Legislature(1993 - 1994)
04/19/1994 08:30 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
MINUTES SENATE FINANCE COMMITTEE April 19, 1994 8:30 a.m. TAPES SFC-94, #64, Side 1 (000-end) SFC-94, #64, Side 2 (575-end) SFC-94, #66, Side 1 (000-139) CALL TO ORDER Co-chair Drue Pearce convened the meeting at approximately 8:30 a.m. PRESENT In addition to Co-chair Pearce, Senators Kelly, Rieger, and Sharp were present. Co-chair Frank arrived soon after the meeting began, and Senator Kerttula arrived as it was in progress. Senator Jacko did not attend. ALSO ATTENDING: Representative Williams; Former Representative Alyce Hanley; Randy Welker, Legislative Auditor; Margot Knuth, Assistant Attorney General, Dept. of Law; Bob Lohr, Executive Director, Alaska Public Utilities Commission; Art Snowden, Administrative Director, Alaska Court System; Clyde Stoltzfus, Special Assistant, Dept. of Transportation and Public Facilities; Jerry Gallagher, Director, Division of Mining, Dept. of Natural Resources; Jimmy Jackson, GCI; Dana Tindall, GCI; Kevin Richie, Director, Division of Personnel/EEO, Dept. of Administration; Mike McMullen, Manager, System Services, Division of Personnel/EEO, Dept. of Administration; Jayne Andreen, Executive Director, Council on Domestic Violence and Sexual Assault, Dept. of Public Safety; Mike Greany, Director, Legislative Finance Division; Peter Ecklund, aide to Representative Williams; Walt Wilcox, aide to Representative James; Carol Carrol, aide to Senator Kerttula; and aides to committee members and other members of the legislature. SUMMARY INFORMATION SB 213 - APUC EXTENSION AND REGULATORY COST CHARGE Testimony was provided by Former Representative Alyce Hanley and Bob Lohr of the Alaska Public Utilities Commission. Amendments 1 through 5 were presented and Amendments 2, 4, and 5 were adopted. CSSB 213 (Fin) was REPORTED OUT of committee with zero fiscal notes from the Dept. of Commerce and Economic Development and Dept. of Revenue. SB 313 - HEALTH CARE: INSURANCE;DATA;PRICES Testimony was presented by Carol Carroll, aide to Senator Kerttula. The bill was then REPORTED OUT of committee with a zero fiscal note from the Dept. of Commerce and Economic Development. SB 333 - DISCLOSURE OF EXEC.BR. CLOSE ASSOCIATIONS Testimony was provided by Randy Welker, Kevin Richie, and Mike McMullen. Amendment No. 1, proposed by Mr. Welker, was adopted. CSSB 333 (Fin) was REPORTED OUT of committee with a $24.3 fiscal note from the Dept. of Administration and zero notes from the Dept. of Law and Office of the Governor. SB 350 - ARREST FOR VIOLATING RELEASE CONDITIONS Testimony was provided by Margot Knuth, Jayne Andreen, and Art Snowden. The bill was REPORTED OUT of committee with a $11.3 fiscal note from the Dept. of Corrections and zero notes from the Dept. of Law, Dept. of Public Safety, and Dept. of Administration (Public Defender Agency and Office of Public Advocacy.) HB 28 - PENALTY FOR PROVIDING ALCOHOL TO A MINOR Testimony was provided by Rep. Williams and his aide, Peter Ecklund. CSHB 28(Jud)am was REPORTED OUT of committee with a $57.9 fiscal note from the Dept. of Corrections, an $18.8 note from the Court System, $2.2 note from the Dept. of Revenue, and zero notes from the Dept. of Public Safety, Dept. of Law, and Dept. of Administration (Public Defender and Office of Public Advocacy). HB 119 - AUTHORIZE USE OF DAY FINES IN MISD. CASES Testimony was presented by Art Snowden on behalf of the Court System. SCS CSHB 119 (Fin) was REPORTED OUT of committee with an $80.1 fiscal note from the Court System and zero notes from the Dept. of Law, Dept. of Corrections, Dept. of Public Safety, and Dept. of Administration (Office of Public Advocacy and Public Defender Agency). HB 183 - TRANSPORTATION CORRIDOR: FAIRBANKS-NOME Walt Wilcox presented testimony on behalf of Representative James. SCS CSHB 183 (TRA) was REPORTED OUT of committee with a zero House Finance Committee fiscal note for the Dept. of Transportation and Public Facilities. HB 453 - TAX ON RESIDUAL MARINE FUEL OIL CSHB 453 (Finance) was REPORTED OUT of committee with zero fiscal notes from the Dept. of Transportation and Public Facilities and the Dept. of Revenue. HB 498 - MINERAL EXPLORATION INCENTIVE CREDITS Jerry Gallagher, Dept. of Natural Resources, briefly testified, and two amendments to the bill were noted. The bill was subsequently HELD in committee for discussion at the afternoon meeting. SB 213 - APUC EXTENSION AND REGULATORY COST CHARGE Co-chair Pearce directed that SB 213 be brought on for discussion and referenced proposed amendments. She then spoke specifically to Amendment No. 1, requested by Anchorage Municipal Light and Power, and noted that since no one had furthered need for the amendment, the assumption is that it will not be offered. No one indicated to the contrary. Co-chair Pearce next directed attention to Amendment No. 2, proposed by GCI and supported by Co-chair Frank. Senator Rieger OFFERED Amendment No. 2 for discussion purposes. He then questioned the following language: Bonds or other debt issued to finance unregulated, competitive ventures by a municipally owned utility shall not be incurred in a manner that would permit a creditor, on default, to have recourse to the assets of the basic regulated utility business. advising that while it appears, on balance, to be good policy, arguments could be made either way. He suggested that it would require much stricter separation of an entity "that has a regulated monopoly power." Senator Sharp voiced need for a clear understanding that the legislative intent is not to allow shifting of costs to any portion of a regulated monopoly. He said that was the basis of his support for the amendment. Co-chair Pearce called for a show of hands on adoption of Amendment No. 2. Amendment No. 2 was ADOPTED with all four members present indicating support. Co-chair Pearce announced that while Amendment No. 3 was logged in, it does not reflect an actual amendment. Committee attention was directed to Amendment No. 4 by Senator Sharp. Senator Sharp OFFERED Amendment No. 4 for discussion purposes. Co-chair Pearce OBJECTED. Senator Sharp said that he met with APUC representatives and other interested parties in an attempt to develop "more gentle, kinder wording" to that inserted by Senate Judiciary. Research on wording in authorizing statutes from New York and Wisconsin produced the language proposed in Amendment No. 4. It is intended to provide APUC the tools it needs to properly regulate and make emergency decisions on service areas. Senator Rieger said he was comfortable with existing language. He then suggested that if the amendment is to be adopted, the word "necessarily" should be deleted and "reasonably" inserted in lieu thereof. APUC has given reasonable examples of need to go beyond the express granting of power in statute. Senator Rieger then formally MOVED to change "necessarily" to "reasonably." Co-chair Pearce called for objections. None were raised, and the Amendment to Amendment No. 4 was ADOPTED. [Co-chair Frank arrived at this time.] FORMER REPRESENTATIVE ALYCE HANLEY, Alaska Public Utilities Commission Member, and BOB LOHR, Executive Director, Alaska Public Utilities Commission, came before committee. Mr. Lohr said that language within Amendment No. 4 "looks better" following the adopted language change. He referenced earlier submission of six versions of sample language based on other utility commissions nationwide as well as language designed to address environmental issues and ensure that they do not "come up" as implied powers. They have to be explicitly granted by the legislature. As an alternative to Amendment No. 4, Mr. Lohr advised that existing statutory language could simply be amended by placing a period after the citation to AS 42.05.711. (See CSSB 213 (Jud), page 1, line 9.) Senator Sharp referenced recent judicial decisions stemming from lack of specificity in terms of powers and duties for various agencies. Under that decision making process both the legislature and agencies lose control. He voiced a preference for inclusion of language that "at least gives some direction and some legislative intent on what the duties are . . . ." Co-chair Frank stressed need for reasonable middle ground and voiced his belief that language within Amendment No. 4 meets that goal. [Senator Kerttula arrived at this time.] Co-chair Pearce called for a show of hands on adoption of Amendment No. 4. The motion CARRIED on a vote of 5 to 1 (Senator Kerttula was opposed), and Amendment No. 4 was ADOPTED. Senator Kelly explained that Amendment No. 5 would delete language mandating cable television regulation by APUC. He suggested that the issue represents a policy call that should be made on its own merits rather than as part of sunset legislation. At the present time, cable television may be regulated if regulation is requested. Co-chair Pearce voiced support for Senate Judiciary inclusion of cable television regulation. She further advised that the sunset process is specifically designed to bring policy calls back before the legislature. Senator Kelly MOVED for adoption of Amendment No. 5. Co-chair Pearce OBJECTED. Mrs. Hanley voiced her understanding that Amendment No. 5 would maintain the status quo. Cable television has not been regulated unless subscribers petition the commission for regulation. Co-chair Frank voiced his understanding that in situations where competition cannot be achieved and the result is a monopoly provider, regulation is somewhat reluctantly endorsed since it provides a measure of protection to the public. He then inquired concerning the philosophy behind deregulation of cable television. Mr. Lohr said that regulation is less compelling for television because it is not an essential service as is water or electricity. The monopoly status is no longer as natural as it once was in that there is limited competition and alternative ways of delivering signals. Many local exchange companies nationwide are "looking at providing cable service" through fiber optic telephone lines. At that point, there will be substantial competition for cable services. Mr. Lohr next spoke to the implications of excluding basic tier cable service from regulation. That is the only issue in question. The federal cable reregulation act of 1992 preempts state regulation of anything (premium channels) above the basic tier. If the state were to statutorily exclude basic tier regulation, the federal government, in regulations under new federal legislation, would preempt the state, and the FCC would assume jurisdiction over basic tier channels. Mr. Lohr voiced his understanding that the amendment would continue to allow subscribers in Alaska to petition for regulation by APUC. However, if opportunity for petition is closed, the federal government would preempt state regulation and would regulate basic tier service from Washington, D.C., through a cumbersome complaint process that is not adaptable to local conditions. Co-chair Frank voiced his understanding that Amendment No. 5 would leave petition opportunities in tact. Mr. Lohr concurred. Co-chair Frank said he had heard no good reasons for exempting cable television from regulation. Senator Kelly noted that premium channels are regulated by federal law. Co-chair Frank asked if the federal government also regulates basic tier service. Mr. Lohr responded affirmatively, explaining that federal regulation applies in "any community where effective competition is not found to exist." Co-chair Pearce voiced her understanding that while the cost of basic service decreased following passage of federal law, the package most people subscribe to, which includes "some sort of a premium channel," increased. Regulation thus resulted in higher fees. Mr. Lohr explained that the complex federal formula said that the average monthly revenues of a cable utility could not increase. However, the formula allows cable companies to shuffle rates within that package. Since that time, the FCC issued a subsequent order resulting in an average 7% reduction. It was recognized that the original intent of federal legislation was not being accomplished. Discussion followed concerning the number of subscribers needed to petition the APUC for regulation. Further discussion followed regarding the cost of cable television regulation. Mr. Lohr explained that regulation for basic tier would make the company's basic tier gross revenues subject to the regulatory cross charge of 4/10 of a percent. Senator Kelly voiced concern raised by utilities that in addition to the RCC rate, they expend thousands of dollars for attorneys to put rate-case packets together. The cost to businesses is higher than merely the RCC rate. Mr. Lohr concurred that preparation of rate cases involves both attorneys and accountants. Senator Kelly noted that this cost is passed on to the consumer. Co-chair Frank voiced concern that regulation would prevent additional competition in the market. Further noting the costs involved and the fact that federal regulation is in place, the Co-chair voiced support for Senator Kelly's amendment. In final comments on the issue, Senator Kelly voiced his understanding that new federal regulations cover all cable television premium channels. Mr. Lohr explained that the regulations apply to all premium channels "for which there is not effective competition." Co-chair Pearce called for a show of hands on adoption of Amendment No. 5. The motion CARRIED on a vote of 4 to 2 (Co-chair Pearce and Senator Rieger were opposed), and Amendment No. 5 was ADOPTED. Senator Kelly MOVED that CSSB 213 (Finance) pass from committee with individual recommendations. No objection having been raised, CSSB 213 (Finance) was REPORTED OUT of committee with zero fiscal notes from the Dept. of Revenue and the Dept. of Commerce and Economic Development. Co- chairs Pearce and Frank and Senators Kelly, Rieger, and Sharp signed the committee report with a "do pass" recommendation. Senator Kerttula signed "no recommendation." CS FOR HOUSE BILL NO. 453(FIN) An Act establishing, for purposes of the levy and collection of the motor fuel tax and for a limited period, a different tax levy on residual fuel oil used in and on certain watercraft; and providing for an effective date. Co-chair Pearce directed that CSHB 453 (Fin) be brought on for discussion and noted discussion of the identical Senate version at the previous meeting. Senator Rieger MOVED that CSHB 453 (Fin) pass from committee with individual recommendations. No objection having been raised, CSHB 453 (Fin) was REPORTED OUT of committee with zero fiscal notes from the Dept. of Revenue and the Dept. of Transportation and Public Facilities. Co-chairs Pearce and Frank and Senators Kelly, Rieger, and Sharp signed the committee report with a "do pass" recommendation. Senator Kerttula signed "no recommendation." SENATE BILL NO. 333 An Act relating to disclosure of close economic associations by certain state employees and to the prohibition against nepotism in the executive branch of state government; and providing for an effective date. Co-chair Pearce directed that SB 333 be brought on for discussion and referenced file material relating to the bill. RANDY WELKER, Legislative Auditor, came before committee. He explained that the bill was introduced by the Legislative Budget and Audit Committee in response to an audit of the Dept. of Public Safety, Fish and Wildlife Protection Division. While the legislature had earlier passed law that made it illegal for fish and wildlife protection officers to be licensed as guides, the audit highlighted potential for an additional problem: close economic association. Those involved in the legislative branch of government are required to disclose such associations. There is no such requirement in the executive branch ethics act. During the audit, evidence was found of fish and wildlife protection officers who either own commercial fishing permits or commercial fishing vessels, or have spouses who own permits or vessels. There were also indications of significant property transactions between fish and wildlife protection officers and those they regulate. Nothing currently requires disclosure of these associations. This situation is not unique to the Dept. of Public Safety. Law does not presently prohibit an ABC investigator from being co-owner of a liquor license. Further, an oil and gas auditor within the Dept. of Revenue is not required to disclose that he or she owns significant stock in an oil company. The proposed bill requires that those who exercise substantial discretion in regulatory or audit matters be required to disclose economic associations to their supervisors. The legislation also provides for action by the supervisor in either reassigning duties or ordering divestiture of the interest. Section 2 of the bill extends provisions of the current nepotism statute. The present prohibition only extends to blood relations to the executive head of the department. The law should include all employer/subordinate relationships in state government. Section 2 expands the current prohibition. The fiscal note from the Dept. of Administration relates to changes in the nepotism statute. Discussion followed regarding the definition of "supervisor." Mr. Welker explained that it is described as "a position as immediate supervisor or as a supervisor within the organizational structure." Co-chair Pearce asked if the child of the Governor's chief of staff could work in one of the departments. Mr. Welker said a legal interpretation of that situation would have to be made. In response to a question from Senator Kelly concerning the definition of "public officer," Mr. Welker voiced his understanding that it refers to "any state employee." Senator Kelly stated his discomfort with broad application of expanded nepotism provisions. Senator Sharp voiced his understanding that private sector nepotism restrictions generally allow for situations where a family member was an employee prior to hire of the related supervisor. Co-chair Pearce suggested that the employee would not necessarily have to be discharged, in the noted situation, but merely transferred to a different section. Mr. Welker concurred. Senator Kerttula attested to substantial abuse in areas covered by the proposed bill. Mr. Welker directed attention to page 1, line 14, and noted language requiring that the "personnel board" adopt associated regulations. The administration pointed out that all executive branch ethics regulations are developed and defined by the Attorney General. The administration has thus asked that "personnel board" be deleted and "Attorney General" inserted in lieu thereof. Mr. Welker recommended the change. KEVIN RICHIE, Director, Division of Personnel/EEO, Dept. of Administration, and MIKE McMULLEN, Personnel Manager, System Services, Division of Personnel/EEO, Dept. of Administration, came before committee. Mr. Richie referenced the $24.3 fiscal note and reiterated that it relates to expanded nepotism provisions. He noted that current statutes provide no waiver for nepotism. Proposed new law extends to a "regular member of the household" as well. That includes "other people living in the household that weren't related by blood." It includes a larger number of people than previously covered, and it is assumed that grievances will be filed over this issue. Senator Rieger directed attention to page 2, lines 4 and 5, and requested an explanation of "official action in a matter that directly involves a person . . . ." He then asked how the language would be interpreted by the Attorney General. Mr. McMullen explained that the executive branch ethics act contains an assumption that relationships exist. Minor interactions are not conflicts of interest. Co-chair Pearce asked representatives from the department if they were supportive of the language change recommended by Mr. Welker. Both Mr. Richie and Mr. McMullen responded affirmatively. Mr. McMullen indicated that the change would reduce the fiscal note by $1.5. Discussion followed regarding expansion of nepotism prohibitions to cover regular members of a household. Mr. Richie acknowledged that inclusion represents a policy call. He noted that today's households contain equivalents of family members that are not related by blood or marriage. Senator Kerttula MOVED for adoption of the language change from "personnel board" to "Attorney General" at page 1, line 14. No objection having been raised, Amendment No. 1 was ADOPTED. Senator Sharp MOVED that CSSB 333 (Fin) pass from committee with individual recommendations and accompanying fiscal notes. Senator Kelly OBJECTED. He attested to the small size of the state population and the number of households with members working for state government. He voiced his belief that certain nepotism prohibitions within the bill were too broad. End: SFC-94, #64, Side 1 Begin: SFC-94, #64, Side 2 Co-chair Pearce called for a show of hands on the motion. CSSB 333 (Fin) was REPORTED OUT of committee on a vote of 4 to 1. It was accompanied by zero fiscal notes from the Office of the Governor and the Dept. of Labor and a $24.3 note from the Dept. of Administration. Co-chairs Pearce and Frank and Senators Kerttula, Rieger, and Sharp signed the committee report with a "do pass" recommendation. Senator Kelly signed "no recommendation." Senator Kerttula asked for a brief recess. RECESS - 9:15 A.M. RECONVENE - 9:30 A.M. SENATE BILL NO. 350 An Act relating to a defendant's violation of conditions of release; and providing for an effective date. Co-chair Pearce reconvened the meeting with both co-chairs and Senators Kelly, Rieger, and Sharp in attendance. She then directed that SB 350 be brought on for discussion and referenced file materials. MARGOT KNUTH, Assistant Attorney General, Dept. of Law, came before committee, accompanied by JAYNE ANDREEN, Executive Director, Council on Domestic Violence and Sexual Assault, Dept. of Public Safety. Ms. Knuth explained that under existing law, police officers have authority to make a warrantless arrest for any felony offense and for certain misdemeanors: DWI, domestic violence, etc. The proposed bill authorizes peace officers to make a warrantless arrest when a defendant has violated conditions of release in those same cases. Under present law, when a person is arrested, he or she is brought before the court and either held in jail pending trial or released. In most instances defendants are released, and conditions such as a monetary bail amount, custody arrangement, etc. are placed upon that release. Individuals remain under release until trial and conviction. The state is finding that many defendants violate conditions of release, and it often takes days to bring them back before the court and to get them into custody. Further, defendants are often again released under more stringent conditions. The proposed bill deals with immediate intervention for violation of release conditions involving domestic violence, rape, sexual abuse, and assault cases. Senator Rieger noted carefully crafted language at page 2 and raised a question concerning need for specific rather than more general language. Ms. Knuth pointed to language at page 3 and noted that in all instances of rape or sexual assault, it does not matter whether the defendant and victim have a relationship or not. Language at page 2, regarding felony assault and the relationship between the defendant and victim is intended to balance the defendant's freedom again public safety interests in immediately bringing the defendant back before the court through a warrantless arrest. Specific language attempts to achieve that balance by saying that when the defendant knows the victim in an assault or sexual abuse case, concern for the victim and protection of society outweigh the defendant's liberty interests. JAYNE ANDREEN voiced support for the legislation. She said that the bill targets the types of crime that involve both violence and the threat of violence. Victims may presently obtain a civil, temporary restraining order against the perpetrator. Violation of that order entails immediate arrest. Under current criminal law, those who violate conditions of release cannot be so readily arrested. Ms. Andreen stressed that in instances of domestic violence and stalking, if the system works very quickly, chances of recidivism are lowered. In response to a question from Senator Kerttula, Ms. Andreen voiced her understanding that the idea behind the proposed bill responds to a request from Alaska judges. ART SNOWDEN, Administrative Director, Alaska Court System, advised that the court system has no objection to the bill. Senator Kerttula MOVED that SB 350 pass from committee with individual recommendations. No objection having been raised, SB 350 was REPORTED OUT of committee with a $11.3 fiscal note from the Dept. of Corrections and zero notes from the Dept. of Law, Dept. of Public Safety, and Dept. of Administration (one each from both the Office of Public Advocacy and the Public Defender Agency). All members present signed the committee report with a "do pass" recommendation. (Senator Jacko was absent from the meeting and did not sign.) CS FOR HOUSE BILL NO. 119(JUD) am An Act authorizing a sentencing court to impose a sentence of a day fine instead of a sentence of imprisonment on a defendant convicted of a misdemeanor; directing the Alaska Supreme Court to develop and implement a day fine plan; requiring the Alaska Court System to report to the legislature on the use of day fines; amending Alaska Rule of Criminal Procedure 32; and providing for an effective date. Co-chair Pearce directed attention to CSHB 119 (Jud)am and noted a draft Senate Finance Committee Substitute (work draft 8-LS0496\R, Luckhaupt, 4/18/94). She further referenced associated fiscal notes and the fact that while the bill was waived from committee last year, it was returned for adoption of the proposed work draft. Senator Rieger MOVED for adoption of SCS CSHB 119, "R" version. No objection having been raised, SCS CSHB 119 (Fin) was ADOPTED. Senator Rieger explained that the only change embodied within the Senate Finance version relates to provisions requiring that moneys collected under the new day-fine system be separately accounted for in the general fund. Provisions also allow the legislature to appropriate one- quarter to the violent crimes compensation board and one- quarter to the council on domestic violence and sexual assault. Senator Kelly inquired concerning a definition of "day fine." ART SNOWDEN, Administrative Director, Alaska Court System, again came before committee. He explained that the "day-fine" system has been used for many years in Europe and in many local jurisdictions within the United States. Such fines will be imposed for non-violent state misdemeanors. Mr. Snowden referenced the current backlog of almost a year prior to incarceration of misdemeanants and stressed need for an economic sanction instead. A day fine takes two elements into consideration: 1. The seriousness of the crime. 2. The income of the perpetrator. Mr. Snowden voiced his belief that economic sanctions would provide great deterrence to these types of crimes. Discussion followed regarding use of permanent fund dividends to pay day fines. Senator Kelly suggested that someone who shoplifts food would not be able to pay the fine. Mr. Snowden advised of alternative community service for working off the fine. Senator Sharp asked if day fines would cover DWI offenses. Mr. Snowden responded negatively, noting that DWI involves a mandatory jail sentence. Senator Kerttula MOVED for passage of SCS CSHB 119 (Fin) with individual recommendations. No objection having been raised, SCS CSHB 119 (Fin) was REPORTED OUT of committee with an $80.1 fiscal note from the Court System, and zero notes from the Dept. of Law, Dept. of Public Safety, Dept. of Corrections, and Dept. of Administration (one each from the Office of Public Advocacy and the Public Defender Agency). All members present signed the committee report with a "do pass" recommendation. (Senator Jacko was absent from the meeting and did not sign.) CS FOR HOUSE BILL NO. 28(JUD) am An Act relating to the penalty for providing alcoholic beverages to a person under the age of 21; and providing for an effective date. Co-chair Pearce directed that CSHB 28(Jud)am be brought on for discussion and referenced accompanying fiscal notes and other file materials. PETER ECKLUND, aide to Representative Williams, came before committee. He then read the sponsor statement (appended to these minutes as Attachment A) accompanying the bill. He noted that the bill was introduced in response to the tragic alcohol-related deaths of two youths in Ketchikan. The purpose of the legislation is to strengthen the penalty for providing alcoholic beverages to a person under the age of 21. Provisions of the bill change the penalty for second or subsequent violations of law to a class "C" felony with a maximum penalty of five years in prison and a $50,000 fine, if the offender has been convicted within the past five years. It also requires that warning signs be posted in places where alcohol is sold. In response to a question from Senator Kerttula, Mr. Ecklund said the bill would not change current law. It merely increases the penalty for second or subsequent offenses. REPRESENTATIVE BILL WILLIAMS came before committee. Senator Rieger referenced AS 04.16.051 and noted that it speaks to furnishing (rather than selling) alcohol to minors. He then voiced concern that an individual providing a beer to a young adult might be guilty of a class C felony. He inquired concerning other felonies within that class, noting discussion of an earlier bill that listed stalking as an unclassified misdemeanor. Representative Williams stressed that class C felony provisions in the bill apply to a second offense within five years. Senator Rieger voiced need to reconcile the severity of the crime with the proposed penalty. Mr. Ecklund noted that the first offense for furnishing alcohol to a minor is a class A misdemeanor involving up to one year in jail and a $5,000 fine. Senator Kerttula raised concerns regarding private parties in private homes involving a broad spectrum of ages (little theater groups were used as an example). Although care is taken to ensure that those under age do not imbibe, there are nonetheless instances where temporary lack of vigilance might place the host in jeopardy for unintentionally furnishing alcohol to a minor. Representative Williams noted the difference between being offered alcohol and taking it and advised that the proposed bill is not aimed at the situation described by Senator Kerttula. Representative Williams advised that similar discussion was had in both House Judiciary and House Finance. The bill passed the House with no votes against it. In the course of further discussion, Mr. Ecklund advised that the statute makes no distinction between provision and sale of alcohol to a minor. Co-chair Pearce called for additional testimony on the bill. None was forthcoming. Senator Sharp MOVED that CSHB 28(Jud)am pass from committee with individual recommendations. No objection having been raised, CSHB 28(Jud)am was REPORTED OUT of committee with the following fiscal notes: Dept. of Corrections $57.9 Dept. of Revenue 2.2 Alaska Court System 18.8 Dept. of Law 0 Dept. of Public Safety 0 Dept. of Administration (OPA) 0 (PDA) 0 Co-chair Frank and Senators Kelly, Kerttula, and Sharp signed the committee report with a "do pass" recommendation. Co-chair Pearce and Senator Rieger signed "no recommendation." CS FOR HOUSE BILL NO. 183(FIN) am An Act directing the identification and delineation of a transportation and utility corridor between Fairbanks and the Seward Peninsula; and providing for an effective date. Co-chair Pearce directed that CSHB 183(Fin)am be brought on for discussion and referenced file materials, including a position paper from the Dept. of Transportation and Public Facilities indicating opposition to a portion of the bill. WALT WILCOX, aide to Representative James, came before committee. Directing attention to earlier mention of a position paper from the Dept. of Transportation and Public Facilities, Mr. Wilcox referenced a subsequent position statement and noted that the objectionable section has been removed from the bill. Co-chair Pearce sought verification from the department. CLYDE STOLTZFUS, Special Assistant, Dept. of Transportation and Public Facilities, indicated support for the bill. Senator Sharp noted that Senate Transportation added language to accommodate Senator Kerttula. He then specifically noted the following wording at page 1, lines 12 and 13: together with adjacent sites that can be developed for necessary construction materials Senator Sharp then MOVED that SCS CSHB 183 (TRA) pass from committee with individual recommendations and the accompanying zero fiscal note. No objection having been raised, SCS CSHB 183 (TRA) was REPORTED OUT of committee with a zero House Finance Committee fiscal note for the Dept. of Transportation and Public Facilities. Co-chair Frank and Senators Kelly, Rieger, and Sharp signed the committee report with a "do pass" recommendation. Co-chair Pearce and Senator Kerttula signed "no recommendation." CS FOR HOUSE BILL NO. 498(FIN) An Act providing for exploration incentive credits for activities involving locatable and leasable minerals and coal deposits on certain land in the state; and providing for an effective date. Co-chair Pearce directed that CSHB 498(Fin) be brought on for discussion and explained that it began the same as SB 371 which was heard by committee at the prior meeting. She then referenced Amendment No. 1, by Senator Kerttula, and Amendment No. 2, by Co-chair Frank. Senator Kelly voiced his understanding that previous discussion of the issue included limiting the bill to new exploration projects. He then noted that the oil and gas incentive credit earlier passed by the Senate reflects a "much tighter bill." He spoke to provisions of that legislation and asked that CSHB 498(Fin) be held for consideration at a subsequent meeting. Senator Kerttula asked that department staff speak to his local hire amendment. Co-chair Pearce also noted that Amendment No. 2, by Co-chair Frank, was requested by the department and asked that staff come before committee at this time. JERRY GALLAGHER, Director, Division of Mining, Dept. of Natural Resources, explained that Amendment No. 2 relates to a concern expressed in Senate Resources regarding impact on trust lands. The proposed amendment would allow the department to make that determination by regulation. He voiced his belief that credits could not be granted on trust lands. Senator Rieger inquired concerning amounts involved in retroactive provisions back to January 1, 1994. Mr. Gallagher remarked that no real answer is available since the credit only applies to new mines that go into production within the next fifteen years. Ongoing exploration as of this date would be covered by the retroactive clause. Senator Rieger asked if the credit would be applied "mine by mine." Mr. Gallagher responded affirmatively. He directed attention to page 3, line 2, and noted that addition of "based on the production from the parcel or site" ties the credit to a specific piece of land. Both exploration expenditures and the credit are property specific. Co-chair Pearce directed that the bill be HELD for action at the evening meeting. End: SFC-94, #64, Side 2 Begin: SFC-94, #66, Side 1 SENATE BILL NO. 313 An Act relating to the Comprehensive Health Insurance Association and to health insurance provided to residents of the state who are high risks; and providing for an effective date. Co-chair Pearce directed that SB 313 be brought on for discussion. She noted that the bill was heard by both Senate Labor and Commerce and Senate Health and Social Services and that a majority of the committee had discussed it in earlier committees. CAROL CARROLL, aide to Senator Kerttula, came before committee. She explained that the bill amends legislation relating to a high risk health insurance pool established in 1992. It responds to problem areas identified by the comprehensive health insurance association and would extend existing legislation to health maintenance organizations. Sections 3 and 4 provide additional forms of deductibles, copayments, and maximums. After a year of experience, the Association has indicated that some individuals would purchase high risk insurance if it could be applied to catastrophic illness and entail a large deductible. Section 5 broadens Association power to offer policies to groups that maintain healthy lifestyles. Section 6 further defines eligibility for the state plan. It would disqualify residents eligible for coverage under small employer health reinsurance association legislation passed last year. Sections 7 and 8 require payment of the premium with the request for insurance. Section 9 explicitly gives the director of insurance ability to formulate policy and adopt regulations. Section 10 provides Association board members immunity from civil or criminal liability for acts and omissions. This is especially important for public members. Section 11 allows the director to accept an application for coverage in cases where two denials of coverage seem to be superfluous. Ms. Carroll further directed attention to the sponsor statement (Attachment B) and sectional analysis (Attachment C). Co-chair Pearce queried members regarding disposition of the legislation. Senator Kerttula attested to benefits of both this and past legislation to small business owners. Co- chair Frank MOVED that SB 313 pass from committee with individual recommendations and the accompanying zero fiscal note. Senator Sharp seconded the motion, voicing support for passage. No objection having been raised, SB 313 was REPORTED OUT of committee with a zero note from the Dept. of Commerce and Economic Development. Co-chairs Pearce and Frank and Senators Kerttula and Sharp signed the committee report with a "do pass" recommendation. All other members had left the meeting and did not sign the report. RECESS Co-chair Pearce announced that the meeting would be recessed at this time and scheduled to reconvene at 5:30 p.m. The meeting was recessed at approximately 10:30 a.m.