Legislature(1993 - 1994)

03/17/1993 08:50 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    SENATE FINANCE COMMITTEE                                   
                         March 17, 1993                                        
                            8:50 a.m.                                          
  SFC-93, #37, Side 2 (181-end)                                                
  SFC-93, #39, Side 1 (000-end)                                                
  SFC-93, #39, Side 2 (000-end)                                                
  SFC-93, #41, Side 1 (000-end)                                                
  SFC-93, #41, Side 2 (575-370)                                                
  CALL TO ORDER                                                                
  Senator  Steve Frank,  Co-chair,  convened  the  meeting  at                 
  approximately 8:50 a.m.                                                      
  In addition to  Co-chair Frank, Senators Rieger,  Kelly, and                 
  Sharp were present.  Senator Kerttula arrived soon after the                 
  meeting began.   Co-chair Pearce and  Senator Jacko did  not                 
  ALSO  ATTENDING:    Representative   Larson;  Representative                 
  Foster; Representative Brice;  Representative Martin;  Edgar                 
  Blatchford,  Commissioner, Dept.  of Community  and Regional                 
  Affairs;  David  Cuddy, First  National  Bank  of Anchorage;                 
  Keith Gerken,  Deputy Commissioner, Dept.  of Transportation                 
  and  Public   Facilities;  John  Horn,   Regional  Director,                 
  Northern  Region,   Dept.  of   Transportation  and   Public                 
  Services;  Col. John  Murphy,  Director, Division  of Alaska                 
  State  Troopers; Darcie  Beck,  Alaska Environmental  Lobby;                 
  Juanita Hensley, Chief,  Driver Services, Division  of Motor                 
  Vehicles, Dept. of  Public Safety;  Chip Thoma; Rick  Solie,                 
  aide to Senator Frank; Ken Erickson, aide to Senator Pearce;                 
  Josh Fink, aide  to Senator Kelly;  and additional aides  to                 
  committee members and other members of the legislature.                      
  Steve Lesko; Mike  Saville; Virginia (Ginny)  Sargent; Linda                 
  Giani;  Cheryl  Scott; Brenda  Trumble;  Elaine  Hurley; Joy                 
  Davis, Access Alaska; and William Gumlikpuk.                                 
  SUMMARY INFORMATION                                                          
  SB 82     -    Act relating to the Dalton Highway.                           
                 Testimony  was   presented  by   Commissioner                 
                 Blatchford,  DC&RA;  Keith  Gerken  and  John                 
                 Horn, DOTPF;  John Murphy, DPS;  Darsie Beck,                 
                 Alaska Environmental Lobby;  Chip Thoma;  and                 
                 Rick Solie.   The bill  was subsequently HELD                 
                 in  committee  for  additional  work  on  the                 
                 fiscal notes.                                                 
  SB 84     -    Act relating to fees for identification cards                 
  and            certain motor vehicle  licenses and  permits;                 
                 to  licenses   issued  to   drivers  and   to                 
                 revocation  of   a  license  to   drive;  and                 
                 providing for an effective date.                              
                 Testimony was presented  by Juanita  Hensley,                 
                 DPS,   and  Josh   Fink.      The  bill   was                 
                 subsequently HELD  in committee  for work  on                 
                 the fiscal notes and possible amendments.                     
  SB 97     -    Act  relating  to   enhanced  911   emergency                 
  reporting                systems;  and   providing  for   an                 
                           effective date.                                     
                 CSSB  97   (Finance)  was  REPORTED   OUT  of                 
                 committee with a "do pass" recommendation and                 
                 zero fiscal note  from the Dept.  of Commerce                 
                 and Economic Development.                                     
                          KEY CAMPAIGN                                         
  After  convening  the   meeting,  Co-chair  Frank   welcomed                 
  representatives  of  the Key  Campaign  and asked  that they                 
  commence their presentation.                                                 
  STEVE  LESKO,   President,  Alaska   State  Association   on                 
  Developmental Disabilities, first came before committee.  He                 
  noted that this  is the  sixth year of  the Key  Campaign--a                 
  united coalition of  individuals from  both rural and  urban                 
  Alaska.   The coalition  represents 114  communities.    Mr.                 
  Lesko  next  referred  to  representatives presently  before                 
  committee  and explained that they "and  a thousand more who                 
  we  represent  and care  about  are basically  advocates for                 
  children,   adolescents,   and    adults   who    experience                 
  developmental disabilities."  He stressed that the coalition                 
  believes that community is the key.   A community is a place                 
  for everybody.   He further stressed  that "No one, not  one                 
  single human being .  . . is in need of,  is entitled to be,                 
  or must be  institutionalized."  Community is  the place for                 
  everybody.  With minimal  support, families and  individuals                 
  that experience  developmental disabilities can  live within                 
  community.   Community  has been  proven by  state-generated                 
  statistics  to be decreasing in cost.   It is the most cost-                 
  effective method of  meeting genuine needs.   And it is  the                 
  only method in terms of quality of life.                                     
  Mr. Lesko said  that the  campaign has over  400 reasons  to                 
  come before committee at this time.  The 400 individuals all                 
  have a name, face,  family, friends, and a community.   They                 
  have a single thing  in common:  They are  statistics on the                 
  state waiting list that is growing daily.  By the end of the                 
  calendar year, it is estimated it will exceed 500.                           
  In his concluding remarks, Mr. Lesko  voiced need for a new,                 
  optimistic vision for Alaska.  Success can only be  measured                 
  in terms  of how government, the legislature, the state, the                 
  nation, and  the world  at large  respond to  the legitimate                 
  needs of citizens who cannot assist themselves without help.                 
  He requested the committee's help in achieving the vision of                 
  a positive  future  for  all  Alaskans.    Mr.  Lesko  again                 
  stressed that "community is for everyone."                                   
  MIKE  SAVILLE next came  before committee.   He  noted that,                 
  last year, his  appeal was contained  within a request  that                 
  the  legislature  share in  the responsibility  of providing                 
  services to Alaskan families. As  a result, programs for the                 
  developmentally disabled were spared some of  cuts sustained                 
  by other programs.                                                           
  This year the  campaign is asking  that the legislature  not                 
  only  spare the  Campaign from  cuts, but  also improve  the                 
  quality  of  services and  increase  the number  of services                 
  provided.   Services for the disabled are approximately  16%                 
  behind  the  1986 level,  in  terms  of real  dollars.   Mr.                 
  Saville  said his  program alone  is experiencing  insurance                 
  increases in excess of  16%.  Every  home that is leased  to                 
  provide residential services is  experiencing an increase of                 
  approximately $100 a month.  Utilities  and the cost of food                 
  are also increasing as are other daily essentials.                           
  Mr. Saville  reiterated  that there  are 400  people on  the                 
  waiting  list.  At this time last year, that number was 150.                 
  By  the end of this year, it will be 500.  Every day another                 
  family falls into crisis and is added to the list.  Existing                 
  programs have stretched every available resource.  Community                 
  programs are  less expensive and  more effective.   For  the                 
  last three years, the individual costs of programs have been                 
  dropping.  That  is the  only thing that  has kept  programs                 
  even with the  cost of living.   Mr. Saville requested  that                 
  for the coming  year the  committee consider building  "some                 
  maintenance  of  effort" into  the  budget.   He  asked that                 
  members help take  responsibility for providing  the quality                 
  of life that everyone deserves.                                              
  BRENDA TRUMBLE from  Klawock, Prince  of Wales Island,  next                 
  came before committee.  She told  members that when her son,                 
  Logan, was five  weeks old and received his DPT vaccination,                 
  he  sustained  neurological  damage  resulting  in  cerebral                 
  palsy.    Ms.  Trumble  attested to  the  benefits  of state                 
  programs  such   as  infant   learning,  special   education                 
  services, respite, family  support dollars,  etc.  She  said                 
  her  family  had  been  fortunate  in  receiving  assistance                 
  programs when they were needed.  She further attested to the                 
  difficulties associated with the six months she spent on the                 
  state waiting  list.   Family support  services ensure  that                 
  Logan  partakes in  swimming, basketball,  and  other after-                 
  school activities.  He is doing very well.                                   
  Mrs. Trumble  next spoke to the situation  for the remainder                 
  of the family.   She said her husband  is a Vietnam  veteran                 
  and  college graduate  who was  with the  same employer  for                 
  fifteen years.   Three years  ago he chose  to become  self-                 
  employed and started a business of  his own.  After coverage                 
  under COBRA for eighteen months, the insurance company chose                 
  to  drop coverage  on Logan.   Once  dropped  from coverage,                 
  those with  disabilities are unable  to get insurance.   The                 
  only  option was to  spend down  family resources  to become                 
  Medicaid eligible in  order to receive medical  services for                 
  Logan.   That means  the family  can put  nothing aside  for                 
  retirement, can have no savings or  other money in the bank,                 
  can have no  life insurance, and  cannot even have a  burial                 
  plot.    The  family  is  under  constant,  very  unpleasant                 
  Mrs.  Trumble  voiced  need  for  waivers that  would  allow                 
  Medicaid  eligibility to be  based on  the resources  of the                 
  disabled individual rather than the individual's family.                     
  She spoke to continued attempts to maintain health insurance                 
  for  other members of  the family at  a cost of  $478.00 per                 
  The family's older son wants to  go to college in two years.                 
  The family has no resources with  which to send him.  He  is                 
  not allowed to work or save money for himself.  Mrs. Trumble                 
  urged  support  for  Project  Choice  and  funding  for  the                 
  End, SFC-93, #37, Side 2                                                     
  Begin, SFC-93, #39, Side 1                                                   
  CHERYL SCOTT,  from  Anchorage, next  came before  committee                 
  accompanied  by her son, Justin.  She  said that she and her                 
  husband have three children.  Her husband works for the FAA.                 
  Justin is the youngest child.  He was adopted at 2-1/2 years                 
  of age.   At the time the  adoption was finalized, a package                 
  of  support came with him.  It included a monthly subsidy (a                 
  monthly  check  from  the  state)  to  cover  expenses  that                 
  Medicaid does not cover.  The family has excellent insurance                 
  through the  federal government.  Justin's  medical expenses                 
  are thus well covered.  Justin  is also covered by Medicaid.                 
  That arrangement was part of the adoption package because of                 
  his multiple disabilities and the fact that his mother, when                 
  she was  alive, qualified  for AFDC.   Justin  comes from  a                 
  background  of  alcohol   abuse.    His  mother   was  third                 
  generation.  He came from a single parent  family.  Until he                 
  was adopted, he had never been in a family situation.                        
  Mrs. Scott  advised  that the  family  feels lucky  to  have                 
  Justin as  a member.   He  has made  a great  change in  the                 
  family lifestyle.  Having Justin as a part of the family has                 
  been very expensive, but  his care has been provided  for by                 
  the state.   Not every adoptive family  receives those types                 
  of benefits, even though they may have a child with the same                 
  degree  of disability  as Justin.   The  adoption worker  in                 
  Justin's case was  willing to negotiate  what was needed  to                 
  keep Justin within the family.                                               
  Mrs. Scott spoke to  the fact that there are  other families                 
  in Alaska  that have  given birth  to children  like Justin.                 
  These families cannot  access the  same services her  family                 
  was  provided when  Justin was adopted.   The  inequality is                 
  unbelievable.    Families  are  being  forced to  put  their                 
  children  on waiting  lists for  entry into  foster care  or                 
  institutions  in  order  to  get   the  support  they  need.                 
  Families are being torn  apart.  Parents divorce or  turn to                 
  drink  and/or  drugs  because  they  cannot  cope  with  the                 
  financial responsibilities associated with having a disabled                 
  (Co-chair Frank noted the presence of Representatives Larson                 
  and Martin.)                                                                 
  ELAINE HURLEY,  from Anchorage, next  came before  committee                 
  accompanied by her daughter, Brienna.  She advised  that she                 
  represents the family  to which the prior  speaker referred.                 
  She   explained  that  she  gave   birth  to  a  child  with                 
  disabilities.   She is  therefore not  entitled to  the same                 
  financial  support  as  the  Scott  family which  adopted  a                 
  disabled  child.    Medicaid   eligibility  standards  force                 
  families to  either place their  child in an  institution or                 
  spend down, quit their jobs,  and become poverty stricken to                 
  provide for  their child.   With  a child  the parent  knows                 
  needs medical coverage, there is not much choice.                            
  Ms. Hurley advised that she had spoken before committee last                 
  year.  At that time, she  was married.  She and her  husband                 
  had to quit their  jobs and become dependent to  qualify for                 
  medical coverage of  their daughter.   Ms. Hurley said  that                 
  due to  the emotional, medical, and financial strain, she is                 
  now a single parent.   She questioned the worth  of a system                 
  that will pay tens of thousands  of dollars for her daughter                 
  if  she  is  institutionalized,  but  will not  pay  medical                 
  benefits if the child  remains at home.  There  is something                 
  wrong with a system  that, in the name of  cost containment,                 
  will pay more to institutionalize a  child than to allow the                 
  child to remain with  his or her parents.   Because families                 
  lack  medical  waivers  and  medical  options, there  is  no                 
  choice.   In other  states there  are.   They have  Medicaid                 
  options and  waivers.  SB  5 (MEDICAID FOR  CERTAIN DISABLED                 
  CHILDREN) would  enable parents to go back  to work.  By not                 
  enabling parents to  stick by  their disabled children,  the                 
  quality  of life for  the disabled person,  the parents, and                 
  the family in general is impacted.                                           
  Ms. Hurley  noted legislative  attempts to  cut the  budget.                 
  She then questioned how the state could "justify doing other                 
  things  but  not  putting people  first."    She  urged that                 
  committee members allow those with disabilities to "have the                 
  quality of life as well."                                                    
  JOY DAVIS, Access  Alaska, next came before committee.   She                 
  said she  is the  mother of three.   Two are  her biological                 
  children and  the third is  her fourteen-year-old Athabascan                 
  daughter.  Ms. Davis explained that she  works part-time for                 
  Access Alaska.   She said she could  only maintain part-time                 
  employment so that her children  can obtain medical benefits                 
  and  she,   herself,  remains  eligible  for  personal  care                 
  attendant services.   She termed  attendant care "vital"  to                 
  the life of her family.   She said she believes in the  work                 
  ethic and wants her children to also.  She expressed concern                 
  that, without that care,  her fourteen-year-old would become                 
  the  nurturing element  to her  younger children.   At  this                 
  point, because of the way state resources are developed, Ms.                 
  Davis advised that she does not receive respite care for her                 
  children, although  she  qualifies for  that  care  herself.                 
  Inability to  provide for  the basic  physical needs  of her                 
  children and loss of  respite services is devastating  for a                 
  mother with no finger or hand dexterity.                                     
  Ms. Davis said she  had no problem with paying  for personal                 
  attendant  care  services, but  she  has concern  that these                 
  services  and the number  of care hours  available are being                 
  cut back.   She said  that in  the course of  her work,  she                 
  often has to explain  to people in circumstances similar  to                 
  her own  that the  services are  not available.   The  state                 
  should not be focusing  on the status quo when  services are                 
  not adequate for those already receiving them, and there are                 
  400  to  500  individuals  on  waiting  lists.   It  is  not                 
  appropriate to tell them to wait.                                            
  (Co-chairman  Frank  noted  the presence  of  Representative                 
  WILLIAM GUMLIKPUCK of Knewthweluk, Alaska,  next came before                 
  committee.  He  told of his  nine-year-old son, Willie,  and                 
  the many  surgeries and  complications suffered  by the  boy                 
  since the age of two.   Following surgery in Seattle, Willie                 
  became sick easily and  has spent time in all  the hospitals                 
  in Anchorage and in the Dillingham Hospital as well.  He has                 
  now been home with the family for  approximately three years                 
  and is a much  happier boy.  The bush area needs residential                 
  homes.   Hope Cottage  utilizes the  respite  program.   Mr.                 
  Gumlikpuck  distributed  pictures  of Willie  for  committee                 
  VIRGINIA (Ginny) SARGENT of Kodiak, Alaska, next came before                 
  committee.    She advised  of an  effort  in Kodiak  to take                 
  "needy children  away from  mental health."   The  community                 
  sent a  task force out to look for an  agency to come in and                 
  help take care of these children.  At this point, the effort                 
  has  taken twelve  people from  mental health.   Ms. Sargent                 
  advised that  it is her goal to "take  the rest of them away                 
  from that place."   She advised  that residents had no  care                 
  and no life.  They went  from one group home to another  and                 
  merely sat.  They did not go out in the community  and work,                 
  and sometimes were  not even given lunch.  These individuals                 
  deserve a life of their own.  The effort now has a home  for                 
  these young people.   It must now renovate and  purchase the                 
  LINDA  GIANI  of  Wasilla,  Alaska,  next  testified  before                 
  committee.    She noted  that she  had recently  witnessed a                 
  motorcycle accident  in Anchorage in  which a young  man was                 
  badly injured.  No one knows in the course of each  day what                 
  turn his or her life might take.  Services requested  by the                 
  Key Campaign are  not merely for  "this small group or  even                 
  just for a  waiting list."  Services are needed on behalf of                 
  the state as a whole.  Services must be in place.  It is too                 
  late when a crises occurs, and there is nothing out there.                   
  Ms. Giani  advised that  her son  is approximately  eighteen                 
  years old.  He is severely mentally and physically disabled.                 
  The  family  has   struggled  through  divorce,  remarriage,                 
  multiple problems.   The  two other  children in the  family                 
  "have  given  up things  all  of  their lives."    Ms. Giani                 
  explained  that  when  her husband  was  first  stationed in                 
  Alaska with the military was the first time in fifteen years                 
  any services  were provided.   The  family received  respite                 
  care at that time.  Those services over the last eight years                 
  allowed  the  family  to  keep  Brian   at  home  until  his                 
  eighteenth birthday  this summer.   Ms. Giani said  that her                 
  health and part-time respite services are not good enough to                 
  provide him the care  he needs.  The family is  on a waiting                 
  list for  full-time placement  in a  residential home.   The                 
  family will truly be in crises on June 30, 1993, when parti-                 
  time services may end and the family may not be able to find                 
  another provider to care for Brian.                                          
  JOY  DAVIS  of  Anchorage   again  came  before   committee,                 
  attesting  to need for assistance on  behalf of Key Campaign                 
  members and their families.                                                  
  At  the  conclusion of  the  Key Campaign  presentation, Co-                 
  chairman  Frank  directed   that  the  meeting   be  briefly                 
                       RECESS - 9:30 A.M.                                      
                      RECONVENE - 9:45 A.M.                                    
         The Alaskan Economy from a Banker's Perspective                       
  Upon  reconvening  the  meeting,  Co-chair  Frank noted  the                 
  presence  of  MR.  DAVID  CUDDY,   First  National  Bank  of                 
  Anchorage,  and  asked  that Mr.  Cuddy  speak  to committee                 
  concerning the state economy.   Mr. Cuddy voiced his  belief                 
  that Alaska's  economy will  be good  in 1993  and "probably                 
  1994."  Projections indicating a budget  gap have produced a                 
  reluctance in terms  of investment  or expansion.   Business                 
  people are attempting to determine  whether Alaska is headed                 
  for another "bust situation."  Mr.  Cuddy said that he tells                 
  his customers that change is  certain; they should determine                 
  how to take advantage of  opportunities and adapt to  future                 
  Mr. Cuddy quoted John Kenneth  Galbraith, noting that "There                 
  are two  types of  economists:   Those who  don't know,  and                 
  those that know they don't know."  He told committee members                 
  that while he did not  know what the future might bring,  he                 
  attempts  to  remain  conversant   with  factors  that  will                 
  determine the future.   One  of the major  factors is  state                 
  government.  Mr.  Cuddy voiced concern over  recent comments                 
  by the Governor and three of his commissioners that there ts                 
  not a great need  to cut spending, but what must  instead be                 
  done is to maximize revenues.  Maximizing revenues is likely                 
  to mean more taxes.                                                          
  Mr. Cuddy suggested  that Alaska study what has  happened in                 
  California.  The  Wall Street Journal reports  that profiles                 
  of those now arriving in  California indicate they are under                 
  twenty-five  years  of  age, uneducated,  and  have  few job                 
  skills.  Profiles of those leaving  the state show that they                 
  are  over   forty,  upper  income,   and  better   educated.                 
  California  had  a  great  economy  and active  defense  and                 
  electronics industries.   It continued to  increase spending                 
  and  sustained a $7 billion budget  deficit three years ago.                 
  The state  solved  the problem  by  increasing taxes.    The                 
  following year, the  budget showed  an $11 billion  deficit.                 
  Last year the state temporarily  issued script in an attempt                 
  to balance  the  budget.   Mr. Cuddy  cautioned that  Alaska                 
  should not follow the model set in California.  While Alaska                 
  has experienced  a  robust  economic  decade,  with  several                 
  problem years, the current administration  is discussing tax                 
  increases as a  means of  balancing the budget.   He  voiced                 
  concern  over the  profile  for Alaska,  if  it follows  the                 
  pattern set in California.                                                   
  Senator  Kerttula asked  how establishment  of Wal-Mart  and                 
  Costco  stores would impact smaller retailers long supported                 
  by  local banks.  Mr. Cuddy told  members that the only ones                 
  to survive will  be those that  can focus on service  and/or                 
  offer unique  products  not available  from larger  delivery                 
  systems.    He  further  advised  that he  had  talked  with                 
  representatives of large chain operations, asking what  they                 
  see in Alaska that causes them  to locate here.  The  answer                 
  is that they have a price delivery  system with which no one                 
  can compete.  They  buy in such volumes, and  their shipping                 
  charges are so  cheap, there is no way  a local business can                 
  compete.    Mr.  Cuddy reiterated  his  belief  that smaller                 
  retailers would be forced to close as chain stores move into                 
  the state.  He added, "Nobody thinks that there's enough new                 
  business and enough new buyers out there to support it all."                 
  Mr. Cuddy  commented on  anticipated business from  outlying                 
  communities,  and  the fact  that  chains hope  to intercept                 
  trade that now benefits Seattle.                                             
  Senator Kerttula inquired regarding trade  with Russia.  Mr.                 
  Cuddy explained  that his father and sister  have focused on                 
  Russian  development,  traveling  annually  to  that   area.                 
  Exchange  Russians   are  working   at  First  National   in                 
  Anchorage, and  numerous  Russian contacts  have been  made.                 
  First  National  is "posturing"  itself  to become  the U.S.                 
  banking  contact in dealing with the eastern part of Russia.                 
  Mr. Cuddy said that he did not foresee anything happening in                 
  the immediate future.   The situation is extremely unstable.                 
  The bank is  merely building  a contact network  for a  more                 
  stable time.   Someday, Russia and  Alaska will have a  good                 
  trade situation, but not tomorrow.                                           
  Senator  Kerttula  attested  to  Alaska's  position  as   an                 
  exporter  of  raw  materials and  suggested  that  the state                 
  appears to be moving  toward heavy minerals.  He  then asked                 
  if Mr. Cuddy was  aware of upcoming development.   Mr. Cuddy                 
  responded negatively.   He  acknowledged that  the bank  has                 
  many  gold  miners  as  customers.   He  further  noted that                 
  Engelhard Industries  is considering closing its  offices in                 
  Alaska because of  insufficient volume.  First  National has                 
  been approached to serve as Engelhard's agent for receipt of                 
  gold and subsequent shipment out of state.                                   
  Senator Jacko asked if Mr. Cuddy could point to a particular                 
  industry  as  a bright  spot  for  Alaska.   Mr.  Cuddy told                 
  members  that  he  recently chaired  the  Anchorage  mayor's                 
  committee on military  housing which  determined there is  a                 
  lack  of  housing for  the  military.   Senator  Stevens has                 
  indicated that  Alaska is  the military's  first choice  for                 
  placement of troops  returning from  Europe and the  Pacific                 
  Rim.   Mr. Cuddy  suggested that  if problems  arise in  the                 
  Alaskan economy, and the state loses population, there  is a                 
  ready source of new people to fill  empty houses in the form                 
  of returning troops.   The state will probably not  face the                 
  same "bust" situation as 1986 because  of that backup.  That                 
  is a bright spot, as is tourism.                                             
  Senator Jacko voiced his understanding  that loans and other                 
  banking requirements of  the fishing  industry have not,  in                 
  the past, been met by Alaska banks.  Financing has primarily                 
  come from Seattle-based and overseas  institutions.  He then                 
  asked  if  there  was  opportunity  for improvement.    Will                 
  Alaskan banks become more involved?   Why have they not been                 
  involved in the  past?  Mr.  Cuddy responded that the  state                 
  has  a  better  program  for  permit  loans than  do  banks.                 
  Senator Jacko interjected that this comments related more to                 
  processors and  larger fishing  boats.   Mr. Cuddy  remarked                 
  that most of the processors are based in Seattle.  Companies                 
  with  corporate  offices  in Seattle  tend  to  have ongoing                 
  business relationships with banks in that area.  Much Alaska                 
  fishing is owned and controlled by forces outside the state.                 
  Referring to locally  owned vessels, Mr. Cuddy  advised that                 
  loans involve  analysis  of risk.   First  National makes  a                 
  number of  fishing boat and gear loans,  particularly in the                 
  Cordova,  Sitka,  and  Kodiak  offices.     Its  loans  have                 
  increased more than any other Alaskan bank in the last three                 
  years.    Speaking as  the president  of the  Alaska Bankers                 
  Association, Mr. Cuddy suggested that local banks "have seen                 
  a lot of  losses taken in  fishing" and are concerned  about                 
  reports that  the bottom  fish industry  is becoming  fished                 
  out.  Projected salmon prices and increasing competition are                 
  also causes for concern.  The Cordova office is experiencing                 
  "a near high" in delinquencies for fishery loans because  of                 
  the recent "tough season."                                                   
  Senator  Jacko attested  to  construction projects  in Dutch                 
  Harbor (hotel, shopping mall, and cold storage facility) and                 
  asked if Alaskan banks  are involved.  Mr. Cuddy said that a                 
  customer  has  approached  the  bank  with  a  proposal  for                 
  construction of a floating housing facility at Dutch Harbor.                 
  That is the kind of project the bank would be  interested in                 
  Mr.  Cuddy  noted  that   sometimes  project  developers  go                 
  elsewhere for financing.   He  advised that,  in the  1980s,                 
  several  other  banks  became  very aggressive  in  lending.                 
  First  National  thus  gained a  reputation  for  being very                 
  End, SFC-93, #39, Side 1                                                     
  Begin, SFC-93, #39, Side 2                                                   
  Senator Kelly inquired regarding the impact on Anchorage and                 
  Fairbanks of the cutback of 2,800 Alaskan troops.  Mr. Cuddy                 
  said he could  not respond to  the inquiry. He advised  that                 
  the  military housing  committee  he  chaired submitted  its                 
  report to the mayor  on February 15.  Announcement  of troop                 
  cutbacks occurred after that time.                                           
  Senator Frank inquired regarding the  bank's current lending                 
  posture relative  to the  past ten  to fifteen  years.   Mr.                 
  Cuddy explained that  the bank cut  back on lending in  1984                 
  because of concerns  for the  local economy.   From 1984  to                 
  1989, First  National's  loans  dropped  off  substantially.                 
  Since 1989, the  bank has added  50% to its loan  portfolio.                 
  There  are  no  alternate investments  available  since U.S.                 
  Treasury bonds are  yielding approximately 4%.   The bank is                 
  paying  3%  for  certificates  of  deposit.    With  reserve                 
  requirements  and  overhead,  there is  no  profit  in those                 
  transactions.  The bank is thus aggressively looking for new                 
  loans.   One of  the areas  being expanded  is real  estate.                 
  First National's competition does not generally like to make                 
  long-term real estate loans.  The bank has  thus experienced                 
  quite  an  increase  in  commercial-income  real estate  and                 
  residential real estate in the last three years.                             
  Mr. Cuddy advised that First  National would like to  become                 
  more heavily involved in installment loans, but car and boat                 
  dealers intercept many loans that used  to be made by banks.                 
  The bank is looking at ways to buy "the paper" after dealers                 
  have made these  loans.  Installment  loans tend to be  only                 
  three to  five years in term.   Mr. Cuddy voiced  his belief                 
  that  if the Alaska  economy experiences a  problem, it will                 
  not occur in the next two years.                                             
  In response  to  a question  from Senator  Sharp, Mr.  Cuddy                 
  explained that  any time the bank  can sell a loan  to AHFC,                 
  AIDEA, or  another investor, it does so because the interest                 
  rate tends to be better and the term longer.  The  only real                 
  competitor for real estate loans is National Bank of Alaska.                 
  Last year NBA took  a very conservative posture and  cut its                 
  term to ten years.  During  that time, First National picked                 
  up a lot of loans.  Since then, NBA has extended the term to                 
  15 years and is aggressively competing again.                                
  Senator  Kerttula posed  a  general  question regarding  the                 
  national banking community.  Mr.  Cuddy noted the difference                 
  between   savings   and   loans   and   commercial   banking                 
  institutions.  Savings and loans  were not properly examined                 
  by  the  government,  and  huge  losses occurred  for  which                 
  taxpayers have paid  the bill.  Commercial banks  are funded                 
  out of  their own  insurance premiums.   Taxpayers have  not                 
  paid anything for commercial bank failures.  Mr. Cuddy noted                 
  that  First National and  National Bank of  Alaska have both                 
  had to  pay higher  premiums  because of  failures at  other                 
  Headlines  indicate that  the  banking  industry  made  huge                 
  profits last  year.  The reason  for that is that  bonds and                 
  investments made three years ago at high yields continued to                 
  earn those  yields  while  the cost  of  funds  dropped  off                 
  dramatically.  Most banks thus made nice profits.  That only                 
  happens  50% of the  time.  The  other half of  the time the                 
  reverse is true.  In a  period of increasing interest rates,                 
  loans made at 4%  today will be loser transactions  when the                 
  cost of funds increases.  When  that happens, more banks are                 
  likely to have problems.   The federal government  has never                 
  been  competent  to analyze  banks.   Last  year, regulators                 
  spent five weeks at First National  and reviewed less than a                 
  dozen loans.  They  spent the majority of the  time checking                 
  to see that forms were  correctly filled out and regulations                 
  were met.  Mr. Cuddy concurred that there may be a number of                 
  time bombs awaiting a reverse interest rate situation and an                 
  accumulation of bad loans.                                                   
  SENATE BILL NO. 71                                                           
       An Act relating to emergency medical services; and                      
       repealing  obsolete  references  to the  Statewide                      
       Health  Coordinating  Council  and health  systems                      
  Co-chair  Frank announced  that  the bill  would be  held in                 
  committee as staff  continues to work  on fiscal notes.   He                 
  further  advised  that  Senator Rieger  would  be  proposing                 
  amendments for  incorporation within  the Finance  Committee                 
  SENATE BILL NO. 82                                                           
       An Act relating to the Dalton Highway.                                  
  Co-chair  Frank  directed  that  SB 82  be  brought  on  for                 
  discussion.    He  remarked  that  legislation  relating  to                 
  opening the Dalton Highway to public use had been before the                 
  legislature for a number of years.   At the present time,  a                 
  portion of  the road is  theoretically closed to  public use                 
  although the closure is not enforced.  Permits for travel on                 
  the road are issued to commercial or industrial users.                       
  The proposed bill would open the road to a terminus near the                 
  Arctic Ocean.  The  last few miles are  on oil company  land                 
  leased from  the state.  It is the  intent to have the Dept.                 
  of  Transportation  and  Public  Facilities  work  with  oil                 
  companies to develop an access route through those leases so                 
  that  the public can travel all the way to the Arctic Ocean.                 
  That  access  route is  not mandated,  however.   It  is the                 
  intent of  the sponsor to  have the department  exercise its                 
  authority to close the  road during months of the  year when                 
  it is determined to be unsafe due to cold weather.                           
  KEITH GERKEN,  Deputy Commissioner, Dept.  of Transportation                 
  and Public Facilities, came before committee, accompanied by                 
  JOHN  HORN,  Regional  Director, Northern  Region,  Dept. of                 
  Transportation  and Public Facilities.   Mr.  Gerken advised                 
  that the  department has  long supported  opening the  road.                 
  Opening  it to  the  public would  be consistent  with state                 
  policy on all  other routes.  More  practical considerations                 
  relate  to   the  current  insufficient  amount  of  capital                 
  improvement on the  route.  The principal  source of capital                 
  improvement  moneys  is  federal  highway  dollars.    Those                 
  dollars cannot be  spent on a road  that is not open  to the                 
  public.   Opening  the northern  half of the  Dalton Highway                 
  will  allow  the department  an  opportunity to  use federal                 
  moneys to maintain the road so that this extremely expensive                 
  asset does not further deteriorate.                                          
  The department fiscal  note is zero.   Currently, commercial                 
  traffic on the road is what  determines the amount of needed                 
  maintenance.  Increased traffic projections from tourism and                 
  recreational use do not indicate  that department costs will                 
  be impacted.                                                                 
  For a number  of years, the  department has cooperated  with                 
  the  federal  Bureau  of   Land  Management  on  development                 
  opportunities along the  route.  The BLM is  very interested                 
  and willing to work  on a plan to make  facilities available                 
  for camping, parking, scenic viewing, etc.                                   
  In  response  to a  question  from Senator  Kelly concerning                 
  availability of restaurants and gas stops along the highway,                 
  Mr. Horn said fuel,  food, and lodging are available  at the                 
  Yukon River, Cold Foot, and Deadhorse.  While long distances                 
  lie between those  locations, the  distances are not  beyond                 
  the gas tank  capacity of most vehicles traveling  the road.                 
  The longest stretch is  slightly over 200 miles.   As people                 
  begin to  use the road,  and commercial need  for additional                 
  facilities arises, they  will be built.   But the need  must                 
  first be  developed.  Senator Sharp advised  that the Senate                 
  Transportation Committee was provided information indicating                 
  the BLM has a "pretty elaborate plan set up for waysides and                 
  campgrounds," once the  road is opened and  demand justifies                 
  Further  discussion followed between  Senator Kelly  and Mr.                 
  Horn regarding ownership of existing fuel, food, and lodging                 
  facilities.   Mr.  Horn  noted Native  corporation,  service                 
  company,  and  private  ownership.   Mr.  Gerken  voiced his                 
  understanding that land upon which facilities are located is                 
  leased from BLM on a long-term basis.                                        
  Senator Rieger  raised questions concerning  state liability                 
  for   the   condition   of    the   road   and   maintenance                 
  responsibilities.    Has   an  action   based  on  lack   of                 
  maintenance ever been brought against the state?  Mr. Gerken                 
  acknowledged that  such actions  had been  brought.   Courts                 
  generally "look at that  as whether or not we're  doing what                 
  we can with what we're given."   The majority of the traffic                 
  on  the  road,  both today  and  after  it  is opened,  will                 
  continue to  be commercial.   State  liability thus  already                 
  exists.   He acknowledged that  a greater  number of  people                 
  traveling   the  road   would   increase  already   existing                 
  Mr. Gerken told members that while the condition of the road                 
  is  often described  as primitive, it  is not.   The road is                 
  constructed to federal,  secondary standards.   While it  is                 
  not  paved,  it  is  quite   adequate  in  terms  of  width,                 
  alignment, and  grade.   It is  acknowledged to  have a  few                 
  problems, and access to federal dollars for the northern end                 
  would  help correct situations where grades should not be as                 
  steep  as  they  currently  are.    Unless  the  weather  is                 
  particularly  bad, speed  on the  Dalton is  not a  problem.                 
  Truckers  move quite quickly  across it.   Tourists  will as                 
  well.  The road is passable and safe.  In terms of standards                 
  and maintenance,  it is  perhaps safer  than  the Taylor  or                 
  Denali Highways.   It is built  to better standards.   State                 
  liability should thus not change significantly.                              
  Senator Rieger  next asked  what the opening  of the  Dalton                 
  would mean in terms of the  statewide ISTEA allocation.  Mr.                 
  Gerken explained that the Dalton falls within the definition                 
  of core roads.  It will  thus have to compete against  other                 
  major highways  for available  federal dollars.   The  state                 
  will not receive more federal highway funding because it has                 
  more road  miles on which  to spend it.   The  department is                 
  attempting  to establish  statewide  priorities in  terms of                 
  which routes need attention most.  The Dalton  would compete                 
  and  may  take funding  from other  projects.   It  will not                 
  impact borough allocations.                                                  
  Discussion  followed  between  Senator  Kelly  and Mr.  Horn                 
  regarding pipeline  construction camps.  Mr.  Horn explained                 
  that most  camps have  been closed  or  co-located with  the                 
  seven pump stations along the pipeline.  The department also                 
  has  six  maintenance  stations along  the  route.   Further                 
  discussion  followed  between  Senator  Kelly and  Mr.  Horn                 
  concerning airstrips along the road.                                         
  Senator Sharp voiced  his understanding that the  portion of                 
  the road presently closed to  the public and ineligible  for                 
  ISTEA money consists  of approximately  the last 200  miles.                 
  Mr. Horn advised that  it is technically closed at  Disaster                 
  Creek.    Further discussion  relating  to  past checkpoints                 
  followed.    Mr. Horn  acknowledged that  there had  been no                 
  checkpoint for the last two or three years.  DOTPF never had                 
  enforcement authority along the road.  Due to staffing cuts,                 
  enforcement  by   the  Alaska  State   Troopers  was   rare.                 
  Essentially, anyone wishing  to drive the road  has done so.                 
  Further,  commercial  permits  were  easily  obtained.    In                 
  addition,  recent  statutes   opened  the  area  to   mining                 
  Senator Sharp next  raised a question  about use of  federal                 
  dollars versus general funds  on the portion of the  road to                 
  be opened.   Mr. Horn advised of a recent $5 million project                 
  utilizing general funds.  He said it was the first funded by                 
  general funds since 1984/85.   The road requires resurfacing                 
  every three years.   The  $5 million was  used to  resurface                 
  "Deadhorse south about 53 miles."   By raising the grade and                 
  narrowing the  road to  32 feet,  that portion  of the  road                 
  "essentially  blows itself  clean  now."   In  the past,  it                 
  required two people to control drifting during the winter.                   
  A steady, cyclical CIP  budget for the road will  reduce the                 
  cost of everyday maintenance.   The road wears out  in three                 
  years and maintenance costs increase.   Mr. Horn attested to                 
  other points along the road where drifting is a problem.                     
  Mr. Horn commented that  the road to slightly north  of Cold                 
  Foot has been opened since  1983 with no major impact.   The                 
  forecasted   impact   on  the   environment   and  predicted                 
  breakdowns  and   major   accidents   have   not   occurred.                 
  Commercial facilities will locate along  the highway as need                 
  arises.   Mr. Horn  further attested  to the  fact that  the                 
  farther one ventures from civilization, the more individuals                 
  help each other.                                                             
  If ISTEA funds  are not  going to  be used  on the  northern                 
  portion of  the Dalton, the  department needs $100.0  a mile                 
  every  four  years to  maintain  an adequate,  safe surface.                 
  That translates to approximately $5 million in general funds                 
  annually.  Senator  Kelly asked what the state  is currently                 
  paying to maintain the northern portion  of the Dalton.  Mr.                 
  Horn answered  that prior  to the  35% cut,  last year,  the                 
  department  spent  approximately  $7 million  a  year.   The                 
  reduction  funded  maintenance at  $4.3  million.   That was                 
  inadequate, hence  the $1.2 million  supplemental and moneys                 
  from the Commissioner's  "non-routine emergency  maintenance                 
  fund."   Since  January, approximately half of the  $2.5 cut                 
  has  been  added back.    That  maintains the  road  and the                 
  facilities needed to maintain the road.  It does not include                 
  maintenance of airports along the route.                                     
  COL.  JOHN  MURPHY,  Director,  Division  of  Alaska   State                 
  Troopers,  Dept.   of  Public   Safety,  next   came  before                 
  committee.  Co-chair Frank voiced his understanding that the                 
  Dept. of Public Safety could  meet increased demand for fish                 
  and wildlife and  highway enforcement with the  fiscal notes                 
  that accompanied the bill.   The Co-chair then said  that he                 
  did not totally agree with the level  of the notes and asked                 
  that Col. Murphy speak to increases in the trooper component                 
  as well as fish and wildlife protection.                                     
  Col. Murphy explained  that funding anticipates a  full-time                 
  trooper at seven mile and two  troopers out of Fairbanks who                 
  would travel the highway  on a rotation basis.   Troopers do                 
  not currently conduct roving patrols along the Dalton, but a                 
  supervisor travels  it.  DOTPF  has housing  at seven  mile.                 
  The department proposes to locate a trooper there as well.                   
  End, SFC-93, #39, Side 2                                                     
  Begin, SFC-93, #41, Side 1                                                   
  With increased traffic, there would be need for a trooper on                 
  the road  twelve to  sixteen hours  a day.   The  department                 
  bases  projected  need  on past  haul  road  experience with                 
  commercial traffic.                                                          
  Addressing fish  and wildlife protection needs,  Col. Murphy                 
  advised that an  enforcement officer would be  based at Cold                 
  Foot.   Enforcement personnel is currently  stationed there,                 
  but the department  intended to  transfer the position  this                 
  summer.    If  the road  is  opened,  resulting  hunting and                 
  fishing pressure  would necessitate that the position remain                 
  at Cold Foot.   A part-time position would also be needed to                 
  assist  during the  busy  season, and  an aircraft  would be                 
  required for search and rescue  as problem situations arise.                 
  First-year  costs  are  substantial  due  to  need  for  the                 
  aircraft and other equipment (a snow machine and four, four-                 
  wheel-drive vehicles).   Costs drop dramatically the  second                 
  Senator Sharp acknowledged the  department's desire to reach                 
  adequate staffing levels but questioned whether SB 82 is the                 
  proper vehicle.  He voiced his understanding that  there are                 
  presently no troopers on the road,  and he took exception to                 
  the proposal to  go from "zero to  four on the back  of this                 
  legislation."  The Senator questioned whether opening of the                 
  road would  initially  justify other  than merely  emergency                 
  response capability.   The Department of  Fish and Game  has                 
  indicated no greater incidence of violation along the Dalton                 
  than other locations statewide.   In fact there may  be less                 
  because of the five-mile no hunting  zones on either side of                 
  the road which permit only bow and arrow hunting.    Senator                 
  Sharp suggested that the Department  of Public Safety fiscal                 
  note reflects "overkill" in terms of funding.                                
  Senator  Kelly  asked  if  other   highways  in  Alaska  are                 
  unpatrolled.  Col. Murphy answered  that the Elliott Highway                 
  and  some others  are  not  patrolled  "very  often."    The                 
  troopers do  not patrol those  areas unless called,  or they                 
  patrol on a monthly cycle.                                                   
  Col.  Murphy  added  that the  department  is  not enforcing                 
  commercial vehicle  regulations along  the Dalton.   If  the                 
  road is open to the public  and more private vehicles travel                 
  the Dalton, the department will need to work with commercial                 
  truckers to ensure that  their equipment is safe.   There is                 
  much more  commercial traffic along the Dalton than on other                 
  infrequently patrolled highways.  Senator Kelly and Co-chair                 
  Frank suggested that costs of commercial vehicle inspections                 
  should be covered by program receipts.  Senator  Sharp noted                 
  that the weigh station at Fox  would be the proper site  for                 
  vehicle safety inspections.                                                  
  Co-chair  Frank  acknowledged  questions raised  by  Senator                 
  Lincoln when the  bill was before the  Senate Transportation                 
  Committee.    He  then directed  attention  to  a  packet of                 
  information (March 17, 1993, memo from Rick Solie to Senator                 
  Frank--copy  on  file  in  the  SFC  SB 82  file)  which  he                 
  explained attempts to address those concerns.                                
  RICK  SOLIE,  aide  to  Senator   Frank,  next  came  before                 
  committee.  He enumerated seven  questions raised by Senator                 
  Lincoln, read the brief response set  forth in the memo, and                 
  pointed to attached, in-depth backup materials.                              
  Speaking to the oil industry's  position on proposed opening                 
  of the road, Mr. Solie voiced his understanding that as long                 
  as the road is not opened "all the way to the Arctic Ocean,"                 
  the position would  be neutral.   Language in the bill  thus                 
  speaks to "a terminus  near the Arctic Ocean."   Oil company                 
  concern  is  that  opening  the  road  to  the  Ocean  might                 
  jeopardize operational security.                                             
  Mr. Solie next directed attention to correspondence from the                 
  Department of  Fish and  Game (included  within the  packet)                 
  indicating  that  there  might  be  a positive  impact  from                 
  opening the road "because some of the caribou herds actually                 
  could use a little  more harvest."  It does not appear there                 
  will be an adverse effect from additional hunting.                           
  EDGAR BLATCHFORD, Commissioner,  Department of Community and                 
  Regional Affairs,  next came before committee.   Co-chairman                 
  Frank voiced  his understanding that  the administration has                 
  requested the Commissioner to negotiate a settlement between                 
  the state and the Tanana Chiefs.  The Commissioner explained                 
  that, last summer,  several commissioners  and the  Attorney                 
  General met  with representatives  of TCC and  the law  firm                 
  representing the North Slope Borough.  The state immediately                 
  dismissed  the   suggested  creation   of  a   federal/state                 
  commission to regulate ingress and  egress out of the  North                 
  Slope.    Since  that  time,   there  have  been  additional                 
  discussions with  TCC.    The  Commissioner  explained  that                 
  travel   by   both  himself   and  TCC   representatives  to                 
  Washington, D.C., was unproductive  because senior officials                 
  at the Bureau of Land Management were reluctant to recommend                 
  any action until  after the November election.   Exchange of                 
  correspondence with  TCC is ongoing.   The  administration's                 
  understanding  is  that TCC  will  try  to bring  the  other                 
  parties together, i.e. the North Slope Borough and villages,                 
  etc.  Discussion  continued regarding "how  we can open  the                 
  DARSIE BECK,  Alaska Environmental  Lobby, next  came before                 
  committee.   He voiced  opposition to  opening the  highway,                 
  advising that it would substantially impact wildlife and the                 
  fragile  eco-system  of  areas north  of  the  Brooks Range.                 
  Hunting  pressures, both legal  and illegal,  will increase,                 
  and off-road vehicular traffic will  lead to serious erosion                 
  problems.   There will also be increasing  pressure to build                 
  new roads  from the  Dalton to  distant points.   The  BLM's                 
  ambitious  recreation plan  will attract  additional traffic                 
  and magnify negative impacts on the land and wildlife.                       
  Mr. Beck noted the following intent accompanying legislation                 
  that authorized construction of the Dalton Highway:                          
       It  is  the  sense  of  the legislature  that  the                      
       construction  of  the  highway   will  not  impair                      
       natural wilderness  adjacent to the  highway, will                      
       not   unreasonably   interfere   with  subsistence                      
       hunting, fishing, trapping, and gathering.                              
  Opening  of the  highway to  public  use would  violate that                 
  Senator Rieger pointed  to earlier-mentioned  correspondence                 
  from  the  Department  of  Fish  and  Game  indicating  that                 
  increased harvest  would be good for the long-term health of                 
  the caribou herd.  Mr. Beck disputed that statement.                         
  Co-chairman Frank noted  references by Mr. Beck  to off-road                 
  vehicular  traffic.      The   Senator   then   voiced   his                 
  understanding that the  Dalton has  protection against  off-                 
  road use that no other state  highway enjoys.  The five-mile                 
  corridor  on  each  side  of the  highway  is  a substantial                 
  prohibition.   Co-chairman  Frank voiced  surprise that  the                 
  environmental community would object to "just letting people                 
  drive a road."                                                               
  Mr.  Beck  acknowledged statutory  protection.    He further                 
  noted testimony that there is little or no enforcement along                 
  the road.   Co-chairman  Frank concurred  that there may  be                 
  violations by a small number of  people.  He voiced concern,                 
  however, that  the stand  taken by  the environmental  lobby                 
  indicates that "The people of Alaska won't follow the  law."                 
  Law  enforcement  in  any  state  is  based  upon  voluntary                 
  compliance.    Mr.  Beck  advised   that  the  environmental                 
  community is  opposed to  the opening  on the  philosophical                 
  grounds that it "increases use of resources that  don't need                 
  to be used right now."  The environmental community supports                 
  tourism, but this appears to be irresponsible tourism.                       
  Senator   Rieger   posed   questions   regarding   penalties                 
  associated  with  off-road violations  along  the  road, and                 
  suggested that if the  fine is minor, perhaps the  committee                 
  should  review the penalties.   Co-chairman  Frank predicted                 
  that most tourists  would either fly  to the North Slope  or                 
  travel via tour  bus.  He then voiced his belief that it was                 
  philosophically wrong for a portion of the road, constructed                 
  with public funds, to be closed to the public.                               
  CHIP  THOMA  next  came before  committee,  advising  of his                 
  experience  as a  truck  driver  on  the Dalton  during  the                 
  winters  of  1974, 75,  and 76.    He said  that wind-driven                 
  drifts and white-out  conditions prevail  much of the  time.                 
  He voiced his belief  that the state should not  have agreed                 
  to take over  the road.   It should have remained  a private                 
  road maintained by the oil companies.                                        
  Mr. Thoma suggested  that opening the road  would provide "a                 
  whole new moose  highway" for residents  of Fairbanks.    He                 
  then  voiced support  for efforts by  the Tanana  Chiefs and                 
  North Slope Borough to close the road.                                       
  Co-chairman Frank took exception to Mr. Thoma's comment that                 
  the purpose of  the proposed bill  was to expand access  for                 
  Fairbanks moose  hunters.   He reiterated  that the  impetus                 
  behind the bill  is philosophical:  A public road maintained                 
  with public dollars should  be opened to the public.   There                 
  is no policy reason for keeping  the Dalton closed "half way                 
  up."   No overriding  problems have  arisen as  a result  of                 
  having it open as  far as it is  now.  The people  of Alaska                 
  should have the  opportunity to drive  a road that was  paid                 
  for and is  maintained by public  dollars.  The  Co-chairman                 
  further  advised that he had worked  with the departments of                 
  Fish and Game, Public Safety,  and Transportation and Public                 
  Facilities to address legitimate concerns.                                   
  Mr. Thoma  said  that he  was  not asserting  that  ulterior                 
  motives were involved.   He stressed that from October  1 to                 
  April 1 there is no tourist value to the road.  The issue of                 
  concern is  safety.   The reason  for the  road is  to drive                 
  goods  and  services  to  Prudhoe  Bay.   Co-chairman  Frank                 
  commented that departments charged with responsibility along                 
  the road do not feel there is undue risk.  The  commissioner                 
  has authority to  close the road  if conditions are  unsafe.                 
  The Department  of Transportation and Public  Facilities has                 
  general authority  to  open and  close any  road for  safety                 
  KEITH   GERKEN,   Deputy    Commissioner,   Department    of                 
  Transportation  and  Public  Facilities,  again came  before                 
  committee.    He concurred  in  comments by  the Co-chairman                 
  regarding authority to open and close roads.  The department                 
  has, in the  past, issued notices  of closure to  commercial                 
  traffic.   In  response  to a  question  from Senator  Kelly                 
  regarding  inclusion  of specific  language  to that  effect                 
  within the bill, Co-chairman Frank said that he did not want                 
  the legislature to  arbitrarily set  times for openings  and                 
  The Co-chairman  announced  that  SB  82 would  be  HELD  in                 
  committee  for   additional  work   on  the   fiscal  notes.                 
  Discussion followed  between Senator  Kelly and  Co-chairman                 
  Frank regarding the approach  to fiscal note work.   The Co-                 
  chairman advised that he did not intend to zero the notes.                   
  SENATE BILL NO. 84                                                           
       An  Act relating to  fees for identification cards                      
       and certain motor vehicle licenses and permits; to                      
       licenses issued to drivers and  to revocation of a                      
       license to  drive; and providing for  an effective                      
  Co-chairman  Frank directed  that SB  84 be  brought on  for                 
  Senator Kelly acknowledged a problem  with the $215.7 fiscal                 
  note  from  the  Department  of   Public  Safety  but  noted                 
  projected revenue of $815.0, resulting in  a net gain to the                 
  JOSH FINK, aide to Senator Kelly, came before committee.  He                 
  explained  that similar  legislation passed  the House  last                 
  session.  It  is supported  by the Dept.  of Public  Safety,                 
  Dept. of  Health and Social  Services, the health  and human                 
  services  commission  of   the  Municipality  of  Anchorage,                 
  Mothers  Against  Drunk  Driving,  Bristol Bay  Area  Health                 
  Corporation, and the Alcoholic Beverage Control Board.                       
  The bill is  intended to have  a preventative and  deterrent                 
  impact  on use  of fraudulent  licenses for the  purchase of                 
  alcohol by minors.   A hologram would be placed  on licenses                 
  to prevent tampering.   The phrase "under  twenty-one" would                 
  be inscribed across the face of  licenses for minors to make                 
  it  easier for alcohol  providers to identify  those who are                 
  underage.     Those   who  are   caught   using   fraudulent                 
  identification  to  purchase  alcohol would  be  subject  to                 
  revocation of driving privileges for 60 days.                                
  JUANITA HENSLEY,  Chief, Driver  Services,  Dept. of  Public                 
  Safety, next came before committee.   She voiced support for                 
  the bill as well  as "anything that we can do  to save lives                 
  and prevent alcohol deaths."                                                 
  Directing  attention  to  the  department  fiscal  note, Co-                 
  chairman Frank asked  why three  additional people would  be                 
  needed to administer  the program.   Mrs. Hensley  explained                 
  that the department  estimates an  additional 1,500  license                 
  revocations  a  year.     One  bar  in   Anchorage  annually                 
  confiscates   approximately   400   licenses   from   minors                 
  attempting to purchase alcohol.   The department estimate is                 
  extremely conservative.  There is no way of knowing how many                 
  licenses will actually  be involved.   Approximately 500  to                 
  700  per  year  are  turned  over   to  the  ABC  Board  and                 
  subsequently forwarded to the department.                                    
  Senator Kelly suggested  that licenses for minors  bearing a                 
  hologram and the  above noted  inscription would reduce  the                 
  number of young people attempting  to enter bars or purchase                 
  alcohol.    Mrs. Hensley  explained  that young  people will                 
  sometimes  use the birth certificate of  an older brother or                 
  sister  to obtain a fraudulent duplicate license.  A license                 
  inscription identifying a minor  as being "under twenty-one"                 
  is not going to stop that behavior.                                          
  Last  year's budget contained funding for technical upgrades                 
  within  the  department.    That  funding will  purchase  an                 
  imaging system for  the Anchorage field office.   This pilot                 
  project for driver license photos  will allow the department                 
  to retrieve the photo of the  driver for comparison with the                 
  In response to a question  from Senator Rieger, Mrs. Hensley                 
  concurred that while there was no problem  with the proposed                 
  bill, it would not close  some already identified loopholes.                 
  End, SFC-93, #41, Side 1                                                     
  Begin, SFC-93, #41, Side 2                                                   
  Discussion  followed  between  Co-chairman  Frank  and  Mrs.                 
  Hensley regarding  existing penalties associated with use of                 
  false identification.  The normal  penalty is ten days  with                 
  ten  days  suspended and  a  $100  fine.   Unless  the false                 
  identification  is  used to  defraud  someone of  money, the                 
  lesser misdemeanor  violation rather than felony  forgery is                 
  most often utilized  because prosecutors simply do  not have                 
  the time to pursue a felony conviction.                                      
  Co-chairman Frank asked if the  three positions requested by                 
  the department relate to revocation  hearings.  Mrs. Hensley                 
  answered  that  one  would  be  an  administrative   hearing                 
  officer.  The request is based on the fact that 25% of those                 
  arrested for  DWI request  an administrative  hearing.   The                 
  other two are entry-level document processor II positions to                 
  process the other 75% of the paper work, etc.                                
  Further discussion followed between the Co-chairman and Mrs.                 
  Hensley regarding  issues in dispute  when an administrative                 
  hearing is requested.  Mrs. Hensley noted:                                   
       1.   Did the individual obtain false identification?                    
       2.   Was false identification used to purchase alcohol?                 
       3.   Should the license be revoked?                                     
  Additional discussion followed concerning processes involved                 
  in conducting  administrative hearings.   The  proposed bill                 
  specifies that the hearing will be held telephonically.  The                 
  hearing officer will be based  in Anchorage.  The department                 
  would like to see this provision applied to DWI law as well.                 
  Co-chairman Frank concurred in that approach.                                
  Senator Kelly suggested  that forfeiture of  an individual's                 
  permanent fund dividend be added as a penalty in addition to                 
  the proposed 60-day revocation of license under the proposed                 
  Mrs. Hensley  noted that  the cost  of a  duplicate driver's                 
  license is presently $3.  The  proposed bill increases it to                 
  $5.  From the department's standpoint, it takes more time to                 
  issue a duplicate  license than to renew a  license.  If the                 
  fee  was raised  to  $10, it  would  generate an  additional                 
  Senator Rieger  inquired regarding the  revenue fund  source                 
  set  forth  on the  department  fiscal note.    Mrs. Hensley                 
  explained  that reinstatement fees contribute to the program                 
  receipts.  Further  discussion of incoming program  receipts                 
  Senator  Kelly requested  that  staff  prepare an  amendment                 
  requiring that someone caught using false identification  to                 
  purchase alcohol  would forfeit  his or  her permanent  fund                 
  Mrs. Hensley noted that the  number of licenses suspended or                 
  revoked each year  is extremely  high.  Approximately  5,700                 
  are suspended for DWI, 8,300 for court revocation, 6,200 for                 
  accident involvement with no  insurance, and 400 to 600  for                 
  fraudulent driver licenses.                                                  
  Co-chairman Frank next inquired concerning  Court System and                 
  Dept. of Correction costs associated with the proposed bill.                 
  Senator Kelly suggested  that only a small  percentage would                 
  continue  to  drive once  the  license  was revoked.    Mrs.                 
  Hensley noted that a driver's license is extremely important                 
  to minors.  It is  hoped that the threat of revocation  will                 
  prevent them  from using  false identification.   While  the                 
  potential is there  for them to continue  to drive following                 
  revocation, studies  indicate that they drive more carefully                 
  for fear of getting caught.                                                  
  In the course  of discussion relating to charges for driving                 
  licenses and  duplicate licenses, Mrs. Hensley  advised that                 
  the proposed hologram  would add approximately $0.25  to the                 
  cost  of  the license.   Senator  Kelly  noted that  the fee                 
  charged  for an  Alaska driver's  license is much  less than                 
  that paid in other states.  Mrs. Hensley  noted that the fee                 
  in Alaska equates to $2 a year ($10 for a five year period).                 
  She  referenced  a  list  of  states  and  the fees  charged                 
  thereby,  and concurred that Alaska's is among the lowest in                 
  the nation.  Costs range from $1.75 to $6.25 per year.                       
  Co-chairman  Frank asked  if the  department had  considered                 
  increasing  the  five-year  license  period  to  relieve the                 
  workload on  the department.   Mrs.  Hensley  said that  the                 
  department  had  looked  at  renewal   by  mail.    Problems                 
  associated with a  longer term,  ten-year, license are  age,                 
  changes in vision, health, etc.                                              
  Senator Rieger suggested that  two-year vehicle registration                 
  rather than  the current  annual renewal  would save  costs.                 
  Co-chairman  Frank concurred,  advising that  exploration of                 
  that possibility  ran into  difficulty in  terms of  vehicle                 
  emission testing in  Anchorage and Fairbanks.   Mrs. Hensley                 
  acknowledged that the department presently has authority for                 
  registration every two  years.  It has  encountered problems                 
  with  both  ion  testing  and   yearly  property  taxes  the                 
  department collects on behalf of some municipalities.                        
  Co-chairman  Frank  directed  that  the   bill  be  HELD  in                 
  committee  while  cost  features  of  the  fiscal  note  and                 
  possible amendments are reviewed.                                            
  SENATE BILL NO. 97                                                           
       An  Act   relating  to   enhanced  911   emergency                      
       reporting systems; and providing for an  effective                      
  Co-chairman Frank  directed that  SB 97  be  brought on  for                 
  KEN ERICKSON, aide to Senator Pearce, came before committee.                 
  He directed attention  to a work draft  committee substitute                 
  for  the bill (8-LS0293\O,  Cramer, 3/16/93),  and explained                 
  that it would  allow emergency dispatchers to  better assist                 
  people who call  911. Victims of  crime, the young, and  the                 
  elderly are often  unable to  give adequate directions  when                 
  they dial the  emergency number.   If enacted,  SB 97  would                 
  create a mechanism  to fund enhanced 911  reporting systems.                 
  The  bill  is  permissive.    Enhanced  systems  provide  an                 
  expansion  of  benefits  of  existing  911  services.    New                 
  benefits include:                                                            
       1.   Immediate  visual  display  of  the  location  and                 
  telephone           number of the caller.                                    
       2.   Automatic routing to the appropriate emergency                     
            response unit.                                                     
       3.   Faster response time.                                              
       4.   Curtailment of abuses of the emergency system by                   
            documentation of callers.                                          
  The legislation provides immunity from liability (except for                 
  intentional  acts  of  misconduct or  gross  negligence)  to                 
  municipalities  and  suppliers  of 911  services.    For the                 
  purposes  of  a  dispatcher  furnishing   name  and  address                 
  information  to emergency  response units,  the  bill waives                 
  telephone  customer privacy rights  afforded by  an unlisted                 
  The difference  between the  proposed draft  and the  Senate                 
  Labor and  Commerce version rests in removal  of section two                 
  which  exempted  from  public  record,  transcriptions   and                 
  recordings of 911 phone calls.   Emergency systems currently                 
  work well without that  extra protection.  There is  thus no                 
  reason to change the status quo.  The section was originally                 
  requested by the  Anchorage telephone utility.   The utility                 
  has since decided the section is unnecessary.                                
  Senator Rieger inquired  regarding what kind of  information                 
  might be divulged  as a  result of removal  of section  two.                 
  Senator Kelly  noted that 911 information has been public up                 
  until this time.                                                             
  Senator  Kelly  MOVED for  adoption  of the  draft committee                 
  substitute dated 3-16-93.  No  objection having been raised,                 
  CSSB 97 (Finance)  was ADOPTED.  Senator  Kelly subsequently                 
  MOVED  that  CSSB  97  (Finance)  pass from  committee  with                 
  individual recommendations and  the accompanying zero fiscal                 
  note from the  Dept. of  Commerce and Economic  Development.                 
  No objection having  been raised,  IT WAS SO  ORDERED.   All                 
  members signing  the committee  report (Co-chairs  Frank and                 
  Pearce and  Senators Kelly,  Rieger, and  Sharp) signed  "do                 
  The meeting was adjourned at approximately 11:55 a.m.                        

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