Legislature(1995 - 1996)

04/11/1995 10:05 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    SENATE FINANCE COMMITTEE                                   
                         April 11, 1995                                        
                           10:05 a.m.                                          
  SFC-95, #28, Side 1 (100-575)                                                
  SFC-95, #28, Side 2 (580-end)                                                
  CALL TO ORDER                                                                
  Senator  Rick Halford,  Co-chair,  convened  the meeting  at                 
  approximately 10:05 a.m.                                                     
  Co-chairs  Halford  and  Frank,  Senators  Phillips,  Sharp,                 
  Donley and  Rieger were  present.  Senator  Zharoff was  not                 
  Also  Attending:  Robert   Cole,  Director,   Administrative                 
  Services,  Dept.   of  Corrections;  Deborah   Vogt,  Deputy                 
  Commissioner,  Dept.  of  Revenue;  Loren  Jones,  Director,                 
  Division of Alcoholism  and Drug  Abuse, Dept.  of Health  &                 
  Social  Services, and  Wilda  Whitaker,  Legislative Aid  to                 
  Representative Therriault.                                                   
  Teleconference: Teresa Williams, Dept. of Law, Anchorage                     
  SUMMARY INFORMATION                                                          
       SB  87 ALCOHOLIC BEVERAGES: LOCAL OPTION & MISC.                        
       Discussion was had on SB 87  (JUD). Amendments 1, 2, 3,                 
  and 5                                                                        
       were  ADOPTED.  Amendment  4  FAILED.   Amendment    to                 
  Amendment #1                                                                 
       was ADOPTED.  A Friendly Amendment to  Amendment #1 was                 
           ADOPTED. Co-chair Halford  moved to adopt  deletion                 
  of Section         30.  The  deletion was ADOPTED.   CSSB 87                 
  (FIN) was REPORTED  OUT        of committee  with individual                 
  recommendations  and a zero fiscal       note from the Dept.                 
  of Revenue. Senator Phillips  MOVED to           rescind the                 
  action of PASSING OUT OF COMMITTEE CSSB 87  (JUD).        No                 
  objection having been heard, CSSB 87 (FIN) was RESCINDED                     
    and brought  back before  the committee.  Senator Phillips                 
  MOVED        to delete Section 30.  No objection having been                 
  heard,              deletion of Section  30 was ADOPTED. Co-                 
  chair Halford and              Senators  Phillips and  Sharp                 
  signed "do  pass".  Co-chair Frank       and Senators Rieger                 
  and Donley signed "no recommendations".                                      
       HB   9 DAMAGE TO PROPERTY BY MINORS                                     
       Wilda Whitaker  testified to HB  9.  Amendment  #1 with                 
  language      change with a deletion was ADOPTED.  SCSCSHB 9                 
  (FIN) was          REPORTED OUT of committee with individual                 
  recommendations           and 7 fiscal  notes (see page 5 of                 
  minutes for details).            Co-chairs Halford and Frank                 
  along with Senators  Rieger,             Phillips  and Sharp                 
  signed "do pass".  Senator Donley signed                                     
       "no recommendation".                                                    
       SB 135 PFD NOTICES AND ELIGIBILITY                                      
       Testimony by Deborah Vogt and Loren Jones was given. SB
       was REPORTED OUT of committee  with 5 fiscal notes (see                 
       8 in minutes for details).  Co-chairs Halford and Frank                 
       Senators  Rieger,  Phillips and  Sharp  recommended "do                 
       Senator Donley signed "no recommendation".                              
       SENATE BILL NO. 87                                                      
       "An Act relating to community local options for control                 
  of         alcoholic  beverages; relating to the control  of                 
  alcoholic          beverages; relating to  the definition of                 
  'alcoholic beverage';       relating to purchase and sale of                 
  alcoholic  beverages;  relating           to alcohol  server                 
  education courses; and  providing for an           effective                 
  Senator Donley spoke  to Amendment  K.7. He  stated that  it                 
  deals  with making  it  a violation  to frequent  an illegal                 
  gambling  establishment.  He  said that it  is difficult for                 
  the  owners  of the  legal  establishments because  they are                 
  frequently accused of the improper  activity that goes on at                 
  the illegal  establishments where they  are serving alcohol.                 
  After bar hours,  people will  continue to find  a place  to                 
  drink.  When they  find an establishment that is  not legal,                 
  they  are not subject to  the same kinds  of controls as the                 
  legal establishments exhibit.   This is  a tool to help  the                 
  law enforcement keep people  out of these places, by  way of                 
  issuing a  citation, which  is a violation  to frequent  the                 
  illegal establishments.  The bill did  pass the House in the                 
  1988 session, but did not make it through the Senate.                        
  Senator  Donley  MOVED  Amendment  #2  and it  was  ADOPTED.                 
  Senator Donley  stated that he has been in conversation with                 
  the Department  of Law, the  Department of Revenue,  and Mr.                 
  Sharrock, who is available  in Anchorage for teleconference,                 
  regarding Amendment #1. In response to the questions brought                 
  up at the last committee meeting, Senator Donley pointed out                 
  the  packet sent  by  Teresa  Williams,  Assistant  Attorney                 
  General in Anchorage,  who is handling the  illegal gambling                 
  cases  that  involve  licensed premises.    The  information                 
  provides a list of 5 cases which have occurred since July of                 
  1990  regarding  liquor  licensees  who  were  convicted  of                 
  criminal violations of  the gambling  laws. The Division  of                 
  Gaming does not enforce illegal gambling activities, because                 
  their  charge is  to  regulate  legal  gambling  activities.                 
  Illegal gambling activities are regulated by the troopers or                 
  Department of Law.  The activity in the 5 cases consisted of                 
  slot  machines,  which  is  clearly  prohibited  by statute.                 
  These were the particular sanctions  they were given by  the                 
  ABC Board.  The ABC Board is free to sanction them from zero                 
  to full  revocation of their licenses.  There are provisions                 
  of violations  of Title 4,  which are more  restrictive than                 
  that, but these are criminal law  violations and they have a                 
  general provision  in the code  that allows  them to  pursue                 
  sanctions which are in the public  interest that do not have                 
  specific guidelines.  He modified Amendment #1,  to change 3                 
  months  to  6  months  for   suspension  of  license.  On  a                 
  subsequent  offense,  there  would be  a  revocation  of the                 
  license."  He stressed that this is not for violation of our                 
  legalized  gaming statutes, but  only for criminal gambling.                 
  He indicated that he wanted to add a new subparagraph C that                 
  would  read,  "if   the  Board  receives  notice   from  the                 
  Department  of  Revenue, that  a  licensee or  permittee has                 
  violated  a  provision of  AS  05.15,(the charitable  gaming                 
  provisions  relating  to gaming),  the  Board may  suspend a                 
  license or permit, and  shall suspend for at least  30 days,                 
  if the offense is the person's second violation.                             
  Senator  Donley   introduced  Amendment  #3.     This  would                 
  restructure the  ABC Board.   Currently there is  a mandated                 
  requirement of two  members of the  Board to be involved  in                 
  industry.   The  amendment  would make  it clear  that three                 
  members of the  Board should  represent the general  public.                 
  Currently,  two members have to  be from industry, but there                 
  is no limit.  The amendment adds an ethics provision stating                 
  that of those two persons who represent  the general public,                 
  immediate family members  could not be directly  involved in                 
  the industry.  The provision would also state that to make a                 
  quorum,  at least two of  the members would  have to be from                 
  the general public.  Currently, the quorum can be made up of                 
  two members  from  the  industry  and one  member  from  the                 
  general public.  Senator Donley MOVED Amendment #3.  Senator                 
  Frank  inquired  as  to  the  language  regarding "immediate                 
  Senator Sharp indicated his concerns regarding Section 1, in                 
  that it does not  restrict the number of people  involved in                 
  counseling on the Board.  It could be all three.   He stated                 
  he did not mind that exclusion, as  long as there is a limit                 
  as to those represented from industry, he would want a limit                 
  on other interests groups.                                                   
  Senator Sharp MOVED a Conceptual  Amendment to Amendment #3.                 
  Beginning on  page  1, line  19,  after the  words  "alcohol                 
  beverage industry.",  eliminate the period  and state,  "not                 
  more than two members shall  represent counseling or related                 
  services". No objection having been raised, it was ADOPTED.                  
  Senator Rieger inquired  as to the  clause on line 16  which                 
  reads,  "engaged in any  aspect of".   Senator Donley stated                 
  that it would be  anyone having a financial interest  in the                 
  industry, either ownership or employed by the industry.  Co-                 
  chair  Frank asked if  there are  alcohol counselors  on the                 
  Board? Senator Donley  stated that in  the past there was  a                 
  counselor. Senator Phillips MOVED a  Friendly Amendment.  On                 
  page 1, line  16, delete  the word "aspect",  and after  the                 
  word "any" add "financial interest in".  No objection having                 
  been raised, it was ADOPTED.                                                 
  Co-chair  Halford   asked  for  a  show of  hands  in moving                 
  Amendment  #3.  By a show of hands Amendment #3 was ADOPTED.                 
  Senator Donley introduced Amendment #4.   He stated that  it                 
  is an empowerment  of community  councils to better  protect                 
  their own neighborhoods.  This shifts  the balance of  power                 
  toward the community councils, but with  a check that if the                 
  assembly thinks it is in the best interest of the community,                 
  they can still  do it.   Senator Donley MOVED Amendment  #4.                 
  Senator  Sharp OBJECTED based  on the unanimous  vote of the                 
  Co-chair Frank asked what is  the circumstance regarding the                 
  city  boroughs, do they have absolute veto power, or is it a                 
  recommendation to  the ABC  Board?   Ms. Williams  responded                 
  that  the  Board  may not  overturn  a  protest  by a  local                 
  governing body unless it finds it arbitrary, capricious, and                 
  unreasonable.    Co-chair  Halford  pointed  out  that  this                 
  amendment also  provides for extra  territorial jurisdiction                 
  in areas of overlapping councils.  There may be two or three                 
  councils with authority over one location.                                   
  Senator  Sharp  asked  if  community  councils  are  elected                 
  through the regular election procedure  of the unified city?                 
  Senator  Donley  responded  that  they  are elected  to  the                 
  council.  Senator Donley MOVED an Amendment to Amendment #4,                 
  stating a  requirement of  two-thirds the  vote rather  than                 
  unanimous. Without objection, the Amendment to the Amendment                 
  the show of hands, the amended Amendment #4 FAILED.                          
  Senator  Sharp  MOVED  Amendment #5.    No  objections being                 
  heard,  Amendment  #5  was ADOPTED.    Senator  Donley MOVED                 
  Amendment #1.  He explained  that this  amendment would  set                 
  guidelines  for  appropriate  penalties  for convictions  of                 
  illegal  gambling  activity,  and  separate  standards   for                 
  violations for  charitable gaming laws by  liquor licensees.                 
  This  would also  establish for  a criminal  violation  by a                 
  licensee, that the  Board would suspend  for a period of  at                 
  least 6 months.   A second  criminal offense would call  for                 
  permanent revocation.  A violation  of the charitable gaming                 
  laws would mean a discretionary penalty.  A second violation                 
  for the gaming  statutes, it  would mean at  least a  30-day                 
  suspension.  There is also a  provision that the Division of                 
  Gaming would notify the Alcohol  Control Beverage Board when                 
  there has  been a  violation. Co-chair  Halford stated  that                 
  this  amendment  requires  a conviction  in  criminal  court                 
  subject  to  the  protection  of  the due  process.  Without                 
  objection Amendment #1 was ADOPTED.                                          
  Senator   Sharp   MOVED  CSSB   87  (FIN)   with  individual                 
  recommendations and a  zero fiscal note from  the Department                 
  of Revenue.   Without objection CSSB  87 (FIN) was  REPORTED                 
  OUT of  committee with a  "do pass" recommendation  from Co-                 
  chairs Halford and  Frank and  Senators Phillips and  Sharp.                 
  Senators Rieger and Donley signed "no recommendations".                      
  Further discussion on SB 87 is at the end of the text.                       
       HOUSE BILL NO. 9                                                        
       "An Act relating to recovery of damages from  a minor's                 
  parent       or legal guardian when property is destroyed by                 
  the minor."                                                                  
  Wilda Witaker, Legislative Aide to Representative Therriault                 
  testified to the amendment proposed for HB 9.  The amendment                 
  clarifies who  is responsible  for the  minor when  visiting                 
  versus a custodial parent.                                                   
  Senator Sharp MOVED to amend Amendment #1. Without objection                 
  Amendment #1  was ADOPTED  to be  incorporated in  a CS  for                 
  Senator  Phillips  MOVED  SCSCSHB 9  (FIN)  with  individual                 
  recommendations and 7 fiscal notes from: Dept. of Law, zero;                 
  Dept. Health &  Social Services  (Foster Care), zero;  Dept.                 
  Health &  Social Services  (Residential  Child Care),  zero;                 
  Dept.  of  Administration, Public  Advocacy, zero;  Dept. of                 
  Administration,    Public    Defender,   zero,    Dept.   of                 
  Administration,   Risk   Management,   zero;   and   Courts,                 
  Indeterminate.    Co-chairs  Halford and  Frank  along  with                 
  Senators Rieger,  Phillips and Sharp  recommended "do pass".                 
  Senator Donley signed "no recommendation".                                   
       SENATE BILL NO. 135                                                     
       "An  Act relating  to permanent  fund dividend  program                 
  notice             requirements,  to  the ineligibility  for                 
  dividends of               individuals convicted of felonies                 
  or  incarcerated for                misdemeanors, and to the                 
  determination of the number and          identity of certain                 
  ineligible individuals; and providing for       an effective                 
  Co-chair Frank explained that this is  the same bill as last                 
  year expanding the list  of people to be  denied eligibility                 
  to  include felons  not  serving jail  time  and third  time                 
  misdemeanant.  The concept is to  recoup State monies.  Last                 
  year the bill passed  the Senate, but was not  considered by                 
  the House.  There  has been incorporated into the  bill $2.7                 
  million of expected  savings in the  FY 96 year, built  into                 
  the  budget  process.   This bill  is  part of  the Senate's                 
  overall spending plan.  Co-chair Frank explained that  there                 
  is  no  retroactive feature  to the  bill.   This  bill will                 
  capture the dollars  and put it  into the budget opposed  to                 
  distributing them out to the dividend recipients.                            
  Debra Vogt,  Deputy Commissioner  for the  Dept. of  Revenue                 
  introduced Nancy  Jones, Director,  Permanent Fund  Dividend                 
  Division.  Ms.  Vogt spoke to the  charts handed out  at the                 
  meeting (attached to the  minutes).  SB 135 changes,  as the                 
  sponsor   has  indicated,  both   the  way  the  substantive                 
  provisions  of  the  legislation  and   the  timing  of  the                 
  legislation.  The  bill adds to  the list of applicants  who                 
  are  denied dividends for criminal activity.   The list adds                 
  misdemeanant, third time  misdemeanant who are incarcerated,                 
  and any  felon.  The purpose  is to reimburse the  state for                 
  some of  the costs associated  with criminal activity.   The                 
  bill also adds  to the list  of agencies that receive  funds                 
  from the dividends  denied the criminals.   Currently, those                 
  agencies that  are permitted  to receive  funds include  the                 
  Crime  Victim Compensation  Fund,  the  Council on  Domestic                 
  Violence,  and   the  Department   of   Corrections.     The                 
  legislation adds the Dept. of Revenue for child support, the                 
  Dept. of Public Safety and the Dept. of Law.  The reason for                 
  the addition of the  Dept. of Revenue for child  support, is                 
  that many of  those being denied dividends  are garnished by                 
  the Child Support  Enforcement Division  for the support  of                 
  the criminal's children.  By appropriating a portion of  the                 
  funds to the Dept. of Revenue for child support, it does not                 
  give the money to the  children, who would otherwise receive                 
  it  if  the  Child  Support  Enforcement  Division  were  to                 
  distribute to the children.  The Department opposes changing                 
  the  eligibility  requirements  for  dividends.    There  is                 
  opposition to adding  to the list  of ineligible people  and                 
  adding  to  the list  of eligible  people.   The  timing and                 
  fiscal issues are more important issues.   Ms. Vogt referred                 
  to her  timeline under  current law  vs under  SB 135.   The                 
  Department believes this  is an appropriation to  fund state                 
  agencies out of the  dividend fund.  In the  legislation, it                 
  is prohibited  from informing  the dividend  recipients that                 
  this money has  been taken out of their check.  Section 7 of                 
  the legislation  says, "notwithstanding the  amendments made                 
  by the legislation, the notice requirements for 43.23.028 do                 
  not apply to appropriations from  the dividend fund made for                 
  FY  96.  The Department  recognizes  the sponsors  desire to                 
  close the gap between the criminal  activity in one year and                 
  the appropriation several years later.   A felon in jail for                 
  one  year  can only  have  one  dividend taken  away.   This                 
  legislation appropriates  2 dividends  to state  government,                 
  which is why the Department is opposed to it.                                
  Senator Phillips said  that the legislation can be viewed as                 
  a user  fee.   Ms. Vogt  stated that  the Department  is not                 
  opposed  to the idea  of denying  criminals dividends.   The                 
  double-dipping  aspect   of  this   legislation  takes   two                 
  dividends away,  when there  is really  only one  available.                 
  Therefore the second dividend is coming from the rest of the                 
  people of the state who are not criminals.                                   
  Loren Jones, Director, Division of Alcoholism and Drug Abuse                 
  spoke to two issues in SB 135 that the department  wanted to                 
  bring  to  the  committee's  attention.    Under  this  bill                 
  extending  it  to  third  time misdemeanant  offenders,  the                 
  majority of  those offenders we believe will  be referred to                 
  the court  system into the Alcohol Safety Action Program and                 
  thus into  alcohol treatment.   Unlike  felony probationers,                 
  misdemeanant  probationers,  are   not  supervised  by   the                 
  Department  of  Corrections.  In  most  cases, if  they  are                 
  alcohol  related offenses,  they are supervised  through the                 
  Alcohol  Safety  Action Program  in  the Dept.  of  Health &                 
  Social  Services.    There are  substantial  costs  that the                 
  offender  pays.    Usually,  access to,  or  receipt  of the                 
  dividend, provides  those persons with money to  pay for the                 
  service.  In the  Alcohol Treatment System, it is  estimated                 
  that  $300,000  of  third  party  payments, or  first  party                 
  payments  from  the clients,  actually  come from  the their                 
  dividends. There is concern that it would take away from the                 
  local  non-profit  agencies,  revenue available  to  them to                 
  charge  for their services.   Senator Donley asked what else                 
  the Dept. of  Health & Social  Services is doing to  collect                 
  funds  from the criminals?   Mr.  Jones responded  there are                 
  several avenues.   Providers can go off  medicaid. Providers                 
  can  go  after  private insurance  if  the  individuals have                 
  private insurance.   There is a requirement  to collect fees                 
  through  small  claims court.  Most of  the programs  have a                 
  sliding fee scale. The Department  estimates that beyond the                 
  dividends there  is  double that  amount  of money  that  is                 
  collected from other  fees.   Many of the  clients are  also                 
  coming out of a homeless situation, and more than 65% report                 
  an income of less than $10,000 a year.                                       
  Mr. Robert Cole,  Administrative Director  for the Dept.  of                 
  Corrections, stated there is concern that the Administration                 
  does not support  the bill.   Our most immediate concern  is                 
  that the FY  96 budget  is contingent on  this $2.7  million                 
  revenue source.  A  second concern is that the  $2.7 million                 
  which would be realized if the funds are collected, is still                 
  a one time shot and there is a concern of what position that                 
  puts the Department  in for the succeeding FY  97.  Will the                 
  Department  then  be  $2.7  million  out  of  the  base   in                 
  succeeding  years?   There can  be no assurances  of revenue                 
  from collection of permanent fund dividend checks from third                 
  time misdemeanant.  The Department of Corrections works with                 
  the Department  of  Revenue  and  Public Safety  to  try  to                 
  correlate  the  information   system  with  public  safety's                 
  information system and calculate the likely number of future                 
  third time misdemeanant  who would appear in  the Department                 
  of Correction's rolls, two  and three years out, and  in the                 
  future.   He stated that the  payments are used to pay child                 
  support payments, cost to treatment programs, debts owed and                 
  other costs,  fines, etc.  He stated there would be a effect                 
  on  distribution  in the  future from  those purposes  to an                 
  appropriation  purpose.    He  stated   that  the  Dept.  of                 
  Corrections does not know  where they stand, and that  it is                 
  up to the  appropriations process to  decide, and not to  be                 
  locked in law.                                                               
  Co-chair Frank MOVED  to pass out  of committee SB 137  with                 
  individual  recommendations  and accompanying  fiscal notes.                 
  No objection having  been heard SB  137 was REPORTED OUT  of                 
  committee  with the  following  fiscal notes:  Department of                 
  Revenue $2.4; Department of Corrections, zero; Department of                 
  Public   Safety,  $5.0;   Department  of   Education,  zero;                 
  Department of  Law, zero.   Co-chairs  Halford, Frank  along                 
  with Senators  Rieger, Phillips,  and Sharp recommended  "do                 
  pass".  Senator Donley signed "no recommendations".                          
  Co-chair Halford returned to SB 87.   Senator Phillips MOVED                 
  to delete Section  30.  By a  show of hands, Section  30 was                 
  DELETED from the CS 37 (JUD).  Senator Donley brought to the                 
  attention  of  the committee  Section  49.    He  said  that                 
  Subsection C (2)  the question of whether  local communities                 
  can put a sales tax on alcohol unless there is another sales                 
  tax in that  area.  Conversation  on clarity with regard  to                 
  taxation transpired.   Senator Donley MOVED to  delete after                 
  the  word "sales" on line 29, "if sales taxes are imposed on                 
  other sales within  the municipality".   By a show of  hands                 
  the Amendment FAILED.   Senator Phillips MOVED  CSSB 87(JUD)                 
  with individual  recommendations. No objection  being heard,                 
  CSSB 87 (JUD) was REPORTED OUT of committee.                                 
  At approximately 11:00 a.m. the meeting RECESSED.                            

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