Legislature(2003 - 2004)

05/09/2004 12:10 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                           May 09, 2004                                                                                       
                             12:10 PM                                                                                         
                                                                                                                                
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-04 # 113, Side A                                                                                                            
SFC 04 # 113, Side B                                                                                                            
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair  Gary Wilken convened  the meeting  at approximately  12:10                                                            
PM.                                                                                                                             
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Con Bunde, Vice Chair                                                                                                   
Senator Fred Dyson                                                                                                              
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Senator Ben Stevens                                                                                                             
                                                                                                                                
Also Attending:  TOMAS BOUTIN,  Deputy Commissioner,  Department  of                                                          
Revenue;  JAMES ARMSTRONG,  Staff to Representative  Bill  Williams;                                                            
SUE STANCLIFF, Staff to  Representative Pete Kott; CHERYLYNN WRIGHT,                                                            
Staff  to Representative   Mike Chenault;  SARA  NIELSEN,  Staff  to                                                            
Representative  Ralph Samuels; JON BITTNER, Staff  to Representative                                                            
Cheryll Heinze;  CRAIG TILLERY, Chief  Assistant Attorney,  General-                                                            
Statewide Section  Supervisor, Environmental Section,  Department of                                                            
Law                                                                                                                             
                                                                                                                                
Attending   via  Teleconference:   From  Offnet  Sites:   AL  STORY,                                                          
Lieutenant  and Director  of Staff,  Alaska State  Troopers;  SHARON                                                            
BARTON, Director,  Permanent Fund  Dividend Division, Department  of                                                            
Revenue                                                                                                                         
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
HB 422-BUDGET RESERVE FUND INVESTMENT                                                                                           
                                                                                                                                
The Committee  heard from the bill's  sponsor and the Department  of                                                            
Revenue. The bill reported from Committee.                                                                                      
                                                                                                                                
HCR 32-AK INFO INFRASTRUCTURE POLICY TASK FORCE                                                                                 
                                                                                                                                
The  Committee  heard from  the  sponsor  and reported  a  committee                                                            
substitute from Committee.                                                                                                      
                                                                                                                                
HB 275-ANIMALS AND CRUELTY TO ANIMALS                                                                                           
                                                                                                                                
The Committee  heard from  the sponsor, the  Alaska State  Troopers,                                                            
and reported the bill from Committee.                                                                                           
                                                                                                                                
HB 534-MAKE OFFICE OF VICTIMS RIGHTS PERMANENT                                                                                  
                                                                                                                                
The Committee  heard  from the sponsor  and reported  the bill  from                                                            
Committee.                                                                                                                      
                                                                                                                                
HB 536-PFUND APPLICATION DEADLINES: MILITARY                                                                                    
                                                                                                                                
The Committee heard from  the sponsor and the Department of Revenue.                                                            
The bill was reported from Committee.                                                                                           
                                                                                                                                
HB 295-REGULATIONS: NOTICE AND DISTRIBUTION                                                                                     
                                                                                                                                
The Committee heard from  the Department of Law, adopted a committee                                                            
substitute, and reported the bill from Committee.                                                                               
                                                                                                                                
HB 495-4 DAM POOL JOINT ACTION AGENCY                                                                                           
                                                                                                                                
This bill was scheduled but not heard.                                                                                          
                                                                                                                                
SB 396-INTERIOR RIVERS PORT AUTHORITY                                                                                           
                                                                                                                                
This bill was scheduled but not heard.                                                                                          
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 422(STA)                                                                                             
     "An Act repealing the special subaccount established in the                                                                
     constitutional budget reserve fund; and providing for an                                                                   
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken  stated  that this  legislation  would  repeal  the                                                            
Constitutional  Budget Reserve (CBR) subaccount and,  thereby, allow                                                            
"the  entire CBR  to be  invested in  fixed income  securities."  He                                                            
informed  the Committee  that  the Department  of  Revenue would  be                                                            
responding to concerns  raised during the first hearing on this bill                                                            
regarding  the  investment  policy  pertinent  to the  $400  million                                                            
subaccount.                                                                                                                     
                                                                                                                                
TOMAS BOUTIN,  Deputy Commissioner, Department of  Revenue, reminded                                                            
that Committee that, in  the year 2000, legislation was adopted that                                                            
transferred $400 million  from the CBR into a separate subaccount to                                                            
be "invested  under  the assumption  that  it would  not need to  be                                                            
available for five years or longer."                                                                                            
                                                                                                                                
Mr.  Boutin stated  that the  Department  has determined  that  this                                                            
subaccount  "is no longer  appropriate"  in light  of the manner  in                                                            
which  the CRB  is currently  being  utilized.  He shared  that  the                                                            
subaccount  has experienced  "a great  deal of  volatility" and,  in                                                            
fact, did not  obtain its original  investment level until  December                                                            
2003. He declared  that "the fundamental  investment policy"  of the                                                            
Department  is that  the  CBR should  be  in fixed  income  accounts                                                            
rather than being "market timers."                                                                                              
                                                                                                                                
Senator  Olson asked  the current  value of the  subaccount and  its                                                            
anticipated year-end projection.                                                                                                
                                                                                                                                
Mr. Boutin  stated that  the current  balance of  the subaccount  is                                                            
$419 million, and that no projections have been undertaken.                                                                     
                                                                                                                                
Co-Chair Wilken  recalled that this subaccount was  established with                                                            
the goal of investing  for the long-term in order  to achieve higher                                                            
yields than  those realized  by the CBR, which,  due to the  State's                                                            
need to be  able to access CBR funds  to cover State deficits,  "was                                                            
invested on  a somewhat short-term  basis that have lower  returns."                                                            
He also  understood  that the revenue  generated  by the  subaccount                                                            
investments has never achieved  the revenue stream level required to                                                            
provide bond support.                                                                                                           
                                                                                                                                
Mr. Boutin  affirmed that  this is correct.  He also recounted  that                                                            
the Department had notified  the Legislature that the CBR fund could                                                            
not  be used  as security  for  the issuance  of  tax-exempt  bonds,                                                            
according  to Internal  Revenue Service  (IRS)  code guidelines  for                                                            
"replacement   proceeds".   Therefore,   he   continued,   a   yield                                                            
restriction  is "placed on  the entire CBR  and any part of  it then                                                            
pledged as security for tax exempt debt."                                                                                       
                                                                                                                                
Co-Chair  Wilken  acknowledged  that  yield restriction   parameters                                                            
exist.                                                                                                                          
                                                                                                                                
JAMES ARMSTRONG,  Staff to the bill's  sponsor, Representative  Bill                                                            
Williams, noted  that the bond support provisions  were removed from                                                            
the year 2000 legislation before it was adopted.                                                                                
                                                                                                                                
Co-Chair Wilken acknowledged the clarification.                                                                                 
                                                                                                                                
Senator  Hoffman   commented  that   in  light  of  Governor   Frank                                                            
Murkowski's  position  that  the CBR  should  maintain  a  specified                                                            
minimum  dollar   balance,  the  Legislature   could  "contemplate"                                                             
designating  that the  minimum balance  amount be  invested for  the                                                            
long-term in order to "potentially" obtain higher yields.                                                                       
                                                                                                                                
Mr. Boutin clarified  that the Governor's position  is to maintain a                                                            
one  billion  minimum CBR  balance.  He  informed  that projections                                                             
indicate  that this  "threshold  amount" might  be  breached in  the                                                            
spring  of 2006.  He stated  that,  "if and  when  that one  billion                                                            
dollar  account balance  is  reached," it  should  be maintained  in                                                            
liquid investments as traditionally,  in addition to the possibility                                                            
that a CBR  draw might be required  in order to balance the  State's                                                            
budget, a minimum  cash flow of $400  million has historically  been                                                            
required, annually, to  fund fire suppression, highway projects, and                                                            
other projects  that would later be  federally reimbursed  or funded                                                            
later in the year. In addition,  he stated that CBR funds might also                                                            
be  required  were crude  oil  prices, which  are  a factor  in  the                                                            
State's  budgeting  process,  to plummet.  He  stated  that the  CBR                                                            
account  balance, including  the  subaccount balance,  is  currently                                                            
$2,074,400,000.                                                                                                                 
                                                                                                                                
Senator Hoffman  asked the rationale  of abandoning this  subaccount                                                            
prior to its long-term  five-year maturity date, as he argued, doing                                                            
so would not allow proper evaluation of the concept.                                                                            
                                                                                                                                
Mr.  Boutin responded  that,  contrary to  procedures  that were  in                                                            
place when the  subaccount was established, the Department  does not                                                            
currently maintain five-year time horizon projections.                                                                          
                                                                                                                                
Senator  B.  Stevens  asked  whether the  current  $2  billion  cash                                                            
balance is an accrued balance or a cash balance.                                                                                
                                                                                                                                
Mr. Boutin clarified that it is the cash balance.                                                                               
                                                                                                                                
Senator  B. Stevens  asked  for further  information  regarding  the                                                            
accrued balance, or money owed from reimbursement.                                                                              
                                                                                                                                
Mr. Boutin stated  that there are no borrowings against  the CBR, as                                                            
it  has not  been used  to provide  security  or debt.  However,  he                                                            
stated that  "suspend account"  items such  as outstanding  warrants                                                            
from fire suppression  efforts and other reimbursable  funds are not                                                            
included in the cash balance amount.                                                                                            
                                                                                                                                
Senator B. Stevens asked  what the CBR balance would be were suspend                                                            
accounts included.                                                                                                              
                                                                                                                                
Mr. Boutin  stated  that each weekday  morning  a reconciliation  of                                                            
outstanding warrants is conducted.                                                                                              
                                                                                                                                
Senator B. Stevens informed  that, according to a recent Legislative                                                            
Finance Division  report [copy  not provided],  $300 million  of CBR                                                            
funds were allocated  to but not utilized by Departments  and should                                                            
be swept back into the CBR.                                                                                                     
                                                                                                                                
Co-Chair  Wilken  interjected  that  David  Teal,  the  Director  of                                                            
Legislative Finance,  has informed him that the cash  balance of the                                                            
CBR  is  approximately  two  billion   dollars  and  that  were  all                                                            
outstanding  warrants reimbursed,  the  cash balance  would be  $2.4                                                            
billion.                                                                                                                        
                                                                                                                                
Co-Chair Wilken  commented that reconciling the cash  balance of the                                                            
CBR is not pertinent to this legislation.                                                                                       
                                                                                                                                
Senator   B.  Stevens  stated   that  he   does  not  support   this                                                            
legislation.                                                                                                                    
                                                                                                                                
Senator  Hoffman  asked  the  Department   whether  a  CBR  draw  is                                                            
anticipated this  fiscal year due to the fact that  crude oil prices                                                            
are hovering in the $40 per barrel range.                                                                                       
                                                                                                                                
Mr.  Boutin  responded  that, based  on  recent  calculations,  this                                                            
year's CBR draw could be between $50 and $70 million.                                                                           
                                                                                                                                
Senator Hoffman  asked whether this  draw is factored into  the $2.1                                                            
billion cash balance.                                                                                                           
                                                                                                                                
Mr. Boutin responded in the negative.                                                                                           
                                                                                                                                
Senator  Bunde  moved  to  report  the  bill   from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being  no  objection,  CS  HB  422(STA)   was  REPORTED  from                                                            
Committee with  negative $125,000 fiscal note #1,  dated February 9,                                                            
2004 from the Department of Revenue.                                                                                            
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE CONCURRENT RESOLUTION NO. 32(EDT) am                                                                          
     Relating to information infrastructure and establishing the                                                                
     Alaska Information Infrastructure Policy Task Force.                                                                       
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken  stated that this  bill would establish a  13-member                                                            
information technology  taskforce. He stated that  the sponsor would                                                            
be providing  information  to address Committee  concerns  regarding                                                            
the  bill's accompanying  $99,500  fiscal  note #3,  dated March  4,                                                            
2004, from the Legislative Affairs Agency.                                                                                      
                                                                                                                                
SUE  STANCLIFF,  Staff  to  Representative  Pete  Kott,  the  bill's                                                            
sponsor,  stated that the  Legislative Affairs  Agency (LAA)  fiscal                                                            
note has been  reduced to $58,000 by utilizing existing  Legislative                                                            
staff  to assist the  taskforce  and by absorbing  certain  expenses                                                            
such as contractual  services and supplies within  existing budgets.                                                            
She asserted that  the taskforce's mission would be  challenging and                                                            
that  the  expenses   outlined  in  the  revised  fiscal   note  are                                                            
warranted.                                                                                                                      
                                                                                                                                
Senator  Bunde  asked   for  clarification  that  funding   for  the                                                            
Legislative  staff assistant position  would be absorbed  within the                                                            
LAA budget.                                                                                                                     
                                                                                                                                
Ms. Stancliff clarified  that, were this bill adopted, the LAA would                                                            
fund  the position  during  the  interim  between  this Legislative                                                             
Session  and the First  Session  of the Twenty-Fourth  Alaska  State                                                            
Legislature.  She noted  that were  a taskforce  assistant  required                                                            
into that Session, Legislative staff would be utilized.                                                                         
                                                                                                                                
Senator Bunde moved to  report the bill, as previously amended, from                                                            
Committee with  individual recommendations  and accompanying  fiscal                                                            
notes.                                                                                                                          
                                                                                                                                
There  being no  objection, SCS  CS HCR  32(FIN)  was REPORTED  from                                                            
Committee  with zero fiscal  note #1, dated  February 23, 2004  from                                                            
the University  of Alaska and a new  $58,000 fiscal note,  dated May                                                            
8,  2004  from  Legislature  Administrative  Services,  Legislative                                                             
Affairs Agency.                                                                                                                 
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 275(JUD)                                                                               
     "An Act relating to animals, and to the care of and to cruelty                                                             
     to animals."                                                                                                               
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken  stated that this bill would establish  standards of                                                            
care  for  animals  and, in  addition,  would  outline  the  process                                                            
required to investigate  animal cruelty. In addition, he stated that                                                            
the bill would create the crime of cruelty to animals.                                                                          
                                                                                                                                
CHERYLYNN WRIGHT, Staff  to Representative Mike Chenault, the bill's                                                            
sponsor,  noted that a great  deal of work  has been put toward  the                                                            
development  of this  legislation. She  stated that  the sponsor  is                                                            
pleased with the end result.                                                                                                    
                                                                                                                                
Co-Chair Wilken  asked how the crime of cruelty to  animals would be                                                            
classified.                                                                                                                     
                                                                                                                                
Ms. Wright responded  that the crime would be classified  as a class                                                            
A or B misdemeanor.                                                                                                             
                                                                                                                                
Co-Chair Wilken  asked for details regarding the standards  of care.                                                            
                                                                                                                                
Ms. Wright  responded that this information  is detailed  in Section                                                            
1,  subsection  Sec.  03.22.100.   Minimum  standards  of  care  for                                                            
animals. on  page one, beginning on  line five. She also  noted that                                                            
the determination  as to whether these standards have  been breached                                                            
would be based  on the professional  opinion of a veterinarian.  She                                                            
noted  that  this  language  was adopted  in  the  Senate  Judiciary                                                            
Committee.                                                                                                                      
                                                                                                                                
Senator Bunde  spoke in support of  the bill. He opined that  people                                                            
who abuse  animals often  abuse humans.  He stated  that cruelty  to                                                            
animals should  not be tolerated and  that this behavior  "should be                                                            
pursued with vigor to exterminate."                                                                                             
                                                                                                                                
Senator   Hoffman   inquired    as  to   which   communities    have                                                            
veterinarians.                                                                                                                  
                                                                                                                                
Ms.  Wright  responded  that  nearly  every   community  has  either                                                            
telephone access or direct  access to a veterinarian. She noted that                                                            
this topic  is addressed on Section  1, subsection (c) on  page two,                                                            
beginning  on line 16,  which specifies  that, in  the absence  of a                                                            
veterinarian,  a  peace officer  could  address  the welfare  of  an                                                            
animal.                                                                                                                         
                                                                                                                                
Ms. Wright,  referencing  Senator Bunde's  comments, shared  that an                                                            
[unspecified]  Alaskan  newspaper had  recently reported  a case  in                                                            
which a woman  disposed of a litter of puppies by  throwing them out                                                            
of  a vehicle  window while  traveling  at 55  miles  per hour.  She                                                            
stated  that  two to  the  puppies  died  and that  the  others  are                                                            
receiving care and are  up for adoption. She declared that this type                                                            
of situation would be one  that could be more easily prosecuted were                                                            
this legislation adopted.                                                                                                       
                                                                                                                                
Senator Olson  inquired as to how  this legislation would  mesh with                                                            
the Humane Society's cruelty to animal laws that exist.                                                                         
                                                                                                                                
Ms. Wright  replied  that this legislation  "is  not as radical"  as                                                            
guide-lines recommended  by the Humane Society of  the United States                                                            
nor are they as  extensive as those established in  other states. It                                                            
is, she disclosed,  "one of the lesser  laws, revision of  statutes"                                                            
of all  the states.  She disclosed  that Alaska  in either "49th  or                                                            
50th on the list  with our current animal abuse laws"  and that this                                                            
legislation would align the State more with other states' laws.                                                                 
                                                                                                                                
Senator Olson asked for  further information regarding current State                                                            
law.                                                                                                                            
                                                                                                                                
Ms.  Wright  responded  that  the  current  law  is  "only  about  a                                                            
paragraph and a half long."                                                                                                     
                                                                                                                                
Senator  Hoffman  stated that  animal  rights activist  groups  have                                                            
characterized  the  Iditarod  Dog  Sled  Race as  being  "cruel  and                                                            
unusual punishment  to the dogs."  Continuing, he asked whether  the                                                            
Iditarod Race Committee has reviewed this legislation.                                                                          
                                                                                                                                
Ms. Wright reiterated that  the Iditarod Race Committee and numerous                                                            
other interested parties  have participated in the four-year process                                                            
developing  this legislation.  She stated  that the  section in  the                                                            
bill that addresses  "acceptable training standards,"  is applicable                                                            
to the Race. She  noted that, while the Iditarod Race  Committee has                                                            
not reviewed  this version  of the bill,  they have previously  been                                                            
involved in the discussion.                                                                                                     
                                                                                                                                
Senator  Olson  stated  that  the  Iditarod  Sled  Dog  Race  is  an                                                            
important  event  to  his  District  and  he  would  appreciate  the                                                            
Iditarod Committee's input on the bill.                                                                                         
                                                                                                                                
Co-Chair Wilken interjected  that this legislation would also affect                                                            
the Yukon Quest Race.                                                                                                           
                                                                                                                                
Co-Chair  Wilken asked  the definition  of "protective  custody"  as                                                            
referenced  in the language  in Section  1, subsection  (c) on  page                                                            
two, lines  13 though 27,  which was incorporated  into the  bill by                                                            
the Senate Judiciary Committee.                                                                                                 
                                                                                                                                
Ms. Wright  stated that  rather than the  term "protective  custody"                                                            
meaning that  money would  be required to  construct animal  holding                                                            
areas,  the   intent  is   that  such  things   as  temporary   care                                                            
arrangements  would  be implemented  until  a decision  was made  in                                                            
regard to the animal.                                                                                                           
                                                                                                                                
AL STORY, Lieutenant  and Director of Staff, Alaska  State Troopers,                                                            
testified  via teleconference  from an offset  site and stated  that                                                            
the inclusion  of the term protective  custody "fits well  into this                                                            
bill." He stated  that this is a term whose meaning  is known to law                                                            
enforcement  officers as, similar  to how it is defined for  humans,                                                            
the  intent of  it is  to provide  for  the animal's  well-being  by                                                            
taking them  to a place such  as "a veterinarian  or to a  public or                                                            
private custodian" where  they could be properly cared for and where                                                            
their  condition could  be evaluated  to determine  whether  medical                                                            
treatment would be required.                                                                                                    
                                                                                                                                
Co-Chair Wilken  understood therefore that law enforcement  officers                                                            
are comfortable with the language.                                                                                              
                                                                                                                                
Mr. Story verified  that law enforcement entities  are supportive of                                                            
the legislation.                                                                                                                
                                                                                                                                
Senator Bunde  commented that numerous municipalities  have programs                                                            
through  which poorly  cared  for animals  are placed  in  custodial                                                            
places  similar to what  is being  proposed in  this bill. He  noted                                                            
that once  an animal is brought  back to health  and that proof  has                                                            
been  provided that  the owner  would  act responsibly,  the  animal                                                            
could be  returned to  the owner.  However, he  continued, were  the                                                            
owner  deemed  irresponsible,  the  animal would  be  available  for                                                            
adoption.                                                                                                                       
                                                                                                                                
Senator  Bunde  moved  to  report  the  bill   from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being no  objection, SCS  CS HB  275(JUD)  was REPORTED  from                                                            
Committee with  zero fiscal note #1,  dated March 28, 2004  from the                                                            
Department  of Law; zero  fiscal note #3,  dated April 2, 2004  from                                                            
the Department  of Environmental Conservation; zero  fiscal note #4,                                                            
dated  April 1,  2004  from the  Department  of Public  Safety;  and                                                            
indeterminate  fiscal   note  #5,  dated  April  5,  2004  from  the                                                            
Department of Administration.                                                                                                   
                                                                                                                                
AT EASE 12:40 PM / 12:44 PM                                                                                                     
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 534(FIN)                                                                                             
     "An Act repealing the scheduled termination date of the office                                                             
     of victims' rights."                                                                                                       
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken noted that  this legislation, CS HB 534, Version 23-                                                            
LS1830\D,  would  repeal  the  termination  date  of the  Office  of                                                            
Victims' Rights.  He noted that the  bill is sponsored by  the House                                                            
Rules Committee by request  of the Legislative Budget & Audit (LB&A)                                                            
Committee.                                                                                                                      
                                                                                                                                
SARA NIELSEN,  Staff to Representative  Ralph Samuels, Chair  of the                                                            
LB&A Committee,  stated  that this  "simple bill"  would repeal  the                                                            
termination  date  regarding  the  Office of  Victims'  Rights.  The                                                            
Office,  she noted,  is responsible  for providing  "legal  council,                                                            
education, and assistance  to victims of crime." She shared that the                                                            
original  version of  this bill  specified a  four-year termination                                                             
date; however,  she continued, the  House Finance Committee  amended                                                            
the original bill to specify that the Office be permanent.                                                                      
                                                                                                                                
Co-Chair Wilken  inquired to the reason  the funding would  increase                                                            
from zero in  FY 05 and FY 06 to $541,000  in FY 07 as reflected  in                                                            
the Legislative Affairs  Agency fiscal note #2, dated April 5, 2004.                                                            
                                                                                                                                
Ms. Nielsen  explained that the Office  is currently funded  through                                                            
FY 06, which was its original  termination date. She noted that were                                                            
the Office  to become  permanent as  the result  of the adoption  of                                                            
this legislation, funding would be required on an annual basis.                                                                 
                                                                                                                                
Co-Chair  Wilken understood  therefore, that  rather than  requiring                                                            
new funds, the fiscal note reflects that fund source change.                                                                    
                                                                                                                                
Ms. Nielsen concurred.                                                                                                          
                                                                                                                                
Senator Hoffman  noted, however, that "the Permanent  Fund dividend"                                                            
would continue to be the funding source.                                                                                        
                                                                                                                                
Ms. Nielson affirmed.                                                                                                           
                                                                                                                                
Senator  Olson asked  how  this legislation  would  relate to  other                                                            
victims right legislation.                                                                                                      
                                                                                                                                
Ms. Nielsen indicated  that this legislation would  compliment other                                                            
legislation such as the Victims Compensation Board.                                                                             
                                                                                                                                
Senator Bunde  asked, as a follow-up  to Senator Hoffman's  comment,                                                            
for confirmation  that this  Office would continue  to be funded  by                                                            
the Permanent Fund Corporation earnings.                                                                                        
                                                                                                                                
Ms. Nielsen affirmed, and  stated that the Corporation could provide                                                            
further information.  She understood  that funding is also  provided                                                            
by the Legislative Affairs Agency.                                                                                              
                                                                                                                                
Senator Bunde opined that  the use of Permanent Fund earnings should                                                            
not be  considered as "breaking  new ground"  as these earnings  are                                                            
currently being spent to support the Office.                                                                                    
                                                                                                                                
Senator Dyson  voiced a conflict  of interest  as he disclosed  that                                                            
his wife's  counseling business has  received and might continue  to                                                            
receive funds from this Office.                                                                                                 
                                                                                                                                
Senator  Bunde  moved  to  report  the  bill   from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being  no  objections,  CS  HB  534(FIN)  was  REPORTED  from                                                            
Committee  with zero fiscal  note #2, dated  April 5, 2004  from the                                                            
Legislative Affairs Agency.                                                                                                     
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 536(MLV)                                                                                             
     "An Act relating  to applications for permanent  fund dividends                                                            
     by  certain individuals  serving  in the armed  forces, and  to                                                            
     payment of  certain 2003 and 2004 dividends;  and providing for                                                            
     an effective date."                                                                                                        
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken  commented that this  bill, version 23-LS1796\C,  is                                                            
sponsored  by the  House  Rules Committee,  at  the  request of  the                                                            
Special Committee on Economic  Development. He stated that this bill                                                            
"would  allow members  of the armed  services  who received  hostile                                                            
fire and imminent danger  pay during the FY 03 and FY 04 application                                                            
period an extension  to their 90-day  application period."  He noted                                                            
that a zero fiscal note  accompanies the bill from the Department of                                                            
Revenue.                                                                                                                        
                                                                                                                                
JON BITTNER,  Staff to Representative  Cheryll Heinze, the  Chair of                                                            
the Special  Committee  on Economic  Development,  stated that  this                                                            
legislation would basically  provide members of the armed forces who                                                            
"are in war  zone situations" an extension  on their Permanent  Fund                                                            
Dividend  (PFD) application  period. Continuing,  he noted  that the                                                            
legislation  was  developed  at the  request  of the  PFD  Division,                                                            
Department  of Revenue,  after  they  received appeal  letters  from                                                            
Alaska military  personnel who served  in war in Iraq during  the FY                                                            
03  and FY  04  PFD  application  periods.  He stated  that  due  to                                                            
inoperable communication  systems these people were unable to access                                                            
or remit  their PFD applications.  Therefore,  he stated, this  bill                                                            
would provide  military personnel a 90-day extension,  once they are                                                            
out of a war zone  situation and in an area that would  provide them                                                            
the ability  to access and submit  required PFD paperwork.  He noted                                                            
that the bill  contains retroactive language that  would allow those                                                            
"who  served in  the last  Iraqi and  Afghanistan war"  to file  for                                                            
their PFD dividends.                                                                                                            
                                                                                                                                
Mr. Bittner stated  that the bill would also allow  the Commissioner                                                            
of the Department  of Revenue to further accommodate  the filings of                                                            
war zone  military personnel  who were  unable to  file, due  to war                                                            
related  injuries,  within the  specified  90-day period  once  they                                                            
recovered and were able to provide proof of reasonable cause.                                                                   
                                                                                                                                
Senator  Olson  asked  the number  of  applications  that  might  be                                                            
pending.                                                                                                                        
                                                                                                                                
Mr. Bittner  replied  that, while  Alaska has  approximately  14,000                                                            
active armed  service members,  the number  who might qualify  under                                                            
this legislation,  is undetermined.  He noted that the PFD  Division                                                            
does not  currently analyze  whether pending  military applications                                                             
were war-zone related.                                                                                                          
                                                                                                                                
Senator Hoffman asked therefore  whether the PDF Division would seek                                                            
out these  individuals  or whether  it  would be  incumbent for  the                                                            
applicant to notify the Division, were this legislation adopted.                                                                
                                                                                                                                
Mr. Bittner responded that  the Division would notify those Alaskans                                                            
to whom this legislation would apply.                                                                                           
                                                                                                                                
Senator   Hoffman,  noting   that   the  annual   dividend   formula                                                            
calculation  is  determined  by the  total  number  of applications                                                             
received, asked  the funding source for the additional  dollars that                                                            
would be required for these applicants.                                                                                         
                                                                                                                                
Mr. Bittner responded  that the PFD Division director  has indicated                                                            
that  this would  not be  "a problem"  as the  number of  qualifying                                                            
applicants is expected to be minimal.                                                                                           
                                                                                                                                
Senator Hoffman  continued his questioning,  as he noted,  while the                                                            
Permanent  Fund consists  of millions of  dollars, these  applicants                                                            
would not have been factored into the dividend amount formula.                                                                  
                                                                                                                                
Mr. Bittner deferred to the Division to provide the answer.                                                                     
                                                                                                                                
SHARON   BARTON,  Director,   Permanent  Fund   Dividend   Division,                                                            
Department of  Revenue, testified via teleconference  from an offnet                                                            
site, and informed  the Committee that the Division  would calculate                                                            
the number  of active duty  personnel who  might qualify under  this                                                            
legislation.  This projection,  she stated,  would then be  factored                                                            
into the following  year's dividend formula "and held  in reserve in                                                            
the Permanent  Fund  Dividend Fund."  She noted  that reserves  have                                                            
already been set aside pending additional information.                                                                          
                                                                                                                                
Senator  Hoffman inquired  as to where  the funds  to support  FY 03                                                            
dividend payments would be derived.                                                                                             
                                                                                                                                
Ms. Barton  responded that  the Division  has "a rough projection,"                                                             
and that  reserves have  already been established.  She assured  the                                                            
Committee  that the  numbers would  not be  so many  as to "cause  a                                                            
problem."                                                                                                                       
                                                                                                                                
Senator  Bunde  moved  to  report  the  bill   from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being  no  objection,  CS  HB  536(MLV)   was  REPORTED  from                                                            
Committee  with zero fiscal  note #2,  dated May  6, 2004, from  the                                                            
Department of Revenue.                                                                                                          
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 295(STA) am                                                                                          
     "An Act  relating to the publishing,  furnishing, and  contents                                                            
     of certain  notices regarding  regulations or rules  of certain                                                            
     state  agencies and entities;  relating to distribution  of the                                                            
     Alaska  Administrative  Code, Alaska  Administrative  Register,                                                            
     and supplements  to the code or register; and  providing for an                                                            
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken commented  that this  legislation  would alter  the                                                            
manner  through   which  the  public  is  notified  about   meetings                                                            
pertaining to State regulations.                                                                                                
                                                                                                                                
Senator  Bunde moved  to  adopt the  Finance  committee substitute,                                                             
Version 23-GH1145\I, as the working document.                                                                                   
                                                                                                                                
There being no  objection, the Version "I" committee  substitute was                                                            
ADOPTED.                                                                                                                        
                                                                                                                                
CRAIG TILLERY,  Chief Assistant Attorney, General-Statewide  Section                                                            
Supervisor, Environmental  Section, Department of Law, testified via                                                            
teleconference from an  offnet site to explain that this legislation                                                            
would serve to make advertising  notices for proposed regulations in                                                            
newspapers  more  readable  and  understandable  by  requiring  less                                                            
detail to be included in  those notices. In addition, he stated that                                                            
the  legislation  would make  notice  distribution  methods via  the                                                            
Internet,  mail,  electronic  mail and  newspapers  more  consistent                                                            
between  State  agencies.  Furthermore,  he noted  that  in  certain                                                            
specialized  subject  areas such  as  those pertaining  to  business                                                            
situations or  to persons who rely on the Internet  for information,                                                            
newspaper notices would no longer be required.                                                                                  
                                                                                                                                
Mr.  Tillery stressed  that  "the key  change" of  this legislation                                                             
would be to allow for abbreviated  newspaper notices rather than the                                                            
more  detailed   versions  currently   required.  This  change,   he                                                            
reiterated, would make  notices more understandable and would reduce                                                            
State advertising  expenditures.  He noted  that while the  proposed                                                            
advertising  notice format  would  continue to  provide information                                                             
pertinent  to how a  regulation is  being changed,  it would  direct                                                            
people  to access the  Alaska On-Line  Public Notice  system  on the                                                            
Internet  or  to a  contact  person  at  a State  agency  were  more                                                            
detailed information required.                                                                                                  
                                                                                                                                
                                                                                                                                
SFC 04 # 113, Side B 01:00 PM                                                                                                   
                                                                                                                                
                                                                                                                                
Mr. Tillery continued  "that there are a number of  discrepancies in                                                            
notices as required  by the Administrative Procedures  Act (APA) and                                                            
those  required  in State  Statute  as  a result,  he  attested,  of                                                            
"historical  accidents"  when statutes  were  adopted  prior to  the                                                            
enactment of the  APA. Some of the discrepancies,  he continued, are                                                            
that  while Statutes  require  notices  to  be advertised  in  three                                                            
newspapers, others,  such a those affecting the Teachers  Retirement                                                            
Board,  the Judicial  Retirement  Board,  and the  Public  Employees                                                            
Retirement  Board,  allow  a notice  to  be in  a  single  newspaper                                                            
because these individuals "have greater access to the Internet."                                                                
                                                                                                                                
Mr. Tillery informed  the Committee that although  the original bill                                                            
included  the  Alaska Railroad,  the  Alaska  Aerospace Development                                                             
Corporation, the Alaska  Housing Finance Corporation, and the Alaska                                                            
Industrial Development  and Export Authority (AIDEA),  in the single                                                            
notice  requirement,  the Version  "I"  committee  substitute  would                                                            
require  those agencies  to  publish  notices in  three newspapers.                                                             
Another  change   incorporated  into   the  Version  "I"   committee                                                            
substitute, he  continued, is that the newspaper notice  requirement                                                            
would be eliminated  for highly specialized  subject areas  in which                                                            
"the  interested person  relies  heavily on  the  Internet or  other                                                            
means"  such  as a  trade  group  for  information.  These  affected                                                            
groups, he  shared, would  include the Department  of Community  and                                                            
Economic   Development's   Banking   Securities   and  Corporations                                                             
Division;  Trust Act regulations;  and the  Department of  Revenue's                                                            
corporate income tax regulations.                                                                                               
                                                                                                                                
Mr.  Tillery  also  pointed  out  that  existing  law  requires  the                                                            
Lieutenant  Governor   to  provide  a  paper  copy   of  the  Alaska                                                            
Administrative  Code to a clerk of a local governmental  unit, at no                                                            
cost,  whether  the  clerk wants  it  or  not. He  stated  that  the                                                            
Lieutenant  Governor's  office has  notified the  Department of  Law                                                            
that numerous  municipalities have pointed out that  this paper copy                                                            
is  unnecessary.  The  committee  substitute  would  change  current                                                            
statute to specify  that a municipality's clerk must  request a copy                                                            
and  that  they  must  pay  for  it.  In  addition,   the  Committee                                                            
substitute  would  allow the  clerk  to elect  to  receive  Internet                                                            
assess to the Code at a reduced cost.                                                                                           
                                                                                                                                
Senator Hoffman  asked whether the language change  that would allow                                                            
a notice  to be run  in one  newspaper rather  than three  different                                                            
newspapers  is referenced in  Sec. 13, subsection  (2) on page  six,                                                            
beginning on line eight, which reads as follows.                                                                                
                                                                                                                                
     (2) published in a newspaper [ONE OR MORE NEWSPAPERS] of                                                                   
     general circulation in [EACH JUDICIAL DISTRICT OF] the state;                                                              
                                                                                                                                
     New Text Underlined [BRACKETED TEXT DELETED]                                                                               
                                                                                                                                
Mr. Tillery  stated  that numerous  statutes  relating to  newspaper                                                            
notices are affected by  this bill; specifically that Sections 3, 8,                                                            
and 13 would allow  for a single newspaper notice  and that Sections                                                            
5, 6,  16, 17, and  25 would  continue the  current three  newspaper                                                            
notice requirement.  He noted that the language allowing  the use of                                                            
abbreviated  notices  primarily   pertains  to  the  Americans  with                                                            
Disabilities Act (ADA) language requirements.                                                                                   
                                                                                                                                
Senator  Hoffman  pointed   out  that  no  single  newspaper  has  a                                                            
Statewide  circulation. Therefore,  he stated  that a notice  in one                                                            
newspaper  could  negatively  affect  a  notice's  public  exposure.                                                            
Consequently, he argued  that the cost savings "would not measure up                                                            
to the lack of information" to the public.                                                                                      
                                                                                                                                
Mr.  Tillery  pointed  out that  only  three  entities:  the  Alaska                                                            
Teachers Retirement  Board; the Judicial Retirement  System; and the                                                            
Public Employees Retirement  Board, would be allowed to advertise in                                                            
only one paper.  These three, he reiterated  would be provided  this                                                            
measure because  they utilize the Internet on a daily  basis and are                                                            
able to acquire information  through their place of business via the                                                            
Alaska  On line Public  Notice System  or other  means. He  stressed                                                            
that the  reduced notice  language would be  limited to these  three                                                            
entities.                                                                                                                       
                                                                                                                                
Co-Chair  Wilken recalled  that concerns  relating  to this  subject                                                            
arose from the fact that  previous pieces of legislation proposed to                                                            
allow all  notices to  advertise in  a single  newspaper of  general                                                            
circulation.  This bill,  he stressed,  limits that  ability to  the                                                            
three aforementioned  entities. He  stated that the bill  would also                                                            
allow for abbreviated notices.                                                                                                  
                                                                                                                                
Senator Olson  stated that, despite  the use of the Internet,  it is                                                            
disconcerting  to attempt  to deliver notices  via one newspaper  in                                                            
such  a large  State. He  asked, therefore,  how  he could  reassure                                                            
teachers and others that they would be adequately notified.                                                                     
                                                                                                                                
Mr. Tillery responded that  the use of such things as regular postal                                                            
delivery  mail,   electronic  mailings,   labor  unions   and  other                                                            
associations,  as  well  as  entity representatives   could  further                                                            
communications pertinent to a group.                                                                                            
                                                                                                                                
Senator Olson  noted that people who rely on such  newspapers as the                                                            
Arctic  Sound and  the Nome  Nugget for  public  notices, "might  be                                                            
unduly left in the dark."                                                                                                       
                                                                                                                                
Senator Bunde,  himself being a retired  teacher, assured  that such                                                            
entities as the Teachers Retirement System (TRS) expend a great                                                                 
deal of money on member communication.                                                                                          
                                                                                                                                
Senator Olson  asked the number of time-sensitive  deadline oriented                                                            
communiqués  that might be  delivered via  the United States  Postal                                                            
Service.                                                                                                                        
                                                                                                                                
Senator Bunde reported  that he is unaware of any "immediate nature"                                                            
communiqués,  as he noted  that the majority  of the notices  regard                                                            
meeting  notices   and  agendas  and  "are  proactive   rather  than                                                            
reactive."                                                                                                                      
                                                                                                                                
Senator Hoffman  voiced concern  that the  only place with  Internet                                                            
capability  in rural areas  is the school and  that a lot of  people                                                            
are computer illiterate.                                                                                                        
                                                                                                                                
Senator  Olson  affirmed  that  many people  do  not  have  Internet                                                            
access.                                                                                                                         
                                                                                                                                
Senator  Bunde  moved   to  report  the  Senate  Finance   committee                                                            
substitute  from   Committee  with  accompanying   fiscal  note  and                                                            
individual recommendations.                                                                                                     
                                                                                                                                
There  being no  objection, SCS  CS HB  295(FIN)  was REPORTED  from                                                            
Committee with a negative $123,100 fiscal note, dated April 28,                                                                 
2004 from the Office of Management and Budget.                                                                                  
                                                                                                                                
RECESS TO THE CALL OF THE CHAIR 1:11 PM / 12:03AM                                                                               
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Gary Wilken adjourned the meeting at 12:03 AM.                                                                         

Document Name Date/Time Subjects