introduced Amendment #4. He stated that it
is an empowerment of community councils to better protect
their own neighborhoods. This shifts the balance of power
toward the community councils, but with a check that if the
assembly thinks it is in the best interest of the community,
they can still do it. Senator Donley MOVED Amendment #4.
Senator Sharp OBJECTED based on the unanimous vote of the
assembly.
Co-chair Frank asked what is the circumstance regarding the
city boroughs, do they have absolute veto power, or is it a
recommendation to the ABC Board? Ms. Williams responded
that the Board may not overturn a protest by a local
governing body unless it finds it arbitrary, capricious, and
unreasonable. Co-chair Halford pointed out that this
amendment also provides for extra territorial jurisdiction
in areas of overlapping councils. There may be two or three
councils with authority over one location.
Senator Sharp asked if community councils are elected
through the regular election procedure of the unified city?
Senator Donley responded that they are elected to the
council. Senator Donley MOVED an Amendment to Amendment #4,
stating a requirement of two-thirds the vote rather than
unanimous. Without objection, the Amendment to the Amendment
the show of hands, the amended Amendment #4 FAILED.
Senator Sharp MOVED Amendment #5. No objections being
heard, Amendment #5 was ADOPTED. Senator Donley MOVED
Amendment #1. He explained that this amendment would set
guidelines for appropriate penalties for convictions of
illegal gambling activity, and separate standards for
violations for charitable gaming laws by liquor licensees.
This would also establish for a criminal violation by a
licensee, that the Board would suspend for a period of at
least 6 months. A second criminal offense would call for
permanent revocation. A violation of the charitable gaming
laws would mean a discretionary penalty. A second violation
for the gaming statutes, it would mean at least a 30-day
suspension. There is also a provision that the Division of
Gaming would notify the Alcohol Control Beverage Board when
there has been a violation. Co-chair Halford stated that
this amendment requires a conviction in criminal court
subject to the protection of the due process. Without
objection Amendment #1 was ADOPTED.
Senator Sharp MOVED CSSB 87 (FIN) with individual
recommendations and a zero fiscal note from the Department
of Revenue. Without objection CSSB 87 (FIN) was REPORTED
OUT of committee with a "do pass" recommendation from Co-
chairs Halford and Frank and Senators Phillips and Sharp.
Senators Rieger and Donley signed "no recommendations".
Further discussion on SB 87 is at the end of the text.
HOUSE BILL NO. 9
"An Act relating to recovery of damages from a minor's
parent or legal guardian when property is destroyed by
the minor."
Wilda Witaker, Legislative Aide to Representative Therriault
testified to the amendment proposed for HB 9. The amendment
clarifies who is responsible for the minor when visiting
versus a custodial parent.
Senator Sharp MOVED to amend Amendment #1. Without objection
Amendment #1 was ADOPTED to be incorporated in a CS for
Finance.
Senator Phillips MOVED SCSCSHB 9 (FIN) with individual
recommendations and 7 fiscal notes from: Dept. of Law, zero;
Dept. Health & Social Services (Foster Care), zero; Dept.
Health & Social Services (Residential Child Care), zero;
Dept. of Administration, Public Advocacy, zero; Dept. of
Administration, Public Defender, zero, Dept. of
Administration, Risk Management, zero; and Courts,
Indeterminate. Co-chairs Halford and Frank along with
Senators Rieger, Phillips and Sharp recommended "do pass".
Senator Donley signed "no recommendation".
SENATE BILL NO. 135
"An Act relating to permanent fund dividend program
notice requirements, to the ineligibility for
dividends of individuals convicted of felonies
or incarcerated for misdemeanors, and to the
determination of the number and identity of certain
ineligible individuals; and providing for an effective
date."
Co-chair Frank explained that this is the same bill as last
year expanding the list of people to be denied eligibility
to include felons not serving jail time and third time
misdemeanant. The concept is to recoup State monies. Last
year the bill passed the Senate, but was not considered by
the House. There has been incorporated into the bill $2.7
million of expected savings in the FY 96 year, built into
the budget process. This bill is part of the Senate's
overall spending plan. Co-chair Frank explained that there
is no retroactive feature to the bill. This bill will
capture the dollars and put it into the budget opposed to
distributing them out to the dividend recipients.
Debra Vogt, Deputy Commissioner for the Dept. of Revenue
introduced Nancy Jones, Director, Permanent Fund Dividend
Division. Ms. Vogt spoke to the charts handed out at the
meeting (attached to the minutes). SB 135 changes, as the
sponsor has indicated, both the way the substantive
provisions of the legislation and the timing of the
legislation. The bill adds to the list of applicants who
are denied dividends for criminal activity. The list adds
misdemeanant, third time misdemeanant who are incarcerated,
and any felon. The purpose is to reimburse the state for
some of the costs associated with criminal activity. The
bill also adds to the list of agencies that receive funds
from the dividends denied the criminals. Currently, those
agencies that are permitted to receive funds include the
Crime Victim Compensation Fund, the Council on Domestic
Violence, and the Department of Corrections. The
legislation adds the Dept. of Revenue for child support, the
Dept. of Public Safety and the Dept. of Law. The reason for
the addition of the Dept. of Revenue for child support, is
that many of those being denied dividends are garnished by
the Child Support Enforcement Division for the support of
the criminal's children. By appropriating a portion of the
funds to the Dept. of Revenue for child support, it does not
give the money to the children, who would otherwise receive
it if the Child Support Enforcement Division were to
distribute to the children. The Department opposes changing
the eligibility requirements for dividends. There is
opposition to adding to the list of ineligible people and
adding to the list of eligible people. The timing and
fiscal issues are more important issues. Ms. Vogt referred
to her timeline under current law vs under SB 135. The
Department believes this is an appropriation to fund state
agencies out of the dividend fund. In the legislation, it
is prohibited from informing the dividend recipients that
this money has been taken out of their check. Section 7 of
the legislation says, "notwithstanding the amendments made
by the legislation, the notice requirements for 43.23.028 do
not apply to appropriations from the dividend fund made for
FY 96. The Department recognizes the sponsors desire to
close the gap between the criminal activity in one year and
the appropriation several years later. A felon in jail for
one year can only have one dividend taken away. This
legislation appropriates 2 dividends to state government,
which is why the Department is opposed to it.
Senator Phillips said that the legislation can be viewed as
a user fee. Ms. Vogt stated that the Department is not
opposed to the idea of denying criminals dividends. The
double-dipping aspect of this legislation takes two
dividends away, when there is really only one available.
Therefore the second dividend is coming from the rest of the
people of the state who are not criminals.
Loren Jones, Director, Division of Alcoholism and Drug Abuse
spoke to two issues in SB 135 that the department wanted to
bring to the committee's attention. Under this bill
extending it to third time misdemeanant offenders, the
majority of those offenders we believe will be referred to
the court system into the Alcohol Safety Action Program and
thus into alcohol treatment. Unlike felony probationers,
misdemeanant probationers, are not supervised by the
Department of Corrections. In most cases, if they are
alcohol related offenses, they are supervised through the
Alcohol Safety Action Program in the Dept. of Health &
Social Services. There are substantial costs that the
offender pays. Usually, access to, or receipt of the
dividend, provides those persons with money to pay for the
service. In the Alcohol Treatment System, it is estimated
that $300,000 of third party payments, or first party
payments from the clients, actually come from the their
dividends. There is concern that it would take away from the
local non-profit agencies, revenue available to them to
charge for their services. Senator Donley asked what else
the Dept. of Health & Social Services is doing to collect
funds from the criminals? Mr. Jones responded there are
several avenues. Providers can go off medicaid. Providers
can go after private insurance if the individuals have
private insurance. There is a requirement to collect fees
through small claims court. Most of the programs have a
sliding fee scale. The Department estimates that beyond the
dividends there is double that amount of money that is
collected from other fees. Many of the clients are also
coming out of a homeless situation, and more than 65% report
an income of less than $10,000 a year.
Mr. Robert Cole, Administrative Director for the Dept. of
Corrections, stated there is concern that the Administration
does not support the bill. Our most immediate concern is
that the FY 96 budget is contingent on this $2.7 million
revenue source. A second concern is that the $2.7 million
which would be realized if the funds are collected, is still
a one time shot and there is a concern of what position that
puts the Department in for the succeeding FY 97. Will the
Department then be $2.7 million out of the base in
succeeding years? There can be no assurances of revenue
from collection of permanent fund dividend checks from third
time misdemeanant. The Department of Corrections works with
the Department of Revenue and Public Safety to try to
correlate the information system with public safety's
information system and calculate the likely number of future
third time misdemeanant who would appear in the Department
of Correction's rolls, two and three years out, and in the
future. He stated that the payments are used to pay child
support payments, cost to treatment programs, debts owed and
other costs, fines, etc. He stated there would be a effect
on distribution in the future from those purposes to an
appropriation purpose. He stated that the Dept. of
Corrections does not know where they stand, and that it is
up to the appropriations process to decide, and not to be
locked in law.
Co-chair Frank MOVED to pass out of committee SB 137 with
individual recommendations and accompanying fiscal notes.
No objection having been heard SB 137 was REPORTED OUT of
committee with the following fiscal notes: Department of
Revenue $2.4; Department of Corrections, zero; Department of
Public Safety, $5.0; Department of Education, zero;
Department of Law, zero. Co-chairs Halford, Frank along
with Senators Rieger, Phillips, and Sharp recommended "do
pass". Senator Donley signed "no recommendations".
Co-chair Halford returned to SB 87. Senator Phillips MOVED
to delete Section 30. By a show of hands, Section 30 was
DELETED from the CS 37 (JUD). Senator Donley brought to the
attention of the committee Section 49. He said that
Subsection C (2) the question of whether local communities
can put a sales tax on alcohol unless there is another sales
tax in that area. Conversation on clarity with regard to
taxation transpired. Senator Donley MOVED to delete after
the word "sales" on line 29, "if sales taxes are imposed on
other sales within the municipality". By a show of hands
the Amendment FAILED. Senator Phillips MOVED CSSB 87(JUD)
with individual recommendations. No objection being heard,
CSSB 87 (JUD) was REPORTED OUT of committee.
At approximately 11:00 a.m. the meeting RECESSED.
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