Legislature(2003 - 2004)
05/18/2003 01:03 PM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
May 18, 2003
1:03 PM
TAPES
SFC-03 # 102, Side A
SFC 03 # 102, Side B
SFC 03 # 103, Side A
CALL TO ORDER
Co-Chair Gary Wilken convened the meeting at approximately 1:03 PM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Con Bunde, Vice Chair
Senator Ben Stevens
Senator Lyman Hoffman
Senator Robin Taylor
Senator Donny Olson
Also Attending: REPRESENTATIVE PAUL SEATON; REPRESENTATIVE TOM
ANDERSON; LORALI CARTER, Staff to Representative Kevin Meyer; DAN
SPENCER, Director, Division of Administrative Services, Department
of Administration; MIKE BARRY, Chair, Board of Directors, Alaska
Industrial Development and Export Authority; KEVIN JARDELL,
Assistant Commissioner, Department of Administration; JOSH
APPLEBEE, Staff to Representative Anderson;
Attending via Teleconference: From and off net location: GAIL
VOIGHTLANDER, Assistant Attorney General, Department of Law; DEAN
BROWN, Deputy Director, Division of Forestry, Department of Natural
Resources; JEFF COOK, Vice President, External Affairs, Williams
Alaska Petroleum
SUMMARY INFORMATION
HJR 27-FEDERAL $ FOR ANCHORAGE JAIL EXPANSION
The Committee heard from the sponsor and the bill moved from
Committee.
HB 232-HOMER MERCURY CLASSIC/ GAMING PRIZE LIMIT
The Committee heard from the sponsor and adopted an amendment. The
bill moved from Committee.
HB 248-SALARY OF CHIEF PROCUREMENT OFFICER
The Committee heard from the Department of Administration and the
bill moved from Committee.
HB 165-REPEAL COMMUNITY SCHOOLS GRANT PROGRAM
The bill moved from Committee.
SB 73-AIDEA: LOAN PARTICIPATION & REGULATIONS
The Committee heard from AIDEA. A committee substitute was adopted
and the bill moved from Committee.
HB 112-AIDEA: BONDS & MUNICIPAL TAX EXEMPTION
The Committee adopted a committee substitute and the bill moved
from Committee.
SB 112-MOTOR FUEL TAX: GOVT AGENCY REFUNDS
The Committee heard from the Department of Administration and
adopted a committee substitute. The bill moved from Committee.
HB 245-SUITS & CLAIMS: MILITARY/FIRE/DEFENSE
The Committee heard from the Department of Law and the Department
of Natural Resources. A committee substitute was considered but
failed to be adopted. The bill was held in Committee.
HB 216-FUEL FUND/MUNI TAX: REFINED FUEL PRODUCTS
The Committee heard from the sponsor and a representative from an
oil and gas producer. The bill was held in Committee.
CS FOR HOUSE JOINT RESOLUTION NO. 27(STA)
Relating to support for a federal appropriation for expansion
of the Anchorage Jail.
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that this bill "encourages the United States
Congress to appropriate $30 million for a 200-bed expansion at the
Anchorage Jail to house additional federal prisoners."
LORALI CARTER, Staff to Representative Kevin Meyer testified to
reiterate Co-Chair Wilken's explanation of the bill.
Co-Chair Green offered a motion to move the bill from Committee
with individual recommendations and accompanying fiscal note.
There was no objection and CS HJR 27 (STA) MOVED from Committee
with zero fiscal note # 1 from the Department of Corrections.
HOUSE BILL NO. 232
"An Act relating to mercury classics; and providing for an
effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that this bill, "allows the Homer chapter of
the Kenai Peninsula Boys and Girls Club to operate and implement
the Homer Mercury Classic."
REPRESENTATIVE PAUL SEATON, sponsor, testified this bill would
establish the Homer Mercury Classic, which would operate similarly
to other classics including the Nenana Ice Classic. He stated this
bill would allow the Boys and Girls Club to offer $2 tickets, of
which 50 percent would be paid out in prizes. He told of past
mercury classics held in Fairbanks in 1987 and 1988, noting these
were the only authorized mercury classics. He informed of a
computerized weather station located on the roof of the Boys and
Girls Club building that would allow for temperature monitoring. He
explained the weather station would be used to determine the first
instance in the spring when the temperature rises to 55 degrees and
the first instance in the fall when the temperature lowers to 15
degrees.
Amendment #1: This amendment inserts "relating to contests of skill
under the charitable gaming laws;" into the title of the bill. The
amended title reads as follows.
"An Act relating to contests of skill under the charitable
gaming laws; relating to mercury classics; and providing for
an effective date."
This amendment also inserts a new bill section on page 1, line 3 to
read as follows.
Section 1. AS 05.15.180(g) is amended to read:
(g) A municipality or a qualified organization may award
a maximum of $1,000,000 in prizes each year in activities
authorized under this chapter; however, if a municipality or a
qualified organization contracts with an operator to conduct
on its behalf activities authorized under this chapter, the
municipality or qualified organization may award a maximum of
$500,000 in prizes each year. A municipality or a qualified
organization that conducts a contest of skill and awards more
than $500,000 in prizes to the participants in that contest of
skill, may exclude $500,000 in prizes awarded to those
participants from the $1,000,000 maximum allowed in this
subsection. The holders of a multiple-beneficiary permit under
AS 05.15.100(d) may award a maximum in prizes each year of
$1,000,000 times the number of holders of the permit for
activities authorized under this chapter. In this subsection
"activities authorized under this chapter" means all
activities subject to this chapter other than bingo.
NEW TEXT UNDERLINED [DELETED TEXT BRACKETED]
Senator Olson moved for adoption.
Co-Chair Wilken objected for an explanation.
Senator Olson noted this amendment specifically pertains to the
Iditarod Trail sled dog race and would allow an organization to
award over $1 million in total prize payouts for a game of skill.
He expressed that the Iditarod has been a popular activity for
Western Alaska in the winter months.
Co-Chair Wilken asked if the Iditarod game or any other game of
chance has reached the $1 million payout limit.
Co-Chair Green referenced a letter dated May 17, 2003 to Senator
Olson from Stan Hooley, Executive Director, The Iditarod Trail
Committee, Inc., [copy on file] predicting that the total payout
would exceed $1 million in the year 2004.
Co-Chair Wilken therefore deemed this amendment necessary.
Co-Chair Wilken noted earlier questions were raised relating to the
legality of this provision and asked if the issues have been
resolved.
Senator Olson assured this amendment is legal.
Senator Taylor suggested that without the amendment, the bill would
be subject to criticism in that it specifies only one charity and
one community.
Co-Chair Wilken removed his objection and the amendment was
ADOPTED.
Co-Chair Green offered a motion to report HB 232, as amended, from
Committee with individual recommendations and accompanying fiscal
note.
Senator Taylor objected to rhetorically ask whether the sponsor
would object to an amendment to include video gaming.
Senator Taylor withdrew his objection.
Without objection, SCS HB 232 (FIN) MOVED from Committee with zero
fiscal note #1 from the Department of Revenue.
AT EASE 1:11 PM / 1:11 PM
HOUSE BILL NO. 248
"An Act relating to the annual salary of the chief procurement
officer; and providing for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that this bill, sponsored by the House Rules
Committee by request of the Governor, "changes the salary of the
State's Chief Procurement Officer from Range 23 to Range 24. By
statute the Chief Procurement Officer is appointed to a six-year
term and may be removed only for cause."
Senator Taylor offered a motion to move HB 248 from Committee with
individual recommendations and accompanying fiscal note. He then
objected to the motion to comment that this bill could be
considered as addressing a specific interest because it only
involves one person and one salary range. He opined this provision
should have been included in other broader legislation.
Senator Taylor removed his objection.
Senator Olson objected to ask the date the salary range for this
position was last changed.
DAN SPENCER, Director, Division of Administrative Services,
Department of Administration, was unsure, surmising the pay range
has been unchanged since the enabling statute was first adopted.
Senator Bunde commented this legislation would decrease State
expenditures the deputy position is eliminated.
Without objection HB 248 with zero fiscal note #2 from the
Department of Administration, was MOVED from Committee.
CS FOR HOUSE BILL NO. 165(HES)(efd fld)
"An Act relating to community schools."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that this bill "eliminates the community
schools grant program. The $500,000 for this program has been
deleted in both the House and Senate operating budgets. The House
bill includes intent language regarding the community schools."
Senator Taylor offered a motion to report HB 165 from Committee
with individual recommendations and accompanying fiscal note.
Without objection, CS HB 165 (HES)(edf fld) MOVED from Committee
with zero fiscal note #2 from the Department of Education and Early
Development.
SENATE BILL NO. 73
"An Act relating to the authority of the Alaska Industrial
Development and Export Authority to issue bonds; and providing
for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken reminded this bill relates to the Alaska Industrial
Development and Export Authority (AIDEA) loan participation. He
spoke to a proposed committee substitute Version "I", which only
contains language addressing the AIDEA loan participation. He
pointed out that the original bill includes language pertaining to
the purchase of the Healy Clean Coal project by the Alaska Energy
Authority (AEA), to an extension of AIDEA general bonding
authority, and to the Red Dog Mine.
Co-Chair Green moved for adoption of CS SB 73, 23-GS1018\I, as a
working document.
Co-Chair Wilken objected for further explanation.
MIKE BARRY, Chair, Board of Directors, Alaska Industrial
Development and Export Authority, testified to affirm Co-Chair
Wilken's explanation of the committee substitute. He expressed
intent that the House of Representatives would consider this
"clean" committee substitute, pointing out that House committees
have held hearings on each of the issues included in the original
bill.
Co-Chair Wilken furthered that the utility in which he is a member
had concerns with other items in the original legislation that
could be alleviated with additional discussion. He indicated those
issues would be addressed the following session.
Co-Chair Wilken removed his objection to the adoption of the
committee substitute and it was ADOPTED.
Senator Taylor offered a motion to report SB 73, as amended, from
Committee with individual recommendations and accompanying fiscal
note.
Senator Olson commented that because the matters relating to Tech
Cominco, Inc. and the Red Dog Mine have been addressed in HB 112,
he therefore had no objection to this bill.
There was no objection and CS SB 73 (FIN) MOVED from Committee with
zero fiscal note #1 from the Department of Community and Economic
Development.
CS FOR HOUSE BILL NO. 112(FIN)
"An Act relating to the authority of the Alaska Industrial
Development and Export Authority to issue bonds and to a
municipal tax exemption for certain assets and projects of the
Alaska Industrial Development and Export Authority; and
providing for an effective date."
This was the third hearing for this bill in the Senate Finance
Committee.
Senator Taylor moved for adoption of HB 112, 23-GH1010\U, as a
working draft.
Co-Chair Wilken objected to give an explanation that this committee
substitute extends AIDEA bonding authority up to $10 million to
July 1, 2007, as requested by AIDEA representatives. He added that
the committee substitute extends the municipal tax exemption for
the Delong Mountain Transportation System to July 1, 2007. He
relayed the intent of the Murkowski Administration to draft
legislation with the assistance of the State Tax Assessor that
"sets forth these decisions" for legislative consideration the
following session. He told of assurances he has received that this
committee substitute would not affect other proposed projects.
Senator Olson indicated that Tech Cominco, Inc. does not oppose
this committee substitute.
Co-Chair Wilken removed his objection to the adoption of the
committee substitute and it was ADOPTED without objection.
Senator Taylor offered a motion to report CS HB 112, Version "U"
from Committee with individual recommendations and accompanying
fiscal note.
There was no objection and SCS CS HB 112 (FIN) MOVED from Committee
with zero fiscal note #1 from the Department of Community and
Economic Development.
AT EASE 1:12 PM / 1:22 PM
CS FOR SENATE BILL NO. 112(TRA)
"An Act increasing the motor fuel tax; repealing the special
tax rates on blended fuels; removing the motor fuel tax
exemption of the Alaska Railroad; relating to tax refunds for
government agency purchases of fuel; and providing for an
effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that this bill would "increase the motor
fuel tax." He indicated a proposed committee substitute, Version
Co-Chair Green moved for adoption of CS SB 112, 23-GS1118\W, as a
working draft.
Co-Chair Wilken objected for an explanation.
KEVIN JARDELL, Assistant Commissioner, Department of
Administration, testified to the changes in the committee
substitute. He stated that the "uncontroversial portions have been
removed". He spoke to the request for proposals (rfp) the Division
of Finance issued for credit cards and the provision that those
credit cards must be authorized for use in purchasing fuel. He
indicated he had elaborated on this subject at a previous hearing
and stated that this bill was chosen as the "vehicle" for
implementing the intended policy. He remarked that because this
legislation was not progressing through the Legislature, it was
determined that the motor fuel tax provisions would be deleted to
allow consideration of the credit card provision. He clarified that
only language pertaining to credit cards is contained in the
committee substitute.
Senator Hoffman opined that the committee substitute is, "a major
move in the right direction."
There was no objection and the committee substitute Version "W" was
ADOPTED as a working draft.
Senator Taylor offered a motion to report the CS SB 112, Version
"W" from Committee with individual recommendations and forthcoming
fiscal notes.
Without objection CS SB 112 (FIN) MOVED from Committee with zero
fiscal notes dated 5/18/03 from the Department of Administration
and the Department of Revenue.
AT EASE 1:26 PM / 6:58 PM
CS FOR HOUSE BILL NO. 245(JUD)(efd fld)
"An Act relating to certain suits and claims by members of the
military services; relating to certain suits and claims
regarding acts or omissions of the organized militia; relating
to workers' compensation and death benefits for members of the
organized militia; relating to liability arising out of
certain search and rescue, civil defense, fire management, and
fire fighting activities."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that this bill, sponsored by the House Rules
Committee at the request of the Governor, "limits civil actions
arising out of claims and suits by members of the military service,
organized militia and firefighters. The State's self-insurance
program for tort liability exposures will be favorably affected by
this legislation."
GAIL VOIGHTLANDER, Assistant Attorney General, Department of Law,
testified via teleconference from an off net location in Anchorage
that this bill addresses liability for State and local governments
and State and local government employees and volunteers who provide
"important emergency services."
Ms. Voightlander noted that State and local governments provide
four different areas of emergency response, one being search and
rescue. She informed that the Alaska State Troopers perform
approximately 400 search and rescue operations annually. She
emphasized this bill would provide immunity to the Troopers and
other State and local employees and volunteers involved in these
activities.
Ms. Voightlander assured this legislation and the immunity it would
provide, is consistent with Alaska Supreme Court case law regarding
liability of public safety workers, and she listed examples. She
stated this bill extends the provisions of public safety workers to
include search and rescue operations in granting immunity against
civil liabilities for negligent actions during an investigation.
Ms. Voigtlander furthered that this bill also addresses "intra-
military tort" and would clarify "what was muddied in an Alaska
Supreme Court case in 2001" called Himsel versus the State of
Alaska. She expressed that confusion had long existed as to the
"various hats ? the Alaska National Guard might wear in any given
occasion," and opined that this case further "blurred the
distinction" as well created uncertainty regarding the responsible
party defending against claims made arising from National Guard
activities. She stated that this legislation provides that members
of the Alaska National Guard, if injured while operating under
State orders, would be covered under the State's workers
compensation program, and if injured while operating under federal
orders, would be provided workers compensation and other benefits
by the federal government. She pointed out that members of the
Alaska National Guard mostly operate under federal orders.
Ms. Voightlander continued that the Himsel vs. State decision also
resulting in the allowance of the military to "sue one another" for
civil damages. She reported that all but two other jurisdictions in
the U.S. follow the Feres Doctrine, which determines that it is
poor public policy to allow members of the military to sue
officers, fellow military members and employers for military
activities. She remarked that to allow an individual to give an
order, yet hold that individual liable for civil actions as a
result of giving that order is detrimental to the military command
structure. She also remarked that public policy should not allow
civilian courts to interject with military operations and orders.
She stated this legislation would reestablish the Feres Doctrine in
Alaska.
Ms. Voightlander stressed this portion of the legislation is not a
"change", but rather is in response of the Himsel vs. State ruling.
She informed that the Feres Doctrine had been the "long standing
rule" and that no lawsuits had been filed against the State due to
the awareness of the Doctrine and the understanding that it applied
to Alaska. She pointed out that the National Guard is comprised of
both State and federal employees "providing services under a
variety of orders".
Ms. Voightlander listed the third subject of this legislation as
civil defense. She referenced Title 26. Immunity for Civil Defense
Activities., in Alaska State Statue, and stated this bill would
"continue" that immunity, although it provides "slightly higher
standards for the one exception when lawsuits are allowed in the
area of civil defense. She noted that civil defense activities in
Alaska are primarily responses to natural disasters, including
earthquakes and floods. She said these events normally involve
State and local governments and employees and volunteers. She
stated that this provision of the bill would "immunize" not only
the governments, but also the employees and volunteers providing
"vital emergency services."
Ms. Voightlander concluded with the provisions for firefighting
activities contained in this legislation. She informed that it had
been understood that the State could not be sued for these
activities; however, the Alaska Supreme Court in 2001 ruled in two
cases relating to the Miller's Reach Fire, that the State could be
sued for "certain aspects of firefighting activities". This bill,
she stressed, would provide immunity to State and local
"responders" and to volunteers, "all who conduct firefighting
operations in the State of Alaska", to allow them to perform
emergency responses. She surmised this would permit those personnel
to make emergency decisions without the threat of lawsuits filed
against themselves individually or their employers.
Ms. Voightlander pointed out that workers and volunteers defending
themselves against a lawsuit are subsequently unavailable for
public safety activities during times of court appearances, and
related appointments.
Ms. Voightlander informed that the State and federal employees and
volunteers, are covered by workers' compensation insurance in the
event they are injured during the performance of their duties. She
noted workers' compensation is a "no-fault system" in which
attorneys are not necessary for an injured employee to assert
rights and to receive compensation.
Ms. Voightlander stated this legislation would bring Alaska into
compliance with other Western states and the U.S. Ninth Circuit
Court of Appeals rulings that holds that firefighting activities
are immune.
Senator Taylor asked about the plaintiff in Himsel vs. State why
the suit was brought.
Ms. Voightlander shared that Major General Kenneth Himsel served in
the Indiana National Guard and was stationed in Alaska. She said
the lawsuit arose from a plane crash near Juneau of a federal plane
piloted by a member of the federal National Guard transporting
several members of the Alaska National Guard who were in Active
Guard Reserve (AGR) status, in which there were no survivors. She
explained this status was categorized as a federal status in which
members received federal benefits and in this instance the spouses
and dependent children did receive benefits from the federal
government following the crash. This lawsuit, she stated, argued
whether the mission was State or federal, and the Alaska Supreme
Court, in rejecting the Feres Doctrine of whether injuries arose as
a result of military service, substituted a "new test" the
"uniquely military test." She updated that this lawsuit was settled
for $7.5 million with the State portion of that amount $2.75
million and the remainder paid by insurance the State no longer
carries.
Senator Taylor asked about the other passengers on that flight.
Ms. Voightlander indicated that General Carrol [spelling not
specified] was on that plane and was the only individual involved
who was "clearly a State employee" and therefore his estate was not
included in the lawsuit. She was unaware whether the General's
spouse wanted to participate in the suit, but noted that the
acceptance of State workers compensation benefits precluded such
actions.
Senator Taylor asked if the other passengers were members of the
military.
Ms. Voightlander affirmed and reiterated that Major General Kenneth
Himsel was a member of the Indiana National Guard, the pilot was
considered a federal employee and the co-pilot and other
passengers, excluding General Carrol, were members of the Alaska
National Guard in AGR status. She stated that receipt of federal
benefits prohibited the estates from recovering from the federal
government, although it did not bar them from pursuing remedy
against the State of Alaska. She noted such attempts would be
barred under the Feres Doctrine.
Senator Taylor asked how the State was ruled liable for an event
involving a federal plane piloted by a federal employee.
Ms. Voightlander replied that the Alaska Supreme Court ruled on the
question as to whether the mission was federal or State and whether
the pilot was a "borrowed servant" from the federal government,
necessitating that the State be liable for the pilot's actions.
Senator Taylor and Ms. Voightlander continued to discuss the merits
of this case with Ms. Voightlander summarizing that the State
decided to settle the case following the initial trial court ruling
and after analyzing the strengths and weaknesses and the probable
cost of extended litigation. She addressed Senator Taylor's concern
that the matter was never decided by the Alaska Supreme Court, by
emphasizing that because the Feres Doctrine was dismissed, its
provisions were invalid and subsequently the State was not immune.
Senator Taylor next addressed Section 2 relating to civil immunity,
which stipulates that "a person may not bring a civil action for
damages against the State political subdivision?[for the] results
of an action or a mission for performing or failing to perform
activities or duties authorized" under AS 18.60.120 through 175. He
asked for a summary of these statutes.
Ms. Voightlander responded that these statutes relate to search and
rescue operations, and stipulate the funding and authorized
participation in those activities.
Senator Taylor asked if this provision would grant immunity to
Alaska State Troopers, and other State and local government
employees.
Ms. Voightlander affirmed this would apply to all parities
participating in search and rescue operations including volunteers
and agents.
Senator Taylor clarified this legislation would provide blanket
immunity for all related activities regardless of recklessness or
gross negligence.
Ms. Voightlander affirmed there would be no exemptions.
Senator Taylor asked if this portion of the legislation was
precipitated as a result of the lawsuit relating to the death of an
elderly couple and their grandchild, and the Alaska State Troopers
failure to conduct a search and rescue operation for those stranded
travelers.
Ms. Voightlander answered that a couple of lawsuits have been filed
against the State on this matter, including the situation Senator
Taylor indicated that involved a family traveling on the Denali
Highway after it had been closed for the winter. She stated this
trial resulted in a judgment against the State. She qualified that
family members reported that the travelers were located in the
Kenai area and search and rescue operations were conducted in that
area. She said it was only later learned that the travelers could
be on the Denali Highway, at which time weather conditions were 45
degrees below zero.
Senator Taylor asked the judgment rendered against the State.
Ms. Voightlander told of the rulings and appeals process of this
case.
SFC 03 # 102, Side B 07:23 PM
Ms. Voightlander continued that if the State does not ultimately
prevail, the total judgment would be over $7 million incorporating
the findings that the State shared 50 percent of fault and the
travelers' negligence contributed 49 percent of fault.
Senator Taylor surmised that as a result of this lawsuit, blanket
immunity would be granted, regardless of whether State employees
act negligently, recklessly, grossly negligently or intentionally.
Ms. Voightlander again affirmed. She noted that in addition to this
case, another lawsuit was filed against the State that involved
decisions about whether to instigate a search and rescue operation
from one village or another village, and in which manner the
operation should proceed.
Senator Taylor asked the result of that suit.
Ms. Voightlander responded that a settlement was reached in this
case.
Senator Taylor asked if therefore the State admitted wrongdoing.
Ms. Voightlander explained that in any civil litigation, weight is
given to possible verdicts, potential damages that could be awarded
and appeal costs. She stressed that settlements do not include
admission of liability.
Senator Taylor asked the settlement amount.
Ms. Voightlander answered approximately $250,000.
Senator Taylor again spoke to negligence or gross misconduct of a
State employee resulting in damage to another party that would not
be subject to civil actions.
Ms. Voightlander emphasized this legislation "represents an
enunciation of public policy" that allows parties involved in
search and rescue operations to make the best decisions at the time
for the safety of workers and those being rescued, without concern
for possible civil liability actions.
Senator Taylor noted the absence of language in this Section
specifying immunity would apply to volunteers. He identified
"public employees who are salaried and paid by the State or a
political subdivision" and therefore argued, "it's a nice emotional
argument" to suggest "some poor volunteer might get sued"; however,
the provisions only applies to "our employees doing negligent acts
that cause damage or death."
Ms. Voightlander corrected that volunteers "covered under the
agents principal" and are considered agents of the State.
Senator Taylor asked if volunteers were sued in the two
aforementioned cases.
Ms. Voightlander answered no.
Senator Taylor directed attention to Section 7, which specifies
employees and authorized volunteers and includes an exception from
immunity for malicious actions or reckless indifference to the
rights of others or safety of others. He asked why this language is
not included in Section 2.
Ms. Voightlander replied that this section amends existing statutes
and adds a "clear and convincing" standard. She informed that the
exceptions are not included in other sections of the bill due to
the high cost of defense against lawsuits. She emphasized the
intent of this bill is to not distract from search and rescue
activities.
Senator Taylor next surmised that the language relating to civil
defense in Sections 8 and 9 mirrors federal language relating to
homeland security, specifically in granting civil immunity to those
administering vaccinations.
Ms. Voightlander replied that Section 9 provides immunity for the
activity of administering vaccinations; however she pointed out
that existing programs provide funds for people injured as a result
of adverse reactions to vaccinations.
Senator Taylor understood such programs exist to provide relief
from adverse reactions resulting from specific vaccinations,
although this legislation would apply to all vaccinations. He
opined that statistically all vaccination programs would result in
an adverse reaction to some recipients.
Co-Chair Green referenced the definition of "civil defense"
provided in Section 9 amending AS 26.20.200(1) on page 4, line 31,
through page 5, lines 1 9 as follows.
(1) "civil defense" means the protection and defense
of the civilian population by the organized efforts of the
residents of the state other than those in the military
service, and includes without limitation, fire fighting,
policing, rescue, air raid warning, security, communications,
medical service, vaccination and other actions to protect
public health, transportation, evacuation of persons, welfare
aid, guard duty, anti-espionage and anti-sabotage service,
construction of temporary housing and bomb proof shelters,
[AND] any other service necessary for the protection of and
aid to the public not normally furnished by the military
services, and training, preparation, travel, and other
activities necessary for the provision of the services
described in this paragraph;
New Text Underlined [DELETED TEXT BRACKETED]
Co-Chair Green understood this language clarifies that the immunity
would not apply to all vaccinations, but rather those administered
for the purpose of civil defense.
Senator Taylor surmised Co-Chair Green's assertion to be correct,
although the language is "quite broad" in the parties included.
Senator Taylor then asked if this legislation would prevent parties
from filing suit against the State for incidences similar to those
arising from the Millers Reach fire. He opined that the system
operated correctly in this instance, as well as all such instances,
in that the case was brought and the court ruled that the State was
not at fault. He asked the reason to amend the existing provisions.
Ms. Voightlander indicated this legislation addresses the matter in
Sections 11 and 12 related to firefighting activities. She asserted
this legislation is necessary to affirm public policy factors. She
informed that the cost of this litigation is high, in that these
activities remove employees from their regular jobs to defend
against civil litigation, in addition to defense costs. She listed
the legal expenses of the Millers Reach Fire litigation at $2.5
million to date. She reiterated that this legislation would hold
Alaska consistent with other Western states and with case law that
holds firefighters immune. She expressed that response to emergency
situation requires discretion and judgment decisions.
Senator Taylor asked whether property owner could seek damages in
the event of a disaster when gross negligence of State employees
could be demonstrated.
Ms. Voightlander responded that property owners would be unable to
sue for damages.
Senator Taylor clarified that no exceptions would be allowed for
instances of gross negligence, reckless disregard of human life,
and intentional conduct.
Ms. Voightlander affirmed. She qualified that if an employee or
agent's actions "rise to the level of violating a federally
guaranteed constitutional right" the individual has the "remedy of
filing either in federal or State court under 42 USC Section 1983".
Senator Taylor noted the aforementioned federal statute pertains to
civil rights. He asked if the intent of Sections 11 and 12 is to
allow parties to seek damages under civil rights laws.
Ms. Voightlander responded that these sections would immunize the
State and local governments and employees in fire fighting
activities. She pointed out that the existing AS 09.65.070 provides
immunity to local firefighters.
Senator Taylor asked if any conditions or exceptions are provided
in the aforementioned statute relating to local firefighters.
Ms. Voightlander answered no.
Co-Chair Wilken asked if the witness recognizes a need for
qualifiers in event of gross negligence, such as exampled by
Senator Taylor.
Ms. Voightlander responded that providing exceptions and
qualifiers, requires the State to incur defense expenses even if
successful against lawsuits. She informed that Alaska law provides
that a civil trial could be decided summarily without a trial only
if "no genuine issues of material fact" are demonstrated. She
stated that the standards for summary judgment are set "very high
in Alaska" and that cases are increasingly "having to go to trial".
She furthered that case law provides that "even when people agree
that there is not a fact issue," different jurors "may have
different views as to the inferences to derive from those facts."
DEAN BROWN, Deputy Director, Division of Forestry, Department of
Natural Resources testified via teleconference from an off net
location about the impact this legislation would have on forestry
operations. She pointed out the major function of the Division
relates to wildland fire fighting. She spoke to increasing wildland
urban interface concerns as more people move into wooded areas, and
she noted that during a fire season, approximately 86 percent of
fires are human caused. During the spring season, she furthered,
virtually 100 percent are human caused and are located primarily in
the main roaded area of the State and remarked that the number of
springtime fires is increasing and occurring earlier in the year.
Ms. Brown expressed concern over the impact that litigation has on
firefighters, who are typically seasonal workers for three to five
months annually and are trained to national standards. She stated
these firefighters make critical life and death decisions involving
fires varying from minor campfires to major fires. She stressed the
importance that "their mind be 100 percent on that job" without
concern for the consequences of actions taken in the performance of
duties.
Ms. Brown told of employees fighting fires in the Mat-Su area that
occurred during windstorms in February 2003. She informed that many
of these firefighters fought fires in the evenings and until 5:30
am and then appeared in court at 8:00 am for daylong proceedings
related to the Millers Reach Fire lawsuit.
Ms. Brown also pointed out that federally employed fire fighters
are immune from civil litigation and that in many instances State,
federal and locally employed fire fighters are involved in the same
operations. She reiterated the U.S. Ninth Circuit Court of Appeals
verdict upholding the immunity of government public safety
employees.
Co-Chair Wilken gave a hypothetical situation of firefighter under
the influence of drugs, responding to an emergency call and hitting
a child with a fire truck, killing the child. He asked if that
firefighter would not be held liable in this instance based on the
decision to use drugs "on the job.
Mr. Brown informed that the Department has a "strict" policy
against alcohol and drug use and employment of the hypothetical
firefighter would be "terminated immediately."
Co-Chair Wilken commented this would not "bring the child back".
Senator Taylor noted that Sections 11 and 12 relating to "fires
authorized to be preformed" cite different statutes: AS 41.15.010
and AS 41.17.080. He asked why two "identical immunity provisions"
are necessary.
Ms. Voightlander replied that AS 41.15, cited in Section 11,
relates to forests and provides to firefighting activities, and AS
41.17, cited in Section 12, relates to administration and
management. She explained that under both chapters, the Division of
Forestry is authorized to conduct firefighting activities.
Senator Taylor understood general State policy on liability,
exampling that the Legislature could not be sued for its decisions,
and the Department of Transportation and Public Facilities could
not be sued for decisions made regarding the location of a highway,
as those decisions are considered discretionary. However, he noted
that the Department of Transportation and Public Facilities could
be held liable for administrative actions, such as failure to
safely maintain roadways or otherwise warn the public of the
dangers. He surmised that a threshold exists in which the State
becomes liable for its actions. He asked for clarification of the
activities for which the State could be sued.
Ms. Voightlander agreed with Senator Taylor's assertion that AS
950.250 stipulates that discretionary decisions are not subject to
liable, although once decisions are made the State could be sued
for the manner in which activities are conducted.
Senator Taylor indicated he has many other questions.
Co-Chair Wilken asked the witness to reply to the scenario he
earlier posed involving a firefighter under the influence of drugs.
Ms. Voightlander responded that under existing law AS 965.070, "an
action for damages could not be made against an employee or member
a fire department if the claim is for a tort and is based upon the
act or admission of the member of the fire department in the
execution of a function for which the department is established."
Therefore, she stated that an injured party would be barred from
filing suit in the aforementioned instance.
Senator Olson asked, as a matter of public policy, how the State
provides adequate oversight to ensure quality search and rescue
operations.
Co-Chair Wilken requested the question be held.
Co-Chair Wilken ordered the bill HELD in Committee.
AT EASE 7:56 PM / 7:57 PM
CS FOR HOUSE BILL NO. 216(FIN)
"An Act relating to and limiting municipal taxation of refined
fuel and wholesale sales of fuel, and to the bulk fuel
revolving loan fund."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken said this bill "is a municipal taxation on refined
fuel products sponsored by [the] House Labor and Commerce
Committee, chaired by Representative Tom Anderson. HB 216 clarifies
local municipalities taxing authority for refined fuels sold both
within and outside the local jurisdiction."
REPRESENTATIVE TOM ANDERSON testified that this bill clarifies
local taxing authority for refined fuels sold both within and
outside of a local jurisdiction. He recalled an initiative petition
in the Fairbanks North Star Borough to implement a two-cent per
gallon transfer tax. He expressed that "fortunately" the voters
"overwhelmingly" defeated the proposed tax by a margin of 62
percent to 38 percent. Afterwards, he stated, the industry and
businesses recognized that clarification is necessary to limit the
number of municipalities that could tax the same fuel.
Representative Anderson exampled refined fuel shipped via the
Alaska Railroad from Interior Alaska to Anchorage for use in
Southcentral and Southeast markets. Before reaching Anchorage, he
counted eight different governmental taxing entities this fuel
travels through. He pointed out that conceivably, each jurisdiction
could impose a tax on this fuel. He opined that the "exorbitance to
the consumer" would be such that the fuel would not be purchased.
He predicted that this type of taxation would result in Alaska
residents paying local government costs for municipalities in which
they do not reside.
Representative Anderson gave a hypothetical example of a transfer
tax implemented by the Port of Anchorage on all freight landed at
the Port. He remarked that the cost of products traveling through
the Port would increase and residents of other communities would
pay Municipality of Anchorage expenses.
Representative Anderson stated that this bill clarifies local
government's rights to tax any fuel consumed within their
government boundaries, although prohibits taxation of value added
products refined and shipped outside the jurisdiction.
Representative Anderson noted an agreement reached with the
Municipal League of Alaska, which is reflected in the House Finance
committee substitute. He assured this legislation would not affect
those small communities that currently impose transfer taxes.
Representative Anderson also pointed out the committee substitute
contains an amendment sponsored by Representative Carl Morgan that
would increase the loan amount for the bulk fuel revolving loan
fund to one borrower in any fiscal year from $200,000 to $300,000.
Representative Anderson relayed Representative Morgan's intent to
provide adequate funding to meet the increasing costs associated
with construction and replacement of bulk fuel facilities,
particularly in Rural Alaska.
Senator Hoffman asked if any local governments that presently
implement a transfer tax would be impacted by this legislation.
Representative Anderson listed three, one of which is Cold Bay, and
he assured these communities would not be affected.
Senator Hoffman asked if other communities implementing a transfer
tax that have not been identified would remain unaffected as well.
Representative Anderson answered they would not because this bill
contains a grandfather clause and would only apply to future
situation.
Senator Bunde asked if it is "bad public policy" to allow future
transfer taxation, why local governments that currently impose
these taxes should be allowed to continue the practice.
Representative Anderson responded the intent is to be proactive as
a result of the aforementioned ballot initiative in the Fairbanks
North Star Borough. He suggested that the existing taxing authority
could be repealed but requested it be considered in separate
legislation.
Senator B. Stevens referenced Section 8 on page three of the
committee substitute, noting that the previous session the
authorized loan amounts from of the bulk fuel revolving loan fund
was increased from $100,000 to $200,000 and questioned the proposed
increase one year later. He understood the sponsor's argument that
the increased amounts are necessary for construction expenses, but
informed that use of the funds is only allowed "for the purchase of
fuel" and for "communities with populations of less than 2,000
people." He asked how the integrity of the loan fund would be
protected with an ability to draw from that fund increased by 300
percent in less than one year.
Senator B. Stevens he also asked the number of communities with
populations of less than 2,000 have the ability to purchase
sufficient quantities of fuel to repay a $300,000 loan.
Representative Anderson admitted this provision was inserted in the
bill after the House Labor and Commerce Committee considered the
bill and he was therefore unfamiliar with all the details.
Senator B. Stevens asked the status of the loan fund.
JOSH APPLEBEE, Staff to Representative Anderson, testified that
Representative Morgan sponsored Section 8 as a result of rising
fuel prices.
Senator Hoffman listed two other factors: upgrades of facilities
that are holding larger capacities, and attempts for communities to
establish regionalized facilities to allow for bulk purchases at
lower costs.
Senator B. Stevens expressed concern of the balance of the fund and
the impact of the increase from $100,000 to $300,000 loan amounts.
He cautioned that a few communities could exhaust the loan capacity
in a given year.
Co-Chair Wilken requested staff to research the balance of the fund
and indicated the matter would be revisited.
JEFF COOK, Vice President, External Affairs, Williams Alaska
Petroleum, testified via teleconference from an off net location,
that the company owns the largest oil refinery, which refines
approximately 70,000 barrels per day. He informed that about 90
percent of the finished product is shipped via rail to Anchorage
traveling through a number of municipalities. He expressed that
multiple taxes would hamper continued expansions necessary to meet
the demands of the entire State. He indicated that the company
considered proposing this legislation the previous session, however
decided to wait until residents of the Fairbanks North Star Borough
voted on the issue. He told of support for this legislation from
the Alaska Municipal League of Alaska, the Alaska Oil and Gas
Association and the three refineries operating in the State:
Williams Alaska Petroleum, Petrostar Corporation and Tesoro
Petroleum Corporation. He emphasized the need for these refiners to
maintain a competitive position and to provide Alaskans with
competitively priced fuel.
Mr. Cook commented on the provisions of Section 8 relating to the
Storage Tank Assistance Revolving Loan fund, stating that repayment
has historically been good. He explained this is because the
program allows loan amounts of 90 percent of the value of fuel, and
because many communities purchase fuel once per year and draw
repayment funds from the sale of that fuel over the course of that
year.
Senator Bunde understood the problem of multiple taxation, and
asked whether the continuation of the transfer tax imposed by the
three communities would cause hardship.
Mr. Cook replied that the original version of the bill contained a
blanket restriction; however it was learned that repealing the tax
would cause hardship for the three communities and it was therefore
determined that passage of the overall bill was more important than
the loss incurred in these communities.
Representative Anderson expressed he had no opinion on the
provisions of Section 8 of the committee substitute, reiterating
that the increased loan amount was the request of Representative
Morgan.
Senator Bunde asked the names of the two communities other than
Cold Bay that would have a transfer tax grandfathered by the
passage of this legislation.
Mr. Cook was unsure.
Co-Chair Wilken asked if Senate committees have made any changes to
the bill.
Representative Anderson answered no.
Co-Chair Wilken requested further information regarding the
communities that currently impose a transfer tax, as well as a
profile of the Storage Tank Assistance Revolving Loan Fund.
Senator Taylor recalled testimony before the Committee regarding a
proposed fuel tax, attesting that the community of Unalaska
transferred over 60 percent of all the fuel sold in the State.
SFC 03 # 103, Side A 08:12 PM
Senator Taylor suggested Unalaska could be one of the communities
that currently impose a transfer tax.
Co-Chair Wilken requested additional information.
Co-Chair Wilken ordered the bill HELD in Committee.
AT EASE 8:13 PM / 8:13 PM
AT EASE 8:14 PM / 9:59 PM
ADJOURNMENT
Co-Chair Gary Wilken adjourned the meeting at 09:59 PM
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