Legislature(1995 - 1996)

03/15/1995 09:07 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                             MINUTES                                           
                    SENATE FINANCE COMMITTEE                                   
                         March 15, 1995                                        
                            9:07 a.m.                                          
  TAPES                                                                        
                                                                               
  SFC-95, #12, Side 2, (575-end)                                               
  SFC-95, #14, Side 1, (000-575)                                               
  SFC-95, #14, Side 2, (575-750)                                               
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Senator  Rick  Halford, Co-chair,  convened  the meeting  at                 
  approximately 9:07 a.m.                                                      
                                                                               
  PRESENT                                                                      
                                                                               
  Co-chair Halford, Senators Phillips, Rieger and Zharoff were                 
  present.  Senators Sharp and Donley joined shortly after the                 
  meeting  began.    Co-chair  Frank  arrived later  into  the                 
  meeting.                                                                     
                                                                               
  Also Attending:                                                              
                                                                               
  Senator Miller, Dan  Fauske, CEO/Executive Director,  Alaska                 
  Housing Finance  Corp.; Ron  Swanson, Director,  Division of                 
  Land,  Dept.  Natural  Resources;  Margot  Knuth,  Assistant                 
  Attorney  General,  Criminal Division,  Dept.  of  Law; Mike                 
  Greany,  Director,  Legislative   Finance;  Donna   Schultz,                 
  Juvenile  Probation Officer,  Family  Youth Services,  Dept.                 
  Health & Social  Services; Joe Ambrose, Legislative  Aide to                 
  Senator  Taylor; and  Mary  Vollendorf, Legislative  Aide to                 
  Senator Leman.                                                               
                                                                               
  SUMMARY INFORMATION                                                          
                                                                               
       SB  93 DISPOSAL OF LAND ALONG THE DALTON HWY                            
                                                                               
       Discussion was had with Senator Miller and Ron Swanson,                 
       Director, Division of Land, Dept. Natural Resources.                    
       CSSB14 (RES) was REPORTED OUT of committee with a "do                   
       pass" recommendation and zero fiscal note from the                      
       Dept. of Natural Resources.                                             
                                                                               
       SB   6 LICENSING/REGISTRATION SUSPENSION/DENIAL                         
                                                                               
       Discussion was  has with Joe Ambrose,  Legislative Aide                 
  to           Senator Taylor.  This bill will be brought back                 
  before the                                                                   
       Committee Friday, March 17th.                                           
                                                                               
                                                                               
       SB  14 INCREASED PENALTIES FOR JOYRIDING                                
                                                                               
       Discussion  was   had  with  Margot   Knuth,  Assistant                 
  Attorney                                                                     
       General,  Criminal   Division,  Dept.   of  Law;   Mary                 
  Vollendorf,                                                                  
       Legislative Aide to  Senator Leman; and Donna  Schultz,                 
  Juvenile  Probation Officer, Family Youth Services, Dept. of                 
  Health                                                                       
       & Social Services.  CSSB14 (JUD) was REPORTED OUT of                    
       committee with a "do pass" recommendation, with the                     
       following  fiscal  notes:   Dept.  of   Administration,                 
  $104.6;                                                                      
       Dept. of Law, $81.7; Dept. of Corrections, zero; Dept.                  
       of Public Safety - Troopers, zero; Dept. of Public                      
       Safety  -  Motor  Vehicles,  $96.4;  and  Alaska  Court                 
  System,                                                                      
       $55.0.                                                                  
                                                                               
       SB  92 AHFC SUBJECT TO EXEC. BUDGET ACT                                 
                                                                               
       Discussion  was  had  with  Dan  Fauske,  CEO/Executive                 
  Director,                                                                    
       Alaska Housing Finance Corp. Testimony is attached.  SB                 
  92                                                                           
       was REPORTED OUT of committee with a zero fiscal note.                  
                                                                               
                                                                               
       SENATE BILL NO. 93                                                      
       "An Act relating  to the disposal  of state land  along                 
  the           Dalton Highway; and providing for an effective                 
  date."                                                                       
                                                                               
  Co-chair Halford invited Senator Miller to sit at the table.                 
  Senator  Miller is the  sponsor of SB  93 and was  given the                 
  floor.  He explained that SB 93 does not have a fiscal note,                 
  and has passed out of Resources with a committee substitute.                 
  The Dalton  Highway  is open  to  public travel  creating  a                 
  continuing need for more development along the highway.   SB                 
  93 would allow for leasing  within already identified nodes,                 
  to include the Yukon River Crossing, Happy Valley, Coldfoot,                 
  and  Franklin  Bluffs.   The  procedures provide  for public                 
  review. The leasing covers the areas where existing pipeline                 
  camps existed.  The areas are well established.  Mr. Swanson                 
  from  the Dept. of Natural Resources  supports SB 93.  SB 93                 
  will allow for development, but not strip development.                       
                                                                               
  Senator  Zharoff  asked  who  is presently  maintaining  the                 
  highway.                                                                     
  Senator   Miller    answered   that   the    Department   of                 
  Transportation is maintaining the highway.                                   
                                                                               
  Senator Phillips asked  how many services are  in existence,                 
                                                                               
                                                                               
  at the present time, along that area of the highway. Senator                 
  Miller  responded  that  Coldfoot  offers  food,  gas,  tire                 
  changing,  etc.    Senator  Phillips  asked how  many  miles                 
  between stops?   Mr.  Swanson,  responded between  75 -  150                 
  miles between the various service  points.  Senator Phillips                 
  asked how disposal  would be handled?   Mr. Swanson answered                 
  that there is  an adopted  federal land use  plan in  place.                 
  The  bill  has  restrictions for  commercial  and industrial                 
  disposal. He spoke of the task force ongoing between federal                 
  and   state   agencies   with  the   hope   to   make  their                 
  recommendations  become   the  state  land   use  plan   for                 
  implementation.   Senator Phillips asked for  particulars in                 
  obtaining the land. Mr. Swanson replied that the application                 
  requests vary from 5 to 40 acres, for lease or purchase.  He                 
  noted that surveying and appraising  is a requirement of the                 
  applicant without a time limit.                                              
                                                                               
  Senator Rieger  moved  for passage  of  CSSB 93  (RES)  with                 
  individual recommendations. No objection having been raised,                 
  CSSB 93  (RES) was  REPORTED OUT  of committee  with a  zero                 
  fiscal note from the Department of Natural Resources.                        
                                                                               
                                                                               
       SENATE BILL NO.  6                                                      
       "An Act relating to registration of a motor vehicle and                 
       suspension of a driver's license  for failure to appear                 
  in   court or failure to pay a fine."                                        
                                                                               
  Senator Halford announced Joe Ambrose from  Senator Taylor's                 
  office and asked  him to  join the committee.   Mr.  Ambrose                 
  stated that  Senator Taylor  is the sponsor  of SB 6.  It is                 
  designed  to provide  the  court  system and  municipalities                 
  throughout Alaska with additional leverage in the collection                 
  of fines relating  to moving  vehicle citations and  parking                 
  offenses.  He also  stated that it applies to  an individual                 
  who fails to appear  in court as ordered.   This legislation                 
  passed the Senate last year on a 17 - 3 vote as SB 166.   SB                 
  6  would  be a  valuable  tool  for  use  by the  courts  in                 
  addressing  the  problems  created by  those  who  choose to                 
  ignore the  law, especially  those who  fail  to make  court                 
  ordered appearances  or to pay  fines imposed by  the court.                 
  The  bill  is based  on  statutes  from other  states.   The                 
  experience in the  State of  Washington indicates that  over                 
  50% of those who receive notice of possible sanctions, clear                 
  up outstanding matters  within a week.   SB 6 ties  together                 
  the  failure  to  settle moving  violations  to  the drivers                 
  license,  and parking  violations  to vehicle  registration.                 
  This mirrors the California law.  A new fiscal note from the                 
  Department  of  Public  Safety, Division  of  Motor Vehicles                 
  indicates a change  for additional  leased office space  for                 
  $10.0.   The bill  continues to  be a  generator of  revenue                 
  based on the renewal fees for a suspended license.                           
                                                                               
                                                                               
  Co-chair Halford noted that the change from $104.8 to $114.6                 
  is reasonable.                                                               
                                                                               
  Senator Phillips noted  a situation that involved  a Chugiak                 
  resident who received a ticket and  was to appear before the                 
  court.  He  claims that he did not receive  notice to appear                 
  before court due to an incorrect address.                                    
                                                                               
  Mr. Ambrose responded that this is  an option for the court,                 
  it  is  not mandatory.   He  mentioned  that there  are over                 
  25,000 outstanding moving violations fines  in a given year.                 
  The  court  system  was  working   on  the  assumption  that                 
  approximately 10% of those would fall into  this system.                     
                                                                               
                                                                               
  Mr. Ambrose stated that Senator Taylor's office has received                 
  a response  from  the  parking  ferries.   There  have  been                 
  several POM's  generated.   The  opposition  is not  to  the                 
  overall thrust of  the bill, but  rather to Section 2  which                 
  applies  to unpaid  parking  fines and  would  lead to  non-                 
  renewal of the vehicle registration.  The area of concern is                 
  in  Anchorage, and  in  particular,  the  Anchorage  Parking                 
  Authority.    Section  2  was  included  last  year  at  the                 
  suggestion of several municipal attorneys.  The sponsor does                 
  not take great  ownership in  this section, and  if it  were                 
  deleted he would not be upset.                                               
                                                                               
  Senator  Rieger  supports the  amendment  and asked  what it                 
  would do to the fiscal  note.  He stated that the  Anchorage                 
  Parking Authority cites for improper placement or tagging of                 
  license plates. Senator  Donley stated that  he has a  draft                 
  amendment, and recommended holding the  bill. He stated that                 
  there is  a problem when  ticketed by the  Anchorage Parking                 
  Authority,  in  that  there  are   no  appellate  rights.  A                 
  prohibitive fee is  required to  challenge the ticket.  When                 
  ticketed by a peace officer or a state trooper, one has  the                 
  right to go to  court and defend themselves. He  stated that                 
  when people are ticketed, based  on state rules, they should                 
  be  provided  with  the  same  due  process that  the  state                 
  provides.                                                                    
                                                                               
  Senator Zharoff asked if Alaska  would have reciprocity with                 
  other states  regarding the  parking and moving  violations.                 
  Mr.  Ambrose  responded that  he  didn't know  about parking                 
  violations,  but  that  there  is  an  existing  arrangement                 
  whereby,  if the State runs a  records check and there is an                 
  outstanding warrant, out-of-state, it can be executed.                       
                                                                               
  Senator  Zharoff  then quoted  Section  3, "When  the person                 
  appears in court or pays the  required fine, the court shall                 
  terminate  the suspension imposed  under this subsection and                 
  provide the department and the person with written notice of                 
  the termination."  He noted that  this process is very slow.                 
  He stated that  what should take minutes, often  takes weeks                 
                                                                               
                                                                               
  or months.   He asked  if this particular  problem could  be                 
  remedied?  Mr.  Ambrose stated  that he could  not fix  that                 
  problem in this bill.                                                        
                                                                               
  Mr. Ambrose reiterated that the intent of the legislation is                 
  to  give  the court  additional  leverage.   If  there  is a                 
  failure to appear in court, the court at this time can issue                 
  a warrant.  The fact remains that there are so many of these                 
  cases that it does not happen.                                               
                                                                               
  Senator  Donley issued  his  proposed amendment.    Co-chair                 
  Halford asked if there was conflict in his amendment insofar                 
  as removing Section 2  from SB 6.  Senator  Donley responded                 
  there  was  no conflict.  Senator  Phillips moved  to delete                 
  Section  2  from SB  6.  No  objection having  been  raised,                 
  Section  2  has  been deleted  from  the  bill  and will  be                 
  reflected in a CS.                                                           
                                                                               
  Discussion was had on Senator  Donley's proposed amendment.                  
  Co-chair Halford asked that Senators Zharoff and Donley work                 
  with Senator Taylor in redrafting  the bill.  The  committee                 
  agreed to hold the  bill to the next meeting,  Friday, March                 
  17th.                                                                        
                                                                               
                                                                               
       SENATE BILL NO. 14                                                      
                                                                               
       "An Act relating to criminal mischief."                                 
                                                                               
  Mary Vollendorf, Legislative Aide to Senator Leman presented                 
  testimony on SB 14. (Testimony attached to minutes.)                         
                                                                               
  Margot  Knuth,   Criminal  Division,   Department  of   Law,                 
  testified the problem has been in the increase  in joyriding                 
  in Anchorage which has doubled in the last two years.   Half                 
  of  those  offenses have  been  committed by  juveniles. The                 
  question is, what can be done to impose meaningful sanction?                 
  The most important  feature of  this bill is  that it  makes                 
  joyriding an  offense for  which driving  privileges can  be                 
  revoked.  This  is expected to  have a deterrent effect  for                 
  juveniles in particular.   It is possible to waive  a multi-                 
  offending juvenile to  adult court  for felony purposes  if,                 
  there was a  desire to  go through the  petition for  waiver                 
  proceeding.    She  noted that  in  47.10.010,  which allows                 
  minors to be prosecuted as an adult in district court, there                 
  is an exception for  felonies.  The  law states that with  a                 
  felony  waiver  provision  there  would   be  no  basis  for                 
  excluding the juveniles.                                                     
                                                                               
  End    Tape #12, Side 2 (575-end)                                            
  Begin  Tape #14, Side 1 (000-575)                                            
                                                                               
  Senator Donley  asked for  further explanation.   Ms.  Knuth                 
                                                                               
                                                                               
  responded that the  criminal mischief statute which,  if the                 
  defendant has caused more than $500 damage, is a felony.  In                 
  a  juvenile,  prosecution  would  go  through  Family  Youth                 
  Services.  Or, file  the petition for waiver to  adult court                 
  under the separate  offense of  criminal mischief, which  is                 
  taking  the vehicle  and  causing more  than  $500 worth  of                 
  damage.    That  is separate  from  joyriding  which doesn't                 
  involve any damage to the vehicle.   That is one way to  get                 
  to adult court with the juvenile, the other is through theft                 
  rather than joyriding.                                                       
                                                                               
  Senator  Donley asked how  the court system  will allow this                 
  since a specific statute says, "if they steal a car and they                 
  are under 18, it is not a felony."  Ms. Knuth responded that                 
  the state does  not have a  strong desire to be  prosecuting                 
  these cases as felons.  It is  expensive.  The case needs to                 
  go to the grand jury and in those cases they are going to be                 
  litigated more vigorously. The state prefers that in dealing                 
  with juveniles, it  is made a misdemeanor in district court,                 
  which  would be handled in  a more routine  way.  She stated                 
  that for over 99% of the joyriding cases with juveniles, the                 
  state does not want  them as felons, but rather  in district                 
  court.                                                                       
                                                                               
  Senator Rieger wanted to understand how the bill was drafted                 
  and  drew attention  to section 1  and 3.   Ms. Knuth stated                 
  that  those  under  18 years  of  age  would  not appear  in                 
  district court as  an adult.  She stated that  in section 3,                 
  it specifies that  18 or older  for this offense before  the                 
  mandatory 3 day jail sentence would apply.  If under the age                 
  of  18,   sentencing  could  be  applied  to   a  period  of                 
  incarceration, but would not be in  jail with adults.  There                 
  is no mandatory  sentence for juvenile offenders.   She went                 
  on to say that there are  two processes available when there                 
  is a juvenile.   One, is going through the  juvenile process                 
  system, and the other is being waived to adult court.   If a                 
  juvenile  had been  waived to  adult court  for  a joyriding                 
  offense and it was the second offense, they would be treated                 
  as a felon.  But, there  would be a special arduous petition                 
  for a  waiver process  where this  state has  the burden  of                 
  proving that the juvenile is not amenable to treatment, etc.                 
  Most of the  joyriding offenders  under the age  of 18  have                 
  been going through  the juvenile  process.  They  do not  go                 
  into  district  court,  but  rather  superior  court.    The                 
  proceedings are  closed and  does not result  in a  criminal                 
  conviction on their record.  The only way to  get a criminal                 
  conviction  is  if there  was a  petition  for waiver.   She                 
  stated that it is  unlikely that a juvenile would  be waived                 
  to adult court on a single joyriding offense.                                
                                                                               
  Co-chair Frank joined the committee.                                         
                                                                               
  Senator  Zharoff  asked the  definition  of joyriding.   Ms.                 
  Knuth responded that  joyriding is  referred to as  criminal                 
                                                                               
                                                                               
  mischief.    Statute  11.46.484(a)(2)  states,  "the  person                 
  drives,  tows  away,  or  takes  the  propelled  vehicle  of                 
  another".   This is  distinguished from theft  because it is                 
  not required to prove an intent of permanently depriving the                 
  owner of the vehicle.                                                        
                                                                               
  Senator  Donley  questioned the  fiscal impact  on juveniles                 
  since there is  no room within  the jail facilities at  this                 
  time.  Ms. Knuth responded that  there is no anticipation to                 
  give the juveniles  time to serve for the joyriding offense.                 
  Hence, it's a  property offense, it is likely to  be a first                 
  offense and the sentence would probably be  a suspended term                 
  with  an  order of  restitution,  and revocation  of driving                 
  privileges.  She  clarified "restitution"  by stating  that,                 
  12.55.045(e)  specifies,"If  a  defendant  is  convicted  of                 
  criminal mischief in  the third  degree in  violation of  AS                 
  11.46.484(a)(2), and the victim of the offense incurs damage                 
  or  loss as a  result of the offense,  the court shall order                 
  the  defendant  to pay  restitution."   She  added,  that it                 
  applies to juveniles as well as adults.                                      
                                                                               
  Senator Donley wanted  to know  if there was  a fiscal  note                 
  from the Department  of Corrections?   He said,  there is  a                 
  statement that says the court system  expects 450 cases.  If                 
  this  bill  is  to send  a  message  to  the juveniles  that                 
  joyriding  is  no   longer  going  to  be   tolerated,  then                 
  incarceration for repeat  offenders when not  imposed, makes                 
  the bill pointless. He  then stressed that if the  intent is                 
  not to incarcerate, even though  there has been a conviction                 
  of a misdemeanor, what is the impact on the juvenile system?                 
   Ms.  Knuth   responded  that   Senator  Donley's   question                 
  presupposes that  the system is  not working.   She stressed                 
  there are not many repeat offenders  or those that abuse the                 
  probation  system.  In  order   to  get  to  the   point  of                 
  incarceration,  the offender is a repeater, or has failed to                 
  comply  with  the  conditions of  probation.  Most joyriding                 
  incidences  are  a single  event.    Joyriding  is  not  the                 
  starting offense that leads people down the path of criminal                 
  acts.                                                                        
                                                                               
  Co-chair  Halford  stated  simply  that  he  disagreed  with                 
  everything Ms. Knuth just stated.   Senator Donley says that                 
  the information that  he has received from  his constituents                 
  is that these  are repeat offenders  and they are not  being                 
  treated seriously.                                                           
                                                                               
  Senator Rieger asked for an  explanation of restitution with                 
  or without the bill.  Ms. Knuth responded that if the matter                 
  is handled as  a juvenile proceeding,  none of the  criminal                 
  code applies.   Restitution  does not  apply, revocation  of                 
  driving privileges does not apply, and appearing in front of                 
  a judge does  not apply.   These offenders  will receive  an                 
  adult  conviction,  they  will  go  before  the  judge  with                 
  possible  consequences of:  pay restitution,  suspended jail                 
                                                                               
                                                                               
  sentence, loose  their driving  privileges, permanent  funds                 
  dividends  can   be  attached   for  the   payment  of   the                 
  restitution.  These are not  consequences experienced in the                 
  past.  There are  too many juveniles to go  through superior                 
  court petitions.   The problem is the  exploding population.                 
  District court is  uniquely set  up to process  cases in  an                 
  efficient manner.                                                            
                                                                               
  Co-chair  Frank  asked  if  there  are statistics  regarding                 
  repeat offenders?  Donna Schultz, Juvenile Probation Officer                 
  youth had been charged with  criminal mischief.  Those  with                 
  prior  offenses totalled  12.  Statewide  joyriders totalled                 
  2400, 1200 of those are juvenile  offenders and 600 are from                 
  the Anchorage.  Joyriding is  a crime  of opportunity.   She                 
  stated that joyriding has doubled in two years.                              
                                                                               
  Co-chair Halford inquired how the municipality of  Anchorage                 
  is handling joyriders  now.  Ms.  Knuth responded that as  a                 
  misdemeanor offense Anchorage  has a similar statute  to our                 
  criminal mischief for  adult joyriding offenses.   Anchorage                 
  cases number 600 a year. Co-chair  asked how the decision is                 
  made  to prosecute under  municipal ordinance  versus state?                 
  Ms.  Knuth  said that  if  the  municipality has  a  statute                 
  regarding the crime and prosecutors to handle the case, they                 
  will take it on.  This is not true for all municipalities.                   
                                                                               
                                                                               
  Co-chair Halford directed  attention to  page 1, section  1,                 
  line 5. What  would the effect  be on changing  the word  of                 
  "or" to "and"?  Ms. Knuth responded  that it would take  the                 
  second offender juvenile and  made it a felony.   She stated                 
  that if this bill does not have an effect on joyriding, then                 
  something else needs to  be tried.  However, this bill  is a                 
  big step forward.                                                            
                                                                               
  Ms.  Knuth  reported  that  the  "Use  It/Loose  It"  was  a                 
  legislative  measure passed  last  year targeting  juveniles                 
  drinking.  This has  proven to be effective.   Juveniles are                 
  going  to  the same  parties  in  Juneau, and  now  they are                 
  drinking root beer instead of beer  because they do not want                 
  to loose  their driving licenses.   There have  been similar                 
  reports from around the state.  The threat of jail has never                 
  been a deterrent, probably because like other criminals they                 
  think they are not  going to be caught.  With  "Use It/Loose                 
  It", we have a much higher catch rate.                                       
                                                                               
  Senator Donley stated that he  supports the bill.   However,                 
  he does not want others to get  the wrong message.  There is                 
  no fiscal note  from the  Department of Corrections  because                 
  they assume no juveniles will be incarcerated.  It becomes a                 
  self-fulfilling  prophecy  because  if they  don't  add  any                 
  facilities to deal  with this, the  judges have no place  to                 
  send  the  juveniles,  so they  in  turn  are  not going  to                 
                                                                               
                                                                               
  incarcerate  them.  Restitution is  a good step forward, but                 
  the  public  should not  think this  is  going to  mean that                 
  juveniles are going to serve hard time for this because they                 
  are not going to have any place to send them.                                
                                                                               
  Senator  Donley  made  a  motion  to MOVE  CSSB14(JUD)  with                 
  individual recommendations and accompanying fiscal notes. No                 
  objection having been raised,  CSSB14(JUD) was REPORTED  OUT                 
  of  committee  with  the following  fiscal  notes:  Dept. of                 
  Public  Safety/Dept.  Motor  Vehicles,  $96.4; Dept.  Public                 
  Safety/Troopers,   zero;   Dept.   of   Corrections,   zero;                 
  Department  of Law,  $81.7; Court  System, $55.0.  Co-chairs                 
  Halford  and  Frank  along with  Senators  Rieger  and Sharp                 
  signed with  a "do  pass".   Senators  Zharoff and  Phillips                 
  signed with "no recommendation".                                             
                                                                               
                                                                               
       SENATE BILL NO. 92                                                      
       "An Act requiring  that, in  addition to its  operating                 
  budget,   all  activities  of  the  Alaska  Housing  Finance                 
  Corporation are     subject to the Executive Budget Act."                    
                                                                               
  Co-chair  Halford  announced  that  by  the request  of  the                 
  Legislative Budget and Audit Committee, SB 92 is submitted.                  
                                                                               
  Senator  Phillips  explained  that  Senators  Sharp,  Frank,                 
  Rieger and himself served on the LB&A Committee and that the                 
  Alaska Housing Finance  Corp. and Alaska Railroad  were left                 
  out  of  their  bill  last  year.    This  bill  adds  AHFC.                 
  Discussion  was  had on  the  Alaska  Railroad, and  it  was                 
  decided to create a new bill.                                                
                                                                               
  Co-chair Halford  asked Dan Fauske,  CEO/Executive Director,                 
  Alaska  Housing  Finance  Corp to  join  the  committee. Mr.                 
  Fauske testified to the committee (testimony attached).                      
                                                                               
  Co-chair  Frank   thanked  Mr.  Fauske  for   his  comments.                 
  Historically, the programs were not included in the original                 
  legislation.  The  legislature has had confidence  in AHFC's                 
  ability to  handle political  and arbitrary  decisions.   He                 
  stressed  that  he  meant  not  just  Mr.  Fauske,  but  the                 
  institution which includes the bond counsel and professional                 
  contractors, and  staff.   Senator Frank  does not view  the                 
  inclusion  of  AHFC  in  the  budget  act  as  being  overly                 
  burdensome,  it   is  hoped   that  it   will  improve   the                 
  relationship between  the agency  and the  legislature.   He                 
  added, in  addition to the  items Mr. Fauske  mentioned, the                 
  relationship  between  AHFC  and  the  legislature has  been                 
  strained over the years.  He added that there has not been a                 
  vehicle for  discussion.  The  legislature spends  a lot  of                 
  time   communicating  with   other  state   agencies.     An                 
                                                                               
                                                                               
  understanding  is developed  through the  budget  process of                 
  their  programs. Over time,  communication is  improved. Co-                 
  chair Frank  emphasized that  the agency  may view  it as  a                 
  threat,  but, it  is an opportunity  to improve  the working                 
  relationship between the  agency and  the legislature.   The                 
  legislature  will  not want  to  take  action that  will  be                 
  contrary  to  the purposes  of  the statutes,  programs, and                 
  purposes  of AHFC.  The legislature  does want to understand                 
  what goes on  and wants to  have an improved opportunity  to                 
  work with  the agency  to make  sure that  the purposes  are                 
  carried out.  He  stressed that it is not  the legislature's                 
  purpose  to  cut any  agency  out.   He  noted  that  if the                 
  legislature does not receive cooperation,  then the view may                 
  be that decisions are more rash.  Co-chair Frank stated that                 
  he  supports  bringing  this  legislation  into  the  budget                 
  process and improve the relationship  between the agency and                 
  the  legislature.  Otherwise, he said,  there would be many,                 
  he included,  who would  not be interested  in supporting  a                 
  capital or operating budget for this agency.                                 
                                                                               
  Senator Rieger questioned Mr. Fauske's  testimony.  He asked                 
  if he opposed  the inclusion into  the executive budget  act                 
  suggesting that it would hinder AHFC's operation. Mr. Fauske                 
  responded that he  is not beyond being  scrutinized, but his                 
  review in the short time he has been there is that currently                 
  there was $790,000,000. in loans and activity which occurred                 
  through that  agency.   Currently, the amount  this year  is                 
  $385,000,000.   He stated his  confusion, wanting to know if                 
  it is capped.   He asked, does the agency stop at some point                 
  denying  itself  access to  the  market for  refinancing and                 
  lowering  people's  mortgages.     This  has  been   a  very                 
  successful program.  He  asked, how does the agency  improve                 
  on past performance? He stressed  he welcomed the review and                 
  indicated that next to  the permanent fund this  is Alaska's                 
  most  important  asset.    He  noted  that he  wants  to  be                 
  perceived in some  capacity of success, mainly  being opened                 
  to  the  process  which  takes   place  allowing  people  to                 
  participate.   Again, his concern  is, how does  this become                 
  structured so  that  there isn't  a stoppage  at a  critical                 
  point in the market?                                                         
                                                                               
                                                                               
  Co-chair Frank indicated  that it was not  the legislature's                 
  intent  to  stifle the  agency.   He  suggested it  could be                 
  handled with general authority which is not dollar specific,                 
  or through the LB&A process, requesting additional increases                 
  from the  established dollar  maximum.   The legislature  is                 
  interested  in finding  a way  to make  it  work and  not to                 
  thwart the programs of AHFC.   This legislation is not meant                 
  to be negative, it is meant to be supportive.                                
                                                                               
  Mr. Fauske stated that he needed to receive clarity from the                 
  committee on  a potential problem.   In  the past,  programs                 
  have gone into various districts without the representatives                 
                                                                               
                                                                               
  even aware it was coming in.   He indicated he was stating a                 
  criticism of the agency, that it has not been forthcoming in                 
  dealing with Representatives or Senators of certain areas.                   
                                                                               
  Co-chair Frank responded that there was no truth to that and                 
  it  has  a lot  to  do  with activities  outside  the budget                 
  process.  In  the budget process  the legislators are  tuned                 
  into what state  government is  doing.  If  a legislator  is                 
  sitting  on  the  Finance  Committee,  there is  a  definite                 
  understanding  of  everything.    If  a  legislator  is  not                 
  presiding  on  the  Finance Committee,  then  there  will be                 
  requests from  the constituency for information,  which does                 
  heighten the awareness for those programs.                                   
                                                                               
  Senator Phillips asked if Mr. Fauske  was speaking to the 5%                 
  money? If  it was  passed by  AHFC, and  implemented to  the                 
  public, are you saying that legislators did not  receive the                 
  information  before, or know about the program before it hit                 
  the streets?                                                                 
                                                                               
  Mr. Fauske responded  that he  was not speaking  of the  5%,                 
  which  could   be  another  example.  Specifically,  he  was                 
  speaking to major  HUD funded  projects for senior  centers,                 
  and others that have come into various regions.                              
                                                                               
  Senator Phillips and the committee spoke to the 5% funds.                    
                                                                               
  Senator Rieger stated  that making the agency subject to the                 
  executive   budget   act,   may   not   totally    eliminate                 
  misunderstandings.    AHFC   statutes  have  provisions  for                 
  establishing programs by regulation.                                         
                                                                               
  Mr. Fauske assured  the committee that  it is his intent  to                 
  open up the  communication.   That is  not to  say that  all                 
  problems are solved, but the agency  is striving hard not to                 
  repeat past mistakes.                                                        
                                                                               
  Senator Rieger asked if Mr.  Fauske would oppose legislation                 
  resplitting the AHFC from ASHA?   Mr. Fauske responded that                  
   historically,  and  as  an individual  who  worked  for the                 
  institution on the North Slope, efforts to develop a housing                 
  program  did  not  materialize.     Dealing  with  ASHA  was                 
  impossible.  Regulations were  a problem.  There  were three                 
  and  four  generations living  in  one house.   Conventional                 
  banking  loans were not  available.  In  essence nothing was                 
  working.  It  took 4 years  to finally turn  it around.   He                 
  stressed that if it means going back to that, he opposes it.                 
  He stated there are a great many people in this state who do                 
  not  have the  same access  as some  of the  urban  areas or                 
  technically advanced rural areas, and literally are shut off                 
  from the entire  process. ASHA, in those  days, went through                 
  appropriations  from  the  state, the  regulations  were  so                 
  heavy, the agency could never get around anything.  ASHA was                 
  in poor  standing with HUD at the time,  and that was one of                 
                                                                               
                                                                               
  the   reasons   why  it   was   important  to   create  this                 
  comprehensive unit  that functioned  better.   He felt  that                 
  this  has  been  accomplished  when he  talks  to  staff and                 
  outside agencies.  He stated that he would  oppose it unless                 
  there were  assurances that  it would  not  result in  those                 
  circumstances again.                                                         
  Discussion was had regarding communication and travel during                 
  the out of session months.                                                   
                                                                               
  Co-chair Frank MOVED  for passage of  SB 92 with  individual                 
  recommendations.  No objection having been raised, SB 92 was                 
  REPORTED OUT of committee  with a zero fiscal note  from the                 
  Department of Revenue.   Co-chairs Halford and  Frank, along                 
  with Senators Rieger, Phillips, Donley  and Sharp signed the                 
  committee report with  a "do pass" recommendation.   Senator                 
  Zharoff signed "no recommendation".                                          
                                                                               
  Co-chair  Halford  announced that  SB  6 would  be revisited                 
  Friday, March 17th.                                                          
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 10:50 a.m.                        
                                                                               
                                                                               

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