Legislature(1993 - 1994)

04/19/1994 08:30 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                             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.                             
                                                                               

Document Name Date/Time Subjects