Legislature(1995 - 1996)

05/04/1995 02:45 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    SENATE FINANCE COMMITTEE                                   
                           May 4, 1995                                         
                            2:45 p.m.                                          
  SFC-95, #61, Side 1 (121-end)                                                
  SFC-95, #61, Side 2 (575-end)                                                
  SFC-95, #63, Side 1 (000-500)                                                
  CALL TO ORDER                                                                
  Senator  Rick  Halford, Co-chair,  convened  the meeting  at                 
  approximately 2:45 p.m.                                                      
  In  addition   to  Co-chairman  Halford,   Senators  Donley,                 
  Phillips, Sharp and  Zharoff were  present.  Senator  Rieger                 
  arrived soon  after the  meeting began.   Co-chairman  Frank                 
  arrived as it was in progress.                                               
  ALSO  ATTENDING:  Deborah  Behr, Assistant Attorney General,                 
  Legislation  and Regulations  Section,  Dept.  of Law;  John                 
  Lindback, Chief of Staff, Office of  the Lt. Governor; Chris                 
  Christensen,  Staff  Counsel,  Alaska  Court  System;   Dave                 
  Hutchens,  Alaska  Rural  Electric Cooperative  Association;                 
  Dennis Poshard, Director, Charitable  Gaming Division, Dept.                 
  of Revenue;  Bruce Campbell,  aide to Representative  Kelly;                 
  Tom Anderson,  aide  to Representative  Martin; Jeff  Logan,                 
  aide to  Representative Joe  Green; and  aides to  committee                 
  members and other members of the legislature.                                
  SUMMARY INFORMATION                                                          
  SB 167 -  DAY FINES & INFO FOR COLLECTING FINES                              
            Discussion was  had with  Chris Christensen.   The                 
            bill was held in committee  for additional work by                 
            Senator Rieger.                                                    
  HB  17 -  OFFICERS OF UTILITY COOPERATIVES                                   
            Discussion  was  had  with  Jeff  Logan  and  Dave                 
            Hutchens.  An amendment deleting language (page 2,                 
            lines   28   through   30)  restricting   electric                 
            cooperative authority to provide  direct satellite                 
            television   programming   services  in   an  area                 
            certificated by the APUC for  cable television was                 
            adopted.   SCS CSHB 17 (Fin) was then REPORTED OUT                 
            of committee with zero fiscal notes from the Dept.                 
            of    Commerce     and    Economic     Development                 
            (Banking/Corporations) and Dept.  of Commerce  and                 
            Economic Development (APUC).                                       
  HB  44 -  GAMING PROCEEDS/DEFINE CHARITABLE ORG'NS                           
            Testimony was provided by Tom Anderson and  Dennis                 
            Poshard.  Amendments 1, 2, and 3 were distributed.                 
            The bill was  then held  in committee for  further                 
  HB 130 -  REGULATION ADOPTION PROCEDURES & REVIEW                            
            Testimony was  presented by  Bruce Campbell,  John                 
            Lindback, and Deborah Behr.  An amendment changing                 
            "consideration"  to "attention" at page 5, line 16                 
            was adopted.  SCS CSHB 130 (Fin) was then REPORTED                 
            OUT of  committee with  18 zero  fiscal notes  and                 
            notes  from  the  following   departments  showing                 
            associated costs:                                                  
                 Gov./Lt. Gov.                 $73.7                           
                 DEC (Solid Waste)              10.0                           
                 DEC (Wastewater)                4.5                           
                 DEC (Drinking Water)            6.0                           
                 DEC (Seafood Sanitation)        6.5                           
                 DEC (Palmer Lab.)               3.2                           
                 DPS (Commissioner)              5.0                           
                 DOR                            20.0                           
  CS FOR HOUSE BILL NO. 130(FIN) am(reengrossed)                               
       An Act relating to the  adoption, amendment, and repeal                 
       of regulations.                                                         
  Co-chairman   Halford  directed   that   CSHB  130   (Fin)am                 
  (reengrossed) be brought on for discussion.  BRUCE CAMPBELL,                 
  aide to  Representative Kelly,  came before  committee.   He                 
  explained  that the proposed  bill has  a few,  simple goals                 
  relating  to  the Regulation  Procedures  Act.   Language in                 
  secs. 1, 2,  3, and 4 closes a loop in the process involving                 
  the Legislative Regulation  Review Committee and establishes                 
  the  Governor  as the  key  elected official  overseeing the                 
  regulation process.  Secs. 5 and 6 deal with public comment.                 
  Sec. 5  strengthens public hearing requirements  and directs                 
  agencies to pay additional attention to factual, substantive                 
  comments as well as public testimony regarding the cost of a                 
  proposed  regulation.   While agency staff  has considerable                 
  expertise  in  terms  of the  benefits  of  regulations, the                 
  private sector  has the most expertise in issues relating to                 
  costs.  Sec. 6 incorporates a new section requiring agencies                 
  to report use or rejection of public comments.  Secs.  7, 8,                 
  and 9 are housekeeping.  Sec. 10 deals specifically with the                 
  Dept. of Environmental Conservation  and asks the department                 
  to consider alternate methods of  complying with the statute                 
  while paying close  attention to costs.   The effective date                 
  ensures  that  the  proposed  bill  applies  to  regulations                 
  noticed after the enactment date.                                            
  Discussion  followed between Senator Donley and Mr. Campbell                 
  regarding application of  Secs. 1 through  4.  Mr.  Campbell                 
  noted  application  to  the  Legislative  Regulation  Review                 
  Committee under Title 24 and  the requirement that committee                 
  comments  be  provided  to  both   the  Governor  and  state                 
  agencies.  A loop is thus  created between the committee and                 
  the Governor.                                                                
  Mr. Campbell further noted  that under Sec. 3 language,  the                 
  Governor  may  return  regulations  to  an  agency  for  two                 
       1.   If they  are inconsistent with  faithful execution                 
  of law.                                                                      
       2.   Agencies have need  to respond to specific  issues                 
  raised         by   the   Legislative    Regulation   Review                 
  The Governor may delegate  this authority solely to  the Lt.                 
  In  response to a further  question from Senator Donley, Mr.                 
  Campbell explained that the Regulation Review Committee will                 
  receive a  copy  of proposed  regulations.   At the  present                 
  time, the Committee merely  receives notice that regulations                 
  will be forthcoming.  The general theme of the proposed bill                 
  is that issues  brought to  legislative attention are  those                 
  raised  by  the public.    While  the Governor  now  has the                 
  authority to deny  adoption of proposed regulations,  HB 130                 
  would include the  Regulation Review Committee in  the loop,                 
  as  far as  comments are  concerned, up  to  the end  of the                 
  public notice  period.  It  allows the committee  to address                 
  concerns  directly  to the  Governor  rather than  through a                 
  Responding to a question from Senator Phillips regarding the                 
  impact  of  passage of  HJR 1,  Mr.  Campbell said  that the                 
  resolution would make the system work better.  It brings the                 
  legislature  further  into  the  loop.     HB  130  contains                 
  preparatory language to assist in the process.                               
  JOHN LINDBACK, Chief of Staff,  Office of the Lt.  Governor,                 
  next  came  before   committee.    He  explained   that  the                 
  administration has taken a neutral position on the bill, but                 
  he  added  that, personally,  the  Lt.  Governor is  on  the                 
  "positive side of neutral."  Of chief consideration are cost                 
  aspects.     The  administration  is   very  interested   in                 
  regulatory reform and looks forward to addressing the matter                 
  in  the  interim, in  concert  with  the  legislature.    As                 
  attempts were made to amend the bill in previous committees,                 
  it was determined that amendments  are sometimes more costly                 
  than  expected.    Mr.  Lindback  deferred comment  on  cost                 
  aspects to staff from the Dept. of Law.                                      
  Mr. Lindback agreed that  the proposed bill is  a reasonable                 
  approach to addressing weaknesses in the current process:                    
       1.   It  is closer to the  public perception of how the                 
            regulation process works.   The Office of  the Lt.                 
            Governor is  occasionally contacted by  people who                 
            are under the impression that the Lt. Governor can                 
            simply  not  adopt  regulations  sent to  her  for                 
            filing  based on  how she  feels about  them.   In                 
            fact, filing is a perfunctory ministerial function                 
            at this time.                                                      
       2.   It builds  in extra  steps to  ensure that  public                 
  comment        is    taken    into    consideration   before                 
                 regulations are adopted.                                      
  In  his  closing  comments,  Mr.  Lindback  asked  that  the                 
  administration  be allowed  the  opportunity  to review  its                 
  fiscal notes prior to passage of the bill from committee, if                 
  it is amended.                                                               
  DEBORAH BEHR, Regulations Attorney, Dept.  of Law, next came                 
  before committee.   She  said she  had reviewed  the current                 
  version of the bill and has no legal problems with it.   She                 
  attested  to  having  worked closely  with  the  sponsor and                 
  expressed thanks for his cooperation in developing  language                 
  that will work for the administration.                                       
  Directing attention to page 5, line 16, Ms. Behr voiced need                 
  to  delete "consideration"  and  insert  "attention."    She                 
  referenced page 3, line 29, and  noted use of "attention" in                 
  that instance and need for  parallel language on both pages.                 
  Parallel  construction  will  clarify  that  the  Dept.   of                 
  Environmental  Conservation will  not  have  to conduct  two                 
  types of review.                                                             
  Ms. Behr acknowledged  that the Governor presently  plays an                 
  active  role in  regulations.   Some  delay  in adoption  of                 
  regulations will result  from passage  of the proposed  bill                 
  because of review by the Office of the Governor.                             
  Recording of  the use of public  comments (Sec. 6)  is a new                 
  function  for state  government.  At  the present  time, the                 
  Alaska Administrative Procedures Act requires that the state                 
  agency consider all  comments.  There is,  however, no track                 
  record when  a commissioner accepts or  rejects regulations.                 
  Ms. Behr  referenced fiscal  notes associated  with the  new                 
  Speaking  to  cost  compliance,  Ms.  Behr noted  that  bill                 
  provisions direct state agencies to ask those who fall under                 
  the proposed regulations what costs are  likely to be and to                 
  pay serious attention to those costs.                                        
  The  final  section deals  with  the Dept.  of Environmental                 
  Conservation  and asks  that  the  department  give  special                 
  consideration to comments relating to the cost of compliance                 
  and alternative methods.   The  department does not  believe                 
  this provision will be problematic.                                          
  Discussion  followed  concerning the  number  of regulations                 
  dealt with in a year.                                                        
  Senator  Phillips  MOVED  for  adoption  of the  recommended                 
  change  at  page 5,  line  16, substituting  "attention" for                 
  "consideration."    No  objection  having  been  raised, the                 
  amendment was ADOPTED.                                                       
  Senator Donley directed attention to  a subsequent amendment                 
  which he explained  was earlier  added to other  legislation                 
  relating to regulations.   He noted that under the  existing                 
  regulation  system,  the  administration   merely  publishes                 
  notice of what  it intends to adopt.   It does not  show the                 
  actual  language.    The administration  then  takes  public                 
  comment and thereafter  adopts "almost anything  they want."                 
  It  does  not have  to  provide  notice  or  conduct  public                 
  hearings  if a  subsequent  change is  made.   The  proposed                 
  amendment  requires  that   if  substantial  or  significant                 
  changes are made  in the original  intent of the  regulation                 
  identified in the notice, the  administration is required to                 
  re-notice the regulation and provide copies of what is posed                 
  for adoption.   Exemptions are similar  to those worked  out                 
  several years  ago relating to  special boards  such as  the                 
  board  of  fisheries,  board of  game,  commercial fisheries                 
  entry  commission,  emergency  regulations,  or  regulations                 
  adopted  to  meet  federal  requirements.   In  his  closing                 
  comments,    Senator    Donley    acknowledged   that    the                 
  administration would probably  oppose the  amendment.    Ms.                 
  Behr advised that the amendment would be extremely expensive                 
  since it would  require  "new  rounds of public comments  on                 
  virtually all regulations."   As an  example, she cited  fee                 
  regulations which would require a new public comment process                 
  for each fee  change.  The administration could  find itself                 
  in a continuous cycle of redoing regulations and not meeting                 
  budget obligations.  She suggested  that if the amendment is                 
  of interest  to  committee, she  be allowed  time to  obtain                 
  fiscal notes from all departments.   Ms. Behr noted that the                 
  public can bring court  challenges against regulations  that                 
  are not properly noticed.                                                    
  Co-chairman  Halford asked  if  the proposed  amendment  was                 
  considered when the bill was before prior committees.  Bruce                 
  Campbell explained that  amending language is close  to that                 
  in an earlier "Z" version of the bill.  That bill is not now                 
  before  committee, mostly  because  of cost  considerations.                 
  The amendment  is similar  to  ideas proposed  by the  State                 
  Chamber of Commerce for discussion during the summer.  It is                 
  the  kind  of  concept that  might  well  fit  in a  broader                 
  package.    Mr.  Campbell  stressed  that the  goal  of  the                 
  proposed bill is not to reek havoc within the system  but to                 
  try  to find small ways  to make things  work.  The proposed                 
  amendment is  a  much  more serious  fix  than  the  sponsor                 
  initially intended.                                                          
  Co-chairman  Halford voiced  his belief that  the regulatory                 
  standard should be changed to provide that instead of merely                 
  being reasonable to  implement a statute, a  regulation must                 
  be essential to implementation of the express purpose of the                 
  Senator Donley said he would not offer the amendment at this                 
  time.    He   further  expressed  support   for  Co-chairman                 
  Halford's comments regarding need for  overall change in the                 
  Senator Sharp MOVED for  passage of SCS CSHB 130  (Fin) with                 
  individual  recommendations  and accompanying  fiscal notes.                 
  No  objection having  been  raised, SCS  CSHB 130  (Fin) was                 
  REPORTED  OUT of  committee with  18  zero fiscal  notes and                 
  notes  from  the  following  departments showing  associated                 
       Gov/Lt. Gov.                            $73.7                           
       DEC (Solid Waste)                        10.0                           
       DEC (Wastewater)                          4.5                           
       DEC (Drinking Water)                      6.0                           
       DEC (Seafood Sanitation)                  6.5                           
       DEC (Palmer Lab.)                         3.2                           
       DPS (Commissioner's Office)               5.0                           
       DOR                                      20.0                           
  Co-chairmen  Halford and  Frank  and  Senators Phillips  and                 
  Sharp  signed  the   committee  report  with  a   "do  pass"                 
  recommendation.  Senators Donley, Rieger, and Zharoff signed                 
  "no recommendation."                                                         
  SENATE BILL NO. 167                                                          
       An Act relating to day fines in certain criminal  cases                 
       and release of  employment information  for use in  the                 
       collection of criminal judgments.                                       
  Co-chairman  Halford directed that SB 167  be brought on for                 
  discussion.    CHRIS  CHRISTENSEN, General  Counsel,  Alaska                 
  Court System, came before committee.  He explained that last                 
  year the legislature passed law authorizing courts to impose                 
  day fines  for certain  misdemeanor offenses.   Pursuant  to                 
  that law, the Supreme Court appointed an 11-member panel  to                 
  develop a day-fine plan  for implementation.  In the  course                 
  of developing that plan, problems  became apparent.  Some of                 
  the  problems  could   be  rectified  by  simple   technical                 
  amendments  to  the  original statute.    Those  changes are                 
  incorporated  within  SB  167.    However, there  are  other                 
  problems  that  are more  fundamental.   While  the proposed                 
  legislation does not address these problems, solutions could                 
  be incorporated therein.                                                     
  The first problem  relates to legislative intent  in passing                 
  the original law.   It is clear from committee  comments and                 
  floor debate that the primary intention of day-fines law was                 
  to  reduce the number of misdemeanor  offenders who are sent                 
  to  jail and to  increase fine collection  rates.  Day-fines                 
  legislation, as enacted,  will not  achieve either of  those                 
  objectives  without further changes.  Day-fines law excludes                 
  most misdemeanors  for which  people are  presently sent  to                 
  jail.  The vast majority (in  excess of 85%) of those jailed                 
  for misdemeanors are sentenced for one of six crimes:                        
       1.   DWI                                                                
       2.   Refusal to take a breathalizer.                                    
       3.   Driving with license suspended.                                    
       4.   Driving with license revoked.                                      
       5.   Misdemeanor assault.                                               
       6.   Violation  of  a  domestic   violence  restraining                 
  As the law  currently stands,  a day fine  is applicable  to                 
  none  of  the   foregoing.     Day  fines   will  thus   not                 
  significantly reduce  the number  of misdemeanants  clogging                 
  the jail system.                                                             
  The second  problem is  that, as  now structured,  increased                 
  fine collection is unlikely.  Imposing  a day fine is one of                 
  several sentencing options  available to a  judge.  A  judge                 
  will only impose  a day fine, in  lieu of a regular  fine or                 
  jail if the judge feels the  defendant will actually pay the                 
  fine.  Review  of state collection practices  evidences that                 
  current fine collection rates are  "incredibly low."  People                 
  are supposed  to pay  their fines immediately  to the  court                 
  system.  If they  do not, we refer them to  the Dept. of Law                 
  fine collection unit  which is  funded by program  receipts.                 
  That unit is resource limited  and is only able to  go after                 
  PFDs to collect  fines.   The collection rate  is only  10%.                 
  The day-fines committee believes that until the Dept. of Law                 
  receives  additional resources  for fine  collection, judges                 
  are  unlikely  to  use  this  sentencing alternative.    The                 
  committee  thus   suggested  enactment  of   legislation  to                 
  prohibit  issuance  or  renewal  of  a state  license  until                 
  outstanding criminal fines are paid.                                         
  A  further  problem  with  day-fines  law pertains  to  fine                 
  amounts resulting  from the day-fines formula.   In order to                 
  avoid  separation  of  powers  questions,  the   legislature                 
  statutorily specified the unit scale and general formula for                 
  computing  day  fines.   A person  sentenced  for a  class A                 
  misdemeanor can be sent to jail for up to 365 days.  The law                 
  thus  allows for a fine  of up to  365 days of  salary.  The                 
  day-fines committee found that that would require imposition                 
  of fines of "incredible levels."  The committee thus lowered                 
  the maximum number of days of a  person's salary from 365 to                 
  45 days and discovered that even reduction would continue to                 
  require  "some  incredible  fines to  be  imposed."    As an                 
  example, Mr. Christensen cited the  case of a motorist cited                 
  for illegally passing a school bus.  That offense is a class                 
  B  misdemeanor.   When  an individual  is  convicted of  the                 
  offense,  it  involves  a  mandatory  court  appearance, six                 
  points on the  individual's driving license,  and a fine  of                 
  $100  to  $200.    Under day-fines  law,  reduction  of  the                 
  mandated 365  days of  pay to 45  days would require  that a                 
  person with an income of $10,000 receive  a fine of $275.  A                 
  person with income of  $40,000 would receive a $1,100  fine,                 
  and  an individual  with a  $100,000 income  would be  fined                 
  $2,800.00.  Since  fines are so  high, even after  committee                 
  reduction, the Supreme Court is reluctant to proceed without                 
  legislative  review  of fine  levels  and approval  of those                 
  levels.  Mr. Christensen stressed  that establishment of the                 
  foregoing  fines  is not  a  judicial power  but legislative                 
  power delegated to the courts.   He then reiterated need for                 
  the legislature to "sign off on  this before we implement it                 
  because we're not sure it's entirely what you expected."                     
  The second largest category of misdemeanors is fish and game                 
  offenses.  After much deliberation,  the day-fines committee                 
  excluded those  offenses from  the plan.   Unlike Title  11,                 
  which  has clear statutory  framework with classification of                 
  misdemeanors,  fish  and game  law  has no  clear sentencing                 
  structure.  There are many different penalty provisions.  It                 
  is not  always obvious  which  one applies  to a  particular                 
  offense.  Because many offense definitions overlap, the same                 
  conduct  can  be   charged  under  different  statutes   and                 
  regulations  with  entirely  different  consequences.    The                 
  committee   was  unwilling  to   impose  another   layer  of                 
  complexity  on  this  already overly  complex  system.   The                 
  committee recommended that the legislature appoint a special                 
  legislative committee or interagency working group to assess                 
  and   restructure  fish  and  game  penalty  provisions  and                 
  definitions of offenses.                                                     
  In his closing  comments, Mr.  Christensen stressed that  it                 
  will  require  a  significant  commitment  of  resources  to                 
  implement legislation  from last  year.   The proposed  bill                 
  takes  care of  technical problems,  but larger  fundamental                 
  problems  remain  outstanding.    Those   will  need  to  be                 
  addressed at some time.                                                      
  Responding  to  a  question  from  Co-chairman  Halford, Mr.                 
  Christensen  referenced   the  day-fine   report  which   he                 
  explained  had been  furnished to all  legislators' offices.                 
  He reiterated that even after reduction of the possible fine                 
  from 365  days to 45 days, fines  are very high for offenses                 
  that  "people   shouldn't   do  but   sometimes   they   do,                 
  thoughtlessly."  He  urged the  committee to review  numbers                 
  within the report  and advise  the court system  if that  is                 
  what was intended when authority  was provided.  Co-chairman                 
  Halford said he had no problem with the higher fines.                        
  Senator Rieger asked if authority allows the court system to                 
  use a  fraction of a day as  the basis for a day  fine.  Mr.                 
  Christensen suggested that authority to reduce the number of                 
  days  achieved  the  same  result.   He  questioned  whether                 
  application of a  percentage of daily pay could be utilized.                 
  End:      SFC-95, #61, Side 1                                                
  Begin:    SFC-95, #61, Side 2                                                
  In response to  an additional question from  Senator Rieger,                 
  Mr. Christensen explained that the statute allows for use of                 
  aggravating and mitigating  factors.  The court  is required                 
  to  set  a  presumptive  day  fine   for  an  offense.    If                 
  aggravating or mitigating  factors are found, the  judge may                 
  reduce  or  increase the  fine  within a  certain parameter.                 
  Some of the proposed technical changes relate to aggravators                 
  and mitigators.                                                              
  Co-chairman  Halford  voiced  his  belief  that  it  is  not                 
  excessive  to fine  someone  $1,000 or  $1,500 for  "a major                 
  violation that  endangers people."   He  further voiced  his                 
  support for a minimum fine of $5,000 for drunk driving "that                 
  becomes a super lien on the  vehicle on the second offense."                 
  No bank  would then loan on a car,  and no person would loan                 
  their  car  to  an  individual  after  that  individual  was                 
  convicted of DWI.                                                            
  Senator Rieger advised  of need  to review  the schedule  of                 
  fines, suggesting that  some may be  too low and others  too                 
  high.  The maximum amount of 365  days was placed in statute                 
  so that  the judge could  fine or sentence to  jail for that                 
  amount.  It  appears that  when converted to  a cash  basis,                 
  that flexibility was removed either  by the manner in  which                 
  the courts interpreted  the legislation or  the way the  law                 
  actually reads.  He said he was a proponent of day fines but                 
  agreed that the punishment must fit  the crime.  He attested                 
  to problems stemming from erratic enforcement of law.                        
  Mr. Christensen directed attention to  the fine schedule and                 
  noted that a fine for a level  six offense (the most serious                 
  misdemeanor) if  applied to DWI  (which is not  now covered)                 
  could  amount to $5,500  for a person  with $100,000 income.                 
  The  problem is  that because DWI  carries a  mandatory jail                 
  sentence, a  day fine cannot  be applied.   Both Co-chairman                 
  Halford and Senator  Rieger indicated support for  a fine of                 
  that magnitude.  Senator Rieger  then questioned whether the                 
  legislature had the courage to change DWI from the mandatory                 
  three  days  in  jail to  a  stiff  fine.   The  Co-chairman                 
  suggested that if  the change had an  enforcement mechanism,                 
  there would  be support.   Unless  there are  provisions for                 
  something  like  a  super  lien,  the  money   will  not  be                 
  In  response  to   a  question   from  Senator  Sharp,   Mr.                 
  Christensen explained that for certain misdemeanors, a judge                 
  has the  option of imposing  the standard jail  sentence and                 
  fine or the day fine.  When a day  fine is imposed, there is                 
  no possibility of a jail sentence, but the defendant is "hit                 
  with a  very, very stiff  fine."  Thereafter,  the defendant                 
  cannot  be put in  jail because he  or she does  not pay the                 
  fine  because  the constitution  prohibits  imprisonment for                 
  debt.   As  a  result  of  further  discussion  and  concern                 
  expressed  by  Senator   Sharp,  Mr.  Christensen  suggested                 
  revising  the  traditional  system of  jail  and  a fine  to                 
  include larger fines based  on salary.  The fine  would then                 
  serve as  a condition of probation.  If  it is not paid, the                 
  defendant  would  go to  jail.   Mr.  Christensen questioned                 
  whether  that  would   work  within  the  confines   of  the                 
  constitution.  He noted that  in the present situation,  the                 
  judge "really has to make his decision up front."  The judge                 
  evaluates the defendant and determines whether to impose the                 
  traditional jail time and fine or  a substantial day fine in                 
  lieu of the traditional sentence.  The judge will not levy a                 
  day fine if he or she suspects it will go unpaid.                            
  Senator Zharoff questioned whether alternatives such as jail                 
  time, a low fine, or a higher fine could be imposed based on                 
  the   defendant's   economic   status.     Mr.   Christensen                 
  acknowledged concerns  regarding equal protection.   Under a                 
  day fine, an individual pays a percentage of what he  or she                 
  actually makes.  No matter how poor an individual may be, if                 
  the defendant is making money, he  or she may receive a  day                 
  fine--a percentage  of salary.   The  court will  frequently                 
  impose fines under  the traditional  system, and people  who                 
  cannot  pay  have the  option  of performing  community work                 
  service.  Statutes  have a dollar value for  each day of the                 
  fine.  Judges have the option  of allowing defendants to pay                 
  day fines with legislatively defined community work service.                 
  A judge could not send people to jail "just because they had                 
  no money."                                                                   
  In response to a further question from Senator  Zharoff, Mr.                 
  Christensen voiced his understanding  that while the statute                 
  does not clearly say,  day fines are based on  a defendant's                 
  income rather than combined income of a husband and wife.                    
  Discussion  followed  among  committee   members  concerning                 
  disposition of  the bill and  whether it should  be reviewed                 
  during  the   interim  in   order   to  incorporate   needed                 
  fundamental changes in law.  Mr. Christensen reiterated that                 
  the court is reluctant to proceed with implementation of day                 
  fines without further legislative review.   The court system                 
  will review comments  before committees  and send the  issue                 
  back to the day-fines committee for additional work.                         
  Senator Rieger expressed  support for implementation  of day                 
  fines.   He then  voiced support  for legislative  direction                 
  that allows  the day-fine  schedule to  be more  flexible (a                 
  combination  of  limits on  days,  total days,  fractions of                 
  days, a sliding scale, etc.) and removes prohibition against                 
  use of day fines  for misdemeanors that are now  exempt from                 
  application.  He then asked if  that would be sufficient for                 
  the courts to  implement the program.   Mr. Christensen said                 
  he  could  not  predict  what  the  courts  might  do.    He                 
  acknowledged that the foregoing  changes would help  achieve                 
  one of the purposes  of the day-fine concept:   reduction of                 
  the  number of  misdemeanants clogging  jails.   Co-chairman                 
  Halford  expressed  doubt  that  there  would  be sufficient                 
  legislative support  for inclusion  of DWI  offenders unless                 
  there is assurance  of collection of "major,  multi thousand                 
  dollar fines."                                                               
  Co-chairman Halford voiced his understanding that  day fines                 
  relate  to income but do not apply against assets.  He cited                 
  instances  of  individuals  who  may  have  low  income  but                 
  "tremendous assets" and  suggested that they "ride  the very                 
  low penalty schedule."   He  then asked if  that aspect  was                 
  considered.  Mr.  Christensen acknowledged  the concern  and                 
  suggested that a  judge might decide that a  day fine is not                 
  appropriate for a particular defendant, and  the traditional                 
  jail  sentence  and standard  fine  would  be imposed.    He                 
  stressed that for 90% of  the public, the day-fine  approach                 
  Responding to a question from  Co-chairman Halford regarding                 
  the  seasonal  nature  of  income  for some  residents,  Mr.                 
  Christensen noted that one of the proposed technical changes                 
  requires that judges must believe that the fine will be paid                 
  within one year.   The  original provision required  payment                 
  within six months.  The technical change extends that period                 
  to one year.                                                                 
  Senator Rieger asked if  a judge could suspend a  portion of                 
  the imposition  of a  day fine.   Mr.  Christensen responded                 
  negatively.   However, a  technical change  relates to  set-                 
  aside of conviction.  At the present time a judge may impose                 
  a suspended imposition of sentence and allow one's record to                 
  remain clean.  Day-fine  law does not allow that.   The day-                 
  fines committee felt that if the state allowed for suspended                 
  imposition of  day-fines, it  would encourage  defendants to                 
  pay.   The technical change thus allows a judge to set aside                 
  a conviction if, in the interest  of justice, he believes it                 
  is warranted, and the person has paid his or her fine.                       
  Co-chairman Halford  voiced concern  that the proposed  bill                 
  was introduced on  the 100th day  of a 120-day session,  and                 
  the committee which  should properly deal with such an issue                 
  waived referral to Finance.                                                  
  Further  discussion  followed  regarding  inclusion  of  DWI                 
  offenses.  Co-chairman  Halford stressed  need to ensure  an                 
  arrangement such as three days in jail or a fine of $5,000--                 
  "whichever   the  judge  determines   to  have  the  maximum                 
  deterrent value on that particular offender.  "  If there is                 
  no mechanism for collection, the state will likely never get                 
  paid.  Senator  Rieger expressed his understanding  that the                 
  bill as presently proposed would  not accomplish all that it                 
  should.  Co-chairman Halford suggested that the bill be held                 
  for additional work and advised that  he would bring it back                 
  for further discussion at the next meeting.                                  
  CS FOR HOUSE BILL NO. 17(L&C) am                                             
       An Act expanding the services that may be offered by an                 
       electric cooperative to include sewer and water and gas                 
       services when authorized by the Alaska Public Utilities                 
       Commission, and to include direct satellite  television                 
       services;  relating  to  officers  of  a  telephone  or                 
       electric  cooperative;  relating  to  amendment of  the                 
       articles of incorporation  of a  telephone or  electric                 
       cooperative; and providing for an effective date.                       
  Co-chairman Halford directed that CSHB 17 (L&C)am be brought                 
  on for consideration.   JEFF  LOGAN, aide to  Representative                 
  Green, came before  committee.  He  explained that the  bill                 
  amends Title 10 in three categories:                                         
       1.   Expansion of  the scope  of services  that can  be                 
  offered        by electrical cooperatives to  include water,                 
                 sewer,  natural  gas,  and  direct  satellite                 
       2.   Clarification of voting procedures  for amendments                 
  to        articles   of    incorporation   for    electrical                 
            cooperatives.  New language clarifies how  members                 
            may vote either at the  annual meeting or by mail.                 
       3.   Provision  of  a local  option  in the  titling of                 
  board          members  of  electric  cooperatives.    Under                 
                 current law, board members are required to be                 
                 titled:         president,    vice-president,                 
                 secretary, and treasurer.  Common practice is                 
                 for the presiding  officer of  a board to  be                 
                 called the  chairman.  Some  cooperatives use                 
                 other titles.  Proposed changes allow them to                 
                 select the titles they wish to use.                           
  Remaining  sections, with  the  exception  of the  effective                 
  date, are conforming changes.                                                
  Mr. Logan next directed attention to a draft SCS CSHB 17 and                 
  voiced  support,  on  behalf of  the  sponsor,  for amending                 
  language  therein.   Changes incorporated  within  the draft                 
       Page 2,  line 1,  removes inclusion  of subsection  (7)                 
  from the  citation of  AS 10,25.020  (6) since  there is  no                 
            need to include direct satellite television  under                 
            APUC regulation.                                                   
       Page  2,  line  25,  subsection  (6)   utilizes  Senate                 
       language which is cleaner.                                              
       Page  2,  line  28, subsection  (7)  makes  clear where                 
  direct    satellite television  services may be  offered and                 
            where  they  may   not.     It  also  provides   a                 
  Senator Randy Phillips voiced his understanding that the REA                 
  has changed to the RUS (Rural  Utility Services) in order to                 
  obtain loans  for provision of  other utilities.   Mr. Logan                 
  concurred.  The  Senator then asked  if there was  objection                 
  from  gas, water, and sewer companies  to expansion of rural                 
  electrical  cooperatives to  other  utilities.    Mr.  Logan                 
  responded  negatively.    Co-chairman   Halford  voiced  his                 
  understanding  that  water,  sewer,  and  gas  services  are                 
  provided through a system but not certified  or regulated by                 
  Co-chairman Frank voiced  his understanding  that it is  not                 
  anticipated that rural electrical  coop provision of  water,                 
  sewer, or gas  services would  overlap areas where  existing                 
  utilities provide these  services.   The proposed bill  will                 
  only  apply  to areas  where  there  in  presently  no  such                 
  service.  Mr. Logan  agreed that it  is not the intent  that                 
  service areas overlap.                                                       
  DAVE   HUTCHENS,   Alaska    Rural   Electric    Cooperative                 
  Association, next  came  before committee.    As  background                 
  information he  explained that the proposed  bill represents                 
  the  first  amendment to  AS  10.25, the  electric telephone                 
  cooperative  act, since the 1988 code revision.  It contains                 
  a collection  of needed  items due  to a  change in  present                 
  circumstances or the  fact that  some items were  overlooked                 
  when revision occurred.                                                      
  Speaking to  concern raised by Senator  Phillips questioning                 
  electric coop expertise in other utility areas, Mr. Hutchens                 
  explained that "this  section does not  confer the right  on                 
  the  electric  cooperatives  to  go  out  and  provide  this                 
  service."   It merely  places provision  of services  within                 
  their corporate powers.   It would then be legal for them to                 
  engage in this business, if authorized to do so by the APUC.                 
  Speaking  to the  change  from  REA  to  RUS,  Mr.  Hutchens                 
  referenced combination  of all  rural utility loan  programs                 
  within the Dept. of Agriculture into one entity.  The reason                 
  for the change was to allow electric cooperatives  that have                 
  a  good track record  of management success  to extend sewer                 
  and water  in rural areas where needed.   For loans to rural                 
  entities for small sewer and water  systems that do not have                 
  a  good  management record,  the  proposed bill  would allow                 
  rural  electric  coops  to step  in  and  provide management                 
  services, where necessary, to protect assets built with USDA                 
  loans.  That is the national push behind the issue.                          
  In response to concern raised by Senator Phillips, asking if                 
  a rural  cooperative  could take  over  gas services.    Mr.                 
  Hutchens replied, "Absolutely  not."   The rural coop  would                 
  have to go before the APUC  and make a case that they  could                 
  do  the  job  better  than  Enstar.    He  then  voiced  his                 
  understanding there is no chance they could do that.                         
  Senator  Rieger asked  if  certificates  of convenience  and                 
  necessity are always exclusive.   Mr. Hutchens answered, "In                 
  practice,  it has  been  . .  . for  sewer, water,  gas, and                 
  electric."  Local telephone service  has also been exclusive                 
  in practice.                                                                 
  Responding to an additional question from Senator  Phillips,                 
  Mr. Hutchens explained  that RUS  provides ready funding  to                 
  rural electric coops for water and sewer projects.  There is                 
  $900 million in the federal budget for this year.                            
  Senator Phillips again posed a question regarding expertise.                 
  Mr. Hutchens  pointed  to common  practice  in a  number  of                 
  states for the  electric cooperative  to also provide  sewer                 
  and  water service.    The management  system  is in  place.                 
  Specific expertise in sewer and water is then hired.                         
  Noting  that the  Dept.  of  Environmental  Conservation  is                 
  attempting to construct sewer and water projects in a number                 
  of  areas,  Co-chairman  Frank asked  if  cooperatives  were                 
  working with the department.  He suggested that  coops could                 
  provide both  management and maintenance expertise  that was                 
  lacking in the past.                                                         
  Senator  Sharp  suggested  that for  small  water  and sewer                 
  utilities that  are now  precluded  from selling  out to  an                 
  existing electric cooperative if  they chose to "get out  of                 
  the business," the  proposed bill offers an  opportunity for                 
  improvement of service  by an entity with  greater financial                 
  Mr. Hutchens stressed that in Alaska cooperative members are                 
  not "hungry after the idea of getting into sewer and water."                 
  Members feel it  is good to have  authority to do so  if the                 
  right  opportunity comes  along, or it  makes sense  for the                 
  coop to do  so.  Mr.  Hutchens acknowledged that the  Alaska                 
  Village Electric Cooperative which  services 50 villages  in                 
  the western part of the state is willing to take on whatever                 
  services might be  necessary to make their  communities more                 
  viable.  Naknek Electric is also interested in being able to                 
  provide sufficient natural gas for local service.                            
  Senator Sharp MOVED for adoption of SCS CSHB 17 (9-LS0096\W,                 
  Cramer,  4/26/95).    Senator Rieger  OBJECTED  and inquired                 
  concerning the difference between Senate and House versions,                 
  specifically referencing new language at page 2, relating to                 
  direct  satellite  television.    Mr.  Logan  explained that                 
  satellite television differs from  cable in that programming                 
  is  received by a satellite dish and  relayed to users.  The                 
  utility would not  offer the  service itself.   Cooperatives                 
  would   "service"   the   service.     They   would  provide                 
  administrative and  billing  services.   Mr. Hutchens  added                 
  that the  National Rural  Telecommunications Cooperative  is                 
  owned by a national collection of  coops.  NRTC has its  own                 
  programming package put together in direct negotiations with                 
  programmers such as Disney.                                                  
  Senator Rieger next questioned inclusion of the following:                   
       to  a  location  that  is  not  part  of  an  area                      
       certificated  by  the   Alaska  Public   Utilities                      
       Commission to  a cable  television company  on the                      
       effective date of this Act.                                             
  Mr. Hutchens explained that areas cooperatives would like to                 
  serve with direct satellite television  are "the scattered .                 
  . . housing areas  in their electric service areas."   As an                 
  example,  he  cited  areas in  the  Matanuska  Valley, Kenai                 
  Peninsula,  Copper  Valley,  and   rural  areas  outside  of                 
  Fairbanks  where  it  is  not  feasible  to   have  a  cable                 
  television system.   The foregoing was  added as a means  of                 
  assuring cable television companies that electric coops will                 
  not  be "poaching  their  territory."   Coops  would not  be                 
  serving  areas  that have  cable  television.   Mr. Hutchens                 
  acknowledged that the above does not forego direct satellite                 
  television  service  in  competition  with  cable  delivery.                 
  However,  that  would be  done  through "somebody  like RCA-                 
  Hughes" rather than by an electric coop.                                     
  End:      SFC-95, #61, Side 2                                                
  Begin:    SFC-95, #63, Side 1                                                
  In the course of further  discussion of satellite television                 
  delivery, Mr. Hutchens explained that the consumer would own                 
  his  or  her own  satellite  dish.   The  coop  would merely                 
  provide  billing  services.   Language  within  the  bill is                 
  intended to allow for provision of  service "if and when the                 
  satellite actually has Alaska in its footprint . . . .   Two                 
  years is  the projection on that."   Scattered housing would                 
  be the market  area.  The benefit of  coop provision of this                 
  service  rests  in the  value  added service  and negotiated                 
  rates on programming packages through NRTC.                                  
  Responding to a  question from Senator Rieger,  Mr. Hutchens                 
  advised  that homes  located in  an area  certificated  to a                 
  cable company,  would fall  outside the  area that  could be                 
  served through  a coop.  If the area  is not served by cable                 
  when the proposed bill becomes law,  it could be served by a                 
  Senator  Rieger  inquired  concerning  the  position  of the                 
  sponsor  on  the  proposed  amendment.   Jeff  Logan  voiced                 
  concern  regarding  passage   of  the  legislation   if  the                 
  amendment is incorporated.   He then expressed  a preference                 
  for the draft SCS CSHB  17 as written.  Senator Rieger  said                 
  he would not proceed  against the wishes of the  sponsor but                 
  expressed  concern over  backing  down  because a  regulated                 
  utility "doesn't want the competition."                                      
  Senator  Zharoff raised concern that in smaller communities,                 
  provision of television  services is  a private  enterprise.                 
  He  suggested  that service  by  a  utility  would limit  or                 
  prohibit service by the private sector.                                      
  In  response to a  further question  by Senator  Rieger, Mr.                 
  Hutchens explained  that the  cable television  industry was                 
  not convinced that language  passed in the House bill  would                 
  provide  sufficient  protection  against   competition  from                 
  satellite service.  New language contained within subsection                 
  (7) at  page  2  was  thus incorporated  within  the  Senate                 
  committee substitute.                                                        
  Senator  Rieger MOVED  to withdraw  his proposed  amendment.                 
  Co-chairman Frank  then  MOVED  for  adoption,  saying  that                 
  competition should be  allowed.   Regulation should only  be                 
  necessary  where competition  is  not  possible  because  of                 
  economic  reasons.    Senator  Sharp  voiced   concern  that                 
  competing services, regardless of technological advances, in                 
  a  small service  area  may dilute  the number  of customers                 
  needed for the service to be viable.  Senator Zharoff raised                 
  a question regarding reversal of services provided by a coop                 
  should a community  or private enterprise seek  to take over                 
  service  provision.   Co-chairman Frank  clarified that  the                 
  proposed amendment  would not grant  exclusivity to existing                 
  cable operators  relative  to  direct  satellite  television                 
  program services.  The change  would merely open competition                 
  to electric utilities that choose to provide the service.                    
  Co-chairman    Halford    raised   a    question   regarding                 
  certification of cable  television services, and  discussion                 
  of the issue followed.                                                       
  Senator  Sharp  expressed   concern  over  possible  unequal                 
  competition if one  segment of the industry  is certificated                 
  and  regulated  by  the APUC  while  the  other  is provided                 
  authority by the legislature, through statutes, and bypasses                 
  the regulatory process.                                                      
  Co-chairman Frank said that the  proposed amendment does not                 
  go as far  as he  would like.   He voiced  a preference  for                 
  allowing technology to  advance competition for  the benefit                 
  of the consumer.                                                             
  In response  to additional  questions regarding  regulation,                 
  Mr. Hutchens  advised that  cable television  companies that                 
  serve ten or  more customers are  to be certificated by  the                 
  APUC.    None of  the companies  are  regulated in  terms of                 
  rates,  unless consumers  petition for  economic regulation.                 
  The company in  Juneau is the  only regulated cable  service                 
  provider in Alaska.                                                          
  Co-chairman Frank cautioned  that it is  not good policy  to                 
  artificially  restrict  competition   where  technology   is                 
  allowing it to happen.   Senator Zharoff questioned allowing                 
  a utility to provide a service that  is not governed by APUC                 
  in possible competition with service  that has undergone the                 
  certification or regulatory process.                                         
  Co-chairman  Halford  voiced  his  understanding  that   the                 
  proposed bill merely allows utilities to engage in a form of                 
  competition that is presently available to any other entity,                 
  since provision of television services is unregulated.   The                 
  Co-chairman then  called for  objection to  adoption of  the                 
  proposed amendment.   No objection  having been raised,  the                 
  amendment was ADOPTED.                                                       
  In response to  a further question from Senator Zharoff, Mr.                 
  Hutchens explained that the bill  would simply grant utility                 
  cooperatives  authority  to   provide  needed  services  not                 
  provided by another entity.                                                  
  Senator Sharp MOVED  for passage of  SCS CSHB 17 (Fin)  with                 
  individual recommendations.   Senator  Zharoff OBJECTED  and                 
  advised of need for additional  review.  Co-chairman Halford                 
  called for a show of hands.  The motion carried on a vote of                 
  4 to 2.   SCS CSHB  17 (Fin) was  REPORTED OUT of  committee                 
  with  zero  fiscal notes  from  the  Dept. of  Commerce  and                 
  Economic  Development, one  from  the  Division of  Banking,                 
  Securities, and Corporations  and the other from  the Alaska                 
  Public Utilities Commission.   Co-chairmen Halford and Frank                 
  and  Senators  Phillips,   Rieger,  and  Sharp   signed  the                 
  committee report with a "do  pass" recommendation.  Senators                 
  Donley and Zharoff signed "no recommendation."                               
  CS FOR HOUSE BILL NO. 44(FIN) am                                             
       An Act relating to reporting  by permittees, licensees,                 
       and  vendors;  relating   to  municipal  regulation  of                 
       charitable gaming; providing that a political  group is                 
       not a qualified organization for purposes of charitable                 
       gaming,  other  than  raffles,  and  relating  to those                 
       raffles; relating  to identification  to the  public of                 
       each permittee that will benefit  from the sale of each                 
       pull-tab series and each bingo  session; providing that                 
       the proceeds from charitable gaming, other than certain                 
       raffles conducted by a political organization,  may not                 
       be contributed to a political  party or other political                 
       group; and providing for an effective date.                             
  Co-chairman Halford directed that CSHB 44(Fin) am be brought                 
  on  for  discussion  and  directed  attention  to  SCS  CSHB
  TOM  ANDERSON, aide  to Representative  Martin, came  before                 
  committee.    He  explained  that  under the  proposed  bill                 
  political permittees  would not  be allowed.   No  political                 
  organization or group  may hold a charitable  gaming permit.                 
  The  bill   continues  to  allow   remaining,  non-political                 
  permittees  to contribute  and  donate  to  candidates,  but                 
  distribution of such  funds has  been tightened.   Political                 
  groups may continue to obtain  raffle permits.  Mr. Anderson                 
  urged passage of the bill with proposed amendments.                          
  DENNIS POSHARD, Director, Charitable Gaming Division,  Dept.                 
  of  Revenue, next  came  before committee  to  speak to  the                 
  technicalities of  the bill.   Co-chairman Halford  directed                 
  attention  to Amendments 1, 2, and  3.  Duplicate amendments                 
  contained  within  a   packet  of  information  highlighting                 
  differences between House  and Senate  versions of the  bill                 
  and  the   three  amendments   logged-in  and   stamped  for                 
  distribution to committee  caused temporary confusion.   The                 
  meeting  was  recessed  for  review  and comparison  of  the                 
  The meeting was recessed at 4:50  p.m. and did not reconvene                 
  on this date.                                                                

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