Legislature(2005 - 2006)SENATE FINANCE 532
03/23/2006 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB 206 | |
| SB222 | |
| SB284 | |
| HB274 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 222 | TELECONFERENCED | |
| + | SB 284 | TELECONFERENCED | |
| + | HB 274 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | SB 206 | ||
MINUTES
SENATE FINANCE COMMITTEE
March 23, 2006
9:06 a.m.
CALL TO ORDER
Co-Chair Lyda Green convened the meeting at approximately
9:06:18 AM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Con Bunde, Vice Chair
Senator Fred Dyson
Senator Bert Stedman
Senator Donny Olson
Also Attending: SENATOR GENE THERRIAULT; SENATOR GRETCHEN
GUESS; REPRESENTATIVE MIKE HAWKER; DEAN GUANELI, Chief Assistant
Attorney General, Legal Services Section, Criminal Division,
Department of Law; JOHN GEORGE, American Council of Life
Insurers; DIANE BARRANS, Executive Director, Commission on
Postsecondary Education; ANNE CARPENETI, Assistant Attorney
General, Legal Services Section, Criminal Division, Department
of Law;
Attending via Teleconference: From an offnet location: ROB
HEUN, Deputy Chief, Anchorage Police Department; KENTON BRINE,
Northwest Region Manager, Property Casualty Insurers Association
of America; From Anchorage: ED SNIFFEN, Assistant Attorney
General, Commercial/Fair Business Section, Department of Law;
STEVE CLEARY, Executive Director, Alaska Public Interest
Research Group; PAT LUBY, Director, AARP-Alaska; From Mat-Su:
DAN KENNEDY, Certified Public Accountant
SUMMARY INFORMATION
SB 206-DETENTION OF MATERIAL WITNESSES
The Committee heard from the Department of Law and a municipal
law enforcement agency. A committee substitute was adopted and
the bill was reported from Committee.
SB 222-PROTECTION OF PERSONAL INFORMATION
The Committee heard from the sponsors, the Department of Law,
the Department of Education and Early Development, the insurance
industry, and public advocates. The bill was held in Committee.
SB 284-SENTENCING FOR ALCOHOL-RELATED CRIMES
The Committee heard from the sponsor and the Department of Law.
A committee substitute was adopted and the bill was held in
Committee.
HB 274-PUBLIC ACCOUNTANTS
The Committee heard from the sponsor and a certified public
accountant. The bill was reported from Committee.
9:06:48 AM
CS FOR SENATE BILL NO. 206(JUD)
"An Act relating to contempt of court and to temporary
detention and identification of persons."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken moved for adoption of CS SB 206, 24-LS1197\X, as
a working document.
9:07:34 AM
Senator Bunde noted that Co-Chair Green requested this change
that relates to photographing and fingerprinting of material
witnesses. This change would provide that use of this
information is limited to the proper identification of
individuals and that the fingerprints would be destroyed once
the specified purpose had been served.
9:08:09 AM
Co-Chair Green noted that this provision is akin to current
procedure followed for other practices.
9:08:23 AM
Senator Bunde reminded of the question raised at the previous
hearing relating to material witness statutes of other states.
9:09:10 AM
ROB HEUN, Deputy Chief, Anchorage Police Department, testified
via teleconference from an offnet location that police often
find that witnesses at a crime scene are influenced by fear or
peer pressure. Many would provide information but were concerned
about repercussions from the "people they have to live with". If
required by law to provide information, these witnesses would
have "cop cover" to justify their actions to others. When
talking with witnesses, officers observe individuals mentally
assessing the possible risks and repercussions when making their
determination about whether they would cooperate.
9:10:58 AM
Senator Hoffman asked the reason both photographs and
fingerprinting of material witnesses is necessary.
9:11:19 AM
Mr. Heun replied that fingerprints would allow confirmation of
identification. Photographs provide an expeditious method to
locate the witness to serve a subpoena.
9:12:06 AM
Senator Olson understood the purpose of obtaining either prints
or a photograph; however, both could be excessive. He asked the
number of other states that allow law enforcement to require
both from a material witness.
9:12:35 AM
Mr. Heun did not know the number of other states. He considered
the amount of time required to fingerprint and take a photograph
as insignificant.
9:13:15 AM
Senator Dyson recalled that the vehicles utilized by the
Anchorage Police Department have equipment that allows officers
to take photographs and fingerprints. He asked the length of
time necessary to secure both.
9:13:46 AM
Mr. Heun assured the person would be detained only long enough
to obtain the information provided for in this bill. If events
prevented officers from processing a witness immediately, that
person could not be expected to remain at the scene. He noted
that although possible suspects could be directed to "stand over
there" to await further questioning, the burden would be placed
on law enforcement to expedite processing of a material witness.
9:14:46 AM
Senator Dyson surmised such processing of material witnesses
would require hours rather than days and weeks.
9:14:53 AM
Mr. Heun affirmed.
9:14:57 AM
Senator Dyson asked the process of detaining a witness for a
longer period if police had reason to suspect a witness would be
subjected to intimidation or harm, or would otherwise be
unwilling to cooperate.
9:15:27 AM
Mr. Heun responded that an arrest warrant would be required to
detain a person any longer than necessary for obtaining
identification information. Such a warrant would be difficult to
secure if the person was not a suspect in the crime.
9:15:43 AM
Senator Dyson asked if the process for obtaining a warrant
includes presenting the situation to a judge.
9:15:56 AM
Mr. Heun affirmed, but stressed this action would not be a
preferred option.
9:16:03 AM
DEAN GUANELI, Chief Assistant Attorney General, Legal Services
Section, Criminal Division, Department of Law, testified to the
correctness of the previous witness' assertion that the duration
of detention would only be as long as required to determine what
the individual witnessed. If the person had not seen anything
relevant to the crime that occurred, he or she would be released
soon thereafter. Mr. Guaneli expected the length of detention
would be minutes rather than hours. Suspects could be held for
longer periods, but witnesses could only be held long enough to
gather information. Courts would require this as a
constitutional matter.
Mr. Guaneli then spoke to the necessity to obtain both
photographs and fingerprints of the witness. The database of
known fingerprints that would be used to determine
identification is limited to those arrested for crimes, certain
job applicants, state license holders, etc. If a subpoena was
issued and the witness failed to appear, the ability of using
fingerprints to assist in locating the person would be limited.
Photographs would better assist law enforcement in locating the
witness.
9:18:57 AM
Senator Olson asked how this legislation would apply in
situations involving a "distraught" witness in which the victim
was a loved one.
9:19:36 AM
Mr. Guaneli replied that police encounter this situation
frequently and consideration is given to the circumstances. The
witness is allowed to accompany the victim to the hospital if
necessary. This legislation would apply to those wanting to
leave the scene of a crime specifically to avoid identification.
9:20:25 AM
Senator Bunde offered a motion to report CS SB 206, 24-LS1197\X,
from Committee with individual recommendations and new fiscal
notes.
There was no objection and CS SB 206 (FIN) was MOVED from
Committee with four new zero fiscal notes: one dated 3/17/06
from the Department of Administration, Public Defender Agency;
one dated 3/20/06 from the Department of Administration, Office
of Public Advocacy; one dated 3/17/06 from the Department of
Law; and one dated 3/19/06 from the Department of Corrections.
9:20:53 AM
CS FOR SENATE BILL NO. 222(JUD)
"An Act relating to breaches of security involving personal
information, credit report security freezes, consumer
credit monitoring, credit accuracy, protection of social
security numbers, disposal of records, factual declarations
of innocence after identity theft, filing police reports
regarding identity theft, furnishing consumer credit header
information, and truncation of credit and debit card
information; and amending Rule 60, Alaska Rules of Civil
Procedure."
This was the first hearing for this bill in the Senate Finance
Committee.
SENATOR GENE THERRIAULT, Co-Sponsor of the bill, noted the
increase in instances of identity theft in Alaska and the
nation. He and Senator Gretchen Guess identified model
legislation in other states and each introduced bills for
consideration for Alaska. They decided to combine their efforts
and co-sponsor one bill.
Senator Therriault explained this bill would "put on notice"
those who are "in the business" of collecting, utilizing and
brokering people's personal information. These businesses would
be required to undertake certain protections of the information
they control. The bill outlines violations, definitions, and
manners in which documents must be maintained and destroyed, to
protect information from being stolen for illicit use in the
"modern economy".
9:23:22 AM
SENATOR GRETCHEN GUESS detailed the bill sections. Section 1
would amend AS 45 by adding a new chapter to read: Chapter 48,
Personal Information Protection Act.
Senator Guess outlined the articles of the new chapter beginning
with Article 1, Breach of Security Involving Personal
Information, which provides that the holder of an individual's
personal information must alert that individual of any breach of
security. The article also defines breach of security.
9:24:13 AM
Senator Guess stated that Article 2, Credit Report Security
Freeze, allows a person to prohibit a consumer credit reporting
agency from releasing information without express written
authorization of the consumer.
9:24:29 AM
Senator Guess noted Article 3, Consumer Credit Monitoring;
Credit Accuracy, grants Alaskans increased assess to their
credit reports in a "reasonable fashion" as well as the ability
to correct errors.
9:24:54 AM
Senator Guess pointed out that Article 4, Protection of Social
Security Number, specifies instances in which a person could be
required to provide their social security number and how and
when that number could be used, sold, etc.
9:25:16 AM
Senator Guess informed that Article 5, Disposal of Records,
provides how personal information must be handled and disposed.
9:25:32 AM
Senator Guess explained Article 6, Factual Declaration of
Innocence after Identity Theft; Right to File Police Report
Regarding Identity Theft, allows a victim of identity theft to
declare their innocence of accumulated debt in a court of law.
This article also allows an individual to file a police report
in their resident jurisdiction even if the crime was committed
elsewhere. Many federal provisions pertaining to identity theft
do not go into affect without a police report.
9:26:18 AM
Senator Guess continued with Article 7, Consumer Credit Header
Information, which relates to the social security number and
prohibits the selling of credit header information for the sole
purpose of the sale. Such transactions must first be permissible
under federal law.
9:26:45 AM
Senator Guess stated that Article 8, Truncation of Card
Information, provides that printed material only list the last
five digits of credit cards and debit cards.
9:27:02 AM
Senator Guess noted Article 9, General Provisions, includes many
definitions as they apply to this bill.
9:27:10 AM
Senator Guess commented on the extensive efforts of the co-
sponsors to resolve as many issues as possible for the different
stakeholders.
Senator Guess told of a policy decision she and Senator
Therriault agreed upon to not provide "carve outs", or
exemptions, for any specific industry or entity. Rather, issues
would be resolved for all parties. It would be unfair to hold
different groups to different standards. This decision resulted
in fiscal notes from State agencies, as government would be held
to the same liability standards.
9:28:30 AM
Senator Stedman referenced the language of subparagraph (a) (5)
of Section 45.48.400. Use of social security number., in Article
4 on page 16, lines 7 through 18. This subparagraph would
prohibit printing of an individual's social security number on
material mailed to the individual unless provided by law or is
included on an application or necessary for verification. The
social security number, if printed, could not be visible without
the envelope containing the information being opened.
Senator Stedman asked if a financial institution that utilizes
social security numbers embedded in account numbers would be
required to change the customer's account number.
9:29:15 AM
Senator Guess replied that if the institution planned to
disclose that account number or print the account number on
material in a manner other than provided for in Sec.
48.48.400(a)(5), the account number would have to be changed. No
stakeholder has advised the co-sponsors that it utilizes account
numbers with social security numbers embedded, although that may
have been a past practice. This practice is not safe.
9:29:52 AM
Co-Chair Green understood that some group health plans use
social security numbers as identification numbers.
9:29:58 AM
Senator Guess agreed this had been practiced; however most
carriers have changed their methods.
9:30:19 AM
Senator Stedman again asked if account numbers would have to be
changed.
9:30:26 AM
Senator Guess affirmed this would be required unless a state or
federal law required the use of the social security number.
9:30:39 AM
Co-Chair Green asked if this provision pertains to material
enclosed or to information exposed on the outside of mailings.
9:30:52 AM
Senator Guess responded that the information could not be
included unless federal law requires the social security number,
or the sender could send the information in an enclosed mailing.
A postcard would not be allowed.
9:31:11 AM
Senator Stedman requested clarification as account statements
are mailed in enclosed envelopes, whether social security
numbers were embedded in the account number or not.
9:32:04 AM
Senator Guess answered the account numbers must be changed,
unless State or federal law required the social security number,
or unless the party received consent of the account holder.
Senator Guess surmised that this would likely apply in the event
the social security was obvious.
9:33:37 AM
Senator Stedman understood that many changes have been
undertaken to eliminate the embedding of social security
numbers; however many older accounts continue to contain social
security numbers in the account number. He again asked if
industry would be forced to review and change these older
account numbers.
9:34:14 AM
Senator Guess responded that for a business that practices
disclosure of social security numbers, the provisions of this
bill would apply. If a social security number is contained in
the business's system and linked to an account number, but the
social security number were not disclosed either separately or
as part of the account number, the account number would not
require changing.
9:34:52 AM
Co-Chair Green asked if in discussions on this issue the point
had been raised that this is "a little late". She provides her
social security number frequently.
9:35:15 AM
Senator Therriault remarked that the ability to collect and
transfer information electronically has expanded. People used to
print social security numbers on their checks and otherwise
provided their number regularly. However, he had not given his
number in years. Social security numbers are no longer printed
on driver's licenses.
9:35:46 AM
Co-Chair Green countered that every visit to a doctor involves
the utilization of a social security number.
9:35:52 AM
Senator Therriault informed that industry is responding to
threats of identity theft and social security numbers are being
removed from disclosed information. This is occurring in other
transactions as well. For example, entire credit card numbers
are no longer always printed on receipts. Industry is "slowly
correcting".
9:36:41 AM
Co-Chair Wilken referenced Sec. 45.48.850. Truncation of care
information of Article 8, on page 23, lines 2 through 5. He
related that federal law stipulates that entire credit card
numbers could not be printed as of January 1, 2005. He asked if
the inclusion of this provision is State statute is intended to
reinforce the federal law, or whether it serves a different
purpose.
9:37:39 AM
Senator Guess was unaware of the federal law and would research
the matter. The practice is occurring currently, and therefore
some vendors have received an exemption or are violating the
law.
9:38:06 AM
Co-Chair Wilken did not oppose the proposed language, surmising
it would "serve as a reminder". While recently traveling in
Canada, he noticed that his entire credit card numbers were
printed on receipts. This has also occurred in some
establishments stateside.
9:39:07 AM
Co-Chair Green admitted this provision was included in the bill
at her request. A member of her staff had experienced receipts
with the entire number printed and had expressed concern. She
would also research the matter.
9:40:12 AM
ED SNIFFEN, Assistant Attorney General, Commercial/Fair Business
Section, Department of Law, testified via teleconference from
Anchorage to the extensive comments made to previous committees
hearing this bill. The co-sponsors have addressed the
Department's concerns about the ability of State agencies to
operate. Information must be accessed and disclosed in the
course of State business, including student loans and
collections. Instances exist in which information must be shared
with non-governmental entities for reasons not covered in law,
but are essential nonetheless.
9:42:35 AM
Mr. Sniffen also spoke to the State's binding liability for
damages to third parties in the event of noncompliance to this
law. While the Department does not oppose the compliance
requirements, the liability provision would not encourage
compliance but would require the State to defend against
frivolous lawsuits. If methods were provided for individuals to
sue the State, such suits would be made.
Mr. Sniffen pointed out that the State does not generate revenue
from the sale of private information. The information is only
utilized for conducting government business.
9:43:44 AM
STEVE CLEARY, Executive Director, Alaska Public Interest
Research Group, testified via teleconference from Anchorage
about the organization, which supported this bill. He told of an
incident involving Choice Point, Inc. alerting many Americans of
a potential leak of personal information. Many similar
incidences have occurred since involving other businesses. The
notification process is very important. The Group also supports
the credit report freeze provision that would prevent a thief
from receiving credit using stolen identity. He related an
instance in which a person inadvertently provided personal
information to a possible "fisher" and subsequently made an
immediate freeze on her credit report until the issue was
resolved. This practice is beneficial to business, as billions
of dollars are lost each year from this sort of fraudulent
actions.
9:47:08 AM
Co-Chair Green asked the name of the company involved in the
first major security breach.
Mr. Cleary answered Choice Point, Inc. is a company operating in
the state of Georgia that inadvertently released private
information.
9:47:31 AM
PAT LUBY, Director, AARP-Alaska, testified via teleconference
from Anchorage in support of this bill. The organization has
multiple consumer affairs records from its members relating to
identity theft. He encouraged passage of the bill.
9:48:26 AM
KENTON BRINE, Northwest Region Manager, Property Casualty
Insurers Association of America, testified via teleconference
from an offnet location that the trade association represents
more than 1,000 insurance companies that write nearly 41 percent
of the property casualty policies in the country. The
Association had expressed concerns with this legislation in
other committees. Approximately 40 other states have considered
or were considering measures intended to protect consumer
information from unauthorized access or exposure, or to allow
consumers to freeze access to their credit information. Also,
legislation is under consideration in the US Congress to create
a national standard.
Mr. Brine informed of the federal Fair and Accurate Credit
Transaction Act, or FACT ACT of 2003, which includes provisions
intended to help consumers fight identity theft, to assure the
credit history items identified as fraudulent would not be
considered against the consumer during the course of legitimate
business transactions, and to ensure that victims of identity
theft would continue to qualify for goods and services dependant
on credit information.
Mr. Brine explained that the FACT ACT allows any consumer with
reason to believe he or she is a victim of identity theft to
request that a fraud alert be placed on their credit file. This
would inform users of the report that the information on the
credit file could be inaccurate and that further investigation
could be warranted. These consumers could also request that
items identified as fraudulent be blocked from appearing on
their credit report. The advantage of blocking certain
information over freezing an entire report would allow the
consumer to continue to qualify for credit based on their true
history.
Mr. Brine stressed that a lack of uniformity between states
could cause difficulties for financial services companies,
including insurers' efforts to effectively serve customers.
Mr. Brine relayed that insurance companies have successfully
sought exemptions in several other states considering similar
legislation to allow credit freezes.
Mr. Brine indicated he would submit suggested amendments for
consideration.
9:54:49 AM
JOHN GEORGE, American Council of Life Insurers, testified in
Juneau that life insurers are financial institutions carefully
controlled by the Division of Insurance and through federal
regulations. The State has adopted regulations that are more
restrictive than federal law. The companies do not sell or
purchase personal identification information, but rather share
the information internally with financial partners. This
information is utilized to insure against fraud.
Mr. George gave an example of a person who purchased a life
insurance policy while residing in the state of Florida,
relocating several times in the course of his life to other
states before passing away many years later in Alaska. The
identity of this policyholder must be verified so the claim
could be paid. He gave another example of a husband purchasing
multiple policies from different carriers on his wife, who then
disappears or dies unexpectedly. In such an instance, the
policies must be complied to assist in an investigation of
possible crimes.
Mr. George relayed that an exemption for the insurance industry
would be appropriate because it is already controlled and does
not buy or sell personal information.
9:58:16 AM
Senator Olson asked if the witness did not support the bill.
9:58:24 AM
Mr. George responded that the life insurance industry strongly
supports identification protection and the use of account
numbers different from social security numbers. However, the
adoption of alternative numbers could result in their wide usage
and subsequent theft. Aside from DNA, fingerprinting or retinal
scanning, accurate identification is not guaranteed.
9:59:44 AM
Senator Bunde thought the issue had been addressed in the Senate
Labor and Commerce Committee.
9:59:58 AM
Mr. George replied that provisions are included in the bill to
allow access to a social security number in instances legally
required by State and federal law. However, he was unsure that
existing statutes would apply to every instance in which the
insurance industry would need the information. Often the social
security numbers are required to report payments to the Internal
Revenue Service.
10:00:43 AM
DIANE BARRANS, Executive Director, Alaska Commission on
Postsecondary Education (ACPE), testified in Juneau, reading a
statement into the record as follows.
While the Commission is already in compliance with a number
of the information security elements of the bill, we do
have significant concerns about the provisions relating to
the collection and use of social security numbers. The
current provisions constitute a potential major impairment
of ACPE's ability to efficiently and effectively carry out
its administrative responsibilities for state financial aid
programs. Specifically, (page 6, lines 25 to 27) AS
45.48.400(b) Unless expressly required by federal or state
law, a person may not sell, lease, loan, trade, rent, or
otherwise disclose an individual's social security number
to a third party for any purpose without the individual's
written consent.
Currently, ACPE uses the SSN as one of several key
identifiers in a multi-point ID protocol when performing
statutorily required servicing processes which include:
insuring the identity of the applicant, review of applicant
credit history, review for relevant selective service
status, review for child support delinquency, garnishment
of wages and/or PFDs, skip tracing, credit reporting, etc.
These matches are made with both federal and state entities
as well as with private postsecondary institutions and
other non-governmental third parties critical to the
process.
Collection of SSNs is absolutely critical to these
processes and yet, the act of collecting the SSN is not
expressly required by law, it is performing the processes
that is required.
Current language contained in the state education loan
Master Promissory Note (MPN) includes an important notices
section, which advises applicants that submission of the
SSN is required to participate in the loan program. It
further advises them, generally, how the SSN will be used
as an identifier, when needed and appropriate, throughout
the life of the loan. While the promissory note does state:
"Information Sharing I authorize the release of information
pertinent to my loans…etc.", it does not contain an
explicit statement relating to release of the SSN. Should
this phrasing issue be subject to litigation and the
language deemed to be deficient, I cannot estimate what
costs could come from a class action. The current MPN has
been in use for the past four years.
For the Commission to have to require new MPNs of all
current borrowers is estimated to cost in excess of $50,000
in printing, distribution and staff time explaining to
borrowers and participating institutions why the existing
MPN must be replaced. There would also be the intangible
cost to the organization, of putting our customers'
confidence in the organization at risk. Since we also
operate as a lender under the federal program, should we be
able to comply with federal credit reporting requirements
the financial losses to the Alaska Student Loan Corporation
could be in the millions. Federal loan volume for the
current loan year is estimated to be approximately $27
million and represents slightly less than 40% of our total
loan volume.
The other two sections of related concern are 45.48.410 and
45.48.415. While 45.48.410 appears to provide agencies with
the ability to create SSN-related "law" through regulation,
as it currently reads, that ability is limited to this
single section. Should we attempt to provide all of the
requisite authority to support critical administrative
processes, I am very concerned that, if subjected to
litigation by a disgruntled borrower, the courts would take
a strict reading of the statute and disallow any such
regulation that was not supported by clear statutory
authority.
It is also relevant to note that the legislature has
expressly charged ACPE with acting as an enterprise agency,
using a business model to generate revenue for the state.
However, by prohibiting a state agency from asking for a
SSN, but not extending that prohibition to other entities,
the proposed language in 45.48.410 not only results in
significantly increased cost for ACPE - and associated
decreases in ACPE's ability to generate revenue for the
state - but also results in ACPE not being able to compete
with out-of-state organizations that actively market their
loans to Alaska's students, costing those students more,
decreasing state revenues, and resulting in an outflow of
education loan repayment dollars to other states.
Finally, ACPE's business process is already subject to a
variety of federal consumer protection laws including: Fair
Debt Collection Practices Act (FDCPA); Telephone Consumer
Protection Act (TCPA); Fair Credit Reporting Act (FCRA);
Patriot Act (for OFAC compliance); Gramm Leach Bliley
(GLB): Fair and Accurate Credit Act (FACT ACT); Alaska
Privacy Act; Alaska statutes and regulations governing the
education loan programs; Truth in Lending Act as well as a
variety of federal and state laws relative to consumer
information protection, identity theft, payment processing,
debt collection, and related financial information. The
additional requirements placed on the agency by this
legislation certainly adds complexity to compliance, due to
possible conflicts, without adding meaningfully to the
protection of our customers.
If it is not possible to altogether exempt ACPE from these
referenced requirements, then appropriate amendments are
necessary to avoid devastating consequences to our
operations, our ability to operate as an enterprise agency,
and - most important - our ability to support Alaska's
students and institutions of higher education.
10:05:53 AM
Senator Therriault informed that in the course of the committee
hearing process, 26 formal changes have been adopted to address
stakeholder concerns. A new committee substitute was being
drafted to further address issues and would be submitted for
consideration. He invited Committee members to participate in
this process.
Senator Therriault pointed out however that a decision was made
by the Senate Labor and Commerce Committee as well as the Senate
Judiciary Committee to not treat State agencies differently than
businesses.
10:07:24 AM
Senator Guess referenced testimony from the Alaska Commission on
Postsecondary Education and Department of Law testimony
regarding social security numbers. The co-sponsors had prepared
amendments intended to address the concerns but had decided to
delay their introduction to allow the changes to be combined
with other planned changes currently being drafted.
Senator Guess disclosed that the co-sponsors were continuing
communications with life insurance carriers to accommodate the
specific needs of that industry. She disagreed that it should
receive a special exemption and instead supported efforts to
draft language to clarify how the provisions of the bill would
apply unless otherwise provided in law.
10:08:54 AM
Co-Chair Green directed members to submit any concerns or
recommendations to her office to be transmitted to the co-
sponsors.
Co-Chair Green ordered the bill HELD in Committee.
10:09:11 AM
CS FOR SENATE BILL NO. 284(JUD)
"An Act relating to sentencing for the commission of a
felony while under the influence of alcohol."
This was the first hearing for this bill in the Senate Finance
Committee.
10:09:44 AM
Senator Therriault, sponsor of the bill, stated this legislation
would provide aide for law enforcement and courts in addressing
a societal problem. He read the sponsor statement into the
record as follows.
In the interest of public safety and reducing the rate of
recidivism among certain violent offenders, I have
introduced Senate Bill 284 giving judges a new option when
sentencing felons who commit crimes against persons. (AS
11.41)
In instances that clear and convincing evidence shows a
long-term pattern of alcohol abuse as a major contributing
factor in the commission of a violent crime against a
person, or in the case of extreme DUI convictions, a judge
may impose as a condition of sentencing, up to a lifetime
prohibition on the use of alcohol.
This legislation is intended to accomplish three main
objectives. The first is to allow courts to remove a
controlled substance from those who have a long track
record of being dangerous when they use it. The second is
to prevent future acts of violence by establishing a
different threshold for re-arrest before actual violence
may occur. The third goal is to establish a lifelong
deterrent to offenders who might be tempted to use a
substance that unleashes their violent nature.
10:11:35 AM
Senator Therriault informed that he has collaborated with the
Department of Law to shorten the bill. The Division of Legal and
Research Services drafter agrees the new language structure
would be sensible and prepared a new committee substitute.
10:12:13 AM
Co-Chair Green suggested the proposed committee substitute could
be distributed at this time to allow members to review the
changes. She agreed the current version was repetitive.
10:13:30 AM
Senator Therriault explained that the proposed committee
substitute summarizes the references to other statutes.
10:13:52 AM
Co-Chair Wilken offered a motion to adopt CS SB 284, 24-
LS0581\L, as a working document.
There was no objection and CS SB 284, Version "L", was ADOPTED
as a working document.
10:14:14 AM
ANNE CARPENETI, Assistant Attorney General, Legal Services
Section, Criminal Division, Department of Law, explained the
shortened committee substitute. Judges need the guidelines
provided in this legislation. The Department supports this bill.
10:15:38 AM
Co-Chair Green indicated she would review the committee
substitute. When she first learned of this effort, she was
skeptical it could be successful. She has since concluded the
guidelines could be helpful.
The bill was HELD in Committee.
10:16:05 AM
CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 274(FIN)
"An Act relating to the practice of accounting; and
providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
10:16:13 AM
REPRESENTATIVE MIKE HAWKER, sponsor of the bill, testified that
Alaska's accounting statues were written in 1960 through 1962.
Many accounting practices have changed since that time. Efforts
are underway nationally to standardize accounting practices
including education and licensing requirements. The Alaska Board
of Public Accountants has been collaborating with the American
Institute of Certified Public Accountants to implement changes
to comply with the Uniform Accountancy Act, written by the
Institute. This bill represents the first portion of those
efforts.
Representative Hawker stated that most of the language in this
lengthy legislation is technical, conforming to current
standards.
Representative Hawker informed of the shortage of qualified
Certified Public Accountants (CPA) in Alaska. This bill would
grant practice privileges to out of state accountants under the
Standard of Substantial Equivalency. The reciprocity
requirements are designed to encourage accountants to work in
Alaska by not requiring them to redo any professional
credentials.
Representative Hawker told of the current requirement that all
communications to the accounting community must be conducted
through certified mail. At the request of the Board of
Accountancy this provision would be repealed and would reduce
operating costs of the Board by $6,000 to $8,000 a year.
Representative Hawker emphasized the public reliance on audits
attesting to the correctness of financial statements. The
national trend has been to increase regulation and management of
CPAs performing attest functions. This bill would mandate that
professional accountants undergo peer reviews, a practice
currently in regulation. However, regulations do not include a
definition of attesting, nor do they provide for a process of
writing regulations to address attesting. This bill would
require the Board of Accountancy to develop regulations defining
attest functions and providing special oversight of accountants
who perform those functions.
10:21:40 AM
Representative Hawker relayed attempts within the accounting
community in Alaska to change practices to conform to the
national Uniform Accountancy Act. Some have been eager to fully
conform, while others were reluctant to make changes. The Board
held internal and public hearings on the issue and this
legislation represents compromises made to the various concerns.
Those accountants who had opposed making any changes were
satisfied with the proposal and expressed willingness to see the
results.
Representative Hawker explained that the delayed effective date
of the statutory changes is January 1, 2008. Regulations could
be written in the meantime and, if deemed necessary, statutory
changes could be offered in the next legislative session.
Representative Hawker described the support for this bill from
different factions of industry.
10:23:59 AM
Senator Olson remarked that businesses are dependant on
accountants. He asked if any negative criticism to this bill has
been voiced from business representatives.
10:24:19 AM
Representative Hawker had heard of no negative comments with the
exception of comments raised by independent accountants, those
who are not certified. Those concerns have been addressed.
10:24:34 AM
Senator Olson asked if his accountant would therefore support
this legislation.
10:24:41 AM
Representative Hawker responded this would depend on who his
accountant is. Those who have been actively involved in the
process have reached agreement on the provisions in the bill.
10:25:12 AM
Representative Hawker noted that the oldest member of the
association supports this bill. This person represented the
anchor of the "old school" approach. Through the process, he
became supportive of allowing regulations to be adopted, and if
those regulations proved effective, he would support their being
codified.
Representative Hawker predicted this bill would likely not be
the last legislation addressing changes to the accounting
statutes.
10:26:18 AM
Co-Chair Green recalled the dissent when these changes were
originally proposed.
10:26:26 AM
DAN KENNEDY, Certified Public Accountant, testified via
teleconference from Mat-Su, acknowledging that this issue is
relatively insignificant in comparison to other issues before
the legislature. He supported this bill, a modernization of
Alaska's accounting procedures that would align with 40 other
states. This legislation represents a compromise within the
accounting profession. He had advocated for more aggressive
changes, including a reduction of the activity requirements for
becoming a CPA. Currently an accountant must work under the
supervision of a CPA for two years. Alaska is the only state
with this requirement. He had recommended one year of supervised
practice.
Mr. Kennedy defined the peer review process as an audit of the
auditors, which would strengthen the profession. Therefore, only
one year of supervised practice is necessary. However, he was
willing to compromise on this item in the interest of passage of
this legislation.
10:30:18 AM
Senator Bunde offered a motion to report the bill from Committee
with individual recommendations and accompanying fiscal note.
Without objection HB 274 was MOVED from Committee with zero
fiscal note #1 from the Department of Commerce, Community and
Economic Development.
ADJOURNMENT
Co-Chair Lyda Green adjourned the meeting at 10:31:09 AM
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