Legislature(2001 - 2002)

05/03/2001 06:56 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                           May 03, 2001                                                                                       
                              6:56 PM                                                                                         
                                                                                                                                
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-01 # 93, Side A                                                                                                             
SFC 01 # 93, Side B                                                                                                             
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Pete  Kelly re-convened the  meeting at approximately  6:56                                                            
PM.                                                                                                                             
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Dave Donley, Co-Chair                                                                                                   
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Loren Leman                                                                                                             
Senator Lyda Green                                                                                                              
Senator Gary Wilken                                                                                                             
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Senator Ward                                                                                                                    
                                                                                                                                
Also  Attending:    REPRESENTATIVE  JOE  HAYES;  CHRIS CHRISTENSEN,                                                           
Deputy  Administrative   Director,   Alaska  Court  System;   ROBERT                                                            
BUTTCANE,  Legislative  and  Administrative   Liaison,  Division  of                                                            
Juvenile Justice, Department  of Health and Social Services; CANDACE                                                            
BROWER, Program Coordinator,  Office of the Commissioner, Department                                                            
of Corrections;  AV  GROSS, Attorney  representing  the North  Slope                                                            
Borough;                                                                                                                        
                                                                                                                                
Attending  via  Teleconference:    From  Anchorage:   BOB  LOEFFLER,                                                          
Director, Division of Mining,  Land and Water, Department of Natural                                                            
Resources;                                                                                                                      
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
HB 101-CHARTER SCHOOLS                                                                                                          
                                                                                                                                
The bill moved from Committee.                                                                                                  
                                                                                                                                
SB 161-NO PAY FOR JUDGES UNTIL DECISION                                                                                         
                                                                                                                                
The Committee  adopted  a committee  substitute and  heard from  the                                                            
Alaska Court System. The bill moved from Committee.                                                                             
                                                                                                                                
SB 139-STATE WATER USE                                                                                                          
                                                                                                                                
The Committee  heard  from the  Department of  Natural Resources.  A                                                            
committee substitute  was adopted  and amended with two amendments.                                                             
The fiscal note was amended and the bill moved from Committee.                                                                  
                                                                                                                                
SB 169-HATE CRIMES: AUTOMATIC WAIVER OF MINORS                                                                                  
                                                                                                                                
The  Committee  heard  from  the Department  of  Health  and  Social                                                            
Services and the  Department of Corrections. A committee  substitute                                                            
was amended and adopted and the bill moved from Committee.                                                                      
                                                                                                                                
SB 186-MUNICIPAL TAX: PIPELINE PROP/G.O.BOND DEBT                                                                               
                                                                                                                                
The Committee heard from  the sponsor and the North Slope Borough. A                                                            
committee  substitute   was  adopted  and  the  bill   was  held  in                                                            
Committee.                                                                                                                      
                                                                                                                                
HB  32-SEX CRIME AND PORNOGRAPHY FORFEITURES                                                                                    
                                                                                                                                
The  Committee heard  from  the sponsor  and  the bill  was held  in                                                            
Committee.                                                                                                                      
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 101(HES)                                                                               
     "An Act relating to charter schools; and providing for an                                                                  
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Donley  stated that after  conducting an investigation,  he                                                            
was prepared to support this legislation.                                                                                       
                                                                                                                                
Co-Chair Donley  offered a motion  to move SCS CS HB 101  (HES) from                                                            
Committee  with   two  accompanying  fiscal  notes,   one  from  the                                                            
Department  of  Education   and  Early  Development,   Teaching  and                                                            
Learning Support  for $1,425,000 and another from  the Department of                                                            
Education and Early Development, K-12 Support for $609,800.                                                                     
                                                                                                                                
There was no objection and the bill MOVED from Committee.                                                                       
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 161(JUD)                                                                                            
     "An  Act relating  to the  withholding of  salary of  justices,                                                            
     judges,  and  magistrates;  relating  to  prompt  decisions  by                                                            
     justices,  judges, and  magistrates; and  relating to  judicial                                                            
     retention  elections for judicial  officers; and providing  for                                                            
     an effective date."                                                                                                        
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Donley  moved to adopt CS SB 161, 22-LS0009\X  as a working                                                            
draft.                                                                                                                          
                                                                                                                                
Without objection it was ADOPTED.                                                                                               
                                                                                                                                
Co-Chair  Donley  stated   that  he  has  been  working  with  Chris                                                            
Christensen from  the Alaska Court System to develop  this committee                                                            
substitute,  which would  improve the language  in existing  statute                                                            
regarding the  six-month requirement for judicial  decisions without                                                            
expanding  it to  apply to  the appellate  level.  He explained  the                                                            
committee substitute  adopts a state policy indicating  the State of                                                            
Alaska expects  most trial court, and a majority of  appellate court                                                            
decisions to be rendered  within six months following oral arguments                                                            
of  the  case. He  noted  these  goals  are  consistent  with  goals                                                            
announced by Chief Justice Dana Fabe.                                                                                           
                                                                                                                                
Co-Chair Donley  also pointed out the committee substitute  provides                                                            
in statute, that  the number of times a trial court  justice has had                                                            
salary  withheld  due to  outstanding  cases  beyond  the  six-month                                                            
deadline would  appear in the Official  Election Pamphlet  (OEP) for                                                            
voter consideration when that judge's term is up for retention.                                                                 
                                                                                                                                
Co-Chair Donley  continued the committee substitute  stipulates that                                                            
8a report would  be issued to the legislature listing  the number of                                                            
pending  judicial  matters  that have  surpassed  the  deadline.  He                                                            
stated  this ensures  that  judges'  salary warrant  information  is                                                            
provided  to the public and  to organizations  such as the  Judicial                                                            
Council,  which he said has  not always occurred.  He explained  the                                                            
inability for interested  parties to obtain this information was due                                                            
to a decision  made in  the Department  of Administration  regarding                                                            
confidential personnel information.                                                                                             
                                                                                                                                
CHRIS  CHRISTENSEN,  Deputy Administrative  Director,  Alaska  Court                                                            
System, relayed the Chief  Justice's appreciation of Co-Chair Donley                                                            
for listening  to the court system  concerns and for his  efforts to                                                            
address those concerns on this matter.                                                                                          
                                                                                                                                
Mr. Christensen  stated  the committee substitute,  "does  eliminate                                                            
all the problems,  which we discussed at the last  meeting regarding                                                            
the danger  to  the six month  rule."  He remarked  that the  intent                                                            
language is  a "reasonable expression  of the legislature's  wishes,                                                            
given that  it is  the funding  authority." He  assured efforts  are                                                            
made to  accomplish  the timely resolution  of cases  and the  court                                                            
administration  shares the legislature's interest  in continuing the                                                            
process.                                                                                                                        
                                                                                                                                
Co-Chair Donley  offered a motion to move from Committee  CS SB 161,                                                            
22-LS0009\X with new zero  fiscal note from the Alaska Court System.                                                            
                                                                                                                                
Senator Hoffman  asked if Mr. Christensen had any  opposition to the                                                            
committee substitute.                                                                                                           
                                                                                                                                
Mr.  Christensen   asserted   he  did  not   oppose  the   committee                                                            
substitute.                                                                                                                     
                                                                                                                                
Without objection the bill MOVED from Committee.                                                                                
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 139(RES)                                                                                            
     "An Act  relating to fees for  certain uses of state  water and                                                            
     to the accounting  and appropriation of those fees; relating to                                                            
     authorizations  for the  temporary use  of state water;  making                                                            
     other  amendments to  the Alaska Water  Use Act; and  providing                                                            
     for an effective date."                                                                                                    
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
AT EASE 7:03 PM / 7:04 PM                                                                                                       
                                                                                                                                
Senator Leman  moved to adopt  CS SB 139,  22-GS1087\P as a  working                                                            
draft.                                                                                                                          
                                                                                                                                
The committee substitute was ADOPTED without objection.                                                                         
                                                                                                                                
Amendment  #1: This  amendment makes  the following  changes to  the                                                            
committee substitute.                                                                                                           
                                                                                                                                
     Page 3, lines 23- 27:                                                                                                      
     Delete all material.                                                                                                       
     Insert a new bill section to read:                                                                                         
       Sec. 4. AS 46.15.020(b) is amended to read:                                                                              
         (b) The commissioner shall                                                                                             
                (1) adopt procedural and substantive regulations to                                                             
     carry  out   the  provisions  of  this  chapter,   taking  into                                                            
     consideration   the  responsibilities  of  the   Department  of                                                            
     Environmental  Conservation under  AS 46.03 and the  Department                                                            
     of Fish and Game under AS 16;                                                                                              
                (2) keep a public record of all applications for                                                                
     permits  and  certificates  and other  documents  filed in  the                                                            
     commissioner's   office;  and  shall  record  all  permits  and                                                            
     certificates  and  amendments  and  orders affecting  them  and                                                            
     shall  index them in  accordance with  the source of the  water                                                            
     and the name of the applicant or appropriator;                                                                             
                (3) cooperate with, assist, advise, and coordinate                                                              
     plans  with the federal, state,  and local agencies,  including                                                            
     local  soil  and  water  conservation   districts,  in  matters                                                            
     relating  to the  appropriation,  use,  conservation,  quality,                                                            
     disposal, or control  of waters and activities related thereto;                                                            
                (4) prescribe fees or service charges for any public                                                            
     service  rendered  consistent with  AS 37.10.050  -  37.10.058,                                                            
     except  that  the  department  may  charge  under  regulations                                                             
     adopted by the department  an annual $50 administrative service                                                            
     fee  to  maintain  the  water  mana2ement  program  (5)  before                                                            
     February  1  of each  year,  prepare  a report  describing  the                                                            
     activities   of  the  commissioner   under  AS  46.15.035   and                                                            
     46.15.037;  the commissioner shall notify the  legislature that                                                            
     the report is available; the report must include                                                                           
                         (A) information on the number of                                                                       
              applications  and  appropriations for  the removal  of                                                            
              water from  one hydrological unit to another that were                                                            
              requested and  that were granted and on the amounts of                                                            
              water involved;                                                                                                   
                         (B) information on the number and location                                                             
              of sales of water conducted by the commissioner and                                                               
              on the volume of water sold;                                                                                      
                         (C) recommendations of the commissioner for                                                            
              changes in state water law; and                                                                                   
                         (D) a description of state revenue and                                                                 
              expenses related to activities under AS 46.15.035 and                                                             
              46.15.037."                                                                                                       
                                                                                                                                
Senator Green  moved for adoption and referenced earlier  discussion                                                            
regarding water  rights and the involved  parties in the  state. She                                                            
shared that in  communities with a large agricultural  presence, the                                                            
local  soil and water  conservation  districts are  involved in  the                                                            
process. The intent  of this amendment, she explained,  is to ensure                                                            
their remaining involvement.                                                                                                    
                                                                                                                                
AT EASE 7:06 PM / 7:07 PM                                                                                                       
                                                                                                                                
Senator  Leman  detailed the  four  changes  made in  the  committee                                                            
substitute. The first,  he said, is a technical change of "relating"                                                            
to "related" in the Section  2 title, "FINDINGS, POLICY, AND PURPOSE                                                            
RELATED  TO AUTHORIZATIONS  FOR  CERTAIN  TERMPORARY  USES OF  STATE                                                            
WATER." on page  2, line 21. He informed that language  deleted from                                                            
page 4, following  line 7, and on line 21, allowed  the commissioner                                                            
to  extend  authorization   for  temporary  use   of  water  for  an                                                            
additional  five  years. He  noted  this  provision was  removed  in                                                            
response to  concerns raised by Senator  Wilken during the  previous                                                            
hearing.  He concluded  with the replacement of "public health" with                                                            
"human  health"  on  line  25.   This,  he  said,  is  to  make  the                                                            
terminology  consistent   with  that  used  by  the  United   States                                                            
Environmental Protection  Agency flood page, as well as the National                                                            
Institute  of Health.  He clarified  that public  health relates  to                                                            
epidemiology  and diseases  whereas human health  is related  to the                                                            
effects  of  human  activities  and is  more  appropriate  for  this                                                            
legislation.                                                                                                                    
                                                                                                                                
Senator Green explained  that Amendment #1 replaces certain language                                                            
from  a  previous  committee  substitute,   22-GS1087\J,  which  the                                                            
Committee did  not adopt, and provides  that the commissioner  shall                                                            
adopt  procedural  and  substantive  regulations  to carry  out  the                                                            
provisions in the legislation.                                                                                                  
                                                                                                                                
Senator  Green stated that  additional language  was recommended  by                                                            
the  bill drafter  that  requires the  Department  of Environmental                                                             
Conservation to submit  an annual report to the legislature. She was                                                            
unsure how this relates to the current Version "P".                                                                             
                                                                                                                                
BOB  LOEFFLER,  Director,  Division   of  Mining,  Land  and  Water,                                                            
Department of  Natural Resources, testified via teleconference  from                                                            
Anchorage  to the  amendment.  He stated  the proposed  language  is                                                            
acceptable.                                                                                                                     
                                                                                                                                
There was no objection and the amendment was ADOPTED.                                                                           
                                                                                                                                
Amendment #2: This amendment  inserts language into Section 1 (c) on                                                            
page 2, line 17 of the  committee substitute. The amended subsection                                                            
reads as follows.                                                                                                               
                                                                                                                                
          (c) It is the policy of the legislature that the                                                                      
     Department of Natural Resources minimize:                                                                                  
                (1) the required costs, including application fees,                                                             
     on individuals and businesses withdrawing less than a                                                                      
     significant amount of water;                                                                                               
                (2) consider providing a partial fee reduction for                                                              
     water rights holders and applicants who have approved                                                                      
     irrigation management plans.                                                                                               
                                                                                                                                
Senator Green moved for adoption.                                                                                               
                                                                                                                                
Co-Chair Kelly objected for the purpose of discussion.                                                                          
                                                                                                                                
Senator Green noted this  amendment was also prepared to the Version                                                            
J committee substitute.  She read the inserted language of Section 1                                                            
(c)(2) and explained approval  of irrigation management plans is the                                                            
current practice  in the soil and water conservation  districts, and                                                            
this provision  allows the  districts to obtain  for credit  for the                                                            
work already completed.                                                                                                         
                                                                                                                                
Mr. Loeffler commented  there are a number of industries in addition                                                            
to agricultural  activities  that  conserve  water in  a variety  of                                                            
ways. He did not oppose the amendment.                                                                                          
                                                                                                                                
Co-Chair Kelly  removed his objection and the amendment  was ADOPTED                                                            
without further objection.                                                                                                      
                                                                                                                                
Senator Green  offered a motion to  report the committee  substitute                                                            
as amended from Committee.                                                                                                      
                                                                                                                                
Co-Chair  Donley moved  to amend the  motion in  order to amend  the                                                            
fiscal note.                                                                                                                    
                                                                                                                                
Without objection, Senator Green WITHDREW her motion.                                                                           
                                                                                                                                
Co-Chair Donley  moved to amend the Department of  Natural Resources                                                            
fiscal  note dated April  12, 2001  to delete  the addition  of five                                                            
full-time positions in FY 02.                                                                                                   
                                                                                                                                
There was no objection and the fiscal note was AMENDED.                                                                         
                                                                                                                                
Senator Green  again offered a motion to move from  Committee, CS SB
139, 22-GS1087\P,  as  amended, with  forthcoming  zero fiscal  note                                                            
from the Department of Natural Resources.                                                                                       
                                                                                                                                
The bill MOVED from Committee without objection.                                                                                
                                                                                                                                
AT EASE 7:16 PM / 7:17 PM                                                                                                       
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 169                                                                                                        
     "An Act relating to the nonapplicability of the delinquency                                                                
     laws to certain minors accused of certain crimes against                                                                   
     persons directed at certain victims."                                                                                      
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Donley  testified this legislation would  be an addition to                                                            
current  statute  requiring   waiver  to  adult  court  for  certain                                                            
juveniles  over  the  age of  16  charged  with  committing  certain                                                            
offenses. He  referenced a list of  these offenses. [Copy  on file.]                                                            
                                                                                                                                
Co-Chair  Donley informed  that this bill  adds Class A misdemeanor                                                             
and felony  crimes of violence against  a person motivated  by race,                                                            
sex, color,  creed,  physical or  mental disabilities,  ancestry  or                                                            
national origin, to the  list of juvenile offenses mandated to adult                                                            
court.                                                                                                                          
                                                                                                                                
Co-Chair  Donley  noted adult  court  proceedings  are  open to  the                                                            
public, whereas  in a juvenile case,  the public would be  unable to                                                            
learn  the  ruling  and  subsequent  punishment.  He  added  another                                                            
advantage to the  legislation is that it "raises the  level of this"                                                            
and helps to deter "this  kind of despicable activity in the future"                                                            
by demonstrating  to would-be offenders that there  are consequences                                                            
for this conduct.                                                                                                               
                                                                                                                                
ROBERT BUTTCANE,  Legislative and  Administrative Liaison,  Division                                                            
of  Juvenile Justice,  Department  of  Health and  Social  Services,                                                            
agreed  with the  sponsor  that there  is a  need  to communicate  a                                                            
social  value that  "says hate  crimes  are not  acceptable in  this                                                            
state." However,  he testified  that the  department does not  favor                                                            
the expansion  to the list  of automatic  waiver crimes,  especially                                                            
for offenses that  would involve low-level felonies  and misdemeanor                                                            
offenses.                                                                                                                       
                                                                                                                                
Mr. Buttcane  stated  that the  juvenile system  would impose  "more                                                            
strenuous significant  sanctions" for those low-level  offenses then                                                            
what is currently  imposed in the adult system. He  explained that a                                                            
young person  committing a misdemeanor  offense in the adult  system                                                            
would most  likely receive a suspended  jail sentence of  only a few                                                            
days  and  perhaps  a  fine  and  community  work  service.  On  the                                                            
contrary, he  stressed, young people  who commit a crime  of bias as                                                            
described  above, and who's  case is handled  in the juvenile  court                                                            
system,  are required to  participate in  victim impact activities,                                                             
cultural  sensitivity  and,  in  the past,  have  been  required  to                                                            
complete  a book report,  write an  essay or  otherwise learn  about                                                            
issues and challenges  facing the targeted minority  group. He added                                                            
that these  offenders are required  to complete "a number  of hours"                                                            
of community  work  service  specifically  on behalf  of the  people                                                            
offended.                                                                                                                       
                                                                                                                                
Mr. Buttcane continued  that the juvenile system is  better equipped                                                            
to deal  with young offenders  who have  committed low-level  felony                                                            
and misdemeanor  offenses,  especially, he  stressed, when  the same                                                            
crimes would be  addressed with less intensity in  the adult system.                                                            
                                                                                                                                
Mr. Buttcane shared that  the department recommends consideration of                                                            
the  duel  sentencing  provision   enacted  into  law  in  1998.  He                                                            
suggested expanding  this to add a  prosecution phase to  the public                                                            
with  the  option  to  allow  the  court  to  enter   a delinquency                                                             
disposition  and to  direct the  delinquency system  to process  the                                                            
juvenile.  At  the  same  time,  he  elaborated,   the  court  would                                                            
pronounce  an  adult   sentence  and  if  the  juvenile   failed  to                                                            
successfully complete  a delinquency process, the  adult court could                                                            
impose a criminal sentence  and the juvenile would be transferred to                                                            
the Department of Corrections.                                                                                                  
                                                                                                                                
Co-Chair  Kelly clarified that  a Class B  felony, which is  a crime                                                            
against  a person,  is currently  contained in  the duel  sentencing                                                            
provision.                                                                                                                      
                                                                                                                                
Mr. Buttcane  affirmed, but  noted this provision  requires  a prior                                                            
delinquency adjudication before it could be imposed.                                                                            
                                                                                                                                
Co-Chair  Kelly  asked what  is the  difference  between  a Class  B                                                            
felony crime against a  person and Class A misdemeanor crime against                                                            
a person.                                                                                                                       
                                                                                                                                
Mr. Buttcane  replied a Class A misdemeanor  crime against  a person                                                            
would include an assault  in the fourth degree, which could apply to                                                            
"a wide  range of behaviors,  by words or  conduct, placing  another                                                            
person  in  fear,  or causing  physical  injury  not  of  a  serious                                                            
nature."  He  gave  examples  as  "bloodying   somebody's  nose  and                                                            
bruising their arm."                                                                                                            
                                                                                                                                
Mr. Buttcane defined  a Class B felony as possibly  a sexual assault                                                            
in  the second  degree.  He  noted there  were  few Class  B  felony                                                            
charges.                                                                                                                        
                                                                                                                                
Co-Chair  Kelly  expressed  concern  that  a fourth-degree   assault                                                            
charge  "can  be pretty  meaningless."   He asked  for  an  expanded                                                            
definition of Class A misdemeanor crimes against a person.                                                                      
                                                                                                                                
Mr. Buttcane  understood the intent  of the legislation is  to apply                                                            
to the offense  that is included in the automatic  waiver provision.                                                            
                                                                                                                                
Co-Chair  Kelly  asked if  theoretically,  a  16-year  old could  be                                                            
mandated to adult court because "he scared another 16-year old."                                                                
                                                                                                                                
Mr. Buttcane affirmed and  noted, "It is conceivable this would meet                                                            
the conditions."  However, he stressed  the difficulty is  whether a                                                            
prosecutor  would take this type of  case to court, and if  not, the                                                            
juvenile system has no jurisdiction over the matter.                                                                            
                                                                                                                                
Mr.  Buttcane  continued  listing  crimes  constituting  a  Class  B                                                            
felony,  as intentionally  causing physical  injury  to a person  by                                                            
means of a  dangerous instrument.  He noted the distinction  between                                                            
second and first-degree  assault pertains to the seriousness  of the                                                            
injury  in  that  first-degree   assault  would  involve   "serious,                                                            
protracted, impairment,  life-threatening type injuries." He defined                                                            
sexual  assault  in the  second  degree as  sexual  contact  without                                                            
consent, sexual  contact with a person who is mentally  incapable or                                                            
incapacitated,  or  sexual  contact  with  a  person  who  has  been                                                            
entrusted to the care of the offender by law.                                                                                   
                                                                                                                                
Co-Chair Kelly  remarked the legislation  is directed at  the recent                                                            
paintball  attack in  Anchorage that  targeted  Native Alaskans.  He                                                            
asked if these crimes are second-degree assault.                                                                                
                                                                                                                                
Mr. Buttcane  answered  that all  three perpetrators  involved  were                                                            
charged with three counts of assault in the fourth degree.                                                                      
                                                                                                                                
Co-Chair  Kelly  asked if  these  cases were  formally  adjusted  or                                                            
handled through adjudication.                                                                                                   
                                                                                                                                
Mr. Buttcane answered that  delinquency petitions were filed against                                                            
the  two juveniles  involved  and  a criminal  complaint  was  filed                                                            
against the one adult.                                                                                                          
                                                                                                                                
Co-Chair  Kelly  asked  the maximum  sentence  the  juveniles  could                                                            
receive under the current system.                                                                                               
                                                                                                                                
Mr. Buttcane responded  the perpetrators could be  institutionalized                                                            
at the McLaughlin Youth  Center for a period not to exceed two years                                                            
                  th                                                                                                            
or until their  19  birthday,  or they could be placed  on probation                                                            
for the  same amount of  time. He pointed  out that these  offenders                                                            
could receive  up to two-year  sentences, which  is an advantage  of                                                            
the juvenile  system because regardless  of the level of  crime, the                                                            
delinquency disposition could be applied.                                                                                       
                                                                                                                                
Mr. Buttcane shared  that he has received an institutional  order in                                                            
court for a  young person who stole  a pack of cigarettes,  and that                                                            
juvenile spent  two years at the McLaughlin  facility. He  qualified                                                            
there  are many  circumstances  that lead  the court  in reaching  a                                                            
finding,  which  he noted  in  this case,  demonstrated  this  youth                                                            
required  a high  level  of isolation  and  security.  He noted  the                                                            
circumstances  in  other cases  could  lead to  a finding  that  the                                                            
offender would  not be institutionalized  and instead be  supervised                                                            
in  the  community.  He restated   there is  wide  latitude  in  the                                                            
juvenile  sentencing  system  that  extends  beyond  the  particular                                                            
offense to the  various circumstances involved. He  listed: response                                                            
to  other  treatment  efforts,  behavior   in  school,  response  to                                                            
parental  supervision, substance  abuse, mental  capacity and  other                                                            
factors as contributing to the circumstances in a case.                                                                         
                                                                                                                                
Mr. Buttcane stressed  that a two-year sentence is  the maximum that                                                            
could be  imposed in  the paint ball  attack cases,  and that  it is                                                            
unlikely the offenders would be sentenced the full two years.                                                                   
                                                                                                                                
Co-Chair  Kelly   summarized  the   witness's  statement   that  the                                                            
Administration does not support this bill.                                                                                      
                                                                                                                                
Mr. Buttcane  agreed that  the Administration  does not support  any                                                            
increase to the list of  automatic waivers, especially for low-level                                                            
crimes.                                                                                                                         
                                                                                                                                
Mr. Buttcane  commented  that in  the delinquency  system, of  those                                                            
crimes of  hate or bias,  some are related  to the perceived  sexual                                                            
orientation  of  the  victim.  He stressed  that  any  expansion  of                                                            
punishment  guidelines  for  bias  and  hate crimes  that  does  not                                                            
include  a  provision  for  sexual  orientation  is  incomplete.  He                                                            
recognized  this  is  not  currently  included   in  the  sentencing                                                            
aggravator, or the Human Rights Commission purview.                                                                             
                                                                                                                                
Co-Chair   Kelly  asked  if   the  witness   was  saying  that   the                                                            
Administration would not  support changes to the hate crime statutes                                                            
if sexual  orientation  were not  included as  a potential  targeted                                                            
minority group.                                                                                                                 
                                                                                                                                
Mr. Buttcane responded  that he is unprepared to speak  on behalf of                                                            
the  Administration.    However,  he noted  that  other  hate  crime                                                            
legislation,  HB 200 that was introduced  by the governor,  includes                                                            
hate crimes based on the sexual orientation of the victim.                                                                      
                                                                                                                                
Co-Chair  Kelly   asked  if  the  governor's  proposed   hate  crime                                                            
legislation contains a provision addressing juvenile offenders.                                                                 
                                                                                                                                
Mr. Buttcane answered it  does and explains the legislation requires                                                            
the juvenile convicted  of a hate crime to participate  in some type                                                            
of sensitivity training.                                                                                                        
                                                                                                                                
Senator Ward  asked if the  Administration  would support SB  169 if                                                            
sexual orientation  were added to  the list of targeted minorities.                                                             
                                                                                                                                
Mr. Buttcane  reiterated that  the department  does not support  any                                                            
increase  in the  automatic  waiver to  adult court  especially  for                                                            
lower-level  felony or misdemeanor  crimes. He also reiterated  that                                                            
any hate  crime legislation  that does not  include bias related  to                                                            
perceived or actual sexual orientation is considered incomplete.                                                                
                                                                                                                                
Senator Ward opined  that if Governor Knowles does  not support this                                                            
legislation  his  actions are  inconsistent  with a  statement  made                                                            
during a press conference regarding the paint ball incident.                                                                    
                                                                                                                                
Mr. Buttcane specified  that HB 200 provides that  juveniles charged                                                            
with  committing a  hate crime  are not  moved to  adult court,  but                                                            
remain   in  the  juvenile   delinquency   system.  He  noted   this                                                            
legislation  imposes  minimum mandatory  sentence  requirements  and                                                            
community work service hours.                                                                                                   
                                                                                                                                
Senator  Ward asked if  the offense  is therefore  not treated  as a                                                            
criminal offense when committed by a juvenile.                                                                                  
                                                                                                                                
Mr. Buttcane corrected  that the matter is treated as a criminal act                                                            
but processed as a delinquency.                                                                                                 
                                                                                                                                
Co-Chair  Kelly stated  that Governor  Knowles  has been  consistent                                                            
with regard to waiver of minors to adult court.                                                                                 
                                                                                                                                
Senator Ward remarked  that he has heard in the media  over the past                                                            
three weeks  that the governor  considers that  "hate crimes  took a                                                            
special niche  in the world."  Senator Ward  charged, "Now  it comes                                                            
time to actually do something  about it and he says 'oh, no we can't                                                            
bother the darlings.' It's kind of interesting."                                                                                
                                                                                                                                
Co-Chair  Kelly  commented,  "the  governor  is  taking  a  horrible                                                            
incident  and he's  trying to  get broad  sweeping  change that  has                                                            
nothing to do with that  incident."  Co-Chair Kelly remarked that it                                                            
is unfortunate  that the Administration has made sexual  orientation                                                            
a part  of this  matter. He  therefore supported  Co-Chair  Donley's                                                            
legislation.                                                                                                                    
                                                                                                                                
Co-Chair  Donley   asked  if  the  paint  ball  incident   would  be                                                            
classified  as a felony under current  statute. He shared  that when                                                            
he learned of the attack,  he surmised the crime would be classified                                                            
as a Class C felony.                                                                                                            
                                                                                                                                
Mr. Buttcane  responded that  the Division  of Juvenile Justice  has                                                            
worked  closely with  the Department  of Law to  impose the  highest                                                            
possible charges  in the paint ball  incident, which was  assault in                                                            
the fourth  degree.   He informed  that  a paint ball  gun does  not                                                            
qualify as a dangerous instrument or weapon.                                                                                    
                                                                                                                                
Co-Chair Kelly  noted the sentence for conviction  of assault in the                                                            
fourth degree could be up to two years in prison.                                                                               
                                                                                                                                
Mr. Buttcane  affirmed a juvenile  offender convicted of  assault in                                                            
the  fourth  degree  could be  sentenced  to  the  McLaughlin  Youth                                                            
Facility for  up to two years. He  qualified it is improper  for him                                                            
to make conjecture as to  the outcome of this pending case, but made                                                            
a general  statement  that it  is unlikely  the  offenders of  these                                                            
types of crimes  would be institutionalized.  However, he  stressed,                                                            
juveniles  adjudicated  in  this type  of  crime would  probably  be                                                            
placed on probation  and would see  a probation officer on  a weekly                                                            
basis, which would  not occur in the adult criminal  justice system.                                                            
                                                                                                                                
Co-Chair  Donley clarified  the most  that the  perpetrators in  the                                                            
paint ball incident  could be charged with is a Class  A misdemeanor                                                            
                                                                                                                                
AT EASE 7:40 PM / 7:46 PM                                                                                                       
                                                                                                                                
Co-Chair  Donley moved to  amend and adopt  CS SB 169, 22-LS0778\F.                                                             
The conceptual  amendment deletes,  "or a class A misdemeanor  crime                                                            
against a person,"  in Section 1 (a)(4) on page 2,  lines 18 and 19.                                                            
The amended language reads as follows.                                                                                          
                                                                                                                                
                (4) that is a felony crime against a person in which                                                          
     the minor is alleged  to have directed the conduct constituting                                                          
     the  crime at  a victim  because of  that person's  race,  sex,                                                          
     color,  creed,  physical  or mental  disability,  ancestry,  or                                                          
     national origin.                                                                                                         
                                                                                                                                
     New Text Underlined                                                                                                      
                                                                                                                                
Without objection the committee  substitute was AMENDED and ADOPTED.                                                            
                                                                                                                                
CANDACE  BROWER, Program  Coordinator, Office  of the Commissioner,                                                             
Department of  Corrections, testified in opposition  to the bill for                                                            
the  same  reasons  voiced by  Mr.  Buttcane.  She  appreciated  the                                                            
amendment  to  remove misdemeanors  from  the  list of  hate  crimes                                                            
waived to adult  court, but thought  the Class C felonies  should be                                                            
removed  as well.  She expressed  that when  considering whether  to                                                            
waive a juvenile charged  of a crime to adult court; it must be done                                                            
with "great care and caution."  She warned that committing juveniles                                                            
to adult  court is a "slippery  slope" because  the adult system  is                                                            
not conducive to addressing  the needs of juveniles. She trusted the                                                            
juvenile  justice system  to "make these  offenders accountable  for                                                            
what they  do and to  intervene in  their behaviors  in a much  more                                                            
appropriate way then we can."                                                                                                   
                                                                                                                                
Co-Chair Donley  stated for the record that dual sentencing  has not                                                            
been effective.                                                                                                                 
                                                                                                                                
Senator  Green repeated  earlier  comments  she made  in the  Senate                                                            
Chambers that  she would not support  any legislation that  contains                                                            
this  language.  She voiced  concerns  that  the  way this  bill  is                                                            
constructed  it  would  never  include   "someone  who  attacked  my                                                            
grandchildren  nor many of the children  of everyone in this  room."                                                            
She stated  she  found this  bill places  "a very  strange level  of                                                            
scrutiny" on  determining whether  a crime is committed out  of bias                                                            
or  hatred.  She   didn't  know  how  this  could  conclusively   be                                                            
determined  "unless someone is stupid  enough to make a film  of it"                                                            
as done  by the perpetrators  in  the paint ball  attack on  Alaskan                                                            
Natives.  She asserted  that  if the  "result  of a  crime is  harm,                                                            
damage, hurt, pain, suffering, etc., the result is the same."                                                                   
                                                                                                                                
Co-Chair Donley offered  a motion to move from Committee, CS SB 169,                                                            
22-LS0778\F,  as amended  with new indeterminable  fiscal note  from                                                            
the Department of Corrections.                                                                                                  
                                                                                                                                
The bill MOVED from Committee without objection.                                                                                
                                                                                                                                
AT EASE 7:52 PM / 7:53 PM                                                                                                       
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 186                                                                                                        
     "An Act establishing a limit on the general obligation debt                                                                
     that may be authorized and issued by home rule and general law                                                             
     municipalities; and providing for an effective date."                                                                      
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Donley  moved to adopt CS SB 186, 22-LS0851\C  as a working                                                            
draft.                                                                                                                          
                                                                                                                                
There was no objection and the committee substitute was ADOPTED.                                                                
                                                                                                                                
Co-Chair  Donley testified  this bill  would set  limits on  bonding                                                            
exposure  to local governments  in Alaska by  placing a $10,000  per                                                            
resident  ceiling  on municipal  general  obligation  bond debt.  He                                                            
noted the bill  also limits the mil rate to one-percent  for oil and                                                            
gas  property tax  for municipalities  with  a per  capita  assessed                                                            
value of property over $500,000.                                                                                                
                                                                                                                                
Co-Chair Donley stated  this legislation is partially in response to                                                            
the  recent  Bullock  vs. State  of  Alaska,  Alaska  Supreme  Court                                                          
decision. He  noted this legislation  would not impact any  existing                                                            
bonded debt  and would only apply  to additional debt incurred  by a                                                            
local government after the effective date.                                                                                      
                                                                                                                                
Senator Wilken asked why  the bill has no fiscal note other then the                                                            
indeterminable fiscal note  and analysis submitted by the Department                                                            
of Revenue.                                                                                                                     
                                                                                                                                
Co-Chair  Donley surmised  there  would be  a fiscal  impact to  the                                                            
state but that it would  take several years before there was a major                                                            
impact.                                                                                                                         
                                                                                                                                
Senator Wilken  suggested  the Committee could  issue a fiscal  note                                                            
for the  Department  of Revenue to  assist in  consideration  of the                                                            
bill.                                                                                                                           
                                                                                                                                
                                                                                                                                
SFC 01 # 93, Side B 07:56 PM                                                                                                    
                                                                                                                                
                                                                                                                                
AVRUM  GROSS,  Attorney   representing  the  North  Slope   Borough,                                                            
testified to the  20 years he has represented the  borough primarily                                                            
on this and  related issues. He asserted  this bill is aimed  at the                                                            
North Slope Borough (NSB)  as a result of the Bullock case and would                                                          
prohibit the borough  from issuing any bonds for the  next ten to 11                                                            
years. He added that it  would prohibit the borough from refinancing                                                            
existing  bonds even  if lower  interest  rates could  be  procured,                                                            
which would save the borough money.                                                                                             
                                                                                                                                
Mr. Gross  told  the Committee  the bill  contains  language in  the                                                            
committee substitute, which he did not understand.                                                                              
                                                                                                                                
Mr. Gross  expressed,  "You must  realize  that this  is a life  and                                                            
death bill as far as the North Slope Borough is concerned."                                                                     
                                                                                                                                
Mr. Gross gave  a background on the statute this bill  would change,                                                            
which he  said came  out of a  legislative special  session  in 1973                                                            
called  by Governor  Bill Egan  because delays  to the Trans-Alaska                                                             
pipeline project  were threatened.  This special session,  Mr. Gross                                                            
reminded,  was called  to resolve  lawsuits filed  by oil  companies                                                            
against  the state  in response  to legislation  adopted during  the                                                            
1972 regular  legislative  session  that attempted  to regulate  the                                                            
pipeline in  ways the oil companies  "found offensive." He  informed                                                            
that  he was  present at  this  special session  as  council to  the                                                            
Atlantic Richfield Company.                                                                                                     
                                                                                                                                
Mr. Gross recounted the  special session addressed the regulation of                                                            
the pipeline,  which he said was removed  and that the "state  caved                                                            
in  on its  ability  to  regulate  the pipeline."  In  addition,  he                                                            
informed,  the special  session addressed  the  matter of  taxation,                                                            
specifically property  taxation of the values that  would be created                                                            
by construction  of the  pipeline and related  facilities along  the                                                            
pipeline  from the North  Slope to  Valdez. He  stressed that  other                                                            
taxes were  already established  to "make sure  that the oil  wealth                                                            
would be  spread across all  the citizens  of the state." He  listed                                                            
severance, income and royalties,  as these taxes, noting they remain                                                            
in existence  and  generate  revenues from  oil production  for  the                                                            
state.                                                                                                                          
                                                                                                                                
Mr.  Gross  pointed  out  two issues  that  arose  in  this  special                                                            
session;  "how much  the oil  companies  should pay"  and "who  they                                                            
should pay it  to." He stated that property taxes  are traditionally                                                            
municipal  taxes and  are the way  local governments  are  financed.                                                            
However, he stated,  some argue that during the time  of the special                                                            
session as well  as in the present, that this was  "too much for too                                                            
few" and  that it would be  unfair to let  the citizens of  the NSB,                                                            
Valdez, Fairbanks,  and other communities along the  pipeline route,                                                            
to tax these properties  in the same manner other  property is taxed                                                            
across the state.  He listed salmon canneries in Kodiak  and Bristol                                                            
Bay, and office  buildings in Anchorage and noted  these communities                                                            
do not  share  the revenue  garnered from  property  taxes on  these                                                            
properties with  the state. The fact that one municipality  has more                                                            
property  than another, he  stated, up to  the point of the  special                                                            
session had never been considered an issue.                                                                                     
                                                                                                                                
Mr.  Gross  told  the  Committee  the special  legislative   session                                                            
resulted in some  compromises. He said the first agreement  was that                                                            
oil  companies  would pay  20  mils  tax to  the  state on  all  oil                                                            
properties  and that any property  tax paid to municipalities  would                                                            
be credited  against the  20 mils  owed to the  state. Secondly,  he                                                            
noted  municipalities  with  oil and  gas  properties  within  their                                                            
boundaries would  be allowed to tax these properties  to raise money                                                            
for their operating budgets under "a very complicated formula".                                                                 
                                                                                                                                
Co-Chair  Kelly  interjected  to request  the  witness  address  his                                                            
earlier statement  that there  is a flaw in  the bill regarding  the                                                            
NSB ability to bond in the future.                                                                                              
                                                                                                                                
Mr. Gross continued  that the last  element of the compromise  is to                                                            
allow boroughs to issue  bonds based on the fair market value of the                                                            
oil and  gas property within  their borders  and without limits.  He                                                            
said the  specific intent  was that the NSB,  which he stressed  was                                                            
specifically  discussed in the legislature,  would be able  to bond,                                                            
realizing  that prior  to that  time the  borough had  no assets  on                                                            
which  to base  bonds.  He  emphasized  the borough  had  no  public                                                            
facilities  and  that  the  oil  and  gas   activities  are  from  a                                                            
nonrenewable resource.                                                                                                          
                                                                                                                                
Mr. Gross raised  this issue, he said because the  sponsor testified                                                            
that the intent  of the legislature  during the special session  has                                                            
been ignored  or mistaken.  Mr. Gross countered  that the intent  of                                                            
the  legislation  adopted during  the  special session  "is  crystal                                                            
clear"  in  stating  there  is no  limitations  on  the  ability  of                                                            
boroughs  to  issue  bonds  based  on  the  value  of  property.  In                                                            
addition, he said, it was  specifically discussed during the special                                                            
session that  the NSB would  be allowed to  issue bonds to,  "try to                                                            
catch up to some of the  things that every other municipality in the                                                            
state has had for years."                                                                                                       
                                                                                                                                
Mr.   Gross  gave   an  example   of   Ketchikan,   which  has   had                                                            
infrastructure  for about  one hundred  years, and  has bonded  over                                                            
that period  of time to  built schools, sewer  systems, parks,  etc.                                                            
and would continue  to do so. He informed  that prior to  passage of                                                            
the legislation  from the  special session,  the NSB had no  sewers,                                                            
water systems,  schools, public safety  facilities, fire  facilities                                                            
or any other  infrastructure. He remarked  that the legislature  was                                                            
aware of this  and specifically authorized the NSB  to bond, knowing                                                            
that  it  would  be   "very  expensive."  The  NSB,   he  said,  has                                                            
subsequently  issued  many  bonds  totaling  "a lot  of  money".  He                                                            
emphasized  that because the  population in  the borough is  sparse,                                                            
and  because of  higher costs  for  infrastructure,  the per  capita                                                            
bonded indebtedness is "extremely high."                                                                                        
                                                                                                                                
Mr. Gross addressed  SB 186 before the Committee saying  it purports                                                            
to prohibit  boroughs  from issuing  bonds  if they  have a  certain                                                            
level of per capita  bonded indebtedness. He stressed  this punishes                                                            
the NSB  for "doing exactly  what the legislature  authorized  it to                                                            
do." He expressed, The  North Slope Borough would be prohibited from                                                            
issuing bonds  for ten to eleven years; any bonds,  of any kind, for                                                            
anything."                                                                                                                      
                                                                                                                                
Mr. Gross continued that  this bill would also prohibit the NSB from                                                            
refinancing  any existing bonds. He  pointed out that even  if lower                                                            
interest rates were available,  the borough could not take advantage                                                            
of them.                                                                                                                        
                                                                                                                                
Mr. Gross remarked  "this is a devastating bill for  the North Slope                                                            
Borough,"  and requested  the Committee  give  the legislation  more                                                            
review. He  told the members,  "You are literally  going to  destroy                                                            
the bonding power  of the NSB if you pass this" which  is a "drastic                                                            
step to  take in the  name of  helping state  finances at this  late                                                            
hour."                                                                                                                          
                                                                                                                                
Co-Chair Kelly  countered that the  earlier legislature "could  have                                                            
never imagined  the extravagance"  with which  the residents  of the                                                            
NSB would utilize  this bonding authority  "to the detriment  to the                                                            
rest  of the  state."   He  remarked  that  if there  are  technical                                                            
problems  with the  bill  he was  interested  in them.  However,  he                                                            
expressed, "I'm having  a hard time buying in to the old 'poor North                                                            
Slope'  and all  they're doing  is what  everyone  directed of  them                                                            
because I don't think the  people back then imagined what they'd use                                                            
their bonding power for."                                                                                                       
                                                                                                                                
Mr. Gross  replied the  NSB has  utilized its  bonding authority  to                                                            
produce  "the  kind  of life  that  people  in  Anchorage  take  for                                                            
granted."  He  stressed  that  most  residents  of  the  state  take                                                            
infrastructure  items, such as sewer for granted,  but there were no                                                            
sewer  systems  on  the  North  Slope.  He  emphasized   the  higher                                                            
construction costs in northern regions.                                                                                         
                                                                                                                                
Co-Chair  Kelly repeated his  request that  the witness address  the                                                            
problem areas of SB 186 regarding refinancing of current bonds.                                                                 
                                                                                                                                
Mr.  Gross  emphasized  that  the  entire bill  was  a  problem.  He                                                            
qualified he did  not understand the first section,  which was added                                                            
earlier in  the day.  He cited Sections  6 and 7 as prohibiting  the                                                            
NSB from  issuing new bonds  or refinancing  existing bonds  even at                                                            
lower rates.                                                                                                                    
                                                                                                                                
Co-Chair  Donley offered  that if there  is a  way to rewrite  these                                                            
sections to  allow refinancing ability  without extending  the terms                                                            
of the  bonds, he surmised  the Committee  would  be open to  it. He                                                            
suggested  the witness  prepare  such  language to  accomplish  this                                                            
while maintaining the intent of the legislation.                                                                                
                                                                                                                                
Mr. Gross asked  if the sponsor's concern is that  the borough would                                                            
refinance its  existing bonds. He asked what the sponsor  wanted the                                                            
language to provide.                                                                                                            
                                                                                                                                
Co-Chair Donley  responded, "The goal is very clear,  to hold bonded                                                            
indebtedness  down below $15,000 per  capita."  He said he  does not                                                            
oppose  allowing  refinancing  so long  as it  does  not extend  the                                                            
amount of time  it would take to bring  the debt below the  proposed                                                            
maximum.                                                                                                                        
                                                                                                                                
Mr. Gross replied that  language allowing such, would address one of                                                            
his concerns with the bill.                                                                                                     
                                                                                                                                
Senator Wilken  agreed that the 1973 legislation provided  a vehicle                                                            
to  allow the  NSB to  fund  its infrastructure.  He  referenced  an                                                            
analysis prepared  by Fitch IBCA, Duff and Phelps  [Portions of this                                                            
report  are on file]  He read,  "The borough's  significant  current                                                            
capital  needs are primarily  to extend  water and  sewer and  other                                                            
utility  services  to seven  outlying  villages, build  schools  and                                                            
complete mandated projects.  Much of the infrastructure is funded so                                                            
future  needs  would  decline  from  prior  levels."  Therefore,  he                                                            
ascertained  there is an ability to  reduce the bonded indebtedness                                                             
of the borough.                                                                                                                 
                                                                                                                                
Senator  Wilken  remarked  that this  issue  would not  concern  him                                                            
except that it  takes funds from the 20-mil tax rate  imposed on oil                                                            
and gas properties.  He pointed out  that every dollar that  goes to                                                            
the NSB to support  debt is a dollar that is not deposited  into the                                                            
general fund and distributed across the state.                                                                                  
                                                                                                                                
Senator Wilken suggested  the intent of the original legislation was                                                            
to prevent  "pools of wealth," which  he emphasized, creates  "pools                                                            
of debt." He stated  this is what has actually occurred  in the last                                                            
30 years and remarked,  "This is the disparity that I see that needs                                                            
to get fixed."                                                                                                                  
                                                                                                                                
Senator  Wilken informed  that  assessed value  determines  property                                                            
taxes and the  economy in most of  Alaska. He divided the  number of                                                            
people  by the  full  and true  assessed  value and  calculated  the                                                            
statewide average per person,  not including the NSB, as $72,000. He                                                            
listed Fairbanks  residents at approximately  $57,700, Anchorage  at                                                            
$63,000, Ketchikan  at approximately $80,000, and  the lowest amount                                                            
is in the Lake  and Peninsula Borough  at $38,000. He explained  the                                                            
assessed  value  "engine"  on  the North  Slope  is  $1,160,000  per                                                            
person, which  is 16 times the statewide  average. He did  not think                                                            
the  legislature,  in 1973,  envisioned  this leverage  on  assessed                                                            
value, of which,  97 percent is from oil and gas property.   He then                                                            
calculated  the  average  debt  per  Alaskan  is  $2,573,  including                                                            
residents  of the NSB. On  the contrary, he  stated, the per  capita                                                            
average  of the  NSB is $64,409,  which  is 20  times the  statewide                                                            
average.                                                                                                                        
                                                                                                                                
Senator Wilken  surmised these  figures are  "so far out of  reason"                                                            
and that  he could not  understand this.  He explained the  proposed                                                            
debt limit of  $15,000 per capita is still five times  the amount of                                                            
any other  municipality. He  pointed out that  the community  of St.                                                            
Paul has a per  capita debt of $13,000, but is primarily  because of                                                            
a large port project.                                                                                                           
                                                                                                                                
Senator Wilken opined that  the Bullock vs. Alaska case is a message                                                          
from the  court to the legislature  that it  is time to address  the                                                            
issue.                                                                                                                          
                                                                                                                                
Senator Wilken  predicted,  "This is a $100  million deal ten  years                                                            
from now for  the general fund." He  stressed this legislation  does                                                            
not "clamp  down" on  the NSB but  rather gives  an ability  to fund                                                            
five times the amount of the remaining communities in Alaska."                                                                  
                                                                                                                                
Co-Chair  Donley  added that  he  did not  believe  in  1973 it  was                                                            
envisioned  that oil and  gas property taxes  would not provide  the                                                            
full amount  of property  tax revenue.   He also  did not think  the                                                            
earlier  legislature predicted  that  the oil supply  would last  as                                                            
long as  it has. He  continued that  in 1973  it was not  understood                                                            
that  one  borough  would develop  a  $490  million  permanent  fund                                                            
savings  account. Therefore,  he stressed  many things have  changed                                                            
since the  adoption of the  original bonding  authority. He  did not                                                            
find  the argument  that the  original  legislation  was adopted  30                                                            
years ago  and "it's  worked great"  persuasive  because he did  not                                                            
think it  has worked great.  This, he said,  is because none  of the                                                            
current conditions could have possibly been foreseen.                                                                           
                                                                                                                                
Mr. Gross responded  that he did not  testify that just because  the                                                            
legislation  was  adopted 30  years  ago it  was great.  Rather,  he                                                            
remarked, it is  unfair to retroactively determine  that because the                                                            
NSB issued the  amount of bonds it has, the borough  could not issue                                                            
additional bonds for the  next ten or eleven years. He stressed that                                                            
this legislation  does not provide  that the borough could  issue up                                                            
to five  times  the amount  of per capita  bonded  debt, as  Senator                                                            
Wilken  stated.   Mr.  Gross  expressed   the  legislation   instead                                                            
penalizes  the  borough   for  issuing  bonds  as  the  legislature                                                             
permitted.                                                                                                                      
                                                                                                                                
Mr. Gross admitted  that the concerns raised are valid.  However, he                                                            
stressed that  in 1973 the NSB had no tax base and  that in 20 to 30                                                            
years  it would  again have  no tax  base after  oil production  has                                                            
ceased.  He also  noted  the value  of the  oil and  gas  properties                                                            
decreases  every  year, resulting  in  less revenue,  and  remarked,                                                            
"that is all they  have, and when it's gone, that's  it." Therefore,                                                            
he informed  that the borough has  "a brief window of time"  to make                                                            
capital  improvements.   He  agreed  that  the  borough  has  bonded                                                            
"enormously" but noted  it would not be able to do so, regardless of                                                            
whether this legislation passes.                                                                                                
                                                                                                                                
Co-Chair  Kelly requested  reviewing the refinancing  issue  and the                                                            
possibility  of a "ramp down  provision so  these next eight  to ten                                                            
years,  there isn't just  this brick  wall that  they run into."  He                                                            
assured this  was not the  intention of the  Committee. However,  he                                                            
voiced  concern that  if proposed  natural gas  development  occurs,                                                            
relative property  taxes could be "sucked up" by the  NSB, resulting                                                            
in a similar situation to this.                                                                                                 
                                                                                                                                
Co-Chair Kelly  addressed the witness' comparison  of infrastructure                                                            
of the NSB to  that of Anchorage and Fairbanks, stressing  there are                                                            
many  amenities  the  NSB  has  that  are   not  provided  in  other                                                            
municipalities.  He said  he does  not begrudge  NSB residents  from                                                            
receiving these,  but opined the current system has  been abused. He                                                            
admitted there is disagreement  between him and Mr. Gross on whether                                                            
there has been abuse.                                                                                                           
                                                                                                                                
Senator Olson  requested an explanation  of how the decision  in the                                                            
Bullock vs. Alaska  case and subsequent rulings are  related to this                                                          
legislation.                                                                                                                    
                                                                                                                                
Mr. Gross detailed  the history of the case brought  by Don Bullock,                                                            
a former employee of the  Department of Revenue, that unsuccessfully                                                            
advocated that  the manner in which the statutes governing  taxation                                                            
of oil and  gas properties  in the NSB and  other areas, were  being                                                            
improperly  interpreted.   Mr.  Bullock,  according  to  Mr.  Gross,                                                            
alleged that the administrators  of the oil and gas property tax for                                                            
the past  25 years  had been mistaken.  Mr. Gross  relayed that  the                                                            
Alaska Supreme  Court ruled  it was plaintiff  who was mistaken  and                                                            
that the state officials administering the tax were correct.                                                                    
                                                                                                                                
Mr. Gross continued  that some people hoped the court  would rule in                                                            
favor  of the  plaintiff primarily  because  they felt  the NSB  was                                                            
getting  too much  money. He  said this  is the reason  for SB  186,                                                            
which would  change the law  to reflect what  had been hoped  for in                                                            
the court decision.                                                                                                             
                                                                                                                                
Senator  Olson  shared  that  this  raised  more  questions  and  he                                                            
requested  time to  consider  them before  action was  taken on  the                                                            
bill.                                                                                                                           
                                                                                                                                
Co-Chair Kelly  stated that the bill  would be held for the  purpose                                                            
of addressing the issue of refinancing of existing bonds.                                                                       
                                                                                                                                
Co-Chair Donley chaired remainder of the meeting.                                                                               
                                                                                                                                
Senator Wilken  commented that he has a more optimistic  view of the                                                            
future of the North Slope in twenty or thirty years.                                                                            
                                                                                                                                
Mr. Gross pointed out that  he is the former chair of the governor's                                                            
Gas Pipeline Commission  1975 charged with determining  the pipeline                                                            
route. He stated that he is therefore more pessimistic.                                                                         
                                                                                                                                
Senator Ward referenced  the sponsor statement [copy on file], which                                                            
states  that  the  NSB  currently  has  approximately   $65,000  per                                                            
resident  for bond indebtedness  and that  this legislation  reduces                                                            
that amount  to $15,000.  He asked  if there was  an amount  between                                                            
these two that the borough could support.                                                                                       
                                                                                                                                
Mr. Gross replied  that any amount less than $65,000  would mean the                                                            
borough could  not issue any bonds until the bonded  indebtedness is                                                            
paid down to that level.                                                                                                        
                                                                                                                                
Co-Chair Donley  announced the bill  would be held to determine  how                                                            
to allow refinancing  without extending  the date the bonds  expire.                                                            
He also wanted  to research the "ramp down" option  that would limit                                                            
the  amount of  debt  to no  more  than the  statewide  average.  He                                                            
predicted  this would allow  for any emergencies.  He stressed  that                                                            
the  NSB has  a  permanent  fund that  would  "be  the envy  of  any                                                            
community  in America." Therefore,  he ascertained  the borough  has                                                            
adequate  resources with which  to draw to  fund any projects  it is                                                            
prohibited from bonding.                                                                                                        
                                                                                                                                
Senator  Wilken  requested  the Department  of  Revenue  detail  the                                                            
fiscal note further.                                                                                                            
                                                                                                                                
Co-Chair Donley ordered the bill HELD in Committee.                                                                             
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 32(JUD)                                                                                
     "An Act relating to  the forfeiture of property used to possess                                                            
     or distribute child  pornography, to commit indecent viewing or                                                            
     photography,  to  commit  a  sex offense,  or  to  solicit  the                                                            
     commission  of,  attempt  to  commit,  or  conspire  to  commit                                                            
     possession  or  distribution  of  child  pornography,  indecent                                                            
     viewing or photography, or a sexual offense."                                                                              
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
REPRESENTATIVE JOE HAYES  read the sponsor statement into the record                                                            
as follows.                                                                                                                     
                                                                                                                                
     As  the use of  computers and  the Internet  expands so  too do                                                            
     crimes  involving the  use of these  technologies. One  area of                                                            
     particular  concern  is  sex crimes  against  children.  Adults                                                            
     prone  to abusing children will  use the Internet to  solicit a                                                            
     minor for  sex or to set up a meeting with a  child in order to                                                            
     rape  or  abuse  the  child.  Further,  Many  people,  who  are                                                            
     inclined  to  distribute or  view  child pornography,  are  now                                                            
     using their computers  to do so. These are new technologies and                                                            
     the  state still  has  relatively few  tools  for dealing  with                                                            
     criminals  using these  technologies.  HB 32  provides us  with                                                            
     another tool to use in combating sexual predators.                                                                         
                                                                                                                                
     Across  the  country   and  at  the  federal  level  there  are                                                            
     forfeiture  laws in  place. Several other  states already  have                                                            
     laws on  the books specifically  relating to the forfeiture  of                                                            
     computers  used  in sex  crimes. The  use of  computers in  sex                                                            
     crimes  is a national  problem.  As more and  more states  pass                                                            
     forfeiture  legislation  it is  becoming  increasingly  obvious                                                            
     that this  is a useful and valuable  tool in the fight  against                                                            
     computer crimes.                                                                                                           
                                                                                                                                
     HB 32 would  make it possible for the police  to stay on top of                                                            
     this  rapidly changing  industry  without  spending more  state                                                            
     dollars. Advances  in computer technologies seem to happen on a                                                            
     daily  basis. New  technology  can often  "outwit" last  year's                                                            
     model,  leaving the  police at  a large  disadvantage in  their                                                            
     attempt  to curb crimes  committed with  the aid of the  newest                                                            
     technology.  In order  for the  police to  combat computer  and                                                            
     Internet  crimes  effectively  it is  imperative  that they  be                                                            
     constantly provided with new hardware.                                                                                     
                                                                                                                                
     Under  AS 12.55.015(c) the court  may award forfeited  property                                                            
     or a percentage  of it to any municipal law enforcement  agency                                                            
     involved  in the arrest  or conviction  of the defendant.  This                                                            
     would  allow  the courts  to  pass on  seized property  to  the                                                            
     police  so that the police can  stay up to date with  available                                                            
     technology in a cost-effective manner.                                                                                     
                                                                                                                                
     HB 32  is designed to  help protect our  children in a  twofold                                                            
     manner:  1) forfeiture  is a proven tool  in the fight  against                                                            
     crime, and 2) the  forfeited property can be given to our local                                                            
     law enforcement  agencies in order to help make  sure that they                                                            
     have  the necessary tools  to protect  our children. I  ask for                                                            
     your support in passing this legislation.                                                                                  
                                                                                                                                
Representative  Hayes pointed  out  changes to  the intent  language                                                            
made  in the Senate  Judiciary  Committee,  which cite  case law  to                                                            
"make it  absolutely positively  airtight"  that the only  equipment                                                            
that could be seized was  that owned by the perpetrator and not by a                                                            
third party.  He showed that Section  3 of the committee  substitute                                                            
specifies that  property owned by  an employer could not  be seized.                                                            
                                                                                                                                
Representative  Hayes referenced information  provided showing  some                                                            
cases that this new law  would apply. He also referred to letters of                                                            
support  and one  letter in  opposition to  the bill  from a  nudist                                                            
organization  [not provided] regarding  their concerns with  vehicle                                                            
forfeiture. He  assured their concerns were addressed  in the Senate                                                            
Judiciary   committee  substitute   with  language  that   specifies                                                            
computers as the only equipment that could be taken.                                                                            
                                                                                                                                
Representative  Hayes  then directed  the Committee's  attention  to                                                            
other  information  regarding   how  forfeitures  work  as  well  as                                                            
statutes  from  other  states.  [Copies  on  file.]  He  noted  this                                                            
legislation is "the most  progressive" language on the West Coast of                                                            
the United States addressing these types of crimes.                                                                             
                                                                                                                                
Senator  Ward   asked  if  this  legislation   includes   e-mail  of                                                            
pornography materials.                                                                                                          
                                                                                                                                
Representative  Hayes  answered that  it does  not. He  told of  law                                                            
enforcement  organizations that infiltrate  Internet chat  rooms and                                                            
other areas to  locate suspected pedophiles and perpetrators  of sex                                                            
crimes. He  noted that if  a person receives  a pornographic  e-mail                                                            
message, but deletes it  and does not pass it along to another user,                                                            
that person would not be subject to the provisions of this law.                                                                 
                                                                                                                                
Senator Leman  asked if the  person who sent  a pornographic  e-mail                                                            
could  be prosecuted  and  under this  legislation,  forfeits  their                                                            
computer equipment.                                                                                                             
                                                                                                                                
Representative   Hayes  did  not  think  so  unless  the  intent  is                                                            
distribution rather  than a joke. He assured that  this question has                                                            
been addressed in other committees.                                                                                             
                                                                                                                                
Senator  Leman hoped  the forfeiture  provision  would apply  saying                                                            
that it does happen occasionally.                                                                                               
                                                                                                                                
Senator Green  asked if the  penalties proposed  in the bill  are in                                                            
addition to other  punishment. She asserted, "this  is a lot of work                                                            
to take someone's computer if they're not being punished."                                                                      
                                                                                                                                
Representative  Hayes replied that only upon conviction  as a sexual                                                            
predator could computer equipment could be seized.                                                                              
                                                                                                                                
Senator  Ward  asked  about  equipment  belonging  to the  State  of                                                            
Alaska.                                                                                                                         
                                                                                                                                
Representative  Hayes reiterated that  the intent language  inserted                                                            
by the Senate Judiciary  Committee specifies legislative intent that                                                            
only equipment  owned by the perpetrator could be  seized. He stated                                                            
that equipment  owned by an employer,  parent, spouse, etc.,  of the                                                            
offender could not be confiscated.                                                                                              
                                                                                                                                
Co-Chair  Donley   drew  attention   to  the  committee   substitute                                                            
provision  setting   the  procedure  for  the  utilization   of  any                                                            
confiscated equipment.                                                                                                          
                                                                                                                                
Co-Chair  Donley  asked  why  there  is  no  fiscal  note  from  the                                                            
Department of Law.                                                                                                              
                                                                                                                                
Representative Hayes explained  there would be no additional expense                                                            
to the  Department of Law  because conviction  on child pornography                                                             
charges would  automatically provide  for equipment seizure  without                                                            
the need for additional specific prosecution.                                                                                   
                                                                                                                                
Senator  Ward  shared  that  Department   of  Public  Safety  Deputy                                                            
Commissioner  Del Smith relayed  to him that  it is not against  the                                                            
law  to  send an  e-mail  using  another  person's  e-mail  address.                                                            
Senator Ward suggested  this legislation could be  used to make such                                                            
a practice illegal.                                                                                                             
                                                                                                                                
Representative  Hayes was unsure how  this could be done  since this                                                            
legislation  is specifically directed  to child pornography  and sex                                                            
crimes.  He again  detailed the  process of  investigators  entering                                                            
chat rooms using an alias as a child to attract child abusers.                                                                  
                                                                                                                                
Senator  Ward ascertained  this  legislation  is "pretty  broad  and                                                            
covers a lot of  territory." He stated that having  no law making it                                                            
illegal to  send pornography using  another person's e-mail  address                                                            
"could be  a problem." He  gave a scenario  of someone distributing                                                             
pornography from the governor's address.                                                                                        
                                                                                                                                
Senator Hoffman suggested  Senator Ward introduce new legislation to                                                            
address this matter.                                                                                                            
                                                                                                                                
Senator Ward wanted to  hold the bill in Committee so he could draft                                                            
an amendment  to make such a practice  illegal. He also stated  that                                                            
impersonating  a public servant is shown to be against  the law, but                                                            
is actually not, according to the Department of Public Safety.                                                                  
                                                                                                                                
Co-Chair  Donley understood  the  concerns  but did  not think  this                                                            
issue complied with the title of the bill.                                                                                      
                                                                                                                                
Senator Ward asserted  that he was certain, "the sponsor  would want                                                            
to do  whatever is  necessary in  order to protect  the public  from                                                            
these sexual predators."                                                                                                        
                                                                                                                                
Co-Chair Donley noted the  bill has the support of the Committee and                                                            
requested  the sponsor  work with  Senator Ward  on addressing  this                                                            
matter.  He  stated the  bill  would  be reconsidered  at  the  next                                                            
meeting.                                                                                                                        
                                                                                                                                
Co-Chair Donley ordered the bill HELD in committee.                                                                             
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Donley adjourned the meeting at 08:42 PM                                                                               

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