Legislature(1997 - 1998)
03/24/1998 09:15 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 24 March, 1998 9:15 a.m. TAPES SFC 98 # 92, Side A (000-591) Side B (591-000) CALL TO ORDER Senator Bert Sharp, Co-Chair, convened the meeting at approximately 9:15 a.m. PRESENT In addition to Co-Chair Sharp, Senators Pearce, Donley, Parnell and Phillips were present when the meeting was convened. Senators Torgerson and Adams arrived later. Also Attending: Senator JERRY WARD; ANNE CARPENETI, Assistant Attorney General, Legal Services Section, Criminal Division, Department of Law; JOHN BITTNEY, Legislative Liaison, Alaska Housing Finance Corporation, Department of Revenue; STEVE ASHMAN, Senior Housing Specialist, AHFC, DOR; KIM METCALF-HELMAR, Special Assistant, Office of the Commissioner, Department of Community and Regional Affairs; YVONNE CHASE, Director, Division of Community and Rural Development, DCR&A; REBECCA GOMEZ, Director, Division of Employment Security, Department of Labor; LIZ DODD, President, Alaska Civil Liberties Union; MIKE GREANY, Director, Division of Legislative Finance and aides to committee members and other members of the Legislature. via Teleconference: From Anchorage: GLEN KLINKHART, Anchorage Police Department; SUMMARY INFORMATION Co-Chair Sharp announced there were five bills on the calendar and they would be taken up in the order they appear on the agenda. He hoped the committee would get through them all at this meeting. Senator Pearce spoke to the committee about the supplemental appropriation bill, HB 461, which was heard in committee the day before. The committee had ordered a new Committee Substitute. She announced the committee would be addressing that CS at the evening meeting later that day. But she said it would not be taken up until after the hearing on HB 53. She anticipated that to be well after 6:00 p.m. CS FOR SENATE BILL NO. 323(JUD) "An Act relating to sexual offenses, to those who commit sexual offenses, and to registration of sex offenders; amending Rule 6(r)(2), Alaska Rules of Criminal Procedure; and providing for an effective date." Co-Chair Sharp turned the floor over to Senator Pearce, sponsor of the bill to give her testimony. Her statement was as follows: "...The use of children in the production of sexually explicit material including photographs, films, videos and computer images is a form of sexual abuse that can result in physical or psychological harm to the children involved." "Individuals who utilize children as sexual objects or are sexually attracted to children, often seek out and collect sexually explicit material for their own sexual gratification. Access to the Internet has become one of the preferred methods of distributing and collecting child pornographic material. Several investigations across the country have revealed thousands of pieces of child pornography in the hands of child pornographers." "Congress passed the Child Pornography Prevention Act of 1996 and several states are taking action to strengthen their pornography laws. The Alaska penalty for distribution of child pornography is not more than five years, but law enforcement officers are encountering problems in trying to prove distribution. Offenders are often charged with, or plead down to Possession of Child Pornography, which is a Class A misdemeanor offence with a penalty of not more than one year of prison. [This is] unless the offender is convicted of more that one count and receives a consecutive sentence." "SB 323 increases the offences for possession and distribution of child pornography to a Class B felony offenses punishable by not more than ten years in prison." "The bill also creates the offense of Indecent Exposure in the First Degree if the offender knowingly masturbates within the observation of a person under 16 years of age. This crime would be a Class B felony. The bill makes the existing offense of indecent exposure to Indecent Exposure in the Second Degree. The penalty for this offense is increased to a Class C felony when committed before a person under 16 years of age, and a Class A misdemeanor when committed before a person 16 years or older." "The bill requires sex offender registration for the offenses of indecent exposure in the first and second degree and for the possession of child pornography. Currently, only offenders who are convicted for the distribution of child pornography are required to register." Senator Pearce then told the committee she introduced the bill at the request of an officer with the Anchorage Police Department. She said that officer was linked to the meeting via teleconference from Anchorage. She requested the committee to have an opportunity hear Officer Klinkhart talk about the reason he came and asked for the bill to be introduced. OFFICER GLEN EDWARD KLINKHART was invited to speak by Co- Chair Sharp. His testimony was as follows: "The reason that I became involved with this prior to joining the police department I spent some fifteen years as one of the state's more active computer people. [I] joined the force about two years ago and much to my surprise, I became involved in several cases involving high tech crimes. I imagined that my role would probably be in chasing down teen-age hackers and people that were moving decimal points in their businesses - that sort of thing. Much to my surprise, I became involved in assisting agencies including the APD, the US Customs Service, the Secret Service, Palmer Police Department and the Alaska State Troopers in cases involving crimes against children. This came as a bit of a shock to me. I didn't imagine even in my experience with computers that this sort of thing was nearly as prolific as it is." "Basically, a quick synopsis of some of the cases that we've worked: I have a couple of cases that are currently open that I can't talk about. But of the ones that I can, one that primarily started this was the case of an Eagle River man." "This particular man had been posting or putting information out on the Internet that he had pictures to trade. By pictures, I mean these were not just photographs. These were actual computer images - computer photographs of nude children. In fact, his preference (most of these people have a preference) was for young females between the ages of five and about sixteen. These pictures would range everything from full frontal nudity to actual sexual acts." "Working with US Customs on this particular case, it turned out that this case and most cases that we find even here in Alaska aren't just localized. They don't just start here they don't just end here." "In this particular case, Hawaii had served a search warrant on a gentleman they had found literally hundred's of pictures of child pornography. From there they discovered this person was trading - actually exchanging picture for picture with a gentleman from Indiana, I believe." "The gentleman in Indiana was a particularly lowesome individual. This particular person was having sexual encounters with his stepdaughter. He was getting her drugged and drunk and was then sexually assaulting her and video taping the act. He then would post them on the Internet, these photographs." "That caught the eye of the gentleman here in Eagle River who thought that that was pretty neat and began exchanging information." "He actually put a computer system on the Internet that allowed him to trade his photographs like trading baseball cards in a sense. 'I'll give you two of these for two of those.' He was pretty slick, really utilized the technology." "It used to be that these people who dealt in this kind of child abuse would have to go underground. There were underground newsletters. It was actually very hard to deal with, which is why US Customs dealt with it because most of the child pornography was coming from third world countries or parts of Europe. Now, because of the technology, you could be anywhere and be able to have access to it." "To make a long story short, we were able to, using computers, using technology and good old police work, serve a search warrant on this particular gentleman in his house." "In his house we discovered a computer which had over 8700 photographs of nude juvenile females. Those ranged from full frontal nudity, probably the least offensive, to actual children engaged in sex. 8700; I don't know if Senator Pearce brought her big pile of paper with her today, but next time you are in your photocopy room, stack 17 reams of paper on top of each another and you'll get a good idea as to how many pictures we're talking about. This is not just one or two, this isn't just an accidental, 'Oops, Look what I came across on the Internet.' These are people who are actively seeking this stuff out." "This particular gentleman I could not charge him under state - or I didn't feel it right to charge him with a simple A misdemeanor for this sort of thing. He was also involved in some other activities including wire fraud and mail fraud. We ended up having to go to the Feds. We ended up having to work with the US Attorney and the federal system, which luckily here in Anchorage works fairly well because they're good people and they were easy access. However, we're finding other investigators don't have that opportunity - don't have the ability to be able to have access to the federal government. In most cases we find that it is faster and more efficient to deal with it on a statewide level." "This is just one example. I have several cases that we're working on. I just did a search warrant last week on a similar case." "We have officers now that as our officers are becoming more technically savvy as we're trying to train them. We're starting to see more of this because we're able to look for it. No longer are we going to go in and find these people after they've sexually assaulted children and find the photographs. We're now being a little more pro-active in being able to find them with the photographs before they go out and actually assault children." "That was the primary reason why I felt it was necessary to talk to somebody like Senator Pearce and be able to bring this sort of problem to the forefront and give law enforcement - we already are learning the tools and have the technological tools to do this. We just are looking now for some help from the people of the State Of Alaska to give us some laws that we can work with and be able to in a sense stop these people from continuing to abuse our children." "Just to give you an idea of how widespread this is, I'm currently on-line on the Internet even as we speak and looking at people from Alaska... I've got people from Alaska right now who are in such areas as let's see, "Family Sex". That's an area where people can get pictures of family members engaged in sex. There's a person right now from Kenai who's logged on who's in an area called "Double Penetration". At any time day or night I can log on here and find people from Alaska who are peddling this sort of filth." "Its unfortunate that one of the great things about technology is it gives us more opportunity. The bad think is that it gives the bad guys more opportunities. They're trading this stuff, like I said, just like baseball cards. I'm just asking for some help and some support here in being able to track these people down and let them know the people of Alaska just are not going to stand for this." This concluded Officer Klinkhart's testimony. Senator Donley asked what it was about the federal law that was different from the state law that encouraged the officer to seek federal prosecution. Officer Klinkhart explained that the crime was a felony under federal law. He continued that given his druthers, he wanted to make sure that the particular gentleman got the best opportunity that the law would allow. Senator Phillips said he knew that the individual had been convicted and a sentencing hearing was scheduled for some time this month. He wondered if that had taken place yet, and if it had what the sentence was. Officer Klinkhart responded that he would be sentenced on Thursday. Looking at the plea agreement, Officer Klinkhart said the sentence would be between 25 and 33 months in jail. Like a lot of cases involving abuse of children, he continued, they found that the ability to plea the sentences down was a good tool. This was because it still allowed the judiciary branch of the government to work effectively, but also allowed in the real world, for young victims to be spared the court proceedings. He shared he was especially grateful for the plea provision in this case because there were sixteen families with girls who were victims of this particular gentleman in Eagle River. He was pleased that they didn't have to bring the sixteen girls into court and put them on the stand, some of who were as young as three years old. He appreciated having the law with teeth, yet also having the ability to lessen the charge and get the perpetrator to work with law enforcement thus avoiding the necessity of subjecting the victims to a trial. Senator Pearce wanted to note for the record that the committee had a letter from the University of Alaska- Fairbanks Police Department and one from the Chief of Police of the APD in support of the bill. She added she had received verbal support from a number of other police departments across the state. She pointed out that the support from APD was not just from Officer Klinkhart, but from the entire department. There were no further questions of the sponsor or APD officer. Senator Pearce moved for adoption of Amendment #1. She explained the amendment, which would delete the offense of Indecent Exposure in the Second Degree if committed before a person sixteen years or older, from the sex offender registration statute. She said this was because most of the sex offenders required to register had committed felony offenses. The Department of Correction had brought this to her attention, she said, because they wanted to be consistent. In talking to the drafter, she felt it was a mistake as they put the bill together. Amendment #1 was adopted without objection or discussion. Senator Pearce then offered a conceptual amendment for discussion of the committee. She said the Department of Law had pointed out Sections 13 and 14 (Page 5 Lines 5-11.) Those sections stated that when five years had passed after a teacher had been discharged for conviction of one of these crimes, he or she might petition the department to reissue a teaching certificate in spite of the conviction. One of the Governor's bill that dealt with child abuse, she said, deleted that ability for a teacher to apply to be reinstated five years after being convicted of one of these felony charges. She listed the charges as Distribution of Child Pornography, Possession of Child Pornography, Indecent Exposure in the First Degree, Indecent Exposure in the Second Degree, Unlawful Exploitation of a Minor, Indecent Viewing, Sexual Abuse of a Minor in the First, Second, Third and Forth Degree. In her opinion, someone who had been convicted of one of these crimes probably shouldn't be allowed back into the classroom even after five years. She then moved to adopt a conceptual amendment to remove the ability for a person convicted of one of the fore-mentioned crimes to petition for reinstatement of a teacher's certificate. According to the Drafter, the necessary changes would effect Sections 13 and 14. The areas of those sections that allowed the petitioning for teacher's certificates would be deleted, she explained. She told the committee the motion needed to be conceptual because there might be other statutory sites which would also be effected and need to be changed. Co-Chair Sharp ordered the conceptual amendment adopted, as there was no objection. He requested staff work with Senator Pearce to incorporate it into the new Senate Finance CS. Senator Donley asked if a representative of the DOL was available to answer questions. ANNE CARPENETI came to the table. Senator Donley pointed out that this was a complicated area of the criminal statutes. He told that because of the significant changes this bill would make to existing law, he wanted to hear the department's opinion. Ms. Carpeneti responded saying the DOL believed these were serious offenses and there was good reason for raising the level of seriousness for some of the offenses. However, she voiced concerns that some of the offenses were being raised too high of a level. She gave an example of the crime of Possession of Child Pornography, which would be raised to a Class B Felony. That would be the same level as Distribution of Child Pornography and Production of Child Pornography, she pointed out. She said the departments had concerns that the behavior being addressed was not the same level of seriousness. Whether possession is as serious as production was an issue the department wanted addressed. Similarly, Indecent Exposure in the First Degree under the bill was the same in the Governor's child protection bill, according to Ms. Carpeneti. In that bill, the offense was set at a C Felony, in this bill it was a B Felony, making the offence the same level of seriousness as Sexual Penetration of a 13-year old. The department disagreed as to whether they carried the same level of seriousness. She suggested the committee consider making Indecent Exposure in the First Degree as Class C felony and Possession of Child Pornography a Class C felony. Otherwise, she stressed the acts were serious and didn't disagree that the acts should be raised, but not to that level. Senator Pearce told the committee the issue had been discussed. One of the reasons she and the APD officer decided to raise the possession of child pornography level was because of the difficulty in proving distribution. The officers had found it difficult to put together a case against an individual they believed to be involved in distribution, but felt they could use the possession charge in the level were serious enough to incur adequate penalties. She emphasized, "Why else would anyone have 8700 pictures if they weren't trading them or doing something with them." She said it didn't make a lot of sense to keep that many pictures under the bed. She continued saying, law enforcement was interested in having the higher degree of penalty and if they needed to use in plea cases they could avoid making young children testify. She noted that to bring three and four-year olds to trial was very difficult on the children. For this reason, they wanted the higher penalty to use as a tool. Senator Donley said that sometimes when looking at particularly heinous crimes such as these, he had concerns over losing sight of the big picture of the criminal statutes. He stressed the importance of actual acts of physical violence and said he tried to compare changes to other areas to the actual violence. He said he was relying on the DOL to point out whether the legislation would by- pass other areas of violence. They should keep up with the other crimes, he felt. Ms. Carpeneti said she understood his point and that she had been comparing the crime to other crimes involving the sexual abuse of minors. Sexual Assault of a Minor in the Second Degree was also a Class B Misdemeanor, which included sexual penetration of a 13 to 15-year old child by a person over age 16. She warned that when trying to set the levels of what a crime should be, it was important to keep them in some sort of prospective. She understood the concerns about the difficulties in proving distribution of child pornography and the desire to have at least a felony charge for prosecutors to fall back on. That was why she suggested making the possession charge a Class C felony rather than a Class B felony. She pointed out that currently, the charge was a Class A misdemeanor, so the change to a Class B felony would be a step in the right direction. Senator Donley asked if there where any acts of violence against children, or for adults for that matter, that would be less than the mere possession of these items. Ms. Carpeneti replied that Assault in the Third Degree was a Class C felony. Senator Donley wanted to know if there was a charge of Assault in the Third Degree against children. Ms. Carpeneti said the charge could include physical assault against children not of a sexual nature. Senator Donley stressed to the committee that his worry was that the actual physical violence against children was a lesser offence than the possession of these heinous materials. He felt that the crime of a violent offence against a child should be as serious as possessing this kind of material. He spoke of a bill he submitted in 1990 to allow prosecution as a felony of violent crimes against children. He referred to permanent disfigurement to children. He wanted to keep the levels in line with the various offenses and prevent the people who commit the crimes lighter than those who just think about committing the crimes. Ms. Carpeneti pointed out to the members there was a bill, SB 218 sitting in the committee, which did address problems with child homicide. There were other bills in the Legislature this session they could look at. Senator Pearce said she understood what Senator Donley was saying, but pointed out that in order for there to be child pornography, somebody had to take a picture of the child. To her, that was just as invasive as an actual act of violence - it was an act of violence against the child. In her mind, this was just as violent as striking a child. She added that this created the same and perhaps worse psychological damage to the children in the future. This concluded discussion on this legislation. Senator Pearce made a motion to move Senate Finance Committee Substitute for SB 323 from committee with individual recommendations and accompanying fiscal notes. There was no objection and Co-Chair Sharp ordered the new CS be reviewed and approved by Senator Pearce before sending it to the Senate Rules Committee. Senator Pearce publicly thanked Officer Klinkhart for bringing the matter to the Legislature's attention. She acknowledged the great deal of time he put into the legislation. Co-Chair Sharp said it had been brought to his attention that SJR 42, while in the previous committee, did not receive public testimony from all interested parties. He announced his intention to assign the bill to a subcommittee for the purpose of taking public testimony via teleconference. After the public hearing process had been completed, the bill would be brought back before the whole committee, he announced. There was some discussion as to who would be on the subcommittee and Co-Chair Sharp said he would name the subcommittee chair and members at a later time. CS FOR SENATE BILL NO. 223(RLS) "An Act lowering the age requirement from 60 years to 55 years for purposes of senior housing programs; relating to the senior housing revolving fund; relating to bonds to fund senior housing loans; repealing provisions establishing the senior housing bond account of the Alaska Housing Finance Corporation; and repealing a provision relating to the interest rate on senior housing loans made by the Alaska Housing Finance Corporation." Co-Chair Sharp noted this was the first hearing the committee held on this bill. He invited to the table, BENJAMIN BROWN, Legislative Aid to Senator Tim Kelly, who was the Chairman of Senate Rules Committee and sponsor of this legislation. Mr. Brown's testimony was as follows: "The version before the Senate Finance Committee is a Rules Committee Substitute, which is a little unusual. That is because members of the committee and other members of the Senate were concerned that some of the fiscal implications of this legislation had not been addressed. I'm happy to be here on Senator Kelly's behalf to make sure we look at those things as carefully as they ought to be looked at." "This bill attempts to remedy several problems in Alaska's senior housing statute. In 18 56.700, which is the area of Alaska's statutes which sets up the Alaska Housing Finance Corporation." "Back in 1990, Legislation was passed that created the Senior Housing Office. At that time it was in the Department of Community and Regional Affairs. That office's purpose was to help provide loans that would make sure that Senior Housing was available to Alaskans who wanted to remain up here. We had many other programs, obviously to encourage seniors to be independent. This is the housing part of the picture. The Senior Housing Office was merged into AHFC when the merger went through in 1992. At that time AHFC took over managing the provisions of these loans to make sure that non-profits that wanted to get together to build either rental apartment units or ownership condos would have financing available at a reasonable rate from the state." "Since that time, of the nine senior housing projects that have been built around Alaska, eight have been financed, not under the Senior Housing Revolving Fund (the program we're talking about today,) but have been financed instead under the Special Needs Multi Family Loan Program, another of AHFC's programs. The reason for that is, this is an antiquated statute and some of the things that were put in back in 1990 into Senator Duncan's legislation that originally created the OSH are just no longer necessary given the superstructure of the AHFC over the Senior Housing Program." "So, Senator Kelly was just interested in streamlining the statutes and making sure that the unnecessary provisions that date from a prior time when DCRA was in the senior housing business are no longer there. One very targeted change he also wished to make was to lower the age of eligibility for persons wishing to move into these publicly financed senior housing projects from 60 to 55 years of age. That was a specific response to difficulty in achieving maximum occupancy at a couple facilities around the state. One here in Juneau, which we are all pretty familiar with, is Fireweed Place. That large fairly new building off of Calhoun near the Governor's house. That was not financed under the SHRF. It was finance under the other program I mentioned, the SNMFP. But if they had not been able to lower their age of eligibility from 60 to 55, they would probably still be at about 50 percent occupancy. They've raised that to about 75 percent thanks to the AHFC Board's ability to lower the age of eligibility for moving in there to 55 years." "This bill attempted to take that policy change, going from 60 to 55, and bring it back to the main loan program, which ought to be used for the SHRF for the financing of senior housing in Alaska." After offering to answer any questions up to that point, Mr. Brown continued. "As I worked with AHFC, the bill was originally very simple and just lowered the age to 55 from 60 in statute. But then Mr. Bittney, AHFC's Legislative Liaison who has much experience in this branch of government as well, brought a few more details forward as we went through the process of little things that needed to be tweaked in 18 56.700. One of those things was getting rid of an old fiscal structure where there was a bond account. The corporation sold bonds, the money from the bonds was put into the bond account and then was transferred into the revolving funds each time a loan had to be made." "This legislation, at the recommendation of AHFC, (the Rules Committee Substitute is where this change was put in,) eliminates the bond account and takes it current assets of some $14 million I believe, and puts them straight into the revolving fund and makes it a fully functional financing mechanism for these senior housing loans." "The bill also authorizes the capitalization of the SHRF with up to $30 million in new bonds. So there's two infusions of capital into this new fund that we're attempting to streamline so it can again be put to use as the primary agent for financing senior housing in Alaska." "I believe that may be the area of greatest concern to members of the Senate Finance Committee, although I don't want to second guess your judgement. The point I'd like to make most strongly this morning is, this legislation and the cleaning up of statutes it accomplishes can proceed with or without the transfer of the $14 million and the bond account. That's a policy call that AHFC I think would be certainly be glad to speak to in a moment if given the opportunity. But that's not necessarily integral to what Senator Kelly is trying to accomplish the way his bill came out of the rules committee." Co-Chair Sharp said he assumed the difficulty would be in moving the money over without an appropriation. He said the committee would talk with Mr. Bittney on that issue. Mr. Brown had one more thing to add to his presentation. "There was a separate issue that was a bit of a bone of contention, not so much with the AHFC staff, but some of the members of the AHFC Board and some members of the senior community, that by lowering the age in statutes for the SHRF, there would be no flexibility. It would just automatically be down to 55 and the AHFC Board would have no latitude if that ended up creating too much demand for senior housing. The way they handled it with the other loan program, the SNMF loan program, the board has the regulatory authority to lower it to 55 on a case by case basis. It seems that is more friendly approach to a lot of the senior community. So much so that the Commission on Aging passed a resolution in support of changing this bill so that it's not a statutory lowering from 60 to 55, but enabling the AHFC Board by regulation to take step." "This just gives them a little tighter hold on the reins on the demand there if there is a problem. It's really not - they're Actuary Analysis does not anticipate a huge spike in demand by adding five more years of population. The average senior in Alaska is 77.5 or something. That's not the area of senior population that is going to be most demanding on these senior housing units. But it's probably prudent to make sure we don't change it in statutes and have to go and raise it again at some future point." "So I have had the Finance Committee Secretary distribute a workdraft "H" version. It is identical to the Rules Committee substitute except that it does not include a statutory change in the age limit from 60 to 55, but leaves it for the regulatory discretion of the AHFC Board." "That's all I have. Maybe the folks from the corporation can address any other concerns." Co-Chair Sharp then invited JOHN BITTNEY, Legislative Liaison for AHFC, and members of his staff to come to the table. STEVE ASHMAN, Senior Housing Specialist for AHFC joined Mr. Bittney. Mr. Bittney made his statement: "Mr. Chairman, we're here today to speak in favor of the proposed draft CS that Mr. Brown has referenced. My understanding is that the CS would change the Rules Committee version in relation to how the bill addresses the lowering of the age requirement for these projects. Instead of taking a blanket, across the board approach in statute of lowering the age eligibility from 60 to 55, it would more or less put it into something that we would be able define by regulation. We would be limited by not being able to go below the age of 55." "Right now we do have a multi-family loan program that's called Special Needs Program, that we've been financing most senior projects around the state since the time of the merger. We got started in this discussion last summer by addressing the age eligibility for those with the regulation process." "We had proposed lowering it again much the same way the bill originally did. That did cause some concern on the part of our board for its impact and that policy call. The draftsman here was working at the time and held some hearings with some senior folks around the state and did a survey." "So what the board did in its final review of that regulation was basically say that senior developments around the state - if they experienced some sort of an economic hardship situation - they could apply to AHFC to lower the age on a temporary basis down to the age of no lower than 55. We would look at that regulation if the CS were to go through to basically do the same thing for loans under the revolving fund." Mr. Ashman added to Mr. Bittney's comments: "Mr. Chairman I think its fair to acknowledge AHFC did receive a letter from the co-chair of the Finance Committee requesting that our board of directors review the assets within the bond account as potentially being available. That issue is being addressed at our board meeting as we speak right now. I expect to have a resolution or some sort of board action with regard to that matter any minute now." Senator Torgerson asked what kind of waiting list the corporation anticipated if they dropped the age down to 55. What would the impact be and how many folks would be affected, he wondered. Mr. Bittney responded by sharing information on the demographic population. He said he looked at the '60 and above' and compared that to the '50 and above'. When his office looked at the figures a couple years ago, he thought the population of '60 and above' would have went from about 35,000 up to 60,000 senior citizens under that definition. They didn't think it would have much of a cause of increased demand on the loan program. The primary reason was because with independent senior housing, the average age at the time of occupancy was about 75. For assisted living, the average age was 83 to 85 years of age. He concluded that the more mobile senior wasn't likely to move into the complex because they typically did not want to move out of their own home. Senator Torgerson then wanted to know what was the residency requirement to receive the loan. Mr. Ashman told him there was a residency requirement under regulation or statute. He said that while an out of state developer could build senior housing, it would have to be located within the State Of Alaska and be utilized by Alaska citizens. However, there was no residency requirement like what may be required for other loan programs administered by state agencies. Co-Chair Sharp had a question on Page 2, Lines 21 and 22 of the draft referring to bonds in the amount of no more than $30 million. He wanted to know if that was currently accessed. Mr. Bittney replied that it was not as there were no applications pending before the corporation right now for loans under this program. He added, they were leaving in place, the $30 million bonding cap in statutes. Co-Chair Sharp interjected asking if that was a maximum amount per project or a cumulative amount of bonds that could be issued. Senator Donley told him the amount was the maximum amount of bonds that could be issued. Mr. Bittney agreed that was the way he also read the statute. Mr. Bittney continued, pointing out the current statute that was being deleted, which talked about approval by the corporation. That clause was leftover from before the merger. The bill would try to clear up some of the ambiguity as to how authority worked between the two accounts, he said. He noted the difficulties in trying to issue debt to capitalize one account and then have to transfer the proceeds to be issued over to the loan fund. It was not clear how the funds could be used as collateral for the bond account. He said it would be better to have all the funds in one account. Co-Chair Sharp asked where the $14.2 million dollars originated that was currently in the SHRF account. Was that equity money of AHFC, he wanted to know. Mr. Ashman affirmed that. He said the bond account had always been at AHFC. What happened, he explained, was when that was set up in 1990 an appropriation bill went through the Legislature that was tied to the enabling legislation. The appropriation granted $10 million of AHFC receipts into the newly established bond account at that time. It's been there to this day. Co-Chair Sharp asked if the funds were transferred in 1989. Mr. Ashman replied he believed the year was 1990. Co-Chair Sharp noted that the money had been held in the account for seven years and had not been utilized. The rising account balance was from the accrual of interest and not from loan activity, he wondered. Mr. Ashman confirmed that. Co-Chair Sharp questioned if the reason the funds had not been put to use was because of the difficulty in accessing the funds and making both statutes fit. Mr. Bittney answered that was correct. In addition, he said when the two funds and the functions were separated between AHFC and DCRA, statute required that a surcharge be placed upon the interest rate calculation for any loan going out. The rate was one-half percent for a permanent, or regular loan and two points for a construction loan. This was with the idea that proceeds of the surcharge would be used to fund DCRA. Now that the program is a part of AHFC it is not necessary, he concluded. Basically, he surmised that by going to the other loan program where folks could apply for low-income senior housing, they could avoid the surcharge. Section Eight of the pending legislation would repeal the surcharge. Mr. Bittney continued by saying what AHFC would do if this loan program were improved. They would use the fund to address the needs of moderate, or middle-income market rate senior housing. He explained that the special needs program was something that had been geared toward lower income situations that require set-asides and was where AHFC would offer tax-exempt rates, which come with strings attached. His office was seeing more interest in market rate or moderate, middle-income senior housing. By improving the senior loan program, efforts would be placed in making loans for these programs. In Mr. Bittney's opinion, that was the intention of the program. Co-Chair Sharp pointed out the "Senior Housing Mortgage Loans" and asked if that was what these monies would be used for, as well as loans made for building materials for senior housing. He questioned that to qualify, did the projects have to multi-unit housing, or could single-family units participate. As Mr. Bittney recalled the legislation, AHFC would have the ability to finance single family homes for senior citizens 60 years of age or older under existing definition. He doubted they would ever use that mechanism because their single-family home products had a much more favorable interest rate than they would under this program. Traditionally the interest rates had been higher under the special needs program and the senior program than the prevailing market rates. Co-Chair Sharp directed the conversation to the lowering of the permissible age. He asked if the regulation would be set by the board, or by the executive director or staff. Mr. Bittney explained how under the administrative procedures they would have to take a regulation to the board of directors as well as hold public hearings. Co-Chair Sharp wanted to know if once the regulation was approved, did Mr. Bittney foresee a delegation of authority to the AHFC administration. Mr. Bittney responded that the current regulations for the special needs program - as far as applying for the hardship situation - was done through the staff. Co-Chair Sharp mentioned objections he had heard with regard to lowering the age to meet the federal age limit of 55. The seniors who currently live in senior housing were not too excited about getting a lower age group in their complex, according to comments he had received. He asked if these complexes were owner-occupied, like condominiums. Mr. Brown told the committee he visited many senior housing developments across the state while working on this legislation. The only ownership facility was Chester Park in Anchorage. It was unique because of that. The good thing about it being a real condo, many of the Alaskans there had been able to convert the equity in their homes into buying the units. That was a very nice transition, he commented. He noted a collegial, village-type arrangement at Chester Park that was geared toward middle and upper-middle class seniors. He said he met with some of the residents and the manager and never heard of concerns about a new influx into the population. In his opinion, the residents were hoping to get more occupants to help share with the fixed costs. Senator Adams arrived at the meeting, coming from a public testimony hearing and stated for the committee that the reality checks in rural Alaska and in Anchorage was - people did not want to cut the budget. Co-Chair Sharp brought the discussion back to the bill at hand. He pointed out that the proposed draft did not transfer or allocate funds. Mr. Brown interjected saying Section 7 of Workdraft H did transfer all assets in the Senior Housing Bond Accounts, on the effective date of the act, into the Senior Housing Revolving Fund. He didn't know if that would be an impediment for those funds being further appropriated, but they would be a different source of appropriation. He didn't know if that legislation would have to be changed to permit that eventuality later in the session. The workdraft did make the transfer just for the purpose of tidying up the statute and getting rid of the bond account, an unnecessary financial instrument. The revolving fund was meant to be the source of loans and the destination of repayments. Co-Chair Sharp asked for confirmation that all the assets in the Senior Housing Bond Account were Alaska Housing equity and had nothing to do with any bond receipts or obligated funds. Mr. Ashman affirmed that. He added that under Section 8, the bond account was being repealed, and elaborated on the details. There was further clarification on that matter between Co-Chair Sharp and Mr. Ashman. Co-Chair Sharp stated his desire to hold the bill until the decision was received from the board on the request by the co-chairs. He offered to allow the workdraft be adopted by the committee in the meantime. Senator Adams moved and asked unanimous consent that Senate Finance Committee Substitute for SB 223 Version H be adopted as a workdraft. There was no objection and Co-Chair Sharp so ordered. Co-Chair Sharp thanked the involved parties for their participation. He warned of the possibility that Section 7 would be struck from the bill. He wanted to ensure that it would not cause damage to the other goals the sponsor wanted to accomplish. That concluded discussion on the bill. CS FOR SENATE BILL NO. 274(JUD) "An Act relating to fees for probation and parole." Co-Chair Sharp invited Senator Jerry Ward, sponsor of the bill to join the committee and speak to his request. Senator Ward's testimony was as follows: "This bill and also I have put in an amendment on it (hopefully it will be presented,) - basically what this does, it enable those people that are causing the cost to government to share in that burden of cost." "At the beginning, before the amendment, basically let me tell you what it does. What it does is it puts into place, which has been in place since 1846 and this is not to punish or to inflict punishment. What this is, is to generate revenues to offset those dollars, which the public is now paying. Every person in this room that is not on probation or parole, and with the amendment hasn't been convicted on a misdemeanor, is sharing the cost and the burden of this." "We have sent letters to all the commissioners asking them to please identify which portions of their budgets goes towards the - and I want to speak on the amendment too as well as the first part. Because that's what led me to it is when I first went into Probation and Parole and realized that there was $8.5 million being spent on this. Even going through the original bill, at the very highest level it only generates $5.5 million. That's with 100% participation. Then when I started looking, and one of the bills you just had earlier - we've got a list of all the misdemeanors - under current statutes possession of child pornography under this bill with the amendment except that they would lose their permanent fund dividend." "There is a lot of misdemeanors. I don't pretend to understand all of them but I do know that somebody's staff and somebody's legislative office spent a lot of time getting these through and putting them on the books." "If all convicted misdemeanors and all convicted people and all people on probation and parole entered into their share of the cost and if it was 100 percent successful, they would generate $25 million. This is a revenue-generating bill. That's exactly what it is. It's set up and the purpose of it is, is to take the permanent fund away from those people that are in this position to off-set the cost of getting them in this position." "The cost is the cost of charging, arresting, prosecuting and it flows through the court system, through Public Safety, to Village Public Safety, to Fish and Game, to Transportation, through almost every department there is. We have tried to gather these various costs together - and what is the total cost - and we have been so far been told that it is much too complicated to ever figure that out. But anybody that takes a look at the State's operating budget clearly realized that it's somewhere around $60 million in order to do these functions. That's taking in all the departments there are. What this does, it enables the people of the State Of Alaska to generate revenue from those people that cause the problem in order to off-set some of those costs." "I don't think that we should drop anybody from probation or parole or convicted misdemeanors just because it costs the state more than we could possibly bring in, but however in this time of measuring revenues and measuring results, this is one of the ways of doing it." "I have been down here for some time and I haven't seen very many revenue-generated mechanisms. I do believe that we should join in not only with some other states, in having our probation and parole pay for their debt to society and help to reimburse those costs. But I also feel that this is an appropriate way of doing it." "We are the only state in the union that does give out a permanent fund dividend. Under the probation and parole at $3.30 per day, it works out to roughly $100 per month, which is equal to our permanent fund dividend. Even with all the probation and parole people paying for this amount, that does not generate the $8.5 million that's needed." "You'll notice in the legislation we clearly call for professional collectors - third party collections that's because the people that are in parole and probation have not and can not have the capability to collect these, nor should they. They should do what they are hired to do, which is to be in charge of probation and parole, not to be collectors. There are third party independent people - companies that do this for a living and can do it quite well. That is who we should have do it. We've had several of them contact our office and they are available." "Coming into this, when I started to realize the tremendous cost that is put upon public safety, the departments of law, the public defenders office, and all facets of government. That's where the proposed amendments for misdemeanors to be applied at this time because they share in the burden of the cost too. They too have a debt to society and if they were not convicted they would not be causing us to have that portion of government that need to be funded at a certain level." "Right now the way this bill presently is and with the amendment, if every person were to pay it would generate $25 million. Because of child support payments and other things that come in line before these and because of multiple attachments that of course will not come to be. But it should at least hit the 50 percent level of $12 million." "I believe whole-heartedly that this debt to society that these people should share in that burden. If our burden of cost is too high to charge, prosecute and convict all of these people, then we should re-look at our underlying statutes as to their worthiness. But as it stands right now, in the reality of the day, what this is, this is a repayment of a debt to society instead of having those people that did not cause this pay the debt. That's what this bill is about. It's a revenue-generating bill." "With that I have Craig Johnson of my office who has been working on this legislation and we'll be glad to try to answer any questions that we can." That concluded Senator Ward's opening remarks. Senator Adams questioned the collection of fees. He referred to Section 3 and Section 4. Section 3, lines 13 and 14 he read into the record, "While on probation among the conditions of probation, the defendant may be required..." He pointed out that it was not mandatory that the defendant have to pay according to the language, because of the use of the word "may". However, he jumped to Section 4 and read the language stating that, "the court granting probation shall require a periodic portion." Therefore, he wondered if there was a conflicting statement between the two, because one said, "shall" and the other "may". Senator Ward told the committee his intention was for "shall". He believed the "shall" was overriding. Senator Adams said he didn't see the requirement as mandatory because of the language. Senator Adams continued his questioning and directed attention to the collection of the permanent fund dividends. He referred to Page 5, Section 8, the exemptions and where this collection was prioritized behind such obligations as child support, court-ordered restitution, defaulted scholarship loans, court-ordered fines, judgements, debts to state agencies, domestic violence statutes. The way this bill read, the parole/probation obligation would be number eight in line, he observed. He also pointed out that felons don't receive a dividend so he didn't see how the state would recover $12 million. Senator Ward responded that was why he added the misdemeanor offenses to the legislation. Their cost to the state was every bit as much. He warned that the state would need to either reduce the cost of misdemeanors or let them help pay for the debt. He stressed that they were being convicted, there was a cost and the citizens were paying for it. He apologized to the chair for speaking to an amendment that had not been offered. He gave as his reason that it had become clear to him that the system was not remotely starting to pay even a portion of what was being demanded of the citizens. He emphasized that he was trying to get those people who were burdening society with these costs to pay for a portion of their debt to society. He stressed that this was not a punishment but a revenue-generating legislation. Instead of giving them a permanent fund dividend, let those funds be directed toward reducing the parole/probation costs, he said. Senator Donley asked Senator Ward to refresh his memory of the current requirements. He thought that for a person imprisoned for a felony then released; in the year they got out and for one following year would not receive a permanent fund dividend. After that they would be eligible to receive the dividends again. Senator Ward confirmed that, but said that under this legislation, as long as they were on probation or parole there was a cost to the state and they would be liable to pay the equivalent of the PFD. Senator Ward continued, restating much of his testimony. Senator Pearce, for discussion purposes, moved for adoption of Amendment #1 and asked Senator Ward to speak to that amendment. Senator Adams objected to the motion so the committee could get an explanation from the sponsor. Senator Ward started speaking to a different amendment, which had not yet been offered. After he was corrected, he directed CRAIG JOHNSON from his office to speak to Amendment Mr. Johnson explained that the amendment was initially introduced in the Senate Judiciary Committee at the request of the Permanent Fund Division. The Legislative Affairs Agency's Legal Services' staff had concerns with the word "except" and it was their belief that when language said "except for number eight in prior state agencies", the Department of Corrections was a state agency. In their interpretation, that eliminated DOC's ability to collect money under this law. Therefore this amendment was offered to correct Section 8. He explained that this was just a housekeeping amendment. Senator Adams requested that the new language be read in full, incorporating the changes from the amendment. Mr. Johnson obliged, reading, "A dept owed by an eligible individual to the agency of the state, unless the dept is contested and appeal is pending or the time of limited filing of appeal is not expired, other than for a fee under 8 of this subsection." Senator Adams understood the change would read "...a dept other than...owed by an individual". He asked to have that explained to him. Mr. Johnson replied that his understanding, the word dept was not in there. Senator Donley attempted to clarify that this was the section that referred to the fee exemption. He asked if it was the sponsor's intent to make this a case where the exemption was not available. Senator Ward said no, and read the changes as, "A debt other than for a fee under 8 of this subsection, owed by an eligible individual..." which was where he felt the change would be inserted. Senator Donley still didn't understand if the intent was to make the exemption applicable to this new fee. He wanted to know why it was mentioned there and also in Section 8. Senator Ward said his understanding was because Corrections was a department. By stating it there, it put it into chronological order. Senator Donley realized it was the order of priority. He further clarified the amendment's intent with regard to the priority. Senator Adams removed his objection. He stressed that he still did not believe the state would collect that much money with the priority order as such. Co-Chair Sharp noted there was no objection to Amendment #1 and ordered it adopted. Senator Pearce moved for adoption of Amendment #2. Co-Chair Sharp asked the sponsor for explanation of the amendment. Senator Ward spoke to the amendment as follows. "What Amendment #2 does, and there's approximately 20,000 misdemeanor convictions in the State Of Alaska. I have written a letter to all the commissioners and I haven't had a response yet. Basically what I have asked all of them is you go through this enormous list of misdemeanets all the way from fishing ones to sexual things with corpses and child pornography possession you just spoke on, there's a big list of them. But, and they cover all the departments with maybe the - I don't know which departments they wouldn't have some effect on." "So I've written to all the commissioners and asked them, because they don't have this information, exactly what is the cost of these 20,000 misdemeanants to arrest them, to charge them, to convict them, to fine them, to do whatever it is that's going to be done through the court system, and through Public Safety, through Fish and Game, through Transportation, airport police. Its a - and all my staff and I've been able to do is look at the total budget and guess. We've guessed around $60 million." "As Senator Adams clearly stated and I agree with him, this if enacted 100 percent, the $25 million, I don't believe that it will raise $25 million, but I do believe that this bill with the amendment would raise half of that. I believe it would raise about $12.5 million. I think that would go a way towards the people that are causing this debt to society to help repay part of that debt." "I don't think that we as a society should stop enforcing these laws or take them off the books, because they're there apparently for good reasons, whatever those reasons may or may not have been. I think that what this does, this is a revenue-generating mechanism." "I support this amendment because I don't think those citizens in the State Of Alaska that don't do these, that they should have to pay 100 percent of them. I think that those people that are actually convicted of them should share in the reimbursement of that debt. That's what this is." "Also it comes into the same provision of third party collection because I don't believe the state government is capable within their current mission statements of being a collection agency of this type. There are plenty of third party companies more than willing to step forward and take care of this process." "With that I would like the committee to at least consider this as what it is very clearly - a revenue-generating piece of legislation for those who owe a debt to society." Senator Adams objected to the amendment. The original bill affected felons, but this amendment adds misdemeanants. He felt this went beyond the bill. He asked the committee how many of us had gone to a state park and perhaps stayed over our time limit and perhaps got a citation. He pointed out that would perhaps be a misdemeanor. He gave another example of getting off a plane and illegally parking at the Juneau Airport, which would also be a misdemeanor. He stressed the need to look at adding the misdemeanor. He noted other misdemeanors such as subsistence violations, drinking alcohol on an election day or disorderly conduct. He suggested that if the misdemeanor clause was inserted to the bill it either need to be returned to the Judiciary Committee or else this committee would need to site each misdemeanor that would be affected. Senator Pearce shared a list of all the misdemeanor crimes that the sponsor had handed out for committee members. Senator Ward concurred with Senator Adams that possession of child pornography and subsistence fin fishing with unidentifiable gear would be categorized the same under this legislation and both defendants would lose their PFDs. However, he felt the simple fact was that 20,000 misdemeanants cost this state approximately $60 million. He added that if some of the crimes should be taken off the list of misdemeanors, he hoped that some of the people convicted of those crimes would lobby the Legislature to have them removed. Meanwhile, he felt that somebody still had to pay the associated costs and he didn't want to pay for them. The citizens he represented no longer wanted to pay for them either, he stated. He continued speaking to the potential need to have some of the misdemeanor offenses taken off the books, referring to the costs involved. Senator Donley tried to understand the pattern. Citing Sections D1 and D2, which talked about convictions of a misdemeanor and incarceration as a result of the convictions, he asked if both would have to occur before the offenders would lose their dividend or would the mere conviction be sufficient to cause the loss of the PFD. Senator Ward stated the conviction was the method by which the dividend would be fore-fitted. Senator Donley asked for further clarifications on the meaning of the two sections. He continued, asking about AS 11.81.900 that was referenced in Line 18. Mr. Johnson explained that under the current law, if a person were convicted of three misdemeanors he would lose his permanent fund. The proposed amendment would in part repeal that portion of the language, because the PFD would be denied after the first conviction. Senator Donley then pointed out that the PFD would be taken away in the same manner as for a felony conviction, for the first year. This was not permanent, according to Senator Ward, unless they commit another crime and are convicted. Senator Donley asked how Amendment #2 related to the on- going fee provision. Would this replace the version in the bill or would it be an addition, he wanted to know. Mr. Johnson said it would be a separate section and would be in addition to the existing fee structure. The bill was a vehicle to get PFDs from misdemeanants. It did not relate to probation and parole, he said. Senator Donley expressed that he agreed with the system placed forth in the amendment because it was clean, it didn't have administrative cost problems and the state wouldn't have to defend these people. It would just say they were not eligible without needing to provide public defenders. He liked Amendment #2 and suggested expanding on it to clean up some of the other provisions in the bill. Senator Ward responded to those comments. He felt the people on probation and parole needed to understand their responsibility in paying for what they had done. He thought those people should pay for their costs of probation and parole. He believed that helped them. He told the committee that was his beginning thrust of adding responsibilities. He referred to boot camps and getting up in the morning. He stated that responsibility was a good thing, which was how this legislation started out. Senator Donley said he agreed with the philosophy, but he thought the process had not gone far enough with regard to felony convictions. When a person was convicted of a felony, they only lose their dividend for one year under existing law. He said he would be interested in extending beyond that. He wanted to deny PFD for a misdemeanor conviction and to extend the time for a felony conviction. Senator Ward noted that a large percentage of people who had been convicted of a felony have gone on probation, those were the people he was targeted. He talked about efforts of putting people behind bars and that it didn't work to rehabilitate offenders. He spoke about reentering the community and repaying and accepting responsibility. Senator Donley asked if the state could pre-garnish the PFD for felons who were on probation. He noted a provision in the legislation allowing for an individual who claimed they were unable to make the payments. He wanted to know how that would relate to the garnishment of the dividends. He felt that obviously the money was available by the issuance of the PFDs, but would some individuals get the dividend, blow the money on something else and when it came time to pay this debt, claim they couldn't make the payment. He wondered if there was a way for the state to collect the money first and avoid the whole problem. Senator Ward defended the fore-mentioned provision, stating it was inserted to avoid becoming a debtor jail. He stressed that if someone was truly unable to pay this, he did not want to see that person put back into jail. Senator Donley responded that he understood the provision, but wondered if there was a way to avoid getting into the position of granting the dividend, the defendant spending the funds on something else, then saying they couldn't pay the probation fee. Senator Ward assured him that this legislation would prevent the PFD from being issued to the probation/parolee. He said that with electronic transfer, the money would never get into their hands. Senator Donley clarified that there was an anticipatory garnishment that would occur. Senator Ward explained that once the individual was in the system, there would be a procedure that would direct the funds to the state. He further spoke to the costs charged the probation/parolee. He wanted those people to clearly know they were repaying their debt to society. Senator Donley said he would like to work with the sponsor and his staff with changing this legislation. There was discussion as to where the committee was with regard to the amendment. It was determined Amendment #2 had been moved and they were in discussion on that amendment. Senator Ward brought back to the attention of the members his request to the commissioner to identify the actual costs incurred by felons and misdemeanants. He admitted that his figure of $60 million was a guess. He felt that if the departments were to report back actual figures, there would be a better understanding of what the citizens were paying for. Co-Chair Sharp said he had questions he was holding until they came to discussion on the bill. Senator Adams asked Senator Ward if this amendment had been offered in the Senate Judiciary Committee. Senator Ward replied that no, he didn't come up with the amendment until after the bill had moved from that committee. He expounded further on his reasons for adding misdemeanors to the legislation. He said the matter was brought up with phone calls to his office. Another reason was the crime of possession of child pornography. Co-Chair Sharp interrupted announcing that he would like to hear from the Department of Corrections, otherwise he would put the bill aside for a future meeting. First he intended to complete action on the amendment before the body. Senator Adams continued to speak against Amendment #2. He read some other misdemeanor offenses that he felt were unworthy of forfeiture of a PFD. Senator Ward countered; arguing that constituents guilty of those offenses could lobby to have them removed from the list of misdemeanors. Senator Pearce observed that Senator Donley had an interest, not only in Amendment #2 but also with some further changes. In the interest of time, she offered to remove her motion to adopt Amendment #2 so he could get with the sponsor and the department to incorporate those changes. Senator Donley stated that he liked Amendment #2 and did not object to it. Senator Pearce stressed it was clear the committee would not get through the legislation in the time allotted for this meeting. She deferred to the co-chairs call of how he wished to proceed on the motion. Co-Chair Sharp called for a vote on Amendment #2. It failed by a three to three vote with Senators Donley, Phillips and Sharp voting in favor. Senator Parnell was absent during the roll call. Co-Chair Sharp voiced a concern with the high figures included in the fiscal notes. He regretted the committee did not have a chance to hear from the DOC on this legislation. He ordered the bill held in committee. CS FOR SENATE JOINT RESOLUTION NO. 42(JUD) Proposing an amendment to the Constitution of the State of Alaska relating to marriage. Co-Chair Sharp announced his desire to at least get this bill on the table during this meeting to start the hearing process. He stated his intent to set the bill aside and assign it to a subcommittee for the purpose of holding an adequate public hearing. He said he would be announcing the subcommittee chair and members shortly. The subcommittee chair would then announce the time of public testimony hearings. Senator Adams suggested the committee let the court make a decision on this matter, rather than the Legislature. He said after a court decision was announced lawmakers could address the issue if necessary. Co-Chair Sharp ordered the bill held in committee. SENATE BILL NO. 334 "An Act relating to guidelines and standards for state training programs; and relating to the Alaska Human Resource Investment Council." Senator Torgerson suggested the committee adopt the CS, which could then be distributed to the Legislative Information Offices and other interested parties. Co-Chair Sharp agreed, observing this would give the bill its first hearing, and therefore start the process. Senator Pearce moved the committee adopt the workdraft CS, Version "H" for SB 334. Senator Adams objected. He said he supported the legislation, but wanted the senator from Kasilof to have a chance to explain the CS. Senator Torgerson spoke to the workdraft, saying: "Section One of the original bill had the members of the AHRIC committee reduce from 26 down to nine. What this amendment does is reduce it to 21. Basically, Mr. Chairman we took the commissioners of Commerce and Economic Development, Community and Regional Affairs, Education and Labor and made them non-voting members of the council." "Section Two just designates that the council members may appoint as designee, anybody on the council. Currently, the only designees that can be appointed are the ones from the state. This says that anybody that's on the council may appoint a designee that can attend the meetings." "Section Three outlines the appointment of the Governor saying that one person can hold more than one seat, trying to keep that number down as small as we can. The one person who is selected to hold two seats still only gets one vote and his designee still only gets one vote." "Section Four - staggered terms, this is a conforming amendment." "Section Five - basically what section five does, Mr. Chairman, is allow the private members to receive per diem while they're meeting as the AHRIC committee. Currently, they are not entitled to per diem and it has been a barrier we've had." "Section Six, Mr. Chairman says the chairman and the vice- chairman of the committee must be appointed, elected by the committee and they must somebody from business and industry that holds that seat. Currently, it says private sector, but we wanted to be more direct and put business and industry." "It talks about quorums in Section Seven. Section seven also creates the executive committee and establishes four permanent committees and it also establishes that the chairs of those permanent committees that make up the executive committee are from the private sector. So that gives us an entire executive committee that is business and industry or private sector. It outlines the committee." "Section Eight goes through some of the performance measures of each one of the committees and their work." "Section Nine outlines some more performance standards for the council. It gives the council the authority to adopt regulations, to identify what administrative costs are, and then caps administrative fees at 15 percent or whatever is mandated by the federal government. It requires them to submit an annual report to the Legislature by a certain time." "Section Ten again outlines more performance standards. We'd have to get into more detail on that." "Section Eleven just outlines the programs that come under AHRIC. We split them between the ones that are currently under AHRIC and the ones we are adding to the AHRIC committee, which are all the training programs in the state. Section Eleven is a transition period." "Section Twelve is immediate effective date." This concluded Senator Torgerson's presentation on the CS. Senator Adams removed his objection on adoption of the CS. There being no objection, the workdraft CS was adopted. Co- Chair Sharp asked Mike Andrews to look at the CS and be prepared to offer his comments when the committee brought the bill back to the table. This concluded the Committee's bill actions. Senator Pearce had some announcements. She said the committee would again meet at 5:30 that evening. The committee would first take up HB 53 Lease Purchasing, hearing public testimony via teleconference and in-person. She advised committee members come to the table with any questions for representatives, who would be on-line to answer them. She added that the entire meeting would be broadcast live via Armed Services Radio to the Delta Junction Area. She continued saying that the committee would take up the supplemental budget bill with the intention of moving it from committee and getting it to the floor the next morning. She hoped to get some of the supplemental monies out to the departments quickly. She asked for the concurrence of Senator Sharp in bringing SB 334 back before the committee on Friday morning. She noted the meeting had been scheduled to begin at 9:00 am but said she would be willing to start at 8:00 to add this bill to the agenda. Co-Chair Sharp agreed. He added there could be other bills left from today's meeting that would also be ready for another hearing at the Friday meeting. Senator Pearce listed the schedule for the next day's meeting, which would start at 9:00 am and would be a Results Based Budget Worksession on the University of Alaska and teacher training. ADJOURNMENT Co-Chair Sharp recessed the meeting at approximately 11:10 a.m. SFC-98 (30) 3/24/98 am
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