Legislature(2005 - 2006)SENATE FINANCE 532
05/01/2005 01:00 PM Senate FINANCE
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 24 | TELECONFERENCED | |
| += | SB 156 | TELECONFERENCED | |
| += | HB 182 | TELECONFERENCED | |
| += | HB 91 | TELECONFERENCED | |
| += | HB 119 | TELECONFERENCED | |
| + | HB 136 | TELECONFERENCED | |
| + | SB 135 | TELECONFERENCED | |
| += | SB 108 | TELECONFERENCED | |
| + | SB 121 | TELECONFERENCED | |
| + | SB 122 | TELECONFERENCED | |
| + | HB 35 | TELECONFERENCED | |
| + | HB 75 | TELECONFERENCED | |
| + | HB 132 | TELECONFERENCED | |
| + | HB 156 | TELECONFERENCED | |
| + | HB 230 | TELECONFERENCED | |
| += | SB 46 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | HB 19 | ||
| = | HB 15 | ||
MINUTES
SENATE FINANCE COMMITTEE
May 1, 2005
1:09 p.m.
CALL TO ORDER
Co-Chair Green convened the meeting at approximately 1:09:00 PM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Bert Stedman
Senator Fred Dyson
Senator Lyman Hoffman
Senator Donny Olson
Also Attending: REPRESENTATIVE NORM ROKEBERG; REPRESENTATIVE VIC
KOHRING; MIKE TIBBLES, Deputy Commissioner, Department of
Administration; PHELAN STRAUBE, Staff to Senator Ben Stevens;
HEATHER NORBREGA, Staff to Representative Norm Rokeberg; MIKE
PAWLOWSKI, Staff to Representative Kevin Meyer; KAREN LIDSTER,
Staff to Representative John Coghill; DEAN GUANELI, Chief Assistant
Attorney General, Legal Services Section-Juneau, Criminal Division,
Department of Law; LINDA HALL, Director, Division of Insurance,
Department of Commerce, Community and Economic Development; KACI
SCHROEDER, Staff to Representative William Thomas, Jr. and
Committee Aide to the House Community & Regional Affairs Committee;
SALLY SADDLER, Legislative Liaison, Department of Community and
Economic Development; CHERYL FRASCA, Director, Office of Management
and Budget, Office of the Governor; DEVEN MITCHELL, Debt Manager,
Treasury Division, Department of Revenue; KEATH HILLIARD, Staff to
Representative Mike Kelly; SAM KITO JR., Chair, Legislative Liaison
Committee, Alaska Professional Design Council; PAT DAVIDSON,
Legislative Auditor, Legislative Audit Division, Legislative
Agencies & Offices; BEN MULLIGAN, Staff to Representative Bill
Stoltze; RANDY RUARO, Assistant Attorney General, Legislation &
Regulations Sections, Department of Law; MARIE DARLIN, AARP; IAN
FISK, Staff to Representative William Thomas, Jr.;
Attending via Teleconference: From an Offnet Site: KATHRYN DODGE,
Executive Director, North Star Borough Alaska Regional Economic
Development Organization;
SUMMARY INFORMATION
SB 24-REEMPLOYMENT OF RETIREES
The Committee heard from the Department of Administration, adopted
a committee substitute, and held the bill in Committee.
SB 156-LAYOFF/NONRETENTION OF TEACHERS
The Committee heard from the bill's sponsor and reported the bill
from Committee.
HB 182-WAGE & HOUR ACT: EXEC/PROF/ADMIN/SALES/DP
The Committee heard from the bill's sponsor and reported the bill
from Committee.
HB19-PESTICIDE & BROADCAST CHEMICALS
The Committee heard from the bill's sponsor. The bill was held in
Committee.
HB 15-LIQUOR LICENSES: OUTDOOR REC. LODGE/BARS
The Committee heard from the bill's sponsor, adopted one amendment,
and held the bill in Committee.
HB 91-INDECENT EXPOSURE TO MINORS
The Committee heard from the bill's sponsor and the Department of
Law. The bill was held in Committee.
SB 108-INSURANCE
The Department of Commerce, Community and Economic Development
provided an explanation of the bill, and the bill was held in
Committee.
HB 119-AK REGIONAL ECONOMIC ASSISTANCE PROGRAM
The Committee heard from the bill's sponsor, the Department of
Commerce, Community and Economic Development, and a representative
of the Alaska Regional Economic Development Organization. The bill
was held in Committee.
HB 136-DRUNK DRIVING TREATMENT PROGRAM
The Committee heard from the bill's sponsor. The bill was held in
Committee.
SB 121-STATE OF AK CAPITAL CORP.; BONDS
The Committee heard from the Office of the Governor and the
Department of Revenue. The bill was held in Committee.
SB 122-AMERADA HESS INCOME; CAPITAL INCOME ACCT.
The Committee heard from the Office of the Governor and the
Department of Revenue. The bill was held in Committee.
SB 135-ASSAULT & CUSTODIAL INTERFERENCE
The Committee heard from the bill's sponsor, the Department of Law,
and reported the bill from Committee.
HB 75-HUNTING, FISHING, TRAPPING
The Committee heard from the bill's sponsor and the industry. The
bill was held in Committee.
HB 35-EXTEND BD ARCHITECTS/ENGINEERS/SURVEYORS
The Committee heard from the bill's sponsor, the Division of
Legislative Audit, and the industry. The bill was held in
Committee.
HB 132-CRIMES AGAINST ELDERLY
The Committee heard from the bill's sponsor, the Department of Law,
and took public testimony. One amendment was considered but
withdrawn from consideration. The bill was HELD in Committee.
HB 230-LOANS FOR COMMERCIAL FISHING TENDERS
The Committee heard from the sponsor. The bill was held in
Committee.
SB 46-APPROP: CAPITAL BUDGET
This bill was scheduled but not heard.
HB 156-COMMISSION ON AGING
This bill was scheduled but not heard.
CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 24(STA)
"An Act relating to reemployment of and benefits for retired
teachers and public employees and to teachers or employees who
participated in retirement incentive programs and are
subsequently reemployed as a commissioner; and providing for
an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
MIKE TIBBLES, Deputy Commissioner, Department of Administration,
testified in support of the bill.
Co-Chair Wilken moved to adopt CS SS SB 24(FIN), Version 24-
LS0211\X as the working document.
Co-Chair Green objected for explanation.
1:10:56 PM
Mr. Tibbles informed the Committee that this bill would address
concerns that have been raised in the past regarding the State's
rehiring of retirees practices. The Version "X" committee
substitute would address "perceived abuses in the past and offer a
solid management tool going forward for the State, school
districts, and municipalities".
Mr. Tibbles communicated that the practice of rehiring retirees
could be attributed to the difficulty the State has had in
recruiting "specific job classifications" such as Nurse III
positions in the Department of Health and Social Services Pioneer
Homes. One such position was advertised for 34 days without success
of attracting a qualified candidate. The "tool" being addressed in
this legislation was utilized to rehire a retired nurse for that
position. Another example of a difficult position to fill is the
Children Services Manager position which requires a masters degree
and four years of professional "social work experience providing
programs or services focused on serving children at risk". This
Range 21 position was advertised for 21 days and "neither of the
two applicants met the minimum qualifications". A retired
individual was rehired to fill this position as well. Retirees have
also been successfully rehired to fill engineer and biologist
positions.
1:13:05 PM
Mr. Tibbles stated that "the two primary concerns" regarding the
rehiring of retirees are the "cost to the system" and that hiring
retirees prevents "other employees from moving up into higher level
positions".
Mr. Tibbles communicated that the work draft before the Committee
would allow "a program going forward that meets the original
intent" and addresses these two concerns.
Mr. Tibbles stated that this bill would address the question
regarding "the potential liability of what the State had told these
individuals coming back from retirement", as the bill is "very very
clear … that the program ends, the period of reemployment ends, at
the point that the program sunsets". Intent Language and State
Statutes would also further clarify the program.
Mr. Tibbles continued that Sec. 2 of Version "X" would require
rehired retirees "to be covered by their employer's active health
plan". In the past, employment contracts were negotiated that
allowed the rehired retiree to be covered by their retirement
health plans. This action was contrary to the intent of
experiencing cost savings in the retirement health plan systems.
Therefore, Sec. 2, which is specific to the Teachers Retirement
System (TRS), would clarify that a rehired retiree would be
offered, and must accept, the active health insurance offered to
other full time employees within that school district.
1:14:54 PM
Co-Chair Green asked the reason that the continuance of retirement
health benefits for rehired retirees was preferred to including
them on the active health insurance benefit.
Mr. Tibbles explained that an employer would experience an expense
of approximately $830 per month for each employee eligible for
active health insurance. Therefore, allowing a rehired retiree to
continue to be covered by the retirement health plan "would shift"
that expense from the employer and save them money. This
legislation would prevent that from occurring going forward.
Mr. Tibbles also conveyed the understanding that many of the active
health plans have higher co-pays and deductibles than the
retirement health plans. While the existing retirement plan
benefits would continue to be available upon retirement, they would
be suspended during the time of reemployment and the rehired
employee would be subject to the conditions of the active health
plan provided to their co-workers.
1:16:09 PM
Co-Chair Green characterized this as being "an integral part" of
the proposed language in that neither the employer nor the employee
would view the rehiring "as a great thing". The employer would be
unable "to shift the cost" to the retirement medical plan and the
employee would be subject to the conditions of the active health
coverage "which might have less generous benefits".
1:16:52 PM
Mr. Tibbles noted that Sec. 4 of the proposed work draft would
implement a change that is "consistent with Sec. 2, although it
does specify that teachers coming back on a part time basis could
continue to receive the retired medical benefit coverage". To that
point, he expressed the Department's desire that all part-time
rehired retirees would "be offered the same health benefits" as
other active employees in that any employee working part-time hours
of between 15 and 30 hours a week would be provided health
insurance but could be required to pay half of the premium. Rehired
retirees working less than 15 hours per week who might not be
eligible for any health benefits would continue to be covered by
their retirement benefit.
1:17:45 PM
Mr. Tibbles communicated that rehired retirees working less than
full-time would be assured of having access to health coverage.
1:18:00 PM
Co-Chair Green asked whether the part-time provisions specified in
Sec. 4 could be utilized as "a loophole … to avoid the
participation of the employer".
Mr. Tibbles shared that a situation in which an employer might hire
two part-time retirees rather than one fulltime one had been
considered. The conclusion was that recruiting for a part-time
position would be more difficult that recruiting for a full-time
position. Furthermore, the hiring of a part-time rehired retiree
would allow for the upward progression of another individual, as
was previously mentioned as a concern. In addition, the employer
would be required receive approval of the position and to adhere to
the "tough standards" included in the bill prior to being able to
rehire a retiree.
1:19:07 PM
Co-Chair Green asked whether language should be included in the
bill regarding how the rehiring of a less than full time retired
employee would "recoup the costs to the system".
1:19:30 PM
Mr. Tibbles viewed the costs to the system "in terms of the
unfunded liability and how we're paying off that through the
employees' wage base. There's a provision in the bill that requires
an employer to contribute the same past service rate for the rehire
as they do for all other employees."
Co-Chair Green asked for confirmation that that provision would
include those employees working less than full-time.
1:20:04 PM
Mr. Tibbles expressed that the language in Version "X" would
require employers who are currently contributing for their half-
time employees to do likewise for any rehired retirees working
halftime. He was unsure of the scale of those obligations.
Co-Chair Green understood therefore that the bill would make
employers' actions regarding rehired retired halftime employees
consistent with the current hiring and rehiring practices.
Mr. Tibbles affirmed.
1:20:34 PM
Senator Stedman asked whether the Department of Fish and Game has
developed a plan through which to address its "extensive number of
rehires", were this bill not to advance or were a shorter
termination date of the current practice implemented.
Mr. Tibbles replied that he has not seen such a plan; however, he
noted that the Division of Personnel, Department of Administration,
would be assisting departments in the development of business
rules, hiring practices and recruitment efforts. The Version "X"
committee substitute would provide sufficient time for this
activity to occur.
Mr. Tibbles continued that any rehired retirees who had a waiver
prior to the November 3, 2004 notification that the current program
would terminate would be allowed to continue their waiver until
December 2006. Sufficient time would be provided in which to
develop such things as transfer plans and to identify "the critical
components of a job" in regards to "what is so specific about that
position" that makes it difficult to recruit for and to transfer
some of those responsibilities to other employees.
1:21:53 PM
Senator Dyson asked whether the Alaska State Troopers have
developed a plan to address its rehiring of retirees practice.
Mr. Tibbles stated that his response to the question about the
Department of Fish and Game would apply here as well.
1:22:10 PM
Mr. Tibbles stated that Sec. 5 of Version "X" would provide
conformity and consistency language pertaining to the rehiring of
both the TRS and Public Employee Retirement System (PERS) retired
employees, specifically commissioners.
Mr. Tibbles continued that Sec. 6 would require all employers to
contribute the same unfunded liability rate for rehired retirees as
contributed for other employees.
Mr. Tibbles communicated that Sec. 7 is the transition point at
which the language in the bill moves from the TRS system to the
PERS system. Language in Sec. 7(b), page four, beginning on line
27, would affirm that any current rehired retiree's employment
would terminate when the current program is repealed. "This would
eliminate any question in the future of whether or not there is an
entitlement for the employee beyond the sunset date of the bill …
Individuals on the program" must decide by the termination date of
the current program as to "whether they want to continue to stay
employed and stop their retirement benefits or to separate from
service to continue to receive those retirement benefits".
1:23:12 PM
Co-Chair Green asked for further information regarding the time
frame periods pertinent to the differing groups of rehired
retirees.
Mr. Tibbles clarified that the rehired retirees could be separated
into three groups. The first group would consist of those rehired
prior to November 3, 2004 who might have been hired with the
condition that they could remain in the program as long as they
were continuously employed. That liability issue was addressed by
notifying those individuals that, while the program would be
terminated, their "window" would be extended until December 2006.
Mr. Tibbles stated that the second group of individuals would
consist of those rehired retirees hired between November 4, 2004
and July 1, 2005. Those individuals were hired knowing that the
program would terminate on July 1, 2005. The liability issue that
applies to the first group would not apply to this group. This
group must make a decision by July 1, 2005 as to whether they would
"continue with State service" and pay in "and defer their
retirement benefits or separate from service".
Co-Chair Green asked that the dates pertinent to the second group
to be restated.
Mr. Tibbles clarified that these individuals must have been rehired
between November 4, 2004 and July 1, 2005.
Mr. Tibbles continued that the third group of individuals would
consist of those "brought back from retirement" after July 1, 2005,
which is the effective date of this Act.
Co-Chair Green understood therefore that the third group of
individuals would not include anyone who is currently rehired and
in the system.
Mr. Tibbles concurred.
Co-Chair Green concluded therefore that the third group would
consist of "anyone hired after July 1, '05 not currently under
rehire".
1:25:01 PM
Senator Stedman asked for further discussion in regards to the
conditions applicable to retirees hired after July 1, 2005.
Mr. Tibbles communicated that any retiree rehired after July 1,
2005 would be required to "sign a waiver to come back after
retirement". They would "continue to receive their retirement
benefit, and they would be allowed to stay in as long as they
remained continuously employed, or the sunset date of this Act,
which would be July 1, 2009".
Senator Stedman asked the reason for incorporating this scenario.
1:25:47 PM
Mr. Tibbles explained that, "the purpose of extending the window to
allow new individuals to come in … is that" there are many jobs
that the State is unable to fill. This "management tool" has been
used successfully in the past to fill difficult to recruit for
positions. The provisions would insure that the individuals coming
back would not "be costing the system". It would allow the program
to continue forward "in a consistent and controlled manner".
1:26:24 PM
Senator Stedman understood therefore that were a retiree to be
rehired in August 2005, for example, that individual would "stop
receiving all his retirement benefits, and go right back on the
payroll, and start paying back into the system".
Mr. Tibbles responded that a retired person rehired in August 2005,
for example, would be offered "two options": one would be to come
back and "pay into the system, accrue additional benefits, and
defer their retirement benefit. That exists now outside this bill".
This bill would allow that individual the option "to continue to
receive their pension benefit, have the active health coverage from
their employer, and not accrue any additional benefits and not pay
the Normal Cost Rate going forward".
1:27:25 PM
Mr. Tibbles continued that Sec. 8 would primarily apply to
municipalities. It would require, in a manner similar to that
required of the TRS system, that a municipality must adopt a
resolution demonstrating their recruitment problem in certain job
classifications. Policy issues that must be adhered to include such
things as that the person being rehired must have been separated
from service for a minimum of 30-days and that the position must
have been recruited for a minimum of 30-days.
1:28:44 PM
Co-Chair Green understood that the administrator of the plan must
approve the rehire.
1:28:56 PM
Mr. Tibbles affirmed. The director of the Division of Retirement
and Benefits, Department of Administration would be required to
review the qualifying policy and Resolution. It would be a
coordinated activity to which the administrator would have the
ultimate authority.
Co-Chair Green asked whether this scenario would also apply to TRS
positions.
Mr. Tibbles affirmed.
1:29:21 PM
Mr. Tibbles stated that Sec. 9 would address the unfunded
liability. It would require PERS employers to contribute the same
past service rate for the rehired retirees as they do for other
active employees.
Senator Stedman referred to language in Sec. 8, and asked whether
provisions in the bill would address a situation in which an
employee retired with the intention of being rehired and who
communicated that intention to other possible candidates.
1:30:14 PM
Mr. Tibbles responded that, currently, there is a minimum
recruitment period of ten days. The effort could also be limited to
internal recruitment. This has occurred in the past, with the
outcome being that no qualified candidate emerged. This legislation
would require a statewide recruitment for a minimum of 30 days and
"tough standards" would be applied. Therefore, an individual who
retired with the intent to be rehired would be taking "a gamble"
that no other qualified candidates would emerge. Another qualified
candidate could fill the position.
Senator Stedman communicated awareness of such an event having
occurred. He opined that the scenario he presented would be
difficult to control in a small area. Perhaps the requirement that
a Statewide recruitment effort must occur might address the issue.
Mr. Tibbles stated that Sec. 10 would specify the various effective
dates of the bill's provisions.
1:31:50 PM
Mr. Tibbles noted the Sec. 11 would add a PERS report to the
reporting requirements. In addition, it would require the
Administration to report the efforts being undertaken to address
difficult to recruit for job classifications. Measures to address
those jobs might include changing business rules to allow, for
instance, for fewer Engineer V positions and more Engineer II, III,
and IV positions as Engineer V positions are more difficult to
recruit for. Allowing for more Engineer II, III, and IV positions
would allow more people to become qualified for advancement over
time. Rather than focusing on filling the current positions,
efforts could be undertaken "to fill the need".
Mr. Tibbles stated that Secs. 14 and 15 outline the date
determinations regarding the three aforementioned groups of retired
rehires. He read the Sec. 15 language as depicted on page seven,
line 27 through page eight line seven as follows.
Sec. 15. The uncodified law of the State of Alaska is amended
by adding a new section to read:
WAIVER OF APPLICABILITY OF SEC. 7 OF THIS ACT FOR RETIRED
EMPLOYEES WHO MADE AN ELECTION UNDER AS 39.35.150(B) OR (E)
BEFORE NOVEMBER 3, 2004, AND CONDITIONS APPLICABLE TO SERVICE
FROM JULY 1, 2005 THROUGH DECEMBER 31, 2006. From July 1,
2005, through December 31, 2006, the amendment made to AS
39.35.150(b) by sec. 7 of this Act does not apply to a retired
employee who was rehired and made an election under AS
39.35.150(b) or (e) before November 4, 2004, if that person
continues to serve in the same position. However, this section
does not apply to employees who are required to provide health
and medical benefits under AS 39.35.150(b), as amended by sec.
7 of this Act, regardless of whether a member receives
retirement medical benefits under this section.
Mr. Tibbles stated that this language would allow retirees rehired
prior to November 3, 2004, before the notice went out regarding the
program's ending, and who were told they could continue their
employment, to continue their employment through December 2006.
Those being paid solely out of the retirement health account would
be the exception, as that aspect would be discontinued and their
employer would be required to cover them through the active health
plan.
Co-Chair Green understood therefore that that coverage would occur
"in the meantime".
Mr. Tibbles concurred.
1:34:27 PM
Mr. Tibbles stated that Sec. 17 would change the termination date
from July 1, 2005 to July 1, 2009.
Co-Chair Green understood that some amendments would be
forthcoming.
Mr. Tibbles affirmed that some clarifying language pertaining to
the termination dates and the continuing employment terms for the
three different rehired retirees groups, specified in Sec. 14 and
Sec. 15, is being developed.
1:35:33 PM
Co-Chair Wilken noted that a fiscal note pertinent to Version "X"
would also be forthcoming. To that point, he asked whether the
fiscal note would reflect the provisions being considered in SB
141-PUBLIC EMPLOYEE/TEACHER RETIREMENT/BOARDS and how that
legislation might impact the PERS and TRS systems.
Mr. Tibbles responded that that impact was detailed in the analysis
section of the previous Department of Administration fiscal note #1
dated March 7, 2005. That analysis anticipated a $106,000 a year
impact in regards to the TRS component. No impact was anticipated
on the PERS side until the point at which the program had 500
participants. There are currently 211 participants in the PERS
program. There is an expectation that the PERS participant level
would decrease under the new sideboards specified in this bill.
Co-Chair Wilken asked that a fiscal note specific to Version "X" be
developed that specifically addresses the impact to the PERS and
TRS systems. Those expenses should be considered.
Co-Chair Wilken noted that while he supports the bill, he would not
care to add to PERS/TRS expenses.
1:38:10 PM
Co-Chair Green agreed. Continuing, she voiced the understanding
that following the signing of the Governor's Administrative Order
concerning the rehire of retired employees and the implementation
of the Department of Administration's review, the rehiring of
retirees scenario "really changed".
Mr. Tibbles stated that since the Governor's Administrative Order
was released on March 8, 2005, not a single rehire has been
approved for the State of Alaska. The first question asked by the
Department's Administrator when a department submits a request is
"how many qualified individuals did you receive through your
recruitment process". It has been demonstrated in every case to
date that there has been a qualified pool of applicants to choose
from, and therefore, all requests have been denied.
Co-Chair Green understood that in the State of Alaska situation,
the Administrator's "word would be final"; however, she asked
whether this would be the case in regards to municipalities or
school districts "that really had their mind set on hiring a
certain retired person". To that point, she asked whether the
Administrator's decision could be challenged.
Mr. Tibbles specified that the Statute would provide the
administrator "the proper authority to deny somebody coming back
and continuing their retirement benefits if they don't meet the new
requirements laid out in the bill". He was uncertain to the steps
that could be taken were someone to challenge the administrator's
position in Court.
Co-Chair Green requested that clarification as to the proper
authority in this regard be provided.
Co-Chair Green removed her objection to Version "X".
There being no other objection, Version "X" was ADOPTED as the
working document.
The bill was HELD in Committee in order to consider forthcoming
amendments.
1:41:09 PM
SENATE BILL NO. 156
"An Act relating to notification to teachers of layoff or
nonretention."
AT EASE: 1:41:39 PM / 1:41:50 PM
This was the first hearing for this bill in the Senate Finance
Committee.
PHELAN STRAUBE, Staff to Senator Ben Stevens, the bill's sponsor,
informed the Committee that this bill would address what is
referred to "as the pink slip problem by aligning tenured teachers
with non-tenured teachers within the law". Currently, tenured
teachers must be notified by March 16th of each year that "they
would not be retained for the following school year". "Non-tenured
teachers must be notified by the last day of the school term". This
legislation would align the two schedules by specifying that in
both cases, the termination notification must be received by the
end of the school term.
1:42:32 PM
Co-Chair Green inquired as to how this issue was brought to the
attention of the Legislature.
Mr. Straube replied that the primary issue is that neither local
city/school assemblies' budgets nor the State's budget for the
following fiscal year are completed by March 16th of each year. The
requirement that notification must be provided by that date leads
to a sense of instability on the part of teachers and speculation
on the part of the school districts in regards to the funding level
they would receive for the following school year.
Co-Chair Green ascertained therefore that the March 16th
notification date has proven to be more harmful than beneficial.
Mr. Straube agreed. "It creates instability for teachers and for
school districts; it unnecessarily scares parents and teachers."
Co-Chair Green asked whether this issue has ever been "challenged."
Mr. Straube had not discovered any challenge during his research on
the issue. The practice was created in the 1960s "and has not been
addressed since".
Co-Chair Green stated that while this is "a long-standing policy",
it is inconsistent with budget cycles and is not beneficial to
those concerned.
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
There being no objection, the SB 156 was REPORTED from Committee
with previous zero fiscal note #1, dated April 18, 2005 from the
Department of Education and Early Development.
1:45:02 PM
CS FOR HOUSE BILL NO. 182(FIN)(efd fld)
"An Act amending the Alaska Wage and Hour Act as it relates to
the employment of a person acting in a supervisory capacity or
in an administrative, executive, or professional capacity;
relating to definitions under the Alaska Wage and Hour Act and
providing definitions for persons employed in administrative,
executive, and professional capacities, for persons working in
the capacity of an outside salesman, for persons working in
the capacity of a salesman employed on a straight commission
basis, and for persons that perform computer-related
occupations; directing retrospective application of the
provisions of this Act to work performed before the effective
date of this Act for purposes of claims filed on or after the
effective date of this Act, and disallowing retrospective
application for purposes of claims for that work that are
filed before the effective date of this Act."
This was the first hearing for this bill in the Senate Finance
Committee.
HEATHER NORBREGA, Staff to Representative Norm Rokeberg, the bill's
sponsor, informed the Committee that this bill, which would change
the definition of administrative, executive, and profession
capacities, is a duplicate of SB 131, which had previously reported
from Committee with the lone difference between the two bills being
that, unlike SB 131, which specified an effective date of July 1,
2005, this bill has no effective date as the effective date failed
approval on the House floor.
AT EASE: 1:47:35 PM / 1:47:36 PM
Co-Chair Green questioned the reason the bill is before the
committee considering the fact that SB 131 had reported from
Committee and advanced to the Senate Rules Committee.
Ms. Norbrega understood that "the theory" was to have at least one
Senate committee referral on the bill.
REPRESENTATIVE NORM ROKEBERG, the bill's sponsor, affirmed that the
Committee was familiar with the bill's language. Continuing, he
requested that the Committee act with "due diligence" in regards to
action on the bill.
Co-Chair Green asked for confirmation that the language of the bill
is identical to that of SB 131.
Ms. Norbrega affirmed that the lone difference is that HB 182 does
not contain the July 1, 2005 effective date.
At EASE: 1:49:04 PM / 1:49:26 PM
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
There being no objection, CS HB 182(FIN)(efd fld) was REPORTED from
Committee with zero fiscal note #1, dated March 1, 2005 from the
Department of Labor and Workforce Development.
1:49:44 PM
CS FOR HOUSE BILL NO. 19(FIN)
"An Act relating to pesticides and broadcast chemicals; and
providing for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Green asked the bill's sponsor to recap the nature of the
question that arose during the Committee's first hearing on this
bill.
MIKE PAWLOWSKI, Staff to Representative Kevin Meyer, the bill's
sponsor, stated that the question pertained to the Committee's
perception that the March 18, 2005 Department of Environmental
Conservation (DEC) $221,600 fiscal note #2 that accompanied the
bill was incomplete. A new $221,600 DEC fiscal note, dated April
22, 2006 that explains how the amounts were determined has been
provided.
Co-Chair Green acknowledged. She understood that in the future, the
number of pesticide registrations would change due to such things
as attrition and users' decisions not to re-register products that
were seldom utilized.
Mr. Pawlowski affirmed that the fiscal note "assumes" there could
be "up to a 40-percent drop rate in the State" of registered
products. However, several chemical manufacturing companies argue
that a significantly lower amount of pesticides would be un-
registered than the amount projected by the Department. As a result
of utilizing the Department's projections, "the level of receipt
support services divided by the number of registered chemicals
could lead to a lower fee on the manufacturers". Therefore, "the
fiscal note is based on a worst-case scenario".
Co-Chair Green ascertained therefore, that the State would fare
better, revenue-wise, were its projections incorrect.
1:52:03 PM
Co-Chair Green ordered the bill HELD in Committee.
1:53:08 PM
CS FOR HOUSE BILL NO. 15(L&C) am
"An Act relating to outdoor recreation lodge alcoholic
beverage licenses; relating to transfer of certain beverage
dispensary licenses issued before June 6, 1985; and providing
for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Green recalled that the lingering issue on this bill "was
the definition of businesses".
MIKE PAWLOWSKI, Staff to Representative Kevin Meyer, the bill's
sponsor, agreed that including the definition of businesses in
Statute would be appropriate, as it would clarify any ambiguity
that might exist between a privately owned lodge for personal
benefit and a lodge owned for profit. Inclusion of the latter is
the intent of the bill's sponsor.
Conceptual Amendment #2: This amendment inserts the word "licensed"
between the words "a" and "business" in Sec. 2(c) page one, line
14. The amended language would read as follows.
(c) In this section, "outdoor recreation lodge" means a
licensed business that provides…
[NOTE: This amendment was inadvertently referred to as Amendment
#1. It should be correctly referred to as Amendment #2, as a
separate amendment, Amendment #1, had been adopted during the April
28, 2005 hearing on this bill.]
Co-Chair Wilken moved the Amendment.
There being no objection, Conceptual Amendment #2 was ADOPTED.
Co-Chair Green ordered the bill HELD in Committee.
1:55:49 PM
HOUSE BILL NO. 91 am
"An Act relating to indecent exposure."
This was the first hearing for this bill in the Senate Finance
Committee.
KAREN LIDSTER, Staff to Representative John Coghill, stated that
the bill is best presented by the language in the Sponsor Statement
that reads as follows.
Several young girls in Delta Junction were subjected to a man
exposing himself to them in the parking lot of a local store
last summer. He was apprehended and arrested. In a background
check it was reported that he had a prior conviction of a
similar incident in Arizona. When arrested in the Arizona
case, police reported that he matched the description of a man
reported for the same activity several times but they could
never catch him.
In the Delta Junction incident, the local magistrate charged
him with three felonies but because of the circumstances, he
could not be convicted of a felony. He plea-bargained down to
one misdemeanor.
Children are more vulnerable and innocent than adults and
children fall prey to sex offender more easily than adults.
This legislation makes repeat convictions of indecent exposure
within the observation of a person under the age of sixteen a
felony.
1:58:02 PM
Senator Dyson voiced being "intrigued about the circumstances that
kept" the offender from being charged. To that point, he asked how
this bill would address those circumstances.
Ms. Lidster responded that, "the difference between a felony and a
misdemeanor in an act of this nature is whether or not the offender
touches himself". This is the reason that the Delta Junction
offender "could only be charged with a misdemeanor ….it appears
that it's possible that this person had been suspect of doing these
kinds of things previously but seemed to understand" the line "that
should not be crossed". This bill would correct this situation by
specifying that if an individual had previously been convicted of
indecent exposure before a minor, regardless of whether the person
touched themself or not, they could be charged with a felony.
Co-Chair Green asked whether this legislation had been referred to
the Senate Judicial Committee.
Ms. Lidster affirmed that the bill had reported from the Senate
Judiciary Committee without any changes.
Co-Chair Green stressed the importance of the fact that the
Judiciary Committee had heard this legislation, as that committee
has, as a matter of course, thoroughly discussed the misdemeanor
verses felony issue.
Ms. Lidster affirmed. She noted that the bill's sponsor is
conscious of "not ratcheting up penalties". The bill does specify
that there must be an "intent to frighten or shock a person",
specifically minors in this case. There must also be total
disregard "for the person that this is happening in front of as
opposed to sometimes stopping alongside the road" and inadvertently
being observed.
AT EASE: 2:01:16 PM /2:01:17 PM
Ms. Lidster specified that, "an offender commits the crime of
indecent exposure in the second degree if the offender knowingly
exposes the offender's genitals in the presence of another person
with reckless disregard for the offensive, insulting, or
frightening affect the act may have."
Co-Chair Green asked whether such language was included in AS
11.41.460.
Ms. Lidster affirmed its inclusion.
In response to a question from Senator Olson, Ms. Lidster
understood that parents would be protected from this penalty were
their actions not intended "to frighten and have total disregard
for the affect of the act on the children".
Senator Olson inquired to a situation in which a minor might be
exposed to a child being borne.
Ms. Lidster voiced that the purpose of the bill would be to address
intentional episodes of indecent exposure.
2:03:44 PM
Co-Chair Green asked whether the concerns begin raised by Senator
Olson might be addressed by further clarification of the
"knowingly" or "intentional" act language or "the shock" element in
the bill. Care should be taken not "to exonerate all family
members" in this regard.
DEAN GUANELI, Chief Assistant Attorney General, Legal Services
Section-Juneau, Criminal Division, Department of Law, informed the
Committee that he had "never heard of indecent exposure prosecution
being leveled against somebody in a family situation". However, he
agreed that a family member should not "be exempt from the law".
Continuing, he noted that there is a relationship between indecent
exposure and child abuse as well as "indecent exposure and grooming
activities". "Sadly, a lot of that goes on in the family."
Mr. Guaneli voiced the hope that were "there two parents present,
one would be watching out for the children".
Mr. Guaneli determined that it would be difficult to imagine that
such situations would "come to the attention of authorities unless
they are particularly egregious circumstances that we would not
want to exempt from the coverage of the law". He was unsure as to
"how to draft in some sort of an exemption that wouldn't sweep too
broadly and protect activity that we don't want to protect".
2:05:59 PM
Senator Dyson noted that the term "masturbate" is included in
Section 1(a)(1), page one, line eight of HB 91(am), Version 24-
LS0098\A.A. The inclusion of the word "and" in Section 1(a), page
one, line six, indicates that the act of masturbation must
accompany the offense in order for it to deemed as first-degree
indecent exposure. This would "limit the application". Family
members should be prosecuted were that activity to occur.
Ms. Lidster responded that the intent of bill was to prevent
someone who continues to knowingly expose himself or herself to a
minor, and who knows that they could only be charged with a
misdemeanor were they to not touch themselves, from simply being
charged with a misdemeanor. Evidence has concluded that indecent
exposure offenders elevate their offenses overtime.
Co-Chair Green pointed out that the word "or" in Section 1(a)(1),
page one, line nine would negate Senator Dyson's concern that the
felony charge could not be levied unless masturbation accompanied
the indecent exposure act.
Co-Chair Green ordered the bill HELD in Committee.
2:08:59 PM
CS FOR SENATE BILL NO. 108(L&C)
"An Act relating to the regulation of insurance, insurance
licensing, surplus lines, insurer deposits, owner-controlled
and contractor-controlled insurance programs, health discount
plans, third-party administrators, and self-funded multiple
employer welfare arrangements and self-funded governmental
plans; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Green conveyed that the purpose of this hearing was to
hear an explanation of the bill.
LINDA HALL, Director, Division of Insurance, Department of
Commerce, Community and Economic Development, stated that this bill
would propose statutory changes that would make the regulation of
insurance more efficient for the Division, make regulations more
uniform for the insurance industry, and provide increased
protection to Alaskan consumers. Expressing that many of the bill's
sections were "very technical", she stated that her testimony would
review the bill's components by generalized topic area, rather than
in a detailed manner.
Co-Chair Green noted that Members' packets include a Sectional
Analysis of the CS SB 108(L&C), Version 24-GS1083\Y [copy on file].
Ms. Hall stated that one issue addressed in the bill would be to
change licensing regulations in order to streamline the licensing
processes and further the efforts to conform to the National
Association of Insurance Commission Models and National Standards.
Sec. 2 and Sec. 3 would remove the requirement that the Division
notify an insurer's agent of the suspension or revocation of an
Insurer's Certificate of Authority. Such notification would become
the responsibility of the insurer. While Sec. 8 and Sec. 9 would
eliminate the requirement that insurers or agents must file
appointments with the Division, they would require that insurers
provide written notification when an agent's appointment is
terminated "for cause".
2:11:57 PM
Co-Chair Green asked for further clarification regarding the
termination process.
Ms. Hall clarified that when an insurance company terminates an
agent's appointment, they must notify the agent in writing of that
action.
Ms. Hall continued that Sec. 10 would allow the Division to conduct
license renewals via such things as electronic mail. Currently non-
resident new license applications could be conducted
electronically, and efforts to allow resident and renewal licenses
to be conducted electronically would be completed in the near
future. The Division would also endeavor to provide notification of
renewals by electronic means.
Ms. Hall communicated that several sections of the bill address the
issue "of surplus lines". Major changes in the Division's surplus
line Statutes were provided for by legislation that was enacted in
the year 2004. This bill would "clean up requiring some minor
changes in documents that are required to be signed by surplus line
brokers and changes in documents that are required to be filed in
order to allow "alien insurers to report at the same time as they
do their stockholder reports".
Ms. Hall noted that the bill would also eliminate unused provisions
regarding the use of safety deposit boxes for insurers' deposits.
Ms. Hall stated that language in Sections 21, 22 and 24 would
address "a fairly new phenomena called Health Discount Plans".
During the years 2000 to 2002 there were approximately "200,000
programs that resulted in $252,000,000 in unpaid claims nationally.
In order to protect Alaskans from illegal products", the Division
is seeking "to add some specific authority to regulate these types
of plans". Language in this bill would enhance current trade
practice authority to clarify that such plans "could not be sold in
Alaska unless they are licensed by the Division and the carrier
providing them is licensed". She had recently signed "a cease and
desist order against an entity that was providing a health
insurance discount plan in our State". The Division had received
complaints from consumers who had authorized that plan to debit
their checking accounts and who had been assured that their health
providers participated in the health discount plan even though they
did not. "Consumers are being ripped off by scam artists." Such
plans typically advertise on television or fax information to
offices and offer low rates. Their advertising is misleading in
that, while it utilizes health insurance terminology, the plan does
not provide health insurance.
Ms. Hall stressed that she regarded this component of the bill as
being very important. The Division's Consumer Protection Program
Press is developing press releases to alert the public to this
situation.
2:16:43 PM
Co-Chair Green asked whether Legislators might have received
notification of this issue by a doctor's office approximately six
weeks earlier.
Ms. Hall assured that that was quite possible. The Division had
notified the Alaska Medical Association of these types of
activities in the summer of 2004. They in turn "had issued an alert
to Alaska physicians to watch for these". She noted that the
Division is actively pursuing other plans that are targeting the
State.
Co-Chair Green asked whether identities of the offenders could be
released.
Ms. Hall stated that the group to which she had recently signed a
cease and desist order was named Signature Health Group Health Care
Advantage or Signature HCA. She noted that the Division has
developed press releases that identify this entity.
Co-Chair Green asked whether the Division anticipates that there
could be other such entities.
Ms. Hall affirmed there would be. This is a national issue and some
of the work being conducted by the Division is in cooperation with
other state regulators in an effort to prevent the entities from
moving from one state to another.
2:17:24 PM
Co-Chair Green asked whether the term "health discount plan" was
new terminology.
Ms. Hall affirmed that it was. As health insurance costs have
increased, there has been an increase of plans offering health
discounts. Some plans are offered by insurance companies and are
legitimate. However, it should be noted that these plans do not
provide medical coverage; they might provide such things as a 20-
percent discount for a visit to a participating doctor or a 20-
percent discount on a drug prescription with a provider. Some plans
might advertise no waiting periods and allow coverage for
preexisting conditions; such things "are problematic for some
individuals in the health insurance arena".
2:18:15 PM
Co-Chair Green understood therefore that a legitimate health
discount plan would have a list of providers who would offer
discounts, similar to a coupon book.
Ms. Hall affirmed. However, she noted that the plans that the
Division has investigated do not have such service provider lists.
Co-Chair Green disclosed a conflict of interest in the discussion
as her husband sells insurance, albeit not health discount plans.
Furthermore, she would be willing to remove herself from the
discussion and abstain from voting were that the will of the
Committee.
Ms. Hall noted that one of the more technical sections of the bill
deals with Third Party Administrators (TPA), which are entities
that administer health insurance programs. Aetna is the third party
administrator for the State's Select Benefits health insurance
program. Third party administrators are not required to be licensed
in the same manner as insurance salesmen or companies are; however
they must register with the Division. This bill would require that
these administrators must "file certification if they are exempt
from the State's registration process". Provisions would also allow
the Division's director "to immediately suspend registration if the
TPA was financially impaired". Some states have had TPAs that
collect premiums, administer the program, and pay the providers.
While this practice has not, of yet, been experienced in Alaska,
the Division would like to insure that the State would have the
ability to stop a TPA from operating were they to become
financially impaired.
2:20:59 PM
Ms. Hall directed the Committee's attention to Sec. 31, which would
allow the Division to establish requirements regarding the State's
bargaining union health trusts. Current Statutory provisions
provide that "if an entity is not regulated by another regulatory
body, they would be subject to regulation by the Division of
Insurance." The federal government under the Employee Retirement
Income Security Act (ERISA) regulates many self-funded plans;
however, it should be noted that government plans are exempt from
ERISA. To that point, the Division has been requesting information
from the Union Health Trust since March 2004. The information being
requested would allow the Division "to conduct a legal review of
whether or not they are regulated by another entity or whether they
should come under the purview" of the Division. This bill contains
language that she viewed as being a policy decision that the
Legislature should make in that it would propose that the union
health trusts must provide such things "as financial statements and
actuarial opinions both on the level of contribution rate and
reserves for claims" to the Division.
Ms. Hall continued that this bill "has generated some discussion"
that would be appropriately discussed by this Committee.
2:23:20 PM
Ms. Hall stated that, "there are 19,000 State employees whose
health coverage is provided through one of five union health
trusts. A substantial amount of general fund monies are contributed
to the health trust for the provision of health coverage." In the
year 2004, the Alaska State Employees Association (ASEA), for
example, managed $56,000,000 of general fund money. The Public
Employees Local 71 managed approximately $12,000,000 of general
fund money. The policy decision being introduced to the Committee
"is whether there should be some level of oversight of those
funds". Such oversight would require the trusts to incur actuarial
opinion expenses of approximately $40,000 to $50,000. Therefore,
the $50,000 expense that might be associated with acquiring an
actuarial opinion that could affirm that ASEA's "reserving
practices are such that would allow for continued solvency" would
amount to seven-tenths of a percent of the State's and employee's
contribution rate. The cost of such an opinion from Local 71 would
amount to approximately one-third of a percent. She opined that
"this would be good public policy but it is not something" that the
Division should do without Legislative concurrence.
2:25:21 PM
In response to a question from Co-Chair Green, Ms. Hall expressed
that 19,000 State employees' insurance coverage is managed by five
union health trusts. This number would not include dependents.
Co-Chair Green understood therefore, that since these five plans
are governmental plans, they would not be required to report to
ERISA. They also do not report to the Division of Insurance.
Ms. Hall replied that that is the Division's determination.
2:26:15 PM
Ms. Hall stated that the last major component of the bill would
address project owner or contractor controlled insurance programs.
This information is located in Sections 23 and 25 of the bill.
These types of insurance programs typically accompany large
construction projects such as the Trans Alaska Pipeline System. A
single program is written to provide the insurance needs of the
subcontractors and the primary contractor. The rules for such
programs are included in the Divisions Worker Compensation Manuals.
The Division has determined the need to codify these rules.
Attempts have been made to expand such programs into general
operation and maintenance functions. The Division believes such
action would have "a detrimental affect" on both the small
insurance marketplace currently existing in the State as well as to
small individual subcontractor programs. Such action would make it
less and less attractive to insurance companies to conduct business
in the State. In addition, subcontractors who have either their own
self-insured or fully insured insurance programs, would experience
diminished ability to support those insurance programs were they
required to utilize payroll monies to support a project's on-going
maintenance program insurance.
2:28:02 PM
Ms. Hall noted that Sec. 23, beginning on page 13, line 29 and
continuing through page 15, line twelve is the predominate section
regarding this issue.
Co-Chair Green understood Sec. 23 to include new language.
Ms. Hall affirmed. It would expand and codify existing rules.
Co-Chair Green determined that this section would apply to an owner
controlled insurance program or a contractor controlled insurance
program. She asked for an example of such a program.
Mr. Hall responded that the best example of an owner controlled
insurance program would have been the Trans Alaska Pipeline. In
these cases, "the liability and the workers compensation coverage
were all provided in one package." The Division considers "it
appropriate" for either the owner or the general contractor of a
large construction project to purchase the insurance plan. However,
"the line is drawn" at the point where the concept "is expanded to
cover large on-going operations".
Co-Chair Green understood therefore that the desire it that the
program "should not morph" into an ongoing insurance program.
Ms. Hall affirmed.
Ms. Hall stated that the bill contains "a few miscellaneous
sections. Sec. 27 sets the standards for rate making in health
insurance at the same statutory standards" the State currently has
for all lines of insurance. "The rates cannot be excessive,
inadequate or unfairly discriminatory." Section 1 would allow the
Division director to examine or require documents from producers
provided there was "reasonable cause". Sections 29 and 30 would
authorize the Director's designee to accept financial statements
within 45 days after the end of each quarter.
Co-Chair Green ascertained that some sections of the bill are new,
some are "creative", and some would allow the State to align with
nationwide practices.
Ms. Hall stated that the majority of the bill would serve "to keep
Alaska statutory language in conformity" with national trends. This
has been an on-going effort; otherwise, the State's regulations
might discourage business.
2:31:43 PM
Senator Dyson asked whether State law should be changed to
accommodate health savings accounts (HSAs), particularly in regards
to State employees.
Ms. Hall responded that in terms of insurance regulation, the
answer is no. The Division has conducted analyses in this regard.
"Companies are beginning to offer HSAs more readily than they were
before." She could not speak to the matter involving State
employees. "The plans could be very beneficial to Alaskan
consumers." No changes in the insurance title would be required.
2:32:45 PM
Senator Dyson understood therefore that there would be no need to
include language in this "omnibus insurance bill to encourage HSAs
to go forward in this State".
Ms. Hall stated that this issue had been discussed. The
determination was that such inclusion would be unnecessary.
Senator Dyson, having been absent for a portion of Ms. Hall's
comments, asked whether language in Sec. 31 regarding Self-funded
Governmental Plans, had been addressed.
Ms. Hall affirmed that she had addressed that section.
Senator Dyson specifically asked that the major benefit that would
be derived by including the bargaining unit trust plans under the
Division's purview, be identified.
Ms. Hall responded that the major benefit would be that the
Division would be provided a financial statement and an actuarial
analysis that determined that the contribution rates "were adequate
for payments" and that the reserving practices would continue to
allow the program "to remain solvent".
Senator Dyson asked whether the Division had concerns that the
funds had either been mismanaged or misused.
Ms. Hall responded that, "there is no indication that anything has
been misused. That is not the purpose of this legislation."
Senator Dyson continued however, that, "there is the possibility
that they are inadequately funded or actuarially not sound."
Ms. Hall responded that, "that is a possibility".
The bill was HELD in Committee.
AT EASE: 2:35:05 PM / 2:35:34 PM
CS FOR HOUSE BILL NO. 119(FIN)
"An Act extending the termination date of the Alaska regional
economic assistance program; and providing for an effective
date."
This was the first hearing for this bill in the Senate Finance
Committee.
KACI SCHROEDER, Staff to Representative William Thomas Jr., the
bill's sponsor, and Committee Aide to the House Community &
Regional Affairs Committee, explained that the bill would
reauthorize the Alaska Regional Economic Development Organizations
(ARDORs) assistance program through 2010. This program, which began
in 1988, currently provides approximately $50,000 annually to each
of the eleven ARDORs in existence today. These non-profit
organizations are comprised "of local volunteers working together
to promote economic development within their regions". ARDOR
activities include working with other economic development
activities in their regions, collecting and distributing economic
information, and being a liaison between the region, the State, and
the federal government.
Ms. Schroeder noted that each ARDOR could use the funds they are
provided, as they deem appropriate. The Legislature has repeatedly
reauthorized the ARDOR program since its inception.
Co-Chair Wilken opined that while some ARDORs are doing a good job,
others are simply taking the money and "having meetings". He noted
that he had previously expressed concern in this regard, and that
he was pleased that three ARDORs had dissolved. As a result,
additional funds had been provided to the remaining ARDORs that
"are trying to do a good job". Nonetheless, he preferred that the
ARDOR program be extended three years rather than the five-years
proposed in this legislation, as a shorter timeframe would allow
for more Legislative oversight of the ARDOR activities.
Co-Chair Wilken also asked whether some component of the program is
being expanded as a halftime position appears to have been added in
the Department of Commerce, Community and Economic Development
$650,000 Fiscal Note #2 dated April 6, 2005.
Ms. Schroeder deferred to the Department of Commerce, Community and
Economic Development.
2:40:35 PM
KATHRYN DODGE, Executive Director, Fairbanks North Star Borough
Alaska Regional Economic Development Organization, testified via
teleconference from an offnet site in support of the bill on behalf
of the 11 ARDORs existing in the State. The bill would allow ARDORs
to continue their economic development activities. In addition, the
proposal to extend the program for a five-year period rather than
the historical every-other year reauthorization period would allow
the program to concentrate on development activities as opposed to
concentrating on whether or not the program would be reauthorized.
Ms. Dodge disclosed that ARDORs return nine dollars for each State
dollar "invested" in the program. In addition, the program has
implemented an accountability program which "defines what a highly
performing ARDOR does; measures and rewards the activities and
programs"; and assists ARDORS in improving their performance. She
urged that the bill be moved out of Committee.
Co-Chair Green commented that while ARDORs have accomplished "some
very good things", she, like Co-Chair Wilken, has some
reservations. Rather than the program continuing as an entitlement
program, she would prefer it being a competitive grant program. The
Department of Commerce, Community and Economic Development and
other program analysts have communicated to her that the initial
program funding was intended to be "start-up" money; there was no
intent to support the program indefinitely. She agreed with Co-
Chair Wilken that the reauthorization timeframe should be
shortened. While some mechanism might currently exist, she would
like a process instilled through which both the Legislature and the
Department would be provided information about the ARDOR decision-
making process, activity follow-up procedures, and the end result
of the activities.
2:42:56 PM
SALLY SADDLER, Legislative Liaison, Department of Commerce,
Community and Economic Development, communicated that approximately
one-third of the Department's professional local government
specialists provide support and coordination for the ARDOR program.
The half-position referenced by Co-Chair Wilken would provide
administrative staff to support those individuals. The Department
focused on the accountability concern for approximately the past
one-and-a-half years, and as a result, a performance accountability
system has been developed. The system has been implemented and has
provided incentives for performing ARDORS, while placing the "non-
performing ARDORs on a two-year notice that their funding might be
in jeopardy".
Co-Chair Green asked whether funding has ever been withheld from
any ARDOR.
Ms. Saddler responded in the negative, as the performance system
was just recently implemented. A non-performing ARDOR would be
provided a one to two-year timeframe in which to "correct, remedy,
and improve performance" before any action would be taken.
Co-Chair Green asked that a sample of the performance system
guideline be provided.
Ms. Saddler responded that she would provide a copy of the "FY06
ARDOR Tier Application" [copy on file], which lists "the criteria
for the different" ARDOR tiers. Funding is based upon tier level.
Co-Chair Green ordered the bill HELD in Committee.
2:45:04 PM
HOUSE BILL NO. 136
"An Act restricting the authority of a court to suspend
execution of a sentence or grant probation in prosecutions for
driving while under the influence and prosecutions for refusal
to submit to a chemical test; and allowing a court to suspend
up to 75 percent of the minimum fines required for driving
while under the influence and for refusal to submit to a
chemical test if the defendant successfully completes a court-
ordered treatment program."
This was the first hearing for this bill in the Senate Finance
Committee.
REPRESENTATIVE NORM ROKEBERG, the bill's sponsor, informed the
Committee that this bill would accomplish three things. First it
would increase the percent of a fine that could be waived or
reduced in the Therapeutic Court from the current 50-percent to 75-
percent. This would "enhance the ability" of an offender to pay for
the cost of therapy counseling and other activities that they would
be required to participate in under State law.
Co-Chair Green asked for confirmation that the proposed 25-percent
reduction "wouldn't be through the Court; it would be independent"
of the Court.
Representative Rokeberg explained that the Court would impose the
fine mandated by State Statute, and, upon the individual's
completion of the therapeutic program, a portion of the fine could
be waived or suspended. Thus, the individual could utilize that
money to pay for their program participation. He stressed that the
intent would not be to waive or suspend the entirety of the fine.
Representative Rokeberg stated that the bill would also allow
felony Driving Under the Influence (DUI) cases to utilize the
Statutory authority provided to the Therapeutic Courts. Two felony
DUI Court pilot programs had been previously authorized by the
Legislature and are currently operating in the Municipality of
Anchorage. This bill would provide those felony DUI courts "the
same authority" as provided to the District Court so they could
reduce their fines by 75-percent as an incentive for their
offenders to participate in Wellness Court programs. The effort
currently being exercised by the two courts is uncodified law.
Co-Chair Green asked whether individuals who committed a felony
could participate in the Wellness Court.
Representative Rokeberg expressed that while the majority of the
individuals in the Wellness Court had committed misdemeanors, some
felons have been allowed in the program.
Co-Chair Green acknowledged. To that point, she conveyed that she
had heard this issue being discussed by people in "some of the
auxiliary departments". They become "nervous" when individuals who
had committed a felon participate in the program, as "they consider
that a very different circumstance than the misdemeanor."
Representative Rokeberg stressed that the two aforementioned courts
are pilot programs. "They are subject to renewal by the
Legislature." The two courts must be provided "the same tools" at
the felony level as exists at the District Court level. The
authority to continue the pilot programs would continue to be with
the Legislature.
Co-Chair Green asked for confirmation that the intent would not be
to change "the misdemeanor court to a felony court" and that two
separate levels would be "clearly defined".
Representative Rokeberg affirmed. He referenced previous DUI
legislation he had sponsored that had provided Statutory authority
to the misdemeanor courts. Those courts currently operate under
codified law.
[NOTE: Due to static in the recording, some of Representative
Rokeberg's remarks were inaudible.]
Representative Rokeberg noted that the third provision proposed in
this legislation would require that the Courts must impose the
mandated minimum DUI fine levels. The minimum fine for a first
offense DUI is a minimum of $1,500. To this point, "an obscure
older Court of Appeals case", Curtis v. State, has been utilized to
allow the courts to suspend a portion or all of the fines specified
in State Statute. This bill "would basically repeal that case" and
require that the fines authorized by the Legislature be imposed. He
noted that the First Judicial District in Southeast Alaska has been
"the biggest offender" in this regard. The Juneau Empire
newspaper's Court reports consistently reflect the fact that the
majority of DUI fines are suspended.
2:50:35 PM
Co-Chair Green asked whether any other Statutes exist that would
prevent a judge from exercising his or her discretion to impose
fines below the specified minimum fine level.
Representative Rokeberg understood that there were; however, he
deferred to the Department of Law in that regard.
Co-Chair Green stated that further information in this regard would
be sought.
Representative Rokeberg characterized this as a "good bill" and
requested that it be reported from Committee.
Co-Chair Green voiced the need to know whether "instructing the
Court to do this and no less than this" was common practice.
Representative Rokeberg responded that a significant number of
hearings were conducted in conjunction with previous legislation
that increased DUI fine levels, mindful of the fact that there is
"a point of diminishing returns". To that point, the public "is
very concerned" about such behavior, and, the intent of the
Legislature was to mandate $1,500 as being the minimum fine for a
first offense DUI, with there to be no Court discretion allowed in
this regard. However, after that legislation became effective, the
Curtis v. State case was utilized by the Court as a means through
which to lower fines below the level authorized by the Legislature.
He understood that there are those who conduct what could be
likened to "judge shopping" in the First Judicial District, as
defense councils are aware of which judges are stricter than
others. This situation "has cost the judicial system" a significant
amount of money. Revenues would increase were the minimum fine
levels upheld, even were a portion of the fines suspended or waived
for those participating in the Wellness Court programs. The bill is
accompanied by several zero fiscal notes as well as a Department of
Law fiscal note that depicts an increase in revenue as a result of
mandating the minimum fine level, even with the allowance of
increasing the amount of a fine that could be suspended or waived
in the Therapeutic Court, as that would affect "a relatively small
number of people". The Public Defenders Office's fiscal note
reflects that this bill would incur an indeterminate increase in
its expenses. Nonetheless the overall impact of this legislation
would be to increase revenue.
Co-Chair Green asked whether the State is the recipient of any
National Highway Traffic Safety Administration funding, as that
entity is often involved in these sorts of efforts.
Representative Rokeberg noted that there is consideration of
expanding the pilot program to include the communities of
Ketchikan, Juneau, and Fairbanks. The Wellness Court program is
anticipated to generate a significant amount of money. The
Therapeutic Court concept is receiving significant federal
government support because it is producing results in "breaking the
revolving door cycle" of DUI behavior. People's lives are being
changed. This effort is also saving money in the Department of
Corrections and other State programs.
Co-Chair Green understood that a felony DUI is issued at the time
of a third offense.
2:55:27 PM
Representative Rokeberg affirmed that it would be a third offense
conviction within a ten-year period.
Co-Chair Green asked regarding the DUI Court procedure;
specifically who might be "the contact point" between court visits.
Representative Rokeberg responded that each Court might have its
own procedure; however, the typical "template" would include the
judge and the Court's case coordinator who oversees each person's
treatment program. Historically, the case coordinator might have
been a Department of Corrections Probation Officer (PO); however,
through a cooperative effort between the Department of Corrections
and the Department of Health and Social Services, a transition is
occurring at the felony level in which an employee of the
Department's Alcohol Safety Action Program (ASAP) and case
coordinators might absorb some of the workload from the POs.
Additional cooperation would be required from the District
Attorneys in the Department of Law and the Public Defender Agency
and private councilors in regards to the admissions screening
procedure. "Not just everybody gets into these various programs.
They have to have potentiality."
Representative Rokeberg stated that one of "the new features" would
be the use of pharmacological drugs that has been proven successful
"in helping people break their dependency on alcohol". "Some
controversy" has accompanied this treatment. Nonetheless, he voiced
concern that this type of treatment is not frequently utilized in
the two Anchorage felony pilot programs. He also disclosed the
existence of a "cultural problem" at the felony level and "some
resistance" on the part of the Department of Corrections and the
Department of Law prosecutors. To that point, he ascertained that
that resistance is "breaking down".
2:58:21 PM
Representative Rokeberg continued that the findings of the
Anchorage pilot program indicate that, with the support of the
various agencies, the program would work.
Senator Dyson voiced concern about the inability of the Department
of Law's Civil Division's computers to link information to the
Department's Criminal Division. As a result, a judge might not be
aware of the complete situation. Currently, the Civil Division
prints out their information and someone carries it to the Criminal
Division, who must enter it into their computer. The Court System
is addressing this; however, this significant administrative link
"has not been working well".
Representative Rokeberg responded that he had investigated this
issue four years earlier when he was the Chair of the House
Judiciary Committee. It has been frustrating that "the Legislature
seems to be unable to impress upon the bureaucracy that we are in
the 21st Century now. Technology works and the only way we're going
to save money is to increase our productivity."
Co-Chair Green understood that some of this issue would be
addressed in the FY 06 budget.
Senator Dyson affirmed.
Representative Rokeberg urged the Finance Committee to support such
action, as it would be necessary in order to increase productivity.
"The private sector does it all the time."
Co-Chair Green stated that support would be sought.
Co-Chair Green ordered the Bill HELD in Committee.
3:00:56 PM
SENATE BILL NO. 121
"An Act establishing the State of Alaska Capital Corporation;
authorizing the issuance of bonds by the State of Alaska
Capital Corporation to finance capital improvements in the
state; and providing for an effective date."
SENATE BILL NO. 122
"An Act establishing the Alaska capital income account within
the Alaska permanent fund; relating to deposits into the
account; relating to certain transfers regarding the Amerada
Hess settlement to offset the effects of inflation on the
Alaska permanent fund; and providing for an effective date."
This was the first hearing for these bills in the Senate Finance
Committee.
CHERYL FRASCA, Director, Office of Management and Budget, Office of
the Governor, informed the Committee that these bills contain the
Governor's proposal pertaining to funding provided by the lawsuit
that the State brought in the 1970s against oil companies over the
valuation of the State's royalty oil and gas. The case was
eventually settled in the mid 1990's. During the 15-year appeal
process, the oil companies asked the federal courts to move the
case outside of Alaska. The argument was that because all Alaskans
are potential jurors, they would be biased because they would
potentially benefit from the proceeds going into the Permanent
Fund. The federal court asked the Alaska Legislature to attempt to
resolve this issue.
Ms. Frasca continued that two separate Legislative pieces, one
under the Governor Steve Cowper Administration and one under the
Governor Walter Hickel Administration, were passed to address the
concern. One prevented the interest earnings from the Amerada Hess
settlement from counting toward the calculation of the Permanent
Fund Dividend (PFD). That effort served to remove the potential
bias, and the lawsuit was ultimately settled out of Court.
Ms. Frasca stated that the money from the settlement was deposited
into the Permanent Fund, and its balance, as of the end of FY 2004,
amounted to approximately $424,000,000. The proposal contained in
SB 122-AMERADA HESS INCOME; CAPITAL INCOME ACCT. would establish an
income account and the proposal in SB 121-STATE OF AK CAPITAL
CORP.; BONDS would establish a corporation through which
$30,000,000 in annual earnings would be leveraged to issue bonds to
fund State capital projects. The capital projects that would be
funded by the Capital Corporation bond revenue were included as
such in the capital budget the Murkowski Administration presented
in December 2004.
Ms. Frasca noted that Deven Mitchell with the Department of Revenue
would be presenting information pertinent to SB 121, regarding the
Capital Corporation structure.
3:04:48 PM
DEVEN MITCHELL, Debt Manager, Treasury Division, Department of
Revenue, expressed that tremendous work has been conducted in
regards to the structure of the Alaska Capital Corporation;
specifically in consideration that it's structure should not impact
the State's credit rating. The process would first involve the
establishment of the Alaska Capital Income Account, as specified in
SB 122, as a subaccount of the Permanent Fund Earnings Reserve
Account (ERA). "The money doesn't flow to the general fund and
therefore it can be construed as being self-supporting and not
included in the State's net tax supported debt. This is a very
important feature of the proposal."
Mr. Mitchell stated that, "money in the Alaska Capital Income
Account would then be available for annual appropriation for any
legitimate purpose including to the State of Alaska Capital
Corporation". The Alaska Capital Corporation would be a new public
corporation created in the Department of Revenue. The Corporation's
Board would include the State Bond Committee supported by existing
Department of Revenue staff. "The Corporation would be able to
enter into operating leases that would provide for the annual
transfer of money from the Capital Income Account to the
Corporation, subject to annual appropriation." The bond structure
being proposed is a flexible amortization-type of bond issuance,
often referred to as a "turbo" structure. It would require interest
only payments for up to a 40-year schedule with a final balloon
payment at the end. This structure would also allow for "a paying
down of principal in the short years as you had principal
available". It would allow for volatility in the market. The
historical realized return of the Permanent Fund over the past
twenty years has been 8.94 percent; the current realized return
assumption is 7.04 percent. Were a 7.04 percent return realized,
approximately $29,800,0000 a year would be generated by the
settlement funds. That "anticipated revenue stream" could be
leveraged over 17 years to obtain the $340 million in capital
projects being proposed.
Mr. Mitchell qualified however, that it would be unrealistic to
anticipate "a flat 7.04 percent return a year". Returns have
fluctuated from a low of 1.15 percent to "double-digit percents in
other years"; thus the need to address the volatility issue. The
proposed turbo structure concept has been deemed acceptable by the
State's credit agencies. It has also been discussed with
underwriters, and while the various underwriters "have different
ideas on how the actual implementation of the program might occur,
there seems to be a consensus that there are means of dealing with
the revenue stream, the volatile revenue stream, insuring a high
probability of ability to pay". He noted that "one important credit
feature" of this proposal is that the Corporation would have "a
moral obligation on a reserve fund". A "moral obligation is that
there would be a reserve requirement…"
Mr. Mitchell stated that one component of the tax code "is the
maximum annual service, and, if there is ever a draw on that
reserve fund, then the Board is charged with requesting
replenishment from the Legislature". The State currently has
approximately $1.1 billion in outstanding bonds that have such a
moral obligation associated with them. This in effect would
establish "a floor" in regards to the bond issuance. He explained
how the State's investment grade credit rating could be affected
were bonds sold without such a floor.
3:11:05 PM
Ms. Frasca informed the Committee that further information could be
found in the Office of Management and Budget background paper
titled "Use of the Amerada Hess Settlement to Fund Capital
Projects" [copy on file] included in Members' packets. The
schematics of the two proposals are located on page seven and
eight.
3:11:30 PM
Senator Dyson asked whether it would be possible "to issue too many
bonds and overload the system".
Mr. Mitchell responded that regardless of whether the question
pertained to the State's overall bonding or specifically to this
proposal, the answer would be "yes". To that point, the Department
of Revenue "has a strong desire to maintain the State's" AA credit
rating. In order to maintain that credit rating "outside analysts"
are utilized to review the State's action on a continual basis.
While some states' debt management department might be able to
develop "a debt capacity based on projected revenues for the next
twenty years", such action would be impossible in Alaska as the
State's primary source of revenue is extremely volatile. This is
the reason for requiring large reserves in such funds as the
Constitutional Budget Reserve. Therefore, in response to the
question as to whether there would be a limitation on the State's
ability to leverage, this proposal would be recognized as being
sustainable. It could survive a very negative earnings scenario or
cash flow scenario. On a broader scope, it would provide the State
money that would not impact the State's credit rating.
3:13:40 PM
Co-Chair Wilken voiced being "surprised" that on the 111th day of
the Legislative Session, even though it has been discussed by
Legislators and the Administration, the status of this legislation
is as it was on the first day of the Session. While he has no issue
with utilizing Amerada Hess earnings, he does have a problem with
"the complicated system" being proposed. He would support using
Amerada Hess earnings for the debt retirement account as it would
provide approximately $30,000,000 to support this year's
$140,000,000 debt to fund schools, harbors, and other needs. That
action would be "perfectly defensible".
Co-Chair Wilken deemed the activities associated with the Alaska
Corporation Income Account and the Capital Corporation, as depicted
on the aforementioned schematics, as being "unnecessary". A simpler
solution would be to move the money from the Amerada Hess Fund into
the Debt Retirement Fund.
Co-Chair Wilken shared his objection to some of the projects
proposed to be funded in this manner, because doing so would amount
to committing "15-year money" to fund three-year projects. While he
voiced support for the array of projects, funding them in this
manner would not be considered "good fiscal management". Other
funding sources are available.
3:16:16 PM
Co-Chair Wilken continued that he could not support the
establishment of a new bureaucracy through which to fund capital
projects, as it would not be necessary. The Amerada Hess money
could be deposited into an account that is currently utilized to
fund bonds.
3:16:57 PM
Ms. Frasca appreciated Co-Chair Wilken's comments. She reminded
that the Administration had provided its budget proposal in
December 2004 and that work on it had begun as early as October
2004. The options through which to fund the infrastructure were
uncertain at that time. She recognized that "shifting" the Amerada
Hess funding to the Debt Retirement Fund was an option; however,
that Fund would be utilized to fund prior years' obligations. The
desire with this legislation was to finance and develop future
infrastructure needs. "We share the same goals in terms of where we
want to go, and the question is how best to finance it." At the
time the budget was being developed, this was considered the best
option as it met the criteria and did not jeopardize the State's
credit rating. It is still considered "a good mechanism".
3:18:16 PM
Co-Chair Green stated that the question is how to best balance the
funds that are available. There is a "different feel to this year's
budget" than in previous years, because, other than Department of
Transportation and Public Facilities transportation and federally
funded projects, the amount of capital budget projects was held to
a minimum. There are numerous funds out there and efforts should be
exerted to reach a balance in utilizing the funds that are
available.
Co-Chair Green voiced appreciation for the information that has
been provided.
Senator Stedman voiced that he holds a similar position to that of
Co-Chair Wilken.
The bills were HELD in Committee.
3:20:00 PM
CS FOR SENATE BILL NO. 135(JUD)
"An Act relating to the crimes of assault and custodial
interference; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Senator Dyson, the bill's sponsor, stated that he had sponsored the
bill on behalf of the Governor Frank Murkowski Administration.
Therefore, he would defer to the Department of Law to present the
merits of the bill.
3:21:42 PM
DEAN GUANELI, Chief Assistant Attorney General, Legal Services
Section-Juneau, Criminal Division, Department of Law, stated that
this bill would address "two child protection matters that were
made necessary by a couple of opinions by the" State's Court of
Appeals. One case involved a woman who went to work and left her
new boyfriend to baby-sit her nine-month old infant child. When she
returned, she discovered that the infant was bruised around its
head and face. She called the hospital and was told to observe the
child for a few hours. She eventually took the child to the
hospital. A Cat Scan was conducted on the child to determine
whether there might be internal injuries and a blood test was
administered. The child recuperated without any lasting injuries.
Based on law that existed at the time the boyfriend, who claimed
that the child's actions caused it to fall out of bed, "was
prosecuted for assault". The Department of Law believed a provision
of State law would allow a person who assaulted child to the point
where medical attention were required, to be charged with a felony
offense. The State "Court of Appeals took a very narrow view of
what the term treatment meant and said that mere tests for
diagnosing what's wrong with the child", even if the test is fairly
extensive, would not constitute medical treatment. The tests that
were administered were considered as a medical diagnosis, and
therefore, the individual could only be charged with "a misdemeanor
instead of a felony assault".
Mr. Guaneli informed the Committee that the State of Alaska has a
serious problem with assaults against small children including such
things as "shaken baby syndrome". The Department believes that
people who react angrily against such things as crying babies
"really need the kind of felony level supervision and probation
that a felony prosecution provides".
Mr. Guaneli stated that Section 1 of the bill "would change the
provision of assault in the third degree" which is a felony level
of assault, "to make it clear that if the level of injury to the
child would cause a reasonable caregiver to seek medical attention
in the form of diagnosis or treatment that that would be sufficient
to establish a felony level assault". The goal would be to protect
children as much as possible and to ensure that the people who
injure a child seriously enough to go to the hospital should be
placed "under the appropriate form of supervision".
3:25:25 PM
Mr. Guaneli stated that Sec. 2 of the bill would address situations
involving child custody disputes in which a non-custodial parent
with visitation rights might leave the State with the child. This
situation in not uncommon, and the custodial parent might not hear
from either the child or the other parent "for months or sometimes
years". The Department's position has been "that the parent who
took the child couldn't tell the jury later that" that there action
was to protect the child. However, a recent Court of Appeals ruling
allowed that argument. That ruling related to a case in which a
father with visitation rights had repeatedly told the Alaska State
Troopers and the Department of Health and Social Services that the
"child wasn't being cared for"; however, no evidence supported that
claim. The father eventually "took the child and left the State".
Upon being caught, the father was allowed to explain to the jury
that he had acted to protect his child.
Mr. Guaneli stated that Sec. 2 would reverse that Court of Appeals'
ruling. Current State Statute specifies that if "something is done
out of necessity because it would prevent the greater harm from
occurring", then it would be "an affirmative defense to a crime".
This bill would allow that "affirmative defense of necessity in a
custodial interference prosecution, but only if you hold the child
for a maximum of 24 hours or until you have an opportunity to go to
the police".
Mr. Guaneli stated that this approach has been utilized for other
offenses such as an escape from prison were the escapee to claim
that such action was "to protect yourself from being brutalized".
However, that person "must immediately turn" themselves into the
police.
Co-Chair Green asked regarding the reference to "an incompetent
person" as reflected in Sec. 2(c), page two, line 20; specifically
whether that language meant that that person must be "under the
custody of another, even if they weren't a minor".
(c) The affirmative defense of necessity under AS 11.81.320
does not apply to a prosecution for custodial interference
under (a) of this section if the protracted period for which
the person held the child or incompetent person exceed the
shorter of the following:
3:28:58 PM
Mr. Guaneli affirmed that to be correct. The underlying crime of
custodial interference would involve "someone who takes either a
child or an incompetent person, someone who is in custody of
somebody else".
Co-Chair Wilken asked the significance of specifying that Section 1
must apply to harming a child ten years of age or younger.
Mr. Guaneli responded that that age reference is in existing law.
The Statute was originally developed in response to assaults to
children under the age of ten. "They were the least likely to be
able to either defend themselves or run and get help."
Co-Chair Green noted that the language being referenced, Sec. 1(C),
page one, beginning on line 11, would also indicate that the person
conducting the assault be age 18 or older. To that point, she asked
whether State Statute exists that would address assaults conducted
by those younger than 18 years old.
Mr. Guaneli expressed that this language "was designed to apply to
adults and not take into account children who may interact with
other children". The goal was to draw a line "to avoid having
juvenile delinquency proceedings if someone under 18 is causing
injury to a child".
Co-Chair Green asked whether other State Statutes might address the
issue of a person under the age of 18 assaulting children.
Mr. Guaneli clarified that standard misdemeanor assault provisions
would apply to a person under 18 years of age who commits such an
assault. The language in this bill would specify that a person age
18 or older would be subject to a felony. A person under the age of
18 would "be subject to the jurisdiction of the Children's Court".
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
There being no objection, CS SB 135(JUD) was REPORTED from
Committee with zero fiscal note #1, dated April 4, 2005 from the
Department of Administration; zero fiscal note #2, dated April 1,
2005 from the Alaska Court System, and zero fiscal note #2, dated
April 5, 2005 from the Department of Law.
SENATE CS FOR CS FOR HOUSE BILL NO. 75(RES)
"An Act relating to the powers and duties of the commissioner
of fish and game, Board of Fisheries, and Board of Game in
promoting and preserving fishing, hunting, and trapping in the
state; and repealing the power and duty of the commissioner of
fish and game to assist the United States Fish and Wildlife
Service in the enforcement of federal laws regarding fish and
game."
This was the first hearing for this bill in the Senate Finance
Committee.
KEATH HILLIARD, Staff to Representative Mike Kelly, the bill's
sponsor, stated that SCS CS HB 75(RES) was an improved version of
the original bill. The bill was introduced to preserve and promote
"the cultural heritage of hunting, fishing, and trapping" in the
State. Such a bill would be consistent with the State's
Constitution dealing with "the common use and sustained yield
elements in regards to our natural resources". The major change
that occurred in the Senate Resources committee substitute, Version
24-LS0359\L was the removal of "the current Statutory obligation
that the commissioner of Fish and Game work with the federal Fish
and Wildlife Department to enforce all federal regulations".
Co-Chair Green understood that Version "L" included a title change.
M. Hilliard affirmed and noted that the title change resolution has
not yet been developed.
Co-Chair Green ordered the bill HELD in order to allow the Senate
Concurrent Resolution for the title change to be developed.
3:35:14 PM
SENATE CS FOR HOUSE BILL NO. 35(L&C)
"An Act extending the termination date of the State Board of
Registration for Architects, Engineers, and Land Surveyors;
extending the term of a temporary member of the State Board of
Registration for Architects, Engineers, and Land Surveyors;
and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
REPRESENTATIVE VIC KOHRING, the bill's sponsor, stated that this
"simple bill" would extend the State Board of Registration for
Architects, Engineers, and Land Surveyors for four years. The ten-
member Board, whose members are appointed by the Governor, is
charged with adopting regulations and providing oversight for the
issuance of licenses to the aforementioned professionals. The
Legislative Audit Division recently conducted an audit [copy not
provided] and recommended that the Board be continued as it
"successfully carries out its mission" and operates in the public
interest.
Representative Kohring noted that the Senate Labor & Commerce (L&C)
committee substitute contains a change that would best be explained
by the organization that lobbied for it. In conclusion, he asked
for the Committee's support of the bill.
Co-Chair Green identified SCS CS HB 35(L&C), Version 24-LS0273\Y as
being before the Committee.
SAM KITO JR., Chair, Legislative Liaison Committee, Alaska
Professional Design Council, spoke in support of the bill. The
Senate L&C committee substitute "added the temporary extension of a
Landscape Architect position" on the Board. However, the bill
drafter inadvertently omitted a paragraph that provided transition
language in this regard. The desire would be that this Committee
address that inadvertent language omission.
Co-Chair Green asked whether the addition of the Landscape
Architect position to the Board would increase the Board to eleven
members.
Mr. Kito explained that action in the House of Representative's
Finance Committee had changed the temporary Landscape Architect to
a permanent position. Concerns that that action might be
"premature" were expressed by other House members as well as by the
Alaska Professional Design Council. The bill adopted by the House
Finance Committee, CS HB35 (FIN) would have increased the Board to
eleven members. The Senate L&C committee substitute would specify a
ten member Board "plus the one non-voting Landscape Architect
position".
Co-Chair Green stated that the Senate L&C bill, Version "Y", before
the Committee did not specify the make-up of the ten-member Board.
Co-Chair Wilken moved to adopt the Version "Y" committee substitute
(L&C) as the working document.
PAT DAVIDSON, Legislative Auditor, Legislative Audit Division,
Legislative Agencies & Offices, affirmed that the Audit recommended
a four-year extension of the Board, as the Board operated in the
public's interest and the license fees were "sufficient to maintain
the operations of the Board". In addition, the audit recommended
that the Board consider "the use of sub-specialties or sub-
disciplines in the engineering field". Such action is occurring in
other states, and thought was that a study should be conducted in
this regard to determine what costs and benefits such action might
provide.
Co-Chair Green asked for further information about the study.
Ms. Davidson stated that the study would examine the use of
specialties in engineering fields or sub-disciplines. Currently
licenses are provided to the core areas of Civil, Engineering,
Chemical, Electrical, and Mechanical Engineering as well as Mining
and Petroleum Engineering. Continuing, however, she noted that
there is a list of approximately 13 actual specialties and sub-
disciplines. It is unknown whether the activities associated with
those areas would warrant their being licensed. That determination
would be the purpose of the study.
[NOTE: No formal action regarding the motion to adopt the Senate
L&C Committee Version "Y" committee substitute occurred.]
Co-Chair Green ordered the bill HELD in Committee.
3:40:56 PM
SENATE CS FOR CS FOR HOUSE BILL NO. 132(JUD)
"An Act relating to certain crimes committed against the
elderly; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
BEN MULLIGAN, Staff to Representative Bill Stoltze, noted that this
bill would increase the penalty for crimes against the elderly for
as the population of older citizens in the nation and in Alaska is
increasing so are the crimes that target that demographic group.
The purpose of the legislation would be to act as a deterrent
against such crimes.
Amendment #1: This amendment inserts a new subsection into Section
1 of the bill as follows.
(c) In addition to any other penalty imposed by law, a person
sentenced to an increased sentence under (a) of this section
for a crime specified in (b)(9) of this section must
immediately surrender any business license issued by the State
of Alaska and may not obtain, possess, or hold a business
license in the state for two years from the date of
sentencing.
Senator Dyson moved to adopt Amendment #1. He noted that this
amendment is being sponsored on behalf of Senator Bunde who had
introduced a companion bill to this legislation. He also noted that
Representative Stoltze was agreeable to the amendment's language.
Mr. Mulligan stated that this amendment would provide a tool
through which a person, such as a handyman, who defrauds a senior
citizen, would loose the right to hold a State issued business
license. Currently no such tool exists.
Co-Chair Green asked how the age of 65 was determined to be the
appropriate age for the persons to whom such crimes might be
committed.
RANDY RUARO, Assistant Attorney General, Legislation & Regulations
Sections, Department of Law, noted that a review of similar
legislation in other states indicated that the age of 65 was the
most commonly age specified. The age of 65 was an arbitrary
decision.
3:44:51 PM
Co-Chair Green viewed the age of 65 as being very "arbitrary", as
people in their forties could be devastated by such an "attack".
Mr. Ruaro stressed that as the number of seniors has increased, it
has become apparent that they are being "specifically targeted by
con artists".
Mr. Mulligan noted that 65-years of age is the approximate age at
which the majority of people retire and enter into a fixed income
lifestyle. Crimes committed against people on fixed incomes could
be "more significant" than a crime committed against someone in a
different phase of life.
In response to a question from Senator Olson, Co-Chair Green
clarified that the discussion has morphed from an explanation of
the amendment to the age specification. She emphasized her
discomfort with age related legislation, as people the age of 65
should not be labeled as being more vulnerable.
Senator Dyson opined that the age of 65 could be viewed as a point
at which people "deserve much more respect"; this bill would just
affirm that people that age should not be "messed" with.
Senator Olson spoke to the amendment in that the immediate
surrender of a business license would affect more than just the
business owner, it would affect employees who depend on that
business.
Senator Dyson responded that it would be unfortunate to work for
such "jerks". The intent of the amendment would be to remove the
business license related to the crime.
Mr. Mulligan affirmed that the intent would be the elimination of
the business license used to defraud the person.
Co-Chair Green asked for clarification as to whether this amendment
could affect a business license that was totally unrelated to the
crime.
Mr. Ruaro suggested that the amendment language be revised to tie
the business license removal to that associated with the crime. The
language is "a bit broad".
Co-Chair Green objected to the amendment.
Senator Dyson moved to withdraw Amendment #1.
Without objection, Amendment #1 was WITHDRAWN.
3:50:35 PM
MARIE DARLIN, Representative, AARP, spoke in support of the bill.
She noted that while violent crime receives the most media
attention, fraud and identity theft crimes are increasingly
targeting the elderly, particularly individuals 65 years of age or
older. The loss of any amount of money could be more devastating to
a retired victim living on a low or fixed income. AARP research has
found that people over the age of 50 are increasingly staying home
at night due to fear of becoming a crime victim. She noted that
AARP would not object were the age specified in the bill changed.
This bill would assist in deterring those who prey on the oldest
victims, regardless of whether it was violent crime, property
crime, fraud, or identity thief. Reducing crimes against older
persons would assist in restoring their freedom and help prevent
them from essentially becoming "prisoners" in their own home.
Co-Chair Green asked whether Ms. Darlin would anticipate this
legislation to be a deterrent to such crime.
Ms. Darlin declared, "yes", the increased penalties would be a
deterrent. AARP would be conducting seminars on identity theft and
other scams. It could take years for a person to recover from
identity thief. The seminars would be open to people of all ages.
Co-Chair Green stated that the bill would be HELD in Committee to
allow the amendment's language to be reworked.
HOUSE BILL NO. 230
"An Act authorizing the making of loans for upgrade of
commercial fishing tender vessels and gear."
This was the first hearing for this bill in the Senate Finance
Committee.
IAN FISK, Staff to Representative Bill Thomas, the bill's sponsor,
informed the Committee that this bill would address "commercial
fishing tenders and their ability to access the Commercial Fishing
Revolving Loan fund". Tenders could be likened to truckers, as
their job is to receive fish from the harvesters on the fishing
grounds and transport them to the processing plants on shore. "The
Revolving Loan Fund is a mechanism that the State used to promote
the State ownership of fishing permits and vessels." The problem
with the Revolving Loan Fund is that tenders "are not considered
fisherman" and as such are not eligible for loans from the fund.
Co-Chair Green asked whether a tender was a person or a vessel.
Mr. Fisk responded that a tender is a vessel that is operated by a
tenderman.
Mr. Fisk continued that the bill would allow tenders to be eligible
for the Commercial Fishing Revolving Loan fund, specifically the
Product Quality Improvement Loan component of the Fund. The purpose
of that component is to provide funds to fisherman to add equipment
to their vessels that would assist in maintaining "the quality of
the fish after it is harvested". Provided tenders the ability to
acquire loans in this regard would further the State's endeavor to
maintain the quality and value of its fish and further State
residents ownership abilities.
Co-Chair Green asked the history of the bill.
Mr. Fisk communicated that the Alaska Independent Tenderman's
Association brought this issue to Representative Thomas' attention.
He noted that this is companion legislation to SB 145-LOANS FOR
COMMERCIAL FISHING TENDERS, which was sponsored by Senator Stedman.
3:57:28 PM
Co-Chair Wilken asked the reason for furthering this endeavor
through the State's Commercial Fishing Revolving Loan Fund when
options are available through the privately owned Alaska Commercial
Fishing and Agriculture Bank (CFAB).
Mr. Fisk expressed that the issue of whether "CFAB was truly an
independent private entity" would be debatable. The Division of
Investments, which is the State division that manages the
Commercial Fishing Revolving Loan Fund, could provide better terms
to the industry. "They are an excellent organization to work with."
Due to the inherent risk involved, it is "often difficult" for
people in the fishing industry to find private financing. "That is
the reason that the Revolving loan fund was created to begin with."
This bill would "correct an inconsistency in that program".
Co-Chair Wilken asked whether "the credit worthiness requirements"
were the same for both the State and CFAB.
Mr. Fisk responded that the Division of investments would best
answer that question. Continuing, however, he shared that "the
Revolving Loan Fund has been very successful" and has not utilized
general funds since its inception in 1985. It has more than
compensated the initial capitalization and it essentially "operates
independently". The Fund provides the entirety of the Division's
operating expenses, and "is an excellent example of a program that
promotes Alaskan ownership … in an independent manner, in that it
does not require Legislative assistance to operate each year. The
Fund has also supported other programs.
3:59:40 PM
Co-Chair Wilken understood the answer to be that the State provides
better terms. The question remains as to whether its credit
worthiness terms differ from those offered elsewhere.
Mr. Fisk responded that the Division of Investments conducts a
thorough scrutiny of the applicants. "Credit worthiness is
definitely" a factor. "The fact that the program is as successful
as it is would testify to the Division's ability to scrutinize
applications and to determine credit worthiness."
Co-Chair Wilken voiced being okay with that; however, he continued
to voice concern about the State competing with CFAB for business.
4:01:18 PM
Mr. Fisk responded that the Commercial Fishing Revolving Loan Fund
was established after the Limited Entry Act with the intent of
ensuring that Alaskans had access to the fisheries. CFAB was
created following that. He had no knowledge regarding the inception
of CFAB. Nonetheless, both entities "are quasi private". The
Division of Investments is the more "popular" of the two programs,
within the industry.
Co-Chair Green ordered the bill HELD in Committee in order to
further address Co-Chair Wilken's questions.
ADJOURNMENT
Co-Chair Green adjourned the meeting at 04:02 PM.
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