Legislature(2001 - 2002)

03/15/2002 09:10 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                          March 15, 2002                                                                                      
                              9:10 AM                                                                                         
                                                                                                                                
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-02 # 33,  Side A                                                                                                            
SFC 02 # 33,  Side B                                                                                                            
SFC 02 # 34,  Side A                                                                                                            
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Dave Donley convened  the meeting at approximately 9:10 AM.                                                            
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Dave Donley, Co-Chair                                                                                                   
Senator Jerry Ward, Vice Chair                                                                                                  
Senator Loren Leman                                                                                                             
Senator Lyda Green                                                                                                              
Senator Gary Wilken                                                                                                             
Senator Alan Austerman                                                                                                          
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
Also  Attending:  REPRESENTATIVE  NORM  ROKEBERG;  BARBARA  RITCHIE,                                                          
Deputy  Attorney   General,  Department  of  Law;  DWAYNE   PEEPLES,                                                            
Director,  Division   of  Administrative  Services,   Department  of                                                            
Corrections;  JANET SEITZ, staff for  Representative Rokeberg;  DOUG                                                            
WOOLIVER,  Administrative  Attorney,  Office of  the Administrative                                                             
Director,  Alaska Court System;  ERIC YOULD,  Executive Director  of                                                            
ARECA  Trade  Association  for  the  Electric  Utility  Industry  in                                                            
Alaska;  NEERA KOHLER, President  and CEO,  Alaska Village  Electric                                                            
Cooperative,  Incorporated;  BOB  POE,  Executive  Director,  Alaska                                                            
Industrial  Development   &  Export  Authority  and   Alaska  Energy                                                            
Authority                                                                                                                       
                                                                                                                                
Attending   via  Teleconference:   From  Anchorage:   DAVID   JONES;                                                          
Assistant  Attorney  General, Governmental  Affairs  Section,  Civil                                                            
Division, Department  of Law; DIANE WENDLANDT, Manager,  Division of                                                            
Collections, Department of Law                                                                                                
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
SB 292-SUPPLEMENTAL APPROPRIATIONS                                                                                              
                                                                                                                                
The Committee  heard testimony  from the  Department of Corrections                                                             
and the  Department  of Law regarding  a lawsuit  filed against  the                                                            
state. The bill was held in Committee.                                                                                          
                                                                                                                                
SB 347-ALCOHOLIC BEVERAGE TAX                                                                                                   
                                                                                                                                
The Committee  considered two amendments  and adopted one.  The bill                                                            
was reported out of Committee.                                                                                                  
                                                                                                                                
HB 4-MOTOR VEHICLES & DRUNK DRIVING                                                                                             
                                                                                                                                
The  Committee   heard  from  the   sponsor,  adopted  a   committee                                                            
substitute,  and considered and adopted  three amendments.  The bill                                                            
was held in Committee.                                                                                                          
                                                                                                                                
SB 185-PCE BASED ON HIGHEST COST                                                                                                
                                                                                                                                
The Committee heard from  the Alaska Industrial Development & Export                                                            
Authority and  took public testimony on the bill.  The bill was held                                                            
in Committee.                                                                                                                   
                                                                                                                                
SB 339-INCREASE CRIMINAL FINES                                                                                                  
                                                                                                                                
The  Committee  heard  testimony  on  this  bill and  the  bill  was                                                            
reported out of Committee.                                                                                                      
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 292                                                                                                        
     "An Act making supplemental and other appropriations; amending                                                             
     appropriations; making appropriations to capitalize funds; and                                                             
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
This was  the fourth  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Donley  stated the Committee would hear from  Department of                                                            
Corrections  and Department  of Law staff  directly involved  in the                                                            
Dr. Harold claims case  against the State. Co-Chair Donley noted the                                                            
Governor's  FY 02 Supplemental Budget  contains a request  to fund a                                                            
settlement of  Harold vs. State. He announced that  the Committee is                                                            
developing a policy requiring  staff directly involved in cases such                                                            
as  this be  available  to  answer  questions,  in addition  to  the                                                            
traditional presentation by the Department of Law.                                                                              
                                                                                                                                
BARBARA   RITCHIE,   Deputy  Attorney   General,   Civil   Division,                                                            
Department  of  Law,  noted she  is  involved  in  the case  at  the                                                            
Department of Law level.                                                                                                        
                                                                                                                                
DWAYNE  PEEPLES,  Director,  Division  of Administrative   Services,                                                            
Department of Corrections;  stated he is the supervisor of the human                                                            
resource   labor  relations   operations  for   the  Department   of                                                            
Corrections, where  the termination of Doctor Harold  was processed.                                                            
                                                                                                                                
Senator Ward  requested the Department  supply the Committee  with a                                                            
copy of the newsletter that Dr. Harold distributed to nurses.                                                                   
                                                                                                                                
DAVID  JONES;  Assistant  Attorney  General,  Governmental   Affairs                                                            
Section,  Civil  Division,   Department  of  Law  and  the  attorney                                                            
directly  involved in the  case, testified  via teleconference  from                                                            
Anchorage, and  stated he would provide a copy of  the letter to the                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Donley inquired  as to why the State should pay this claim.                                                            
                                                                                                                                
Mr. Jones responded  this was a very difficult case  and voiced that                                                            
the Department  acted appropriately.  He informed the Committee  the                                                            
Department  was  restructuring  its  health care  programs  for  the                                                            
institutions and had hired  Dr. Harold to implement the new program;                                                            
however,  Dr.  Harold  was  proving  "resistant"   to  the  proposed                                                            
changes. Mr. Jones stated  that although "it was clear that this was                                                            
not an  employment relationship  that  was going  to work out,"  the                                                            
Department  was  operating  under  significant  time  and  financial                                                            
restraints in accomplishing the restructuring.                                                                                  
                                                                                                                                
Mr. Jones  stated that one  of Dr. Harold's  lawsuits cites  being a                                                            
"whistle  blower" as a reason  for his dismissal.  Mr. Jones  stated                                                            
this and other claims have not been proven to be factual.                                                                       
                                                                                                                                
Mr. Jones  informed the  Committee that "whistle  blower" cases  are                                                            
difficult to  defend as they require  analysis of managers  involved                                                            
in  the case,  and  that it  "is hard  to  convince someone  who  is                                                            
convinced that  they are being retaliated  against" that  is not the                                                            
case. He stressed there  is always the chance that the judge or jury                                                            
may  side with  the employee.  He  declared  these are  some of  the                                                            
reasons the Department recommends settling with Dr. Harold.                                                                     
                                                                                                                                
Co-Chair Donley  asked why progressive  discipline actions  were not                                                            
taken.                                                                                                                          
                                                                                                                                
Mr.  Peeples  informed   the  Committee  that  specific   plans  and                                                            
instructions  were provided to Dr.  Harold during several  meetings.                                                            
Mr. Peeples  stated the  Department discussed  the direction  of the                                                            
program  with Dr.  Harold and  instructed  him not  to continue  his                                                            
resistance to  the plan. He was put on notice several  times and had                                                            
several   discussions   with   the   Commissioner    regarding   the                                                            
Department's "displeasure" with his behavior and actions.                                                                       
                                                                                                                                
Mr. Peeples  continued  that  in dealing  with an  employee at  this                                                            
level, " …a doctor  in a highly paid, exempt position…"  progressive                                                            
disciplinary  actions  involving conducting  multiple  hearings  and                                                            
discussions were not deemed necessary.                                                                                          
                                                                                                                                
Co-Chair  Donley  inquired  as to  who was  Dr.  Harold's  immediate                                                            
supervisor.                                                                                                                     
                                                                                                                                
Mr.  Peeples stated  that  Dr. Harold's  supervisor  was Mel  Henry,                                                            
Health Care  Administrator, Office  of the Commissioner,  Department                                                            
of Corrections.                                                                                                                 
                                                                                                                                
Co-Chair  Donley inquired  who made  the decision  to terminate  Dr.                                                            
Harold.                                                                                                                         
                                                                                                                                
Mr. Peeples  stated that  after consultation  with himself,  and the                                                            
Human   Resource   Labor   Relations   Operations    Division,   the                                                            
commissioner made the decision.                                                                                                 
                                                                                                                                
Co-Chair  Donley   voiced  support  for  the  goal   of  making  the                                                            
Department  more efficient  and  cost effective;  however,  stressed                                                            
that  progressive  disciplinary  actions  are important,  "even  for                                                            
upper  level positions,"  as  it might  help  avoid  these types  of                                                            
scenarios.                                                                                                                      
                                                                                                                                
Senator  Green asked if  Co-Chair Donley  considers the progressive                                                             
disciplinary process applicable to all fully exempt personnel.                                                                  
                                                                                                                                
Co-Chair  Donley  remarked  it would  be  "wise to  use progressive                                                             
discipline in the process."                                                                                                     
                                                                                                                                
Senator  Green  respectfully  disagreed,  and  stated she  does  not                                                            
support any  change in employment  law for exempt status  employees.                                                            
                                                                                                                                
Co-Chair  Donley concurred  with Senator  Green's comments;  however                                                            
reiterated,  at times,  a record in  the file  might save the  state                                                            
some money.                                                                                                                     
                                                                                                                                
Senator Green stated that  even if a specified process was followed,                                                            
when it gets into a court situation, conditions differ.                                                                         
                                                                                                                                
Co-Chair Donley  re-stated to the  Department of Law that  it is the                                                            
intent  of the  Committee  to have  personnel directly  involved  in                                                            
issues, testify before the Committee.                                                                                           
                                                                                                                                
The bill was HELD in Committee.                                                                                                 
                                                                                                                                
AT EASE: 9:22 AM / 9:23 AM                                                                                                      
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 347                                                                                                        
     "An Act relating to taxation."                                                                                             
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Donley stated  the  Committee has  been  working with  the                                                            
Department of Revenue to  address technical drafting needs; however,                                                            
a title change could be addressed.                                                                                              
                                                                                                                                
Senator  Hoffman  stated  the title  "should  be  left as  broad  as                                                            
possible"  in order for other  measures to  be added to address  the                                                            
state's fiscal gap.                                                                                                             
                                                                                                                                
AT EASE 9:24 AM / 9:27 AM                                                                                                       
                                                                                                                                
Amendment  #1: This  amendment  changes the  bill title  to read  as                                                            
follows.                                                                                                                        
                                                                                                                                
     "An act relating to alcoholic beverages."                                                                                  
                                                                                                                                
Senator Leman moved for adoption.                                                                                               
                                                                                                                                
Senator Hoffman objected.                                                                                                       
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator  Green, Senator Austerman, Senator  Leman, Senator                                                            
Ward, Co-Chair Donley, Senator Wilken                                                                                           
                                                                                                                                
OPPOSED: Senator Hoffman                                                                                                        
                                                                                                                                
ABSENT: Co-Chair Kelly, Senator Olson                                                                                           
                                                                                                                                
The motion PASSED (6-1-2)                                                                                                       
                                                                                                                                
AT EASE 9:36 AM/ 9:38 AM                                                                                                        
                                                                                                                                
Amendment #2:  This amendment amends  the title to read as  follows.                                                            
                                                                                                                                
          "An act relating to alcoholic beverages; and providing                                                                
     for an effective date."                                                                                                    
                                                                                                                                
This amendment also inserts  a new section on page 3, following line                                                            
4 to read as follows.                                                                                                           
                                                                                                                                
          *Sec. 5. The uncodified law of the State of Alaska is                                                                 
     amended by adding a new section to read:                                                                                   
           CONDITIONAL EFFECT. This Act takes effect only if a                                                                  
     version of SJR 23,  proposing amendments to the Constitution of                                                            
     the State  of Alaska relating  to an appropriation limit  and a                                                            
     spending  limit, is passed by  the legislature and approved  by                                                            
     the voters during the 2002 general election.                                                                               
          *Sec.6. If this Act takes effect under sec.5, it takes                                                                
     effect on January 1, 2003.                                                                                                 
                                                                                                                                
Senator Ward stated  this amendment would send "a  clear message" to                                                            
the  voters of  Alaska, that  if the  budget  is passed  with a  two                                                            
percent  increase  as currently  projected,   it "would  trigger  an                                                            
alcohol  tax" and  perhaps other  taxes  including a  sales tax.  He                                                            
stated  that the alcohol  tax increase  in this  bill would  go into                                                            
effect  if  the  people  of  the State  approved   a constitutional                                                             
spending limit as specified in SJR 23.                                                                                          
                                                                                                                                
Senator Ward  reiterated that the  people of the State want  to have                                                            
"restraints"  in government,  and he wants  to let people know  that                                                            
"the  State  of Alaska  is  going  to  live within  its  means."  He                                                            
furthered, "at  the end of this year, we're going  to reach into the                                                            
budget reserve  account, and  still not live  within our means."  He                                                            
continued that  SJR 23 would give  the voters a chance to  vote on a                                                            
constitutional spending  limit, and he stressed that if the citizens                                                            
of the State  approve a limit, the  Legislature is going  to have to                                                            
prioritize  projects  and  make  difficult   decisions  about  which                                                            
projects to fund.                                                                                                               
                                                                                                                                
Senator Ward  voiced appreciation  for the  efforts of those  people                                                            
working to  "promote sobriety  and reduce  the terrible" effects  of                                                            
alcohol. He  continued that the "affects  of alcohol are  a lot more                                                            
devastating  than cigarettes." He  opined the Legislature  "passed a                                                            
cigarette  tax, and  all that  happened  was more  government,"  and                                                            
"more  government  is  one  of  the  most  harmful  things  that  is                                                            
happening to  Alaska right now…it  is making people dependent,  they                                                            
believe there  is an obligation  of cradle  to grave, and it  causes                                                            
harm. We  need to  get a handle  on government"  and help  encourage                                                            
growth in  our economy. He  summarized this  alcohol tax, without  a                                                            
spending limit,  "doesn't reduce,  it doesn't restrict, and  it just                                                            
takes  more  spending  and  puts  it on  top  of  an  open  checking                                                            
account."                                                                                                                       
                                                                                                                                
Senator Ward moved for the adoption of Amendment #2.                                                                            
                                                                                                                                
Senator Wilken objected to the motion.                                                                                          
                                                                                                                                
Senator Austerman  noted there is  other legislation that  addresses                                                            
"larger  based taxes,"  and  this amendment,  if  passed, should  be                                                            
reworded to include passage  of SJR 23 "and/or SJR 33." He explained                                                            
that SJR  33 would impose  a limit on the  level of income  or sales                                                            
taxes.                                                                                                                          
                                                                                                                                
Senator Hoffman  questioned the effectiveness  of SJR 23.  He stated                                                            
the Legislature  needs to "bridge the gap" and work  toward "gaining                                                            
the people's trust" by  responsibly using the revenue generated from                                                            
taxes. He continued  that "this amendment  seems meaningless,  as it                                                            
just affects whether this tax goes into effect or not."                                                                         
                                                                                                                                
Senator Ward  responded that  Senator Hoffman  is correct in  saying                                                            
the  Legislature  needs  to work  to  gain people's  trust,  and  he                                                            
declared, "I  don't trust us to reduce  the budget." He stressed  he                                                            
would  not  be  introducing  this  amendment   if  he  believed  the                                                            
Legislature or the Administration could live within its means.                                                                  
                                                                                                                                
Senator  Ward stated this  discussion involves  "creating money"  by                                                            
taking money  from people who drink  alcohol. He voiced his  support                                                            
for this tax; however,  believes the money generated would be "spent                                                            
on  more  government  just  like the  tobacco  money  was,"  and  he                                                            
believes  this amendment  would  help  make the  government  operate                                                            
within its means.                                                                                                               
                                                                                                                                
Senator Leman  stated he  does not support  this amendment,  as this                                                            
bill and  SJR 23  are both important  measures,  and combining  them                                                            
might "complicate"  efforts. He remarked he is confident  the voters                                                            
would approve SJR 23. He  voiced support of Senator Ward's comments,                                                            
but did not believe this would be the best way to proceed.                                                                      
                                                                                                                                
Senator Hoffman  stated the Legislature has made efforts  to control                                                            
spending,  and noted  the  State of  Alaska  was the  only state  to                                                            
reduce government in the 1990's.                                                                                                
                                                                                                                                
Senator Ward  remarked that  Alaska spends  more "public money"  per                                                            
capita  than any  other  state.  He stressed  that  the Legislature                                                             
should  reduce  the  size  of  government  now  before  the  state's                                                            
resources are  depleted. He reiterated that Alaska  is "spending too                                                            
much,"  and a spending  limit is  necessary to  make the  government                                                            
reduce spending.                                                                                                                
                                                                                                                                
Senator  Austerman   voiced  appreciation  of  the  discussion   and                                                            
stressed the need for the  state to have a long-term fiscal plan. He                                                            
asserted the Legislature  must work "as a group to  prioritize," and                                                            
warned that  until spending  is prioritized,  the Legislature  would                                                            
never be  able to live within  the means of  a budget. He  contended                                                            
that these  types of conversations  would continue  every year  if a                                                            
long-term plan is not in place.                                                                                                 
                                                                                                                                
Co-Chair Donley  voiced appreciation for all the comments;  however,                                                            
noted he does not wish to "link" this bill with SJR 23.                                                                         
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Green, Senator Ward                                                                                           
                                                                                                                                
OPPOSED:  Senator Hoffman,  Senator Leman,  Senator Wilken,  Senator                                                            
Austerman, Co-Chair Donley                                                                                                      
                                                                                                                                
ABSENT: Co-Chair Kelly, Senator Olson                                                                                           
                                                                                                                                
The motion FAILED (5-2-2)                                                                                                       
                                                                                                                                
Senator Leman  suggested the Committee  consider taxing low  alcohol                                                            
content beverages,  including ciders,  at a separate rate;  however,                                                            
if that were  the case, the Committee  should hear testimony  before                                                            
taking any action.                                                                                                              
                                                                                                                                
Senator Green  asked if the revenue  generated from this  bill would                                                            
fund  a specific  program or  would be  deposited  into the  general                                                            
fund.                                                                                                                           
                                                                                                                                
AT EASE 9:54 AM / 9:55 AM                                                                                                       
                                                                                                                                
Co-Chair  Donley responded  that revenues  generated  from this  tax                                                            
would be general funds.                                                                                                         
                                                                                                                                
Senator  Wilken inquired  as to how  the calculations  on the  chart                                                            
distributed  by Co-Chair  Donley  titled "%  Proposed  Tax of  Total                                                            
$4.25 Drink Price" [copy on file] were determined.                                                                              
                                                                                                                                
Senator  Austerman   stated  the   chart  appears  to  reflect   the                                                            
percentage increase per drink generated by the proposed tax.                                                                    
                                                                                                                                
Senator Wilken  noted that retailer  margins and patrons  costs need                                                            
to be  factored into  the percentage  increase.  He calculated  that                                                            
under existing  law,  the tax is  approximately  4.3 percent  of the                                                            
cost of a $4.00  drink, and under the new law, it  would be about 13                                                            
percent.  He stated  the  cost of  a $4.00  drink,  with the  retail                                                            
margin factored  at 100 percent  and the  patron costs factored  in,                                                            
would increase approximately 10 percent.                                                                                        
                                                                                                                                
Senator  Leman  made  a  motion  to move  SB  347  as  amended  from                                                            
Committee with the accompanying fiscal note.                                                                                    
                                                                                                                                
Senator Hoffman objected  to the bill based on the title restriction                                                            
and the targeting of a single industry for taxation.                                                                            
                                                                                                                                
Senator  Leman stated  there are "other  vehicles"  in the House  of                                                            
Representatives  and in  the Senate  pertaining  to Alaska's  fiscal                                                            
challenge.                                                                                                                      
                                                                                                                                
Senator Austerman  again stressed  the need  for a long-range  plan;                                                            
however, voiced  support for this bill because of  the "industry set                                                            
of  woes the  State of  Alaska  has, driven  by the  consumption  of                                                            
alcohol." He stated this tax could help address these expenses.                                                                 
                                                                                                                                
Senator Hoffman,  referring to Senator  Leman's comment "that  there                                                            
are other vehicles  out there;" stated that if he  were assured that                                                            
other tax measures  were forthcoming  and would be passed,  he might                                                            
withdraw his objection.                                                                                                         
                                                                                                                                
Senator Green  stressed her opposition to this discussion  inferring                                                            
that the  revenue  generated from  this tax  would support  programs                                                            
"that  combat alcoholism"  instead  of being  designated as  general                                                            
funds. She stated  that taxes are intended to raise  revenue, not to                                                            
"penalize" people.                                                                                                              
                                                                                                                                
                                                                                                                                
SFC 02 # 33, Side B 10:02 AM                                                                                                    
                                                                                                                                
                                                                                                                                
Senator Austerman  agreed that the  revenue generated from  this tax                                                            
would be  general fund  money; which  could fund  a wide variety  of                                                            
alcohol related programs.                                                                                                       
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator  Leman, Senator Austerman, Senator  Green, Senator                                                            
Wilken, Co-Chair Donley                                                                                                         
                                                                                                                                
OPPOSED: Senator Hoffman                                                                                                        
                                                                                                                                
ABSENT: Senator Ward, Senator Olson, Co-Chair Kelly                                                                             
                                                                                                                                
The motion PASSED (5-1-3)                                                                                                       
                                                                                                                                
CS SB 347(FIN)  was REPORTED from  Committee with a new fiscal  note                                                            
dated  3/10/02  in  the amount  of  $74.5  from  the  Department  of                                                            
Revenue.                                                                                                                        
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 4(JUD)                                                                                 
     "An Act relating to motor vehicles and to operating a motor                                                                
     vehicle, aircraft, or watercraft; and providing for an                                                                     
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  NORM ROKEBERG, sponsor  of the bill, explained  this                                                            
bill maintains efforts  to increase penalties and treatment programs                                                            
within the  Department of  Corrections in  addition to a  forfeiture                                                            
provision and confiscation  of license plates. He stated these would                                                            
further the efforts  to enforce existing state laws  and protect the                                                            
public.  He noted  the accompanying  fiscal  notes  are designed  to                                                            
reflect the cost  of implementing the program, and  place the burden                                                            
of the costs  on the offender through  forfeiture of vehicle  and an                                                            
increase in the level of fines.                                                                                                 
                                                                                                                                
Senator  Austerman moved  to adopt  SCS CS  HB 4,  22\LS0046\V  as a                                                            
working draft.                                                                                                                  
                                                                                                                                
There were no  objections, and the committee substitute  was ADOPTED                                                            
as a working draft.                                                                                                             
                                                                                                                                
Amendment #4: This amendment  deletes the language on page 14, lines                                                            
9-16 as follows.                                                                                                                
                                                                                                                                
   "Sec. 22. AS 28.15.291  is amended by adding a  new subsection to                                                            
   read:                                                                                                                        
   (d)  Notwithstanding   other   provisions   in   this  title,   a                                                            
   municipality   may  adopt   an   ordinance  providing   for   the                                                            
   impoundment or  forfeiture  of a  motor vehicle  involved in  the                                                            
   commission  of an  offense described  under  this  section or  an                                                            
   ordinance  with elements  substantially  similar  to  an  offense                                                            
   described under  this section.  An ordinance  adopted under  this                                                            
   subsection may be more stringent  than or the same as but may not                                                            
   be  less  stringent   than   provisions  under   this  title   or                                                            
   regulations adopted under this title.                                                                                        
                                                                                                                                
It additionally inserts new language to read as follows.                                                                        
                                                                                                                                
     "*Sec. 22. AS 28.15.291(b) is amended to read:                                                                             
          (b) Upon conviction under (a) of this section, the court                                                              
               (1) shall impose a minimum sentence of imprisonment                                                              
                     (A) if the person has not been previously                                                                  
                convicted, of  not less  than 10  days with 10  days                                                            
                suspended,  including   a  mandatory  condition   of                                                            
                probation that the defendant  complete not less than                                                            
                80 hours of community work service;                                                                             
                     (B) if the person has been previously                                                                      
               convicted, of not less than 10 days;                                                                             
                     (C) if the person's driver's license,                                                                      
                privilege to drive, or privilege to obtain a                                                                    
                license was revoked under circumstances described                                                               
                in AS 28.15.181(c)(1), or if  the person was driving                                                            
                in violation  of a limited  license issued  under AS                                                            
                28.15.201(d) following that revocation,  of not less                                                            
                than 20 days with  10 days suspended, and  a fine of                                                            
                not less than $500, including  a mandatory condition                                                            
                of probation  that the defendant  complete not  less                                                            
                than 80 hours of community work service;                                                                        
                     (D) if the person's driver's license,                                                                      
                privilege  to  drive,  or  privilege   to  obtain  a                                                            
                license was  revoked under  circumstances  described                                                            
                in AS 28.15.181(c)(2), (3), or  (4) or if the person                                                            
                was  driving  in  violation  of  a  limited  license                                                            
                issued  under   AS   28.15.201(d)   following   that                                                            
                revocation, of not  less than 30 days and  a fine of                                                            
                note less than $1,000;                                                                                          
                (2) may impose additional  conditions of  probation;                                                            
                (3) may not                                                                                                     
                     (A) suspend execution of sentence or grant                                                                 
                probation except on condition  that the person serve                                                            
                a minimum term of imprisonment  and perform required                                                            
                community work  service as provided  in (1)  of this                                                            
                subsection;                                                                                                     
                     (B) suspend imposition of sentence; [AND]                                                                  
                (4) shall revoke the person's  license, privilege to                                                            
                drive, or  privilege to  obtain a  license, and  the                                                            
                person may not be issued a new  license or a limited                                                            
                license nor may the  privilege to drive or  obtain a                                                            
                license be restored for an additional  period of not                                                            
                less than  90 days after  the date  that the  person                                                            
                would have been entitled  to restoration  of driving                                                            
                privileges;                                                                                                     
                (5) may order that  the motor vehicle that  was used                                                            
                in commission of the  offense be forfeited  under AS                                                            
                28.35.036; and                                                                                                  
                (6)  shall,  if  the  person  has  been   previously                                                            
                convicted under this section,                                                                                   
                     (A) order the motor vehicle used in the                                                                    
                commission  of  the   offense  forfeited   under  AS                                                            
                38.35.036 or  may order the  motor vehicle  taken to                                                            
                the owner's  residence or  property and immobilized                                                             
                for the period  of time that  the person's  driver's                                                            
                license is  revoked;  the court  shall also  require                                                            
                the  person  to  pay  any administrative   costs  of                                                            
                keeping the motor vehicle immobilized; or                                                                       
                     (B) two or more times, order the motor vehicle                                                             
                used in  the  commission  of the  offense  forfeited                                                            
                under AS 28.35.036."                                                                                            
                                                                                                                                
This amendment inserts statutory reference of AS 28.15.291(b) where                                                             
applicable in the remainder of the bill.                                                                                        
                                                                                                                                
Co-Chair Donley moved for adoption of Amendment #4.                                                                             
                                                                                                                                
Representative  Rokeberg explained  that Amendment #4 adds  language                                                            
to the vehicle forfeiture provision.                                                                                            
                                                                                                                                
JANET  SEITZ,  Staff  to Representative   Rokeberg,  explained  this                                                            
amendment  would   "maintain  the  current  driving   while  license                                                            
suspended"   provision   and  adds   language   addressing   vehicle                                                            
forfeitures.                                                                                                                    
                                                                                                                                
Senator  Hoffman  asked for  clarification  that  when  a driver  is                                                            
convicted of a second offense  for driving with a suspended license,                                                            
the vehicle would be forfeited.                                                                                                 
                                                                                                                                
Representative  Rokeberg   stated  one  purpose  for  offering  this                                                            
amendment is  to allow the Department  of Corrections to  assess the                                                            
costs incurred by the forfeiture.                                                                                               
                                                                                                                                
Co-Chair Donley  explained that fiscal notes have  been difficult to                                                            
project for this bill,  and once the bill is further defined through                                                            
the  adoption   of  amendments,  updated   fiscal  notes   would  be                                                            
forthcoming.                                                                                                                    
                                                                                                                                
Senator Hoffman  asked what  would occur if  a person is arrested  a                                                            
second time for  driving with a revoked license; but  is not driving                                                            
a car they own.                                                                                                                 
                                                                                                                                
Representative  Rokeberg stated that the co-owner  could re-register                                                            
the vehicle in their own name.                                                                                                  
                                                                                                                                
Senator  Green asked  for verification  this would  occur after  the                                                            
incident.                                                                                                                       
                                                                                                                                
Representative  Rokeberg confirmed this is correct  as one condition                                                            
of this offense mandates  that the license plate be removed from the                                                            
car. He  clarified that  the re-registering  would occur after  this                                                            
procedure.                                                                                                                      
                                                                                                                                
Senator Hoffman  asked what would  happen if the offense  involves a                                                            
car  the offender  has borrowed  from  an unknowing  and  uninvolved                                                            
individual.                                                                                                                     
                                                                                                                                
Ms.  Seitz  stated there  is  a provision  allowing  that  owner  to                                                            
retrieve the vehicle.  She stated she would supply  that information                                                            
to Senator Hoffman.                                                                                                             
                                                                                                                                
Co-Chair Donley  reiterated that once  a final committee  substitute                                                            
is drafted, the "appropriate fiscal notes" would be forthcoming.                                                                
                                                                                                                                
Representative   Rokeberg  voiced   support  of  Co-Chair   Donley's                                                            
comments and stated  the intent of these amendments  is to draft the                                                            
bill and develop the fiscal notes accordingly.                                                                                  
                                                                                                                                
There were no objections, and Amendment #4 was ADOPTED.                                                                         
                                                                                                                                
Amendment #5: This amendment  deletes the language on page 14, lines                                                            
9-16 as follows.                                                                                                                
                                                                                                                                
   "Sec. 22. AS 28.15.291  is amended by adding a  new subsection to                                                            
   read:                                                                                                                        
   (d)  Notwithstanding   other   provisions   in   this  title,   a                                                            
   municipality   may  adopt   an   ordinance  providing   for   the                                                            
   impoundment or  forfeiture  of a  motor vehicle  involved in  the                                                            
   commission  of an  offense described  under  this  section or  an                                                            
   ordinance  with elements  substantially  similar  to  an  offense                                                            
   described under  this section.  An ordinance  adopted under  this                                                            
   subsection may be more stringent  than or the same as but may not                                                            
   be  less  stringent   than   provisions  under   this  title   or                                                            
   regulations adopted under this title.                                                                                        
                                                                                                                                
Senator Leman moved for adoption of Amendment #5.                                                                               
                                                                                                                                
Representative  Rokeberg   stated  Amendment  #5  deletes  redundant                                                            
language in  the bill concerning a  municipality's ability  to adopt                                                            
language  regarding  the  impoundment  or forfeiture  of  a  vehicle                                                            
involved in an offense.                                                                                                         
                                                                                                                                
Senator Green  remarked Amendment  #5 contains information  included                                                            
in Amendment #4.                                                                                                                
                                                                                                                                
Senator Leman  stated that  because Amendment  #4 has been  adopted,                                                            
Amendment #5 is WITHDRAWN.                                                                                                      
                                                                                                                                
Amendment #6:  This amendment deletes language on  Page 20, line 6-9                                                            
and inserts new language to read as follows.                                                                                    
                                                                                                                                
     "Information  complied  under this subsection  is confidential                                                             
     and  may only  be used  in connection  with  court proceedings                                                             
     involving  the defendant's treatment, including  use by a court                                                            
     in sentencing  a person convicted under this  section, or by an                                                            
     officer of the court  in preparing a presentence report for the                                                            
     use of  the court in sentencing  a person convicted  under this                                                            
     section."                                                                                                                  
                                                                                                                                
This amendment  also deletes "may"  on Page 22, line 27 and  inserts                                                            
"shall [MAY]" to read:                                                                                                          
                                                                                                                                
     (4) shall  [MAY] order [AS A CONDITION OF PROBATION  OR PAROLE]                                                            
                                                                                                                                
In addition, this  amendment deletes language on page  29, lines 13-                                                            
16 and inserts new language to read as follows.                                                                                 
                                                                                                                                
"                                                                                                                               
     "Information  complied  under this subsection  is confidential                                                             
     and  may only  be used  in connection  with  court proceedings                                                             
     involving  the defendant's treatment, including  use by a court                                                            
     in sentencing  a person convicted under this  section, or by an                                                            
     officer of the court  in preparing a presentence report for the                                                            
     use of  the court in sentencing  a person convicted  under this                                                            
     section."                                                                                                                  
                                                                                                                                
On  page 32,  line 11,  this  amendment  deletes "may"  and  inserts                                                            
"shall [MAY]" to read:                                                                                                          
                                                                                                                                
     (6)  the  court shall  [MAY]  also order  forfeiture  under  AS                                                            
     28.35.036,  of the motor vehicle, [OR] aircraft,  or watercraft                                                            
     used  in the commission  of the offense,  subject to  remission                                                            
     under AS 28.35.037; and                                                                                                    
                                                                                                                                
On page 32,  line 14, this amendment  inserts "the court"  following                                                            
"7" to read:                                                                                                                    
                                                                                                                                
     (7)  the  court  shall  order  the  department  to  revoke  the                                                            
     registration  for any vehicle  registered by the department  in                                                            
     the name  of the person convicted  under this subsection:  if a                                                            
     person  convicted  under this  subsection is  a registered  co-                                                            
     owner  of a vehicle, the department  shall reissue the  vehicle                                                            
     registration  and omit the name  of the person convicted  under                                                            
     this subsection.                                                                                                           
                                                                                                                                
Senator Leman moved for adoption of Amendment #6.                                                                               
                                                                                                                                
Representative  Rokeberg explained Amendment #6 introduces  into the                                                            
bill,  language  allowing  the Court  the  ability to  access  prior                                                            
treatment history in sentencing and presentencing reports.                                                                      
                                                                                                                                
Representative  Rokeberg continued  that inserting the word  "shall"                                                            
places mandatory forfeiture  in the felony Driving While Intoxicated                                                            
(DWI) section only.                                                                                                             
                                                                                                                                
Senator  Green inquired  if  Amendment #6  would  generate a  fiscal                                                            
note.                                                                                                                           
                                                                                                                                
Representative  Rokeberg  responded,  "other  forfeiture  provisions                                                            
would  trigger"  the  fiscal  notes;  however,  all  of  the  bill's                                                            
components would be discussed in committee.                                                                                     
                                                                                                                                
There was no objection and Amendment #6 was ADOPTED.                                                                            
                                                                                                                                
Amendment #7: This amendment  deletes language on page 35, lines 18-                                                            
19 and inserts new language to read as follows.                                                                                 
                                                                                                                                
     (c)  Upon   forfeiture  of  a   motor  vehicle,  aircraft,   or                                                            
     watercraft, the court shall require the                                                                                    
          (1) surrender of the registration and certificate of                                                                  
     title of that motor vehicle; the registration and certificate                                                              
     of title shall be delivered to the department;                                                                             
           (2) owner of the motor vehicle, aircraft, or watercraft                                                              
     to  pay all  administrative  costs  incurred  by  the state  in                                                            
     forfeiting   the  motor  vehicle,   aircraft,  or  watercraft,                                                             
     including  costs incurred  by the department,  law enforcement                                                             
     personnel, or the court system.                                                                                            
                                                                                                                                
Senator Leman moved for adoption of Amendment #7.                                                                               
                                                                                                                                
Representative  Rokeberg  stated  this amendment  would  "provide  a                                                            
statutory  basis mandating  that offenders  pay all administrative,                                                             
law enforcement,  and court system's  costs relating to any  vehicle                                                            
forfeiture."  He  affirmed  a  fiscal note  would  be  generated  to                                                            
reflect this.                                                                                                                   
                                                                                                                                
There were no objections, and Amendment #7 was ADOPTED.                                                                         
                                                                                                                                
Co-Chair Donley recommended  these amendments be incorporated into a                                                            
new committee  substitute.  He stated  he would  wait until  updated                                                            
fiscal notes  were generated  before furthering  Amendments  #1, #2,                                                            
and #3.                                                                                                                         
                                                                                                                                
Senator  Hoffman  inquired  if Amendment  #7  changes  the  language                                                            
appropriately.                                                                                                                  
                                                                                                                                
Senator Green echoed Senator Hoffman comments.                                                                                  
                                                                                                                                
Co-Chair Donley  stated it would be  the sponsor's discretion  as to                                                            
how the amendments are worded.                                                                                                  
                                                                                                                                
Co-Chair Donley  noted he would not  be presenting Amendment  #1. He                                                            
explained Amendment #2  would modify the amount of time required for                                                            
maintaining  proof of fiscal  insurance responsibility  based  on an                                                            
"escalating  scale" on the  number of DWI's  a person has,  and also                                                            
require proof  of insurance when a  vehicle is registered.  He noted                                                            
that currently,  proof of insurance is not required  unless a person                                                            
is  subject  to  special   statute.  He  continued   that  each  DWI                                                            
conviction would  require proof of insurance for a  longer period of                                                            
time.                                                                                                                           
                                                                                                                                
Co-Chair  Donley clarified  that vehicle insurance  is mandatory  in                                                            
the State of Alaska,  but individuals with DWI convictions  would be                                                            
required to produce proof of insurance at registration.                                                                         
                                                                                                                                
Senator Green  asked if proof of insurance would be  required when a                                                            
vehicle is registered or when a driver's license is renewed.                                                                    
                                                                                                                                
Co-Chair Donley  stated the intent is to require proof  of insurance                                                            
at  the  time  of vehicle   registration;  however,  this  would  be                                                            
confirmed before Amendment #2 is furthered.                                                                                     
                                                                                                                                
Senator   Wilken  stated   proof   of  insurance   is  required   at                                                            
registration  or  re-registration;  however,  currently  no  one  is                                                            
required  to  produce  proof  of  insurance,  but  instead  signs  a                                                            
declaration on the registration  form verifying that insurance is in                                                            
place.                                                                                                                          
                                                                                                                                
Co-Chair  Donley  stated that  SR 22  is a  form that  requires  the                                                            
insurance  company  to notify  the state  if insurance  coverage  is                                                            
cancelled.                                                                                                                      
                                                                                                                                
Co-Chair  Donley clarified  that  if a person  is subject  to SR  22                                                            
requirements  as a result  of being  in an accident  and not  having                                                            
insurance, or convicted  of a DWI, or if a vehicle judgment or claim                                                            
has not been paid, that  individual has to produce physical proof of                                                            
insurance.                                                                                                                      
                                                                                                                                
Senator  Green  inquired how  proof  of insurance  is  processed  at                                                            
places other than a Division of Motor Vehicles facility.                                                                        
                                                                                                                                
Senator Wilken  stated there are numerous  state-approved  locations                                                            
at which vehicles could be registered.                                                                                          
                                                                                                                                
Representative   Rokeberg  explained  the  requirement   to  present                                                            
physical proof of insurance  is identified on the registration forms                                                            
of those to whom it applies.                                                                                                    
                                                                                                                                
Representative  Rokeberg  voiced  support  for  the  amendment,  and                                                            
continued  that  the  State  does  not  require  insurance   company                                                            
notification when individuals  drop their vehicle insurance coverage                                                            
because it is "extraordinarily expensive" to manage.                                                                            
                                                                                                                                
Senator Green opined the  State's enforcement of mandatory insurance                                                            
coverage has been minimal.                                                                                                      
                                                                                                                                
Senator Green asked for  more information on Amendment #2 before the                                                            
Committee considers it.                                                                                                         
                                                                                                                                
Co-Chair Donley stated he would hold Amendment #2.                                                                              
                                                                                                                                
DOUG WOOLIVER, Administrative  Attorney, Alaska Court System, stated                                                            
the  Court   System's  fiscal   note  projects   approximately   800                                                            
additional hearings  a year in the District Courts  as the result of                                                            
the provision  for  mandatory vehicle  forfeiture.  He stated  if an                                                            
amendment passes  regarding vehicle  forfeitures for "driving  while                                                            
license  is  suspended,"  the  result  would   be approximately   an                                                            
additional 1,000 hearings.                                                                                                      
                                                                                                                                
The bill was HELD in Committee.                                                                                                 
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 185                                                                                                        
     "An Act relating to the basis for determining eligibility for                                                              
     and the amount of power cost equalization payments; and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
ERIC YOULD, Executive  Director, Trade Association  for the Electric                                                            
Utility  Industry  in Alaska  (ARECA),  testified  that  ARECA is  a                                                            
"strong supporter  of the Power Cost Equalization  (PCE) program" as                                                            
it provides  a strong economic  stimulus to  rural Alaska where  the                                                            
cost  of  electricity  is  "four times  higher"  than  the  cost  of                                                            
electricity  in urban areas, "yet  disposable income is so  low." He                                                            
stated  the ARECA  Board of  Directors  is presenting  a  resolution                                                            
[copy on file]  dated Feb 22, 2002  to the Committee that  "strongly                                                            
opposes"  SB  185.  He  stated  if SB  185  were  passed,  it  would                                                            
significantly curtail the  PCE program and hurt the economy of rural                                                            
Alaska.                                                                                                                         
                                                                                                                                
Mr. Yould continued  that legislation being discussed  in the United                                                            
States Congress might financially  assist the PCE Endowment Fund and                                                            
passage of  SB 185 "would  shut the gate and  curtail the amount  of                                                            
funding"  that  might  be  forthcoming.   On  behalf  of  ARECA,  he                                                            
"strongly recommended"  that the Alaska  Legislature not  change the                                                            
PCE funding formula.                                                                                                            
                                                                                                                                
MEERA  KOHLER, President  and  CEO,  Alaska Village  Electric  Co-op                                                            
(AVEC),  testified in  opposition  to SB  185. She  stated that  the                                                            
Legislature has  reduced funding for the PCE program  numerous times                                                            
since its inception in  1984, and currently rural electric consumers                                                            
collectively  pay approximately  80 percent  of the "extremely  high                                                            
cost of electricity"  with the PCE program paying  the balance of 20                                                            
percent. Ms.  Kohler stated "the much  needed construction  of basic                                                            
infrastructure  such  as  water  and  sewer  facilities  and  health                                                            
clinics" has increased  the demand for power in the rural areas. She                                                            
informed  the   Committee  these   improvements  have  been   almost                                                            
exclusively  funded  with  federal  grants and  other  sources.  She                                                            
stressed  that the State's  creation of the  PCE Endowment  Fund two                                                            
years ago has  provided rural residents a "powerful  tool to take to                                                            
Washington D.C." to persuade  the United States Congress to allocate                                                            
additional  funds   to  enable  the  Endowment  Fund   to  be  self-                                                            
sufficient. She urged the  Committee to not amend the PCE formula at                                                            
this time.                                                                                                                      
                                                                                                                                
BOB  POE, Executive  Director  of Alaska  Industrial  Development  &                                                            
Export  Authority   (AIDEA)  and   Alaska  Energy  Authority   (AEA)                                                            
commented  his  Department   has been  conducting   an  analysis  of                                                            
different  options for the  PCE program.  He referenced legislative                                                             
"findings  stating  the purpose  of  PCE  is to  provide  affordable                                                            
energy  as essential  for  the economic  and  social  well being  of                                                            
Alaska." He continued that  the high "cost of power is a significant                                                            
detriment to economic development in Rural Alaska."                                                                             
                                                                                                                                
                                                                                                                                
SFC 02 # 34, Side A 10:51 AM                                                                                                    
                                                                                                                                
                                                                                                                                
Mr. Poe commented the economic  health of Rural Alaska has an affect                                                            
on the commerce  of other  parts of the State.  He detailed  some of                                                            
the effects  on Anchorage: Rural Alaska  accounts for 20  percent of                                                            
all goods  and services  sold; accounts  for one  in eight jobs;  50                                                            
percent of all construction  work by Anchorage and Mat-Su companies;                                                            
and 100 percent of resource  extraction. He stressed there is a huge                                                            
economic connection between rural and urban Alaska.                                                                             
                                                                                                                                
Mr. Poe  stated  there is  " a self-interest"  factor  in the  urban                                                            
support of the PCE program.                                                                                                     
                                                                                                                                
Mr.  Poe  contended  that  if  both  economies   benefit  from  this                                                            
connection, then  modifications to provide incentives  to reduce the                                                            
cost of power  in rural Alaska should  be considered. He  encouraged                                                            
the  Committee to  give  the PCE  program more  time  to be  further                                                            
analyzed.                                                                                                                       
                                                                                                                                
Mr. Poe  stated if  Anchorage,  Juneau, and  Fairbanks were  removed                                                            
from the  cost of  power in Alaska  analysis,  then the comparative                                                             
base  would not  accurately  represent  what the  cost  of power  is                                                            
throughout the State.                                                                                                           
                                                                                                                                
Senator  Hoffman  summarized  if the  cost  of power  in  Anchorage,                                                            
Juneau,  and Fairbanks  were  removed from  the PCE  analysis,  what                                                            
would remain  would be the highest  costs of power in the  state and                                                            
therefore would not result in a PCE program.                                                                                    
                                                                                                                                
Co-Chair Donley  clarified it would be "the highest  costs" of those                                                            
places that are  not included in the PCE program,  and this would be                                                            
"much fairer,"  as currently the PCE program "subsidizes  below what                                                            
some people have to pay who aren't eligible for PCE."                                                                           
                                                                                                                                
Senator Leman  voiced three  concerns: a cash  flow stream  that did                                                            
not materialize  as promised  when the program  was restructured  in                                                            
1999; the  fact that communities  not eligible  for the PCE  program                                                            
are paying  more than the subsidized  PCE rate; and the question  of                                                            
how to  provide incentives  to reduce  the costs  of generating  and                                                            
delivering power in the rural areas.                                                                                            
                                                                                                                                
Senator Leman stated the  Legislature is attempting "to fit all this                                                            
together in a policy statement and have it make sense."                                                                         
                                                                                                                                
Mr. Poe commented  that the endowment  fund losses were a  result of                                                            
the stock market.                                                                                                               
                                                                                                                                
Mr.  Poe  informed  the Committee   that 79  percent  of  all  rural                                                            
ratepayers  are eligible for  the PCE program  and the remaining  21                                                            
percent  are businesses or  other non-eligible  entities. He  stated                                                            
that  the eligible  group  uses  only  29 percent  of  the  eligible                                                            
kilowatt-hours.                                                                                                                 
                                                                                                                                
Senator  Leman clarified  that his  cash flow  concern involved  the                                                            
National  Petroleum  Reserve  Alaska   (NPR-A)  funding,  that  "was                                                            
offered  in  good  faith,  received   in  good  faith  and  did  not                                                            
materialize,"  as a contribution  to the  endowment fund. He  stated                                                            
this resulted in a shortfall in funding revenues.                                                                               
                                                                                                                                
RECESS 11:00 AM / 3:03 PM                                                                                                       
                                                                                                                                
DENNIS  WATSON, Mayor  of  Craig, testified  offnet  from Craig  and                                                            
urged  the Committee  to  make no  changes to  the  PCE program.  He                                                            
stated, "Rural  Alaska has  always considered  that our part  of the                                                            
pie of  the oil revenues,  was the  PCE" and  the endowment  fund is                                                            
what they hoped would support the PCE "in perpetuity."                                                                          
                                                                                                                                
ALAN  JOSEPH,  Vice   President,  Association  of  Village   Council                                                            
Presidents,  testified offnet from  Bethel in opposition  to SB 185.                                                            
He stated  the downturn  in the  fishing industry  has affected  the                                                            
economy in  the region and any reduction  in the PCE assistance  the                                                            
Yukon  Kuskoquim Delta  region would  contribute  negatively to  the                                                            
situation.                                                                                                                      
                                                                                                                                
MARLENE MOTO,  testified offnet from  Deerling, in opposition  to SB
185.  She stated  that  reductions  to the  PCE program  would  make                                                            
electricity too expensive  and people in rural regions are "having a                                                            
hard time paying bills" now.                                                                                                    
                                                                                                                                
ERIC  HANNEN, General  Manager,  Alaska  Power &  Telephone  (AP&T),                                                            
testified via teleconference  from Tok on behalf of Don Mayhan, Vice                                                            
President of Operations  of AP&T. Mr. Hannen stated that AP&T serves                                                            
approximately  6,000  customers  in 20  rural communities,  and  the                                                            
current cost  of power in rural Alaska  is approximately  four times                                                            
more expensive  than power in urban Alaska. He contended  that rural                                                            
area incomes are  half of the income level of urban  areas and there                                                            
are very few job opportunities.  He stated that the residents' fixed                                                            
incomes  could not  absorb  a 25  percent increase  in  the cost  of                                                            
power.  Rural  communities  "have  been encouraged  to  raise  their                                                            
standards of  living" and such things  as water and sewer  treatment                                                            
plants  have been  constructed  and all  require  power to  operate,                                                            
especially in the winter  months. He voiced opposition to SB 185 and                                                            
stated it  would decrease  the standard of  living in Rural  Alaska,                                                            
reduce power  consumption, and decrease  business margins  resulting                                                            
in an  increase  of rates  with the  overall result  of a  "downward                                                            
spiral."                                                                                                                        
                                                                                                                                
CHARLIE  WALLS,  Manager  of  Nushagak  Cooperative   testified  via                                                            
teleconference  from Dillingham in  opposition to SB 185.  He stated                                                            
if  SB  185  were  passed,   the  result  "would  essentially   drop                                                            
Dillingham off the rolls  of the PCE," and would cause real hardship                                                            
to the residents  who "are at the  mercy of oil prices" and  have no                                                            
other  power  supply  options  such  as  access  to  hydropower.  He                                                            
stressed that "now is not the time to change the formula."                                                                      
                                                                                                                                
ALAN JOSEPH,  testified offnet from  Bethel on behalf for  Arthur J.                                                            
Lake, President  of the Association of Village Council.  He read Mr.                                                            
Lake's prepared  testimony [copy on  file] in opposition  to SB 185.                                                            
                                                                                                                                
The bill was HELD in Committee.                                                                                                 
                                                                                                                                
RECESS 3:20 PM / 3:27 PM                                                                                                        
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 339                                                                                                        
     "An Act increasing fines for certain criminal offenses."                                                                   
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Donley  explained   this  bill's  intent  is  to  increase                                                            
criminal  fines. He  informed the  Committee  that individual  fines                                                            
have not  been modified since  1978 and corporation  fines  have not                                                            
been increased since 1990.                                                                                                      
                                                                                                                                
DIANE WENDLANDT,  Manager,  Division of  Collections, Department  of                                                            
Law,  testified   via  teleconference   from  Anchorage   to  answer                                                            
questions concerning this bill.                                                                                                 
                                                                                                                                
Senator  Hoffman inquired  as to  the Administration's  position  on                                                            
this bill.                                                                                                                      
                                                                                                                                
Ms.  Wendlandt  commented   she  is  an attorney   involved  in  the                                                            
collection of criminal  fines and does not know the Administration's                                                            
position.                                                                                                                       
                                                                                                                                
Co-Chair Donley  stated, "these fines  are challenging to  collect;"                                                            
however, it is important  that "the fine is high enough to be both a                                                            
deterrent and a penalty."  He expressed "it is appropriate to have a                                                            
higher level of criminal  fines," as a deterrent and to address "the                                                            
cost to  the criminal justice  system." He  referenced the  breakout                                                            
[copy on file] of fines for various crimes in other states.                                                                     
                                                                                                                                
Senator Ward  offered a motion  to move SB  339 from Committee  with                                                            
accompanying fiscal notes.                                                                                                      
                                                                                                                                
Senator  Green opined  that these  fines are  "incredibly high"  and                                                            
asked "if there  is any point" to which fines are  raised where they                                                            
become "meaningless."                                                                                                           
                                                                                                                                
Co-Chair Donley gave examples  of where higher levels of fines might                                                            
be appropriate deterrents.                                                                                                      
                                                                                                                                
Senator Green asked if there is an option for lower fines.                                                                      
                                                                                                                                
Ms. Wendlandt  stated she  is not aware of  a minimum for fines,  as                                                            
her Division  is not supplied detailed  information on what  offense                                                            
correlate  to each fine from  the Court System.  She mentioned  that                                                            
Judges "enter a very large range" of fines.                                                                                     
                                                                                                                                
Co-Chair  Donley  voiced there  are  standards; however,  the  Court                                                            
System has the  discretion to demonstrate "flexibility  depending on                                                            
financial status  of a person" and  the crime that is committed.  He                                                            
mentioned that  the Committee could  opt for lower fine levels  or a                                                            
"reduced step up."                                                                                                              
                                                                                                                                
Senator Austerman stated  the fines in this bill are "permissive" as                                                            
presented.                                                                                                                      
                                                                                                                                
Senator Hoffman  contended there are "years of inflation"  to factor                                                            
in and that, when comparing  the proposed level of fines to fines in                                                            
other states, the fines seem appropriate.                                                                                       
                                                                                                                                
Co-Chair Donley  stated the actual rate of inflation  since the last                                                            
individual fine modification is 216 percent.                                                                                    
                                                                                                                                
Senator  Hoffman   noted  the  proposed   fines  in  the   bill  are                                                            
approximately four times higher than the current levels.                                                                        
                                                                                                                                
Co-Chair  Donley voiced  that  the fines  proposed in  the bill  are                                                            
"similar to  the higher end of the  rates" used by other  states. He                                                            
reiterated that the Committee could lower the fines.                                                                            
                                                                                                                                
Senator  Ward  again  voiced  his  motion to  adopt  the  bill  with                                                            
individual  recommendations   and  accompanying   fiscal  notes.  He                                                            
concurred with Senator  Austerman's comments that the proposed fines                                                            
are permissive and would  give judges "a tool" to use in determining                                                            
the appropriate level of fines.                                                                                                 
                                                                                                                                
There being no objection,  SB 339 was REPORTED out of Committee with                                                            
a new zero fiscal note  dated 3/15/02 from the Department of Law and                                                            
a new indeterminate  fiscal note, dated 3/15/02 from  the Department                                                            
of Administration.                                                                                                              
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Dave Donley adjourned the meeting at 03:45 PM.                                                                         

Document Name Date/Time Subjects