Legislature(2003 - 2004)

04/30/2004 09:12 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                          April 30, 2004                                                                                      
                              9:12 AM                                                                                         
                                                                                                                              
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-04 # 101,  Side A                                                                                                           
SFC 04 # 101,  Side B                                                                                                           
SFC 04 # 102,  Side A                                                                                                           
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Gary Wilken convened  the meeting at approximately 9:12 AM.                                                            
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Lyda Green, Co-Chair                                                                                                    
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Con Bunde, Vice Chair                                                                                                   
Senator Fred Dyson                                                                                                              
Senator Ben Stevens                                                                                                             
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
Also  Attending:     SENATOR  GARY  STEVENS;  ANSELM   STAAK,  Chief                                                          
Financial Officer,  Division of Retirement and Benefits,  Department                                                            
of  Administration;   MELANIE   MILLHORN,   Director,  Division   of                                                            
Retirement   and  Benefits,   Department   of  Administration;   TIM                                                            
BENINTENDI,  Staff   to  Representative  Carl  Moses;   PETE  KELLY,                                                            
Director, Government  Relations, University  of Alaska; TOM  WRIGHT,                                                            
Staff to  Representative  John Harris; MICHAEL  BARNHILL,  Assistant                                                            
Attorney General, Commercial/Fair  Business Section, Civil Division,                                                            
Department  of  Law; JASON  HOOLEY,  Staff  to Senator  Dyson;  JEFF                                                            
OTTESON, Director,  Division of Program  Development, Department  of                                                            
Transportation and Public Facilities;                                                                                           
                                                                                                                                
Attending  via  Teleconference:    From  offnet  locations:  JANELLE                                                          
VANASSE, Yuut  Elitnaurviat, Inc. People's Learning  Center; ANNETTE                                                            
KREITZER, Chief  of Staff, Office  of the Lieutenant Governor;  From                                                            
Anchorage: TONY  LOMBARDO, Director, Division of Public  Assistance,                                                            
Department  of  Health  and Social  Services;  JAY  MARLEY,  Program                                                            
Manager,  Fraud   Control  Unit,  Division  of  Public  Assistance,                                                             
Department  of Health and  Social Services;  JEFF PARKER,  Attorney;                                                            
SCOTT  CLARK,  Notary   Commission  Administrator,   Office  of  the                                                            
Lieutenant Governor                                                                                                             
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
[Note:  Computer  malfunction   occurred  and  original  notes  were                                                            
destroyed. Minutes compiled strictly from audio recording.]                                                                     
                                                                                                                                
SB 232-RETIREMENT: TEACHERS/JUDGES/PUB EMPLOYEES                                                                                
                                                                                                                                
The  Committee  heard  from  the  Department  of  Administration.  A                                                            
committee  substitute was  adopted and  the bill  was reported  from                                                            
Committee.                                                                                                                      
                                                                                                                                
HB 123-ALASKA WORKFORCE INVESTMENT BOARD                                                                                        
                                                                                                                                
The Committee heard from  the sponsor, the University of Alaska, and                                                            
a proposed vocational  technical education center.  An amendment was                                                            
adopted and the bill was held in Committee.                                                                                     
                                                                                                                                
HB 503-TOBACCO MASTER SETTLEMENT AGREEMENT                                                                                      
                                                                                                                                
The Committee heard from  the sponsor and the Department of Law. The                                                            
bill was held in Committee.                                                                                                     
                                                                                                                                
SB 376-SUBPOENA POWER: PUB ASS'TNCE & PERM FUND                                                                                 
                                                                                                                                
The Committee  heard from the sponsor  and the Department  of Health                                                            
and Social Services. The bill was reported from Committee.                                                                      
                                                                                                                                
SB 371-POWERS/DUTIES DOTPF                                                                                                      
                                                                                                                                
The  Committee   heard   from  the   sponsor,   the  Department   of                                                            
Transportation  and Public Facilities  and an attorney representing                                                             
litigants  against  the  Department.  The  bill  was  reported  from                                                            
Committee.                                                                                                                      
                                                                                                                                
SB 302-OATHS; NOTARIES PUBLIC; STATE SEAL                                                                                       
                                                                                                                                
The Committee  heard from the sponsor.  Two amendments were  adopted                                                            
and the bill was reported from Committee.                                                                                       
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 232(STA)                                                                                            
     "An  Act relating  to federal  tax requirements  for and  other                                                            
     provisions  of  the teachers'  retirement  system,  the  public                                                            
     employees'  retirement  system,  and  the  judicial  retirement                                                            
     system;  removing  village  public  safety  officers  from  the                                                            
     public  employees'  retirement  system;  requiring  the  public                                                            
     employees'  retirement  system  to refund  contributions  under                                                            
     $1,000  to  inactive employees;  limiting  service  credit  for                                                            
     village public safety  officer service in the public employees'                                                            
     retirement   system  to  five  years;  and  providing   for  an                                                            
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken stated  this bill,  sponsored by  the Senate  Rules                                                            
Committee  by request  of  the Governor,  "amends  current  statutes                                                            
pertaining  to the  State's retirement  systems to  comply with  IRS                                                            
standards.  These   changes  impact  the  TRS,  PERS   and  Judicial                                                            
retirement systems."                                                                                                            
                                                                                                                                
Co-Chair Green  moved for adoption  of CS SB 232, 23-GS1009\I,  as a                                                            
working document.                                                                                                               
                                                                                                                                
Co-Chair Wilken objected for an explanation.                                                                                    
                                                                                                                                
ANSELM STAAK,  Chief Financial Officer,  Division of Retirement  and                                                            
Benefits, Department  of Administration, testified  that the primary                                                            
difference  between the  Senate State Affairs  Committee  substitute                                                            
and the Version  "I" committee substitute pertains  to the "specific                                                            
wording that  have been  negotiated with  the IRS [federal  Internal                                                            
Revenue Service]."                                                                                                              
                                                                                                                                
Mr. Staak stated  that this bill is the "second installment"  of the                                                            
changes required  by the IRS in the  "plan documents" of  the Public                                                            
Employees Retirement  System (PERS), the Teachers  Retirement System                                                            
(TRS),  and  the  Judicial  retirement  system.  Because  these  are                                                            
"qualified  tax plans"  these changes  must contain  an appropriate                                                             
plan document.  The plan  documents for each  of these plans  is the                                                            
governing State  statute. Therefore, State statute  must comply with                                                            
the IRS  code. This  legislation  would also  repeal the  provisions                                                            
adopted in the year 2001  by SB 145 relating to inclusion of Village                                                            
Public Safety Officers (VPSO) in the PERS program.                                                                              
                                                                                                                                
Mr.  Staak informed  that  the State  Affairs  committee  substitute                                                            
consists  of the  exact  language  requested  by the  IRS,  although                                                            
differs  from the  formats utilized  by  the Division  of Legal  and                                                            
Research  Services for statute.  The committee  substitute,  Version                                                            
"I" conforms  the language  to the  IRS code  requirements and  also                                                            
meets the  standards required  for State  statute. The IRS  approved                                                            
the committee substitute language.                                                                                              
                                                                                                                                
Co-Chair Green referenced  Section 8 of Version "I" on page 4, lines                                                            
6  - 26,  which  amends  AS  14.25.075(b)(2)  to,  in  part,  insert                                                            
"irrevocable"  in  the  provision  allowing  a  member  to  purchase                                                            
credited services. She  asked if "irrevocable" is a term employed in                                                            
IRS rules.                                                                                                                      
                                                                                                                                
Mr. Staak  affirmed  and reiterated  that every  change included  in                                                            
this legislation  conforms to IRS code. He furthered  that the issue                                                            
of irrevocable  election to purchase  credited service involved  six                                                            
months  of  negotiation  between  the  Division  and  the  IRS.  The                                                            
Division preferred  the exclusion of the "irrevocable"  stipulation.                                                            
                                                                                                                                
Co-Chair Green asked for an explanation of the stipulation.                                                                     
                                                                                                                                
Mr. Staak  explained that  once the employee  makes the election  to                                                            
purchase the  credited service, the  employee could not change  that                                                            
decision.  He  exampled  that employees  could  opt  to pay  off  an                                                            
indebtedness with  pre-taxed income; however, once  the agreement is                                                            
made, the payments  must continue,  regardless of reduced  salary or                                                            
other circumstances.  Payments could  stop only upon termination  of                                                            
employment.  This   stipulation  is  required  to   obtain  a  "very                                                            
favorable method to pay off an indebtedness."                                                                                   
                                                                                                                                
Co-Chair Green  next cited Section 24, on page 12,  lines 17 - 25 of                                                            
the committee substitute, which reads as follows                                                                                
                                                                                                                                
          Sec. 24. AS 39.35.200(b) is amended to read:                                                                          
          (b) [IF, UPON TERMINATION OF EMPLOYMENT, AN EMPLOYEE HAS                                                              
     CREDITED  SERVICE OF  LESS THAN  FIVE YEARS  AND HAS LESS  THAN                                                            
     $1,000  IN THE EMPLOYEE CONTRIBUTION  ACCOUNT, A REFUND  OF THE                                                            
     EMPLOYEE CONTRIBUTION  ACCOUNT MUST BE MADE UNLESS THE EMPLOYEE                                                            
     INDICATES  IN WRITING  THAT FUTURE RETIREMENT  IS INTENDED  AND                                                            
     CONTRIBUTIONS  SHOULD  NOT  BE REFUNDED.]  An  employee who  is                                                            
     reemployed  with an employer  and whose contributions  have not                                                            
     been  refunded  before  reemployment  is  not  eligible  for  a                                                            
     refund.                                                                                                                    
                                                                                                                                
     [DELETED TEXT BRACKETED]                                                                                                   
                                                                                                                                
Co-Chair Green  asked if the deletion of this language  from statute                                                            
would result  in a discontinuation  of refunds of less than  $1,000.                                                            
                                                                                                                                
Mr. Staak responded that  originally a "forced cash out" was made to                                                            
those employees  who would be "deferred vested". The  aforementioned                                                            
language is the  result of an amendment to statute  that removed the                                                            
cash out requirement.  The IRS code  allows an employer to  cash out                                                            
an account  of a small  amount to simplify  administrative  expenses                                                            
for  the employer.  However,  this  language  had been  inserted  in                                                            
statute to  accommodate those employees  who work for short  periods                                                            
of time, including  legislative employees,  to allow them  to retain                                                            
their contribution account.                                                                                                     
                                                                                                                                
Co-Chair  Green  understood  that  the  funds  in  the contribution                                                             
account  would  remain and  continue  to  increase if  the  employee                                                            
returns to service.                                                                                                             
                                                                                                                                
Mr. Staak  affirmed and added  that the employee  would not  need to                                                            
repurchase the service  as indebtedness and pay additional interest.                                                            
The account would  also earn interest while the employee  was not in                                                            
service.                                                                                                                        
                                                                                                                                
Co-Chair  Green then  asked about  the term  "actuarial adjustment"                                                             
included in Sections 13,  19 and 28 of the committee substitute, and                                                            
whether the  amended language would  be an improvement over  current                                                            
practice.                                                                                                                       
                                                                                                                                
Mr. Staak replied  that the State  is required, under the  IRS code,                                                            
to place a description  of any reduced benefit in the plan document.                                                            
He exampled  a 50 percent  joint survivor  option for those  members                                                            
eligible  for  a  full  benefit.  He  informed   that  the  Division                                                            
unsuccessfully  argued with the IRS  to relent this position,  which                                                            
would have required  approximately 40 pages of additional  statutory                                                            
language. Instead, the  agencies agreed to allow the descriptions to                                                            
be  provided  for  in  regulations,  given  that  regulations   have                                                            
potentially the force of law in Alaska.                                                                                         
                                                                                                                                
Senator  Hoffman  asked  if  the TRS  and  Judicial  system  require                                                            
changes as a result  of the inclusion of VPSO employees  in the PERS                                                            
program.                                                                                                                        
                                                                                                                                
Mr. Staak  answered  that all the  changes in  this legislation  are                                                            
required to comply with the IRS code.                                                                                           
                                                                                                                                
AT EASE                                                                                                                         
                                                                                                                                
Senator Dyson  supported the  creation of a  Tier IV level  of State                                                            
employment, and asked if this would not occur at this time.                                                                     
                                                                                                                                
MELANIE  MILLHORN, Director,  Division of  Retirement and  Benefits,                                                            
Department of  Administration, affirmed such action  is not included                                                            
in this legislation.                                                                                                            
                                                                                                                                
Senator Dyson  asked when the Division  anticipated a Tier  IV would                                                            
be established.                                                                                                                 
                                                                                                                                
Ms. Millhorn replied that  recommendations would be presented to the                                                            
legislature in February 2005.                                                                                                   
                                                                                                                                
Co-Chair  Wilken  removed  his  objection  to the  adoption  of  the                                                            
committee substitute.                                                                                                           
                                                                                                                                
The  committee   substitute,   Version  "I"   was  ADOPTED   without                                                            
objection.                                                                                                                      
                                                                                                                                
Senator Bunde requested  discussion on the situation, which resulted                                                            
in the  need  for an  appropriation  of funds  to the  PERS and  TRS                                                            
programs. He commented on the magnitude of the problem.                                                                         
                                                                                                                                
Co-Chair Wilken stated  that the matter would be discussed, although                                                            
not in conjunction with debate on this legislation.                                                                             
                                                                                                                                
Senator Bunde  offered a  motion to report  CS SB 232, 23-GS1009\I,                                                             
from  Committee with  individual  recommendations  and accompanying                                                             
fiscal note.                                                                                                                    
                                                                                                                                
There was  no objection  and CS  SB 232 (FIN)  MOVED from  Committee                                                            
with zero fiscal note #1 for "Various" departments.                                                                             
                                                                                                                                
Co-Chair  Wilken  spoke  to media  reports  of  earlier in  the  day                                                            
regarding the  rates for PERS and  TRS contributions, as  referenced                                                            
by Senator Bunde.  Co-Chair Wilken requested Ms. Millhorn  provide a                                                            
brief outline of the situation.                                                                                                 
                                                                                                                                
Ms. Millhorn  reported  that on  April 19,  2004, the  PERS and  TRS                                                            
boards of directors  met in Anchorage  and the PERS Board  adopted a                                                            
five-percent  rate  increase,   which  would  increase  the  average                                                            
employer  contribution  rate to  16.77 percent  for FY  06. The  TRS                                                            
Board recommended a five-percent  increase, which would increase the                                                            
rate from 16 percent  for FY 05 to 21 percent for  FY 06. She stated                                                            
the Division  has calculated  the costs to  the State for FY  06 for                                                            
all PERS and TRS employees.                                                                                                     
                                                                                                                                
Mr. Staak furthered that  the cost of the five percent increases for                                                            
both  PERS  and  TRS would  total  an  additional  $109  million  in                                                            
contributions:  approximately $79  million for PERS and $30  for TRS                                                            
employees. This  is in addition to the $100 million  cost for FY 05.                                                            
He indicated  a spreadsheet would  be made available to detail  this                                                            
information.                                                                                                                    
                                                                                                                                
Senator  B.  Stevens  noted  this  amount  reflects   the  mandatory                                                            
contribution   rate  and   asked   the  amount   suggested  as   the                                                            
contribution rate.                                                                                                              
                                                                                                                                
Ms. Millhorn  replied that  the amount for  PERS was 26 percent  and                                                            
TRS was 38 percent.                                                                                                             
                                                                                                                                
Mr. Staak pointed out the  rate for TRS increased three-percent from                                                            
the recommended rate. The rate for PERS decreased "slightly".                                                                   
                                                                                                                                
Senator Bunde  clarified that  once an employee  is included  in the                                                            
retirement system,  the courts have ruled their contributions  could                                                            
not be changed. Therefore  the entire amount of the increase must be                                                            
borne by the State.                                                                                                             
                                                                                                                                
Mr.  Staak affirmed  this  provision is  established  in the  Alaska                                                            
Constitution  and the employers essentially  must assume  all of the                                                            
risk.                                                                                                                           
                                                                                                                                
Senator  Bunde calculated  the State must  contribute approximately                                                             
$100 million this year  and another $100 million the following year.                                                            
He asked the  number of years the  increased contributions  would be                                                            
required.                                                                                                                       
                                                                                                                                
Mr. Staak responded  that because the current rate  is 16.77 percent                                                            
and the rates  could increase to as high as 25 percent,  another two                                                            
to  three  years   of  increases  would  occur  until   the  highest                                                            
percentage  was reached. This would  also occur for the TRS  program                                                            
for five to six years.                                                                                                          
                                                                                                                                
Senator  Bunde asked  the impact  of early retirement  programs  and                                                            
whether these would expand the State's debt.                                                                                    
                                                                                                                                
Mr. Staak affirmed.                                                                                                             
                                                                                                                                
Senator B.  Stevens asked  the percentage  of the TRS contributions                                                             
made for State employees versus municipal employees.                                                                            
                                                                                                                                
Mr.  Staak  responded   that  approximately  $22  million   of  PERS                                                            
contributions  would be  municipality obligations.  He included  TRS                                                            
employees  and stated the  total amount would  be approximately  $38                                                            
million.                                                                                                                        
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 123(FIN)                                                                                             
     "An Act relating to the allocation of money appropriated to                                                                
     the Alaska Workforce Investment Board; and providing for an                                                                
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken  stated this bill, sponsored by Representative  Carl                                                            
Moses "adds the Southwest  Alaska Vocational and Education Center in                                                            
King Salmon  to the  roster of  entities eligible  to receive  money                                                            
under the technical vocational education program."                                                                              
                                                                                                                                
TIM BENINTENDI,  Staff  to Representative  Carl  Moses, noted  three                                                            
changes were made to the  original version of the bill. One reflects                                                            
the name change  from the Alaska Human Resources Investment  Council                                                            
to the Alaska  Workforce Investment  Board. The second change  makes                                                            
the effective  date July  1, 2004, and the  third change  eliminated                                                            
the inclusion  of the Bethel People's  Learning Center contained  in                                                            
the original version of the bill.                                                                                               
                                                                                                                                
Mr.  Benintendi   reiterated   Co-Chair  Wilken's   statement.   Mr.                                                            
Benintendi added this would  provide the Southwest Alaska Vocational                                                            
and  Education Center  (SWAVC)  a four  percent share  of  available                                                            
funds through  the workforce development program,  thus reducing the                                                            
amount  available to  the University  of Alaska  to 59 percent.  The                                                            
University of  Alaska does not oppose this legislation,  which would                                                            
provide $183,000 to SWAVC for operating expenses.                                                                               
                                                                                                                                
Mr. Benintendi  informed  this funding  is generated  from the  one-                                                            
tenth  of one  percent  assessment collected  from  each  employee's                                                            
contribution  to the unemployment  insurance fund for the  technical                                                            
vocational  education program  within  the Department  of Labor  and                                                            
Workforce Development.                                                                                                          
                                                                                                                                
Mr.  Benintendi   assured   this  legislation   would  not   require                                                            
additional  general funds. The SWAVC  would join the Galena  Project                                                            
Education  Vocational  Center, the  Kotzebue Technical  Center,  the                                                            
Alaska Vocational  Technical Center and the University,  in eligible                                                            
recipients of these funds.                                                                                                      
                                                                                                                                
Mr. Benintendi  stated  the SWAVC is  located in  a region in  which                                                            
economic  fisheries disasters  have  been declared  in three of  the                                                            
last eight years. An emphasis  has been placed on retraining workers                                                            
from fisheries  related activities  to other occupations  that would                                                            
enhance employment.  In the two-year operation of  the Center, SWAVC                                                            
has provided  services  to over 900  area residents.  The region  is                                                            
"ripe with potential" for  new oil and gas development as manifested                                                            
by the  recent passage of  SB 265 and SB  266. Mining opportunities                                                             
also exist and demonstrate a need for skilled workers.                                                                          
                                                                                                                                
Senator  Dyson  asked   about  training  for  commercial   operators                                                            
licenses as  referenced in the sponsor  statement. He asked  if this                                                            
pertains to truck drivers or vessel operators.                                                                                  
                                                                                                                                
Mr. Benintendi replied the training is for truck drivers.                                                                       
                                                                                                                                
Senator Dyson  then referenced computer hardware training  and asked                                                            
if software training would be available.                                                                                        
                                                                                                                                
Mr. Benintendi  understood the intent  is to expand into  the entire                                                            
information technology field.                                                                                                   
                                                                                                                                
Senator Dyson asked the training programs currently offered.                                                                    
                                                                                                                                
Co-Chair  Wilken  directed Senator  Dyson's  attention  to a  report                                                            
listing the Center's mission  statement and highlighting the current                                                            
activities and goals of the program [copy on file.]                                                                             
                                                                                                                                
Amendment #1: This amendment  would restore language in the original                                                            
version of the bill and  would include the Bethel Yuut Elitnaurviat,                                                            
Inc.  People's Learning  Center  as an  eligible  recipient of  four                                                            
percent of  the funding available  through the technical  vocational                                                            
education program.                                                                                                              
                                                                                                                                
Senator Hoffman  moved for adoption  and deferred to Ms.  Vanasse to                                                            
speak to the motion.                                                                                                            
                                                                                                                                
Co-Chair Wilken objected for an explanation.                                                                                    
                                                                                                                                
JANELLE VANASSE,  Yuut Elitnaurviat, Inc. People's  Learning Center,                                                            
testified via  teleconference from  an offnet location in  Bethel to                                                            
"discuss the value  of the amendment". She informed  that the Yukon-                                                            
Kuskokwim region  has been identified  as the poorest in  the State;                                                            
yet has great  opportunity for workforce  development. Despite  high                                                            
poverty  rates,  jobs  are  available  in  the  region,  up  to  300                                                            
positions at any time.  The issue is that the local residents do not                                                            
have the  education and training  to fill  the higher wage  jobs. To                                                            
address  this, nine agencies,  including the  Alaska National  Guard                                                            
and the largest  school district in the region, the  City of Bethel,                                                            
the   University  of   Alaska,   and  the   Yukon-Kuskokwim   Health                                                            
Corporation,  and the Native  corporations,  have joined efforts  to                                                            
provide training to the  local workforce. This is important not only                                                            
for  the quality  of life  of  workers, but  also  for the  economic                                                            
development of the region.                                                                                                      
                                                                                                                                
Ms. Vanasse  assured that the training  to be provided is  in fields                                                            
identified  as high priority and because  jobs are available  within                                                            
the region.  She listed education  and early childhood development,                                                             
construction trade,  health care, and aviation. Local  employers who                                                            
are willing  to invest in the training  of local workers  drive this                                                            
project.  This project  would  be sustainable  and  would utilize  a                                                            
variety of funding sources.  Once the facility is fully operational,                                                            
nine funding sources would sustain operations.                                                                                  
                                                                                                                                
Ms.  Vanasse  stated  the  purpose  of  this  legislation  and  this                                                            
amendment  is "investing  in this  as a  model of the  State."   The                                                            
commissioners of the Department  of Labor and Workforce Development,                                                            
the  Department   of  Education  and   Early  Development   and  the                                                            
Department of Community  and Economic Development have characterized                                                            
the Center as  a valuable pilot project that should  be invested in.                                                            
                                                                                                                                
Ms. Vanasse reported that  although the intent is to construct a new                                                            
facility, services are  being provided currently. Programs are being                                                            
developed and  delivered utilizing any available locations.  Because                                                            
of this  ability, the  Center is  currently serving  over 300  local                                                            
residents.                                                                                                                      
                                                                                                                                
Ms.  Vanasse stressed  that  including the  Center  in the  programs                                                            
eligible  for funding  through  the technical  vocational  education                                                            
program would be a "solid investment in the State".                                                                             
                                                                                                                                
Senator Bunde  congratulated  the witness on  the efforts made  with                                                            
this  project. Many  community  colleges  utilized  the practice  of                                                            
"storefront  education"   whereby  classes  were   held  at  various                                                            
available  locations near  the people  in need of  the training.  He                                                            
asked  if the  facility were  constructed  whether  the practice  of                                                            
locating classes near the students would discontinue.                                                                           
                                                                                                                                
Ms. Vanasse  replied  that the  opportunity to  "mobilize  training"                                                            
would remain.  However,  only inadequately  equipped facilities  are                                                            
currently available  for some training such as nursing  courses. The                                                            
new facility would  have a nursing laboratory equipped  with gurneys                                                            
and other  necessary  equipment.  Construction  trades also  require                                                            
"hands  on"  training  that  is  not  available  in  the  classrooms                                                            
currently used. She predicted  that distance training would continue                                                            
with travel to the Center  required only for those courses requiring                                                            
the equipped facilities.                                                                                                        
                                                                                                                                
Senator  Bunde understood  the  need  for equipped  facilities,  but                                                            
cautioned that with the  establishment of a centralized location, it                                                            
becomes  more  convenient  for the  instructors  to remain  at  that                                                            
location rather than "reach out" to students.                                                                                   
                                                                                                                                
Senator Dyson  surmised that allocating funds to one  or both of the                                                            
vocational technical education  centers would result in less funding                                                            
available for the University.                                                                                                   
                                                                                                                                
Mr. Benintendi  responded  that the funding  would be received  from                                                            
the  University  portion  of  the  technical  vocational   education                                                            
program.                                                                                                                        
                                                                                                                                
Senator Dyson asked the  activities of the University that would not                                                            
be funded if this legislation were adopted.                                                                                     
                                                                                                                                
Mr. Benintendi deferred to the University of Alaska.                                                                            
                                                                                                                                
PETE KELLY,  Director, Government  Relations, University  of Alaska,                                                            
testified in support of  this bill and the amendment. The University                                                            
would  accommodate  the reductions  to  its budget.  The  University                                                            
supports the workforce  development efforts in those  areas affected                                                            
by  this  legislation,  and  the  University  supports  delivery  of                                                            
services  to residents  of  those  regions.  This legislation  is  a                                                            
viable method to accomplish this.                                                                                               
                                                                                                                                
Co-Chair Green  qualified she did not support this  legislation. She                                                            
asked the status of the  People's Learning Center and questioned the                                                            
ability   for  students   to  achieve  certification   without   the                                                            
establishment of the Center.                                                                                                    
                                                                                                                                
Senator  Hoffman  replied that  no structure  currently  exists  and                                                            
deferred to Ms. Vanasse.                                                                                                        
                                                                                                                                
Ms.  Vanasse   responded  that  many   organizations  were   already                                                            
attempting to fill the  "workforce development gap", but the results                                                            
would be limited.  It was agreed that  existing successful  programs                                                            
would  be combined  into a  new system.  The existing  programs  are                                                            
continuing and  expanding, regardless that the new  facility has yet                                                            
to be constructed.                                                                                                              
                                                                                                                                
Co-Chair  Green wanted to  know how the funding  would be  expended.                                                            
She pointed out that in  many areas of the State, nursing assistance                                                            
and other  vocational training  is provided  by the high schools  as                                                            
part of the regular curriculum.  These programs do not require a new                                                            
learning center and those  communities are not requesting additional                                                            
funding from the legislature  to provide the same services. She also                                                            
was unsure  why funding  should be  appropriated  for a Center  that                                                            
does not exist. She also  wanted to know why the request is only for                                                            
FY 05 and FY 06.                                                                                                                
                                                                                                                                
Mr. Benintendi  replied this is the  cycle in which the allocations                                                             
are   made,  once   the   appropriation   has  been   granted.   The                                                            
appropriation is made annually.                                                                                                 
                                                                                                                                
Co-Chair  Green asked  if  the provisions  of this  legislation  are                                                            
passed every two years.                                                                                                         
                                                                                                                                
Senator  Kelly responded  that this legislation  corresponds  to the                                                            
lapse date  of the original program  established approximately  four                                                            
years prior.                                                                                                                    
                                                                                                                                
Ms. Vanasse stressed the  potential of the Bethel center to serve as                                                            
a model, particularly before the construction of a new facility.                                                                
                                                                                                                                
                                                                                                                                
SFC 04 # 101, Side B                                                                                                            
                                                                                                                                
                                                                                                                                
Co-Chair  Wilken  removed  his  objection  to the  adoption  of  the                                                            
amendment  with  the  understanding  that  the  bill  would  not  be                                                            
reported  from   Committee  at  this   hearing.  He  expressed   the                                                            
University should review the impacts of the reduced funding.                                                                    
                                                                                                                                
Without further objection Amendment #1 was ADOPTED.                                                                             
                                                                                                                                
Mr. Benintendi  commented that the  sponsor supports the  amendment.                                                            
                                                                                                                                
Co-Chair Wilken ordered the bill HELD in Committee.                                                                             
                                                                                                                                
                                                                                                                                
     HOUSE BILL NO. 503                                                                                                         
     "An Act relating to the tobacco product Master Settlement                                                                  
     Agreement; and providing for an effective date."                                                                           
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken stated this  bill, sponsored  by the House  Finance                                                            
Committee,  "was drafted  by the National  Association of  Attorneys                                                            
General and was  unanimously supported by its membership.  It closes                                                            
a loophole that benefits  tobacco manufacturers that are not covered                                                            
under the Master Settlement Agreement."                                                                                         
                                                                                                                                
TOM WRIGHT,  Staff  to Representative  John Harris,  reiterated  Co-                                                            
Chair Wilken's  statement. Mr. Wright noted that currently  AS 45.53                                                            
requires all  non-participating manufacturers  to deposit  a certain                                                            
amount of  money into an  escrow account with  the intent to  "level                                                            
the playing field". The  amount this year is two cents per cigarette                                                            
and every manufacturer  of a cigarette deposits that  amount into an                                                            
escrow account.                                                                                                                 
                                                                                                                                
Mr.  Wright  stated that  the  loophole  allows  those who  did  not                                                            
participate  in the Master  Settlement Agreement,  to withdraw  from                                                            
this escrow account,  anything above their eligible  share. Alaska's                                                            
allocable share  is about .34 percent.  He referenced a spreadsheet                                                             
prepared  by the  Department  of  Law titled,  "NPM  Escrow  Release                                                            
Calculations for  hypothetical non participating manufacturer  Cheap                                                            
Smokes,  Inc." [copy  on file]  detailing the  consequences of  this                                                            
loophole.  He  demonstrated   that  regardless   of  the  number  of                                                            
cigarettes  a non-participating  manufacturer  sells in Alaska,  the                                                            
manufacturer could maintain  a balance in the escrow account of only                                                            
the  amount  of  Alaska's  allocable  share,   thus  permitting  the                                                            
manufacturer  to  pay  significantly  less  than  the participating                                                             
manufacturers.                                                                                                                  
                                                                                                                                
Mr.  Wright  informed  that  this  legislation  would  provide  that                                                            
participating  and  non-participating  manufacturers  would both  be                                                            
required to contribute the same amount to the escrow account.                                                                   
                                                                                                                                
Mr. Wright noted  the bill is comprised of three sections,  with the                                                            
provision   that   if  the   first   section   were  found   to   be                                                            
unconstitutional,  the language of  Section 2 would be implemented.                                                             
If the  court  determines  that neither  section  is valid,  statute                                                            
would revert to existing language.                                                                                              
                                                                                                                                
MICHAEL  BARNHILL,   Assistant  Attorney  General,  Commercial/Fair                                                             
Business  Section, Civil  Division,  Department of  Law, added  that                                                            
similar  legislation has  been enacted  in at least  29 states.  The                                                            
purpose is  to close the loophole  unintentionally created  when the                                                            
statute was  first adopted in 1999.  The loophole was the  result of                                                            
an assumption  that non-participating manufacturers'  sales would be                                                            
in all states and therefore  the relative percentage of sales in all                                                            
states would  mimic the allocable  share. This  has not proved  true                                                            
and non-participating  manufacturers are selling to  "niche markets"                                                            
in  a few  states  and  thus  the  market  share in  each  state  is                                                            
significantly higher than the allocable share.                                                                                  
                                                                                                                                
Senator  Dyson  understood  from the  sponsor  statement  that  this                                                            
legislation  would only  apply to  cigarette. He  asked if it  would                                                            
apply to other tobacco products as well.                                                                                        
                                                                                                                                
Mr. Barnhill responded  that the Master Settlement Agreement applies                                                            
only to cigarettes.                                                                                                             
                                                                                                                                
Co-Chair Wilken ordered the bill HELD in Committee.                                                                             
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 376(HES)                                                                                            
     "An Act relating to public assistance and subpoena powers; and                                                             
     relating to the permanent fund dividend and subpoena powers."                                                              
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken  stated this bill,  sponsored by the Senate  Health,                                                            
Education   and   Social   Services   Committee,   "authorizes   the                                                            
commissioners  of the Department of  Health and Social Services  and                                                            
the  Department  of  Revenue  to  issue   subpoenas  to  compel  the                                                            
production  of records  needed  to investigate  cases  of  suspected                                                            
fraud."                                                                                                                         
                                                                                                                                
JASON HOOLEY, Staff to  Senator Dyson, stated this legislation would                                                            
assist  the  Department  of  Health  and  Social  Services  and  the                                                            
Department  of Revenue  to  "combat  fraud". Currently  when  public                                                            
assistance fraud or permanent  fund dividend fraud is suspected, the                                                            
departments   typically   request   additional    documentation   or                                                            
information from  the applicants. However, these requests  are often                                                            
unheeded or ignored.  The departments must then engage  the judicial                                                            
system  to acquire  subpoenas  to obtain  the information  from  the                                                            
applicants  to determine eligibility.  Engaging the judicial  system                                                            
is time  consuming  and expensive  in the  use of  State  resources.                                                            
Allowing  these departments  to acquire subpoenas  would enable  the                                                            
State to more  efficiently combat  fraud and subsequently  serve the                                                            
people of Alaska.                                                                                                               
                                                                                                                                
Senator  Olson asked  the  number  of cases  of suspected  fraud  of                                                            
public assistance benefits occur annually.                                                                                      
                                                                                                                                
Mr.  Hooley  deferred  to  the  Department   of  Health  and  Social                                                            
Services.                                                                                                                       
                                                                                                                                
TONY LOMBARDO,  Director, Division of Public Assistance,  Department                                                            
of Health  and Social  Services, testified  via teleconference  from                                                            
Anchorage to introduce Mr. Marley.                                                                                              
                                                                                                                                
JAY MARLEY, Program Manager,  Fraud Control Unit, Division of Public                                                            
Assistance, Department  of Health and Social Services, testified via                                                            
teleconference  from  Anchorage  told  of  two types  of  cases  the                                                            
Division tracks:  applicant fraud and recipient fraud.  The Division                                                            
attempts to  stop applicant fraud  before benefits are distributed.                                                             
Last year, the  Division investigated 595 applicant  fraud cases and                                                            
698 recipient fraud cases.                                                                                                      
                                                                                                                                
Senator  Olson  asked  the  number  of  these investigations   would                                                            
require subpoena power.                                                                                                         
                                                                                                                                
Mr. Marley  replied the  number varies and  averages one-quarter  of                                                            
the number  of investigations.  The  subpoenas  are not necessarily                                                             
issued to recipients or  applicants, but rather to employers, banks,                                                            
and other  institutions that  would have  information regarding  the                                                            
applicants and recipients' employment and financial status.                                                                     
                                                                                                                                
Co-Chair Green  offered a motion to  report the bill from  Committee                                                            
with individual recommendations and accompanying fiscal notes.                                                                  
                                                                                                                                
There was  no objection  and CS  SB 376 (HES)  MOVED from  Committee                                                            
with fiscal note #1 for  $5,500 and fiscal note #2 for -$25,100 from                                                            
the Department  of Health and Social Services and  a new zero fiscal                                                            
note dated 4/21/04 from the Department of Revenue.                                                                              
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 371(TRA)                                                                                            
     "An Act relating to  the powers and duties of the Department of                                                            
     Transportation and  Public Facilities; relating to a long-range                                                            
     program   for  highway   construction   and  maintenance;   and                                                            
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken stated  this  bill sponsored  by  the Senate  State                                                            
Affairs  Committee,  "relates  to  the  powers  and  duties  of  the                                                            
Department of  Transportation and Public Facilities.  It affirms the                                                            
validity  of the current  Department's planning  process."  He noted                                                            
the provisions of the legislation would be retroactive to 1977.                                                                 
                                                                                                                                
AT EASE                                                                                                                         
                                                                                                                                
JEFF OTTESON, Director,  Division of Program Development, Department                                                            
of Transportation and Public  Facilities, testified this legislation                                                            
is "vitally important  to both the Department and  to the State." It                                                            
has been  discovered  through a  lawsuit, that  the Department  must                                                            
undertake  a consideration  of  costs and  benefits at  the time  of                                                            
project  selection   for  the  capital   budget  in  the   Statewide                                                            
Transportation  Improvement Program  (STIP). This has not  been done                                                            
for  a  significant  number  of  projects   and  all  such  projects                                                            
currently underway are at risk.                                                                                                 
                                                                                                                                
Mr. Otteson furthered that  undertaking cost and benefit analyses at                                                            
the time  a project  is  under consideration  for  inclusion in  the                                                            
capital  budget  would  not always  be  useful.  This would  not  be                                                            
meaningful  information to  decision makers  for several classes  of                                                            
projects,  or would incur  such costs as to  be overwhelming  to the                                                            
project.                                                                                                                        
                                                                                                                                
Mr. Otteson outlined Section  1 reflects language recommended by the                                                            
Department  of Law  as  necessary  to instruct  the  court that  the                                                            
current  project  involved   in litigation   should  be  allowed  to                                                            
proceed. Section  4 has been the most widely discussed  substance of                                                            
the bill and pertains to  the consideration of cost and benefits for                                                            
new transportation projects  and facilities. The language in statute                                                            
was  codified  from  administrative  code  in  1977  and  has  never                                                            
undergone  the legislative  process.  Section 6  stipulates the  new                                                            
provisions  would  be retroactive  to  1977.  This would  allow  any                                                            
project  underway to  be covered  by the  amended  statute, some  of                                                            
which actually are 30 years  old, including the Cooper River Project                                                            
on the Sterling Highway.                                                                                                        
                                                                                                                                
Mr.  Otteson stressed  the  importance of  this legislation  to  the                                                            
Illiamna/Nondalton  project, which has been underway  since 1975 and                                                            
is  nearly  complete.  The  key  portion   of  the  project  is  the                                                            
construction   of  a  bridge   across  the   Newhalen  River.   This                                                            
legislation  is important  to address other  projects that  could be                                                            
similarly  litigated.  Environmental  organizations  have  indicated                                                            
using the existing  statute to halt  other projects. He warned  that                                                            
this would be easily accomplished  for these groups were the statute                                                            
not changed.                                                                                                                    
                                                                                                                                
Mr. Otteson  compared the stoppage  of the project at the  Pogo Mine                                                            
to the potential  existing for projects  with the existing  statute.                                                            
The Pogo Mine  project obtained all permits and was  underway, until                                                            
the project  was halted due to complications  in federal  law. State                                                            
statute  could   not  address  the   Pogo  Mine  issues,   but  this                                                            
legislation could prevent such occurrences for State projects.                                                                  
                                                                                                                                
SENATOR GARY STEVENS informed  that Governor Walter Hickel signed an                                                            
executive  order  in 1977  establishing  the  Alaska Transportation                                                             
Council and stipulated  that no project could be undertaken  without                                                            
review  and approval  by the Council.  However,  the Governor  never                                                            
appointed  members to  this Council  and adherence  to the  approval                                                            
requirement was  overlooked. The existing statute  should be amended                                                            
to avoid  future lawsuits  and to  prevent further  delays with  the                                                            
Illiamna/Nondalton project.                                                                                                     
                                                                                                                                
JEFF PARKER, Attorney,  testified via teleconference  from Anchorage                                                            
and  indicated  he  is  the  attorney   to  the  plaintiffs  of  the                                                            
Illiamna/Nondalton  litigation, Bob Gilliam [spelling  not verified]                                                            
and Trout  Unlimited.  Mr. Parker  recommended the  bill be held  in                                                            
Committee. The requirement  of cost benefit analyses relate directly                                                            
to fiscal issues. If the  ability to undertake cost benefit analyses                                                            
for  new transportation  modes  and  facilities is  undermined,  the                                                            
legislature  would  "put fiscal  resources  of this  State at  risk"                                                            
because projects  would be constructed  that are not cost  effective                                                            
and would therefore not  be maintained. The cost benefit requirement                                                            
does   not   apply  to   improvements   or   repairs   to   existing                                                            
transportation projects  and facilities. Cost benefit analyses allow                                                            
the  legislature  to  make  reasonable   decisions  about  the  most                                                            
effective  use  of   fiscal  resources.  Absent  this  requirement,                                                             
projects  become   "political  horse   trading"  because   no  other                                                            
objective criterion  is imposed in statute to facilitate  decisions.                                                            
Existing  statute  does  not prohibit  the  undertaking  of  certain                                                            
projects that do not have a favorable cost benefit ratio.                                                                       
                                                                                                                                
Mr. Parker informed that  the litigation over the Illiamna/Nondalton                                                            
project arose  because it  was one of two  projects included  in the                                                            
Southwest  Regional  Transportation  Plan  in which  the  Department                                                            
decided  "on the record"  to not  conduct a  cost benefit  analysis.                                                            
Although Mr. Otteson  warns that all transportation  projects are at                                                            
risk without the adoption  of this legislation, Mr. Parker countered                                                            
that cost  benefit analyses  were conducted  for all other  projects                                                            
and are therefore not subject  to the provisions of current statute.                                                            
                                                                                                                                
Co-Chair   Wilken   asked    Mr.   Otteson   the   threat   to   the                                                            
Illinois/Barnett   Street  Connector   bridge  project  located   in                                                            
Fairbanks if this legislation were not adopted.                                                                                 
                                                                                                                                
Mr. Otteson  surmised it would be,  along with many of the  projects                                                            
included  in  the  bond package  approved   by voters  in  the  last                                                            
statewide general election.  He listed the North Pole interchange, C                                                            
Street  extension,  Donlin Creek  Mine  project, as  examples.  Cost                                                            
benefit  analyses could  be conducted  for each  of these  projects,                                                            
although only  at significant expense.  A cost benefit analysis  was                                                            
recently completed  for a Naknek River  bridge project at  a cost of                                                            
$185,000  and six months  of time. An analysis  is underway  for the                                                            
Illiamna/Nondalton project  with a projected cost of $55,000 for the                                                            
consultants  alone. In both  instances, the  analysis confirmed  the                                                            
Department's assessment that the projects are legitimate.                                                                       
                                                                                                                                
Mr.  Parker  countered  that this  legislation  "creates  a  greater                                                            
likelihood  of projects getting  into the ten  year time track".  He                                                            
defined  the "ten-year  time track"  as a provision  of federal  law                                                            
that stipulates that if  federal funds are expended on a project for                                                            
planning,  design or  other  activities, and  the  project does  not                                                            
reach  construction  within  ten years,  the  State  is potentially                                                             
liable to refund the federal  funds. The STIP includes approximately                                                            
60 projects within  the ten-year time track and involve  hundreds of                                                            
millions of dollars of federal funding.                                                                                         
                                                                                                                                
Mr. Parker  contended  that the  more options  to facilitate  making                                                            
better-informed  decisions  that  are eliminated,  the  greater  the                                                            
likelihood  that "mere politics"  would move  a project forward.  As                                                            
"more  reasoned"   decision-making   is  implemented  later,   these                                                            
projects are  "put on the back burner".  This is the situation  that                                                            
occurred  with  the  Illiamna/Nondalton   project.  He  stated  that                                                            
project is  not near completion, as  attested to by Mr. Otteson  and                                                            
he  spoke of  the high  cost  and political  motivation  behind  the                                                            
project.                                                                                                                        
                                                                                                                                
Co-Chair Green  offered a motion to  report the bill from  Committee                                                            
with individual recommendations and accompanying fiscal note.                                                                   
                                                                                                                                
There was  no objection  and CS  SB 371 (TRA)  MOVED from  Committee                                                            
with zero fiscal  note #1 from the Department of Transportation  and                                                            
Public Facilities.                                                                                                              
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 302(JUD)                                                                                            
     "An Act relating to  the authority to take oaths, affirmations,                                                            
     and  acknowledgments   in  the  state,  to  notarizations,   to                                                            
     verifications,   to  acknowledgments,   to  fees  for   issuing                                                            
     certificates  with  the  seal  of  the state  affixed,  and  to                                                            
      notaries public; and providing for an effective date."                                                                    
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken stated  this bill,  sponsored by  the Senate  Rules                                                            
Committee by  request of the Governor,  "comprehensively  updates AS                                                            
44.50, the  chapter that  governs notary publics.  The last  time we                                                            
did this was in 1961."                                                                                                          
                                                                                                                                
SCOTT  CLARK,  Notary   Commission  Administrator,   Office  of  the                                                            
Lieutenant Governor,  deferred to Ms. Kreitzer to  present the bill.                                                            
                                                                                                                                
ANNETTE  KREITZER,   Chief  of  Staff,  Office  of  the   Lieutenant                                                            
Governor, testified  via teleconference from an off  net location in                                                            
Anchorage,   and  referenced   a  table   titled,  "Notary   Statute                                                            
Comparison  - CS SB 302  (JUD)" [copy on  file], which demonstrates                                                             
the current  requirements and the  proposed changes. Upon  review of                                                            
the current procedures, potential improvements were identified.                                                                 
                                                                                                                                
Ms. Kreitzer  noted the change of  the minimum age requirement  from                                                            
19 years to 18 years. This  is to accommodate the significant number                                                            
of  banking clerks  who  are  18 years  of  age and  require  notary                                                            
authority.                                                                                                                      
                                                                                                                                
Mr. Kreitzer stated  that the residency requirement  would change to                                                            
be consistent  with the general residency  statute AS 01.10.055.  It                                                            
was also discovered  that felons are  not currently restricted  from                                                            
becoming  notaries   and  this  legislation  would  stipulate   that                                                            
applicants  may not be convicted or  incarcerated felons  within ten                                                            
years of application.  The original  version of the bill  would have                                                            
imposed a zero  tolerance and would have prohibited  all felons from                                                            
obtaining  notary  authorization.  However,  statistics demonstrate                                                             
that  most felons  who have  not re-offended  within  ten years  are                                                            
likely to remain lawful  citizens, and the bill was amended to allow                                                            
for those felons to become notary publics.                                                                                      
                                                                                                                                
Ms.  Kreitzer  noted  the terms  would  remain  unchanged  with  the                                                            
exception  of  Limited Governmental  Notaries  Public,  which  would                                                            
remain active  until termination of  employment in the governmental                                                             
capacity that necessitates the notary authority.                                                                                
                                                                                                                                
Ms. Kreitzer told  of the proposed increase in the  price from $2 to                                                            
$5 for each  notary public certificate  issued by the Office  of the                                                            
Lieutenant  Governor  to  reflect  increased  postage  and  printing                                                            
expenses.  The Notary  Bond requirement  would  remain unchanged  at                                                            
$1,000,  although  Limited  Governmental  Notaries would  no  longer                                                            
require  the  bond  because  the  governmental  entities  are  self-                                                            
insured.                                                                                                                        
                                                                                                                                
Ms. Kreitzer  explained  that Limited Governmental  Notaries  Public                                                            
are currently  restricted to providing  notary services only  in the                                                            
capacity of their employment  unless they purchase a separate public                                                            
commission.  This legislation would  allow the Limited Governmental                                                             
Notaries Public  to perform notary  services independently  as well.                                                            
                                                                                                                                
Ms. Kreitzer  informed that currently  the Administrative  Procedure                                                            
Act  must be  invoked to  review all  complaints  against  notaries,                                                            
regardless of the seriousness  of the allegations. The House Finance                                                            
Committee  is considering  legislation  that would  consolidate  the                                                            
appeals processes  of many State agencies  to a centralized  hearing                                                            
officer. A proposed amendment  to SB 302 would include notary public                                                            
activities in the centralized appeals process.                                                                                  
                                                                                                                                
Ms. Kreitzer  reported that  improvements would  be made to  the web                                                            
site detailing the locations  of notary publics available to provide                                                            
notary  services.  Additional  information  would be  gathered  from                                                            
notary publics,  including e-mail  addresses and phone numbers  that                                                            
would  not  be made  public  but  would  assist  the Office  of  the                                                            
Lieutenant Governor in maintaining current contact information.                                                                 
                                                                                                                                
Senator  Dyson asked  if this legislation  only  pertains to  notary                                                            
publics.                                                                                                                        
                                                                                                                                
Ms. Kreitzer responded  that Section 1 of the bill provides that the                                                            
presiding  officers of the  House of Representative  and the  Senate                                                            
would become  notary publics  upon appointment  to those  positions.                                                            
This is  necessary because  an official must  be a notary public  to                                                            
administer  an oath of  office, which  is done  to swear in  persons                                                            
appointed to fill vacant legislative seats.                                                                                     
                                                                                                                                
Senator Dyson told of allegations  that seated legislatures were not                                                            
"validly  serving" because  they had  not taken  the oath of  office                                                            
under  the "proper  [State] seal"  and  had not  spoken the  correct                                                            
language  in  taking the  oath.  He asked  if  this issue  would  be                                                            
addressed.                                                                                                                      
                                                                                                                                
Ms.  Kreitzer had  heard similar  compliant  and  replied that  this                                                            
situation would be corrected with the language in Section 1.                                                                    
                                                                                                                                
Amendment #1:  This conceptual amendment inserts a  new bill section                                                            
on page 16, following line 25 to read as follows.                                                                               
                                                                                                                                
     Sec. 12. AS 44.50.068(e) is repealed and reenacted to read:                                                                
          (e) If the lieutenant governor finds that formal                                                                      
     disciplinary  action may be warranted, the lieutenant  governor                                                            
     shall  refer  the  matter  to  the  office  of  administrative                                                             
     hearings for a hearing.                                                                                                    
                                                                                                                                
This amendment also inserts  new bill sections on page 18, following                                                            
line 8 to read as follows.                                                                                                      
                                                                                                                                
     Sec. 18.  The uncodified law of the State of  Alaska is amended                                                            
     by adding a new section to read:                                                                                           
          CONDITIONAL EFFECT. Section 12 of this Act takes effect                                                               
     only if a  bill is passed by the Second Session  of the Twenty-                                                            
     Third  Alaska State  Legislature,  and enacted  into law,  that                                                            
     establishes  procedures for administrative  hearings  conducted                                                            
     by an  office of administrative  hearings in the Department  of                                                            
     Administration.                                                                                                            
                                                                                                                                
     Sec. 19.  If sec. 12 of this Act takes effect  under sec. 18 of                                                            
     this  Act,  it  takes  effect  on the  effective  date  of  the                                                            
     provisions described in sec. 18 of this Act.                                                                               
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Senator Dyson objected for discussion purposes.                                                                                 
                                                                                                                                
Ms.  Kreitzer  noted  the  conceptual  amendment   would  allow  the                                                            
Division of  Legal and Research Services  to make technical  changes                                                            
where necessary. The language  of this amendment pertains to SB 203.                                                            
If  SB  203 does  not  pass,  existing  statute  is  retained,  that                                                            
provides that the lieutenant  governor determines whether sufficient                                                            
evidence exists for a complaint to proceed.                                                                                     
                                                                                                                                
Senator Dyson  surmised that the Office  of the Lieutenant  Governor                                                            
and the Office of the Governor do not oppose this amendment.                                                                    
                                                                                                                                
Ms. Kreitzer affirmed.                                                                                                          
                                                                                                                                
Senator Dyson  removed his objection and the amendment  was ADOPTED.                                                            
                                                                                                                                
Senator   Bunde  relayed   concerns  that   all  commissioners   and                                                            
appointees do not take an oath of office.                                                                                       
                                                                                                                                
Ms. Kreitzer  was unsure  of the concern,  as all commissioners  are                                                            
required to take the oath.                                                                                                      
                                                                                                                                
Senator  Bunde  clarified  that  State  appointees  to  the  federal                                                            
Subsistence  Board  do not  take an  oath  promising  to uphold  the                                                            
Alaska  Constitution.  If this  oath  were taken,  those  appointees                                                            
would  be unable  to  make  allocations  of fish  and  wildlife  for                                                            
subsistence users.                                                                                                              
                                                                                                                                
Ms.  Kreitzer  responded  that  this bill  would  not  address  that                                                            
situation.                                                                                                                      
                                                                                                                                
Amendment  #2: This conceptual  amendment  would insert language  in                                                            
Section 4,  amending AS 09.63.090.  Certificate of acknowledgment.,                                                             
and Section 5,  amending AS 09.63.100. Forms of acknowledgment.,  on                                                            
page  3,  line  1 through  page  7,  line  3,  relating  to  limited                                                            
liability partnerships to reflect language included in HB 439.                                                                  
                                                                                                                                
Ms. Kreitzer  proposed this amendment  to align this legislation  to                                                            
its  companion  bill  in  the  House  of  Representatives.   It  was                                                            
discovered  that  this  legislation  would not  pertain  to  limited                                                            
liability partnerships. This is "housekeeping language".                                                                        
                                                                                                                                
                                                                                                                                
SFC 04 # 102, Side A                                                                                                            
                                                                                                                                
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Without objection the amendment was ADOPTED.                                                                                    
                                                                                                                                
Co-Chair  Green offered  a  motion to  report  CS SB  302 (JUD),  as                                                            
amended,  from   Committee  with   individual  recommendations   and                                                            
accompanying fiscal note.                                                                                                       
                                                                                                                                
There was  no objection  and CS  SB 302 (FIN)  MOVED from  Committee                                                            
with zero fiscal note #1.                                                                                                       
                                                                                                                                
Co-Chair Green  spoke to public comments on complications  caused by                                                            
provisions in  the FY 04 supplemental budget. She  announced she has                                                            
been communicating  with the Office  of the Governor and  Department                                                            
of Health and  Social Services to  achieve an "interim solution"  to                                                            
this  "anomaly"  to ensure  that  assisted  living and  health  care                                                            
providers and other vendors receive payment without delay.                                                                      
                                                                                                                                
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Gary Wilken adjourned the meeting.                                                                                     

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