Legislature(2005 - 2006)SENATE FINANCE 532

03/23/2006 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 222 PROTECTION OF PERSONAL INFORMATION TELECONFERENCED
Heard & Held
+ SB 284 SENTENCING FOR ALCOHOL-RELATED CRIMES TELECONFERENCED
Heard & Held
+ HB 274 PUBLIC ACCOUNTANTS TELECONFERENCED
Moved CSSSHB 274(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
= SB 206 DETENTION OF MATERIAL WITNESSES
Moved CSSB 206(FIN) Out of Committee
                            MINUTES                                                                                           
                    SENATE FINANCE COMMITTEE                                                                                  
                         March 23, 2006                                                                                       
                           9:06 a.m.                                                                                          
                                                                                                                                
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair  Lyda  Green  convened   the  meeting  at  approximately                                                               
9:06:18 AM.                                                                                                                   
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Lyda Green, Co-Chair                                                                                                    
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Con Bunde, Vice Chair                                                                                                   
Senator Fred Dyson                                                                                                              
Senator Bert Stedman                                                                                                            
Senator Donny Olson                                                                                                             
                                                                                                                                
Also  Attending:    SENATOR  GENE  THERRIAULT;  SENATOR  GRETCHEN                                                             
GUESS; REPRESENTATIVE MIKE HAWKER;  DEAN GUANELI, Chief Assistant                                                               
Attorney  General,  Legal  Services Section,  Criminal  Division,                                                               
Department  of  Law;  JOHN  GEORGE,   American  Council  of  Life                                                               
Insurers;  DIANE  BARRANS,   Executive  Director,  Commission  on                                                               
Postsecondary  Education;  ANNE   CARPENETI,  Assistant  Attorney                                                               
General,  Legal Services  Section, Criminal  Division, Department                                                               
of Law;                                                                                                                         
                                                                                                                                
Attending  via  Teleconference:   From  an  offnet location:  ROB                                                             
HEUN, Deputy  Chief, Anchorage  Police Department;  KENTON BRINE,                                                               
Northwest Region Manager,  Property Casualty Insurers Association                                                               
of  America;  From  Anchorage:  ED  SNIFFEN,  Assistant  Attorney                                                               
General,  Commercial/Fair Business  Section,  Department of  Law;                                                               
STEVE   CLEARY,  Executive   Director,  Alaska   Public  Interest                                                               
Research  Group; PAT  LUBY, Director,  AARP-Alaska; From  Mat-Su:                                                               
DAN KENNEDY, Certified Public Accountant                                                                                        
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
SB 206-DETENTION OF MATERIAL WITNESSES                                                                                          
                                                                                                                                
The Committee  heard from the  Department of Law and  a municipal                                                               
law enforcement  agency. A committee  substitute was  adopted and                                                               
the bill was reported from Committee.                                                                                           
                                                                                                                                
SB 222-PROTECTION OF PERSONAL INFORMATION                                                                                       
                                                                                                                                
The Committee  heard from  the sponsors,  the Department  of Law,                                                               
the Department of Education and  Early Development, the insurance                                                               
industry, and public advocates. The bill was held in Committee.                                                                 
                                                                                                                                
SB 284-SENTENCING FOR ALCOHOL-RELATED CRIMES                                                                                    
                                                                                                                                
The Committee heard  from the sponsor and the  Department of Law.                                                               
A  committee substitute  was adopted  and  the bill  was held  in                                                               
Committee.                                                                                                                      
                                                                                                                                
HB 274-PUBLIC ACCOUNTANTS                                                                                                       
                                                                                                                                
The  Committee heard  from  the sponsor  and  a certified  public                                                               
accountant. The bill was reported from Committee.                                                                               
                                                                                                                                
9:06:48 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 206(JUD)                                                                                            
     "An Act relating to contempt of court and to temporary                                                                     
     detention and identification of persons."                                                                                  
                                                                                                                                
                                                                                                                                
This was the  second hearing for this bill in  the Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken moved for adoption  of CS SB 206, 24-LS1197\X, as                                                               
a working document.                                                                                                             
                                                                                                                                
9:07:34 AM                                                                                                                    
                                                                                                                                
Senator  Bunde noted  that Co-Chair  Green requested  this change                                                               
that  relates to  photographing  and  fingerprinting of  material                                                               
witnesses.   This  change   would  provide   that  use   of  this                                                               
information   is  limited   to  the   proper  identification   of                                                               
individuals  and that  the fingerprints  would be  destroyed once                                                               
the specified purpose had been served.                                                                                          
                                                                                                                                
9:08:09 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green noted  that  this provision  is  akin to  current                                                               
procedure followed for other practices.                                                                                         
                                                                                                                                
9:08:23 AM                                                                                                                    
                                                                                                                                
Senator Bunde  reminded of  the question  raised at  the previous                                                               
hearing relating to material witness statutes of other states.                                                                  
                                                                                                                                
9:09:10 AM                                                                                                                    
                                                                                                                                
ROB HEUN,  Deputy Chief,  Anchorage Police  Department, testified                                                               
via  teleconference from  an offnet  location  that police  often                                                               
find that  witnesses at a crime  scene are influenced by  fear or                                                               
peer pressure. Many would provide  information but were concerned                                                               
about repercussions from the "people  they have to live with". If                                                               
required  by law  to provide  information, these  witnesses would                                                               
have  "cop  cover"  to  justify their  actions  to  others.  When                                                               
talking  with witnesses,  officers  observe individuals  mentally                                                               
assessing the possible risks and  repercussions when making their                                                               
determination about whether they would cooperate.                                                                               
                                                                                                                                
9:10:58 AM                                                                                                                    
                                                                                                                                
Senator   Hoffman  asked   the   reason   both  photographs   and                                                               
fingerprinting of material witnesses is necessary.                                                                              
                                                                                                                                
9:11:19 AM                                                                                                                    
                                                                                                                                
Mr. Heun  replied that fingerprints  would allow  confirmation of                                                               
identification.  Photographs  provide  an expeditious  method  to                                                               
locate the witness to serve a subpoena.                                                                                         
                                                                                                                                
9:12:06 AM                                                                                                                    
                                                                                                                                
Senator Olson  understood the purpose of  obtaining either prints                                                               
or a photograph;  however, both could be excessive.  He asked the                                                               
number  of other  states that  allow law  enforcement to  require                                                               
both from a material witness.                                                                                                   
                                                                                                                                
9:12:35 AM                                                                                                                    
                                                                                                                                
Mr. Heun did  not know the number of other  states. He considered                                                               
the amount of time required  to fingerprint and take a photograph                                                               
as insignificant.                                                                                                               
                                                                                                                                
9:13:15 AM                                                                                                                    
                                                                                                                                
Senator  Dyson  recalled  that   the  vehicles  utilized  by  the                                                               
Anchorage Police  Department have equipment that  allows officers                                                               
to  take photographs  and fingerprints.  He asked  the length  of                                                               
time necessary to secure both.                                                                                                  
                                                                                                                                
9:13:46 AM                                                                                                                    
                                                                                                                                
Mr. Heun  assured the person  would be detained only  long enough                                                               
to obtain  the information provided  for in this bill.  If events                                                               
prevented officers  from processing  a witness  immediately, that                                                               
person could  not be expected  to remain  at the scene.  He noted                                                               
that although possible suspects could  be directed to "stand over                                                               
there" to await  further questioning, the burden  would be placed                                                               
on law enforcement to expedite processing of a material witness.                                                                
                                                                                                                                
9:14:46 AM                                                                                                                    
                                                                                                                                
Senator  Dyson surmised  such  processing  of material  witnesses                                                               
would require hours rather than days and weeks.                                                                                 
                                                                                                                                
9:14:53 AM                                                                                                                    
                                                                                                                                
Mr. Heun affirmed.                                                                                                              
                                                                                                                                
9:14:57 AM                                                                                                                    
                                                                                                                                
Senator  Dyson asked  the process  of detaining  a witness  for a                                                               
longer period if police had reason  to suspect a witness would be                                                               
subjected  to  intimidation  or   harm,  or  would  otherwise  be                                                               
unwilling to cooperate.                                                                                                         
                                                                                                                                
9:15:27 AM                                                                                                                    
                                                                                                                                
Mr. Heun  responded that an  arrest warrant would be  required to                                                               
detain  a   person  any  longer  than   necessary  for  obtaining                                                               
identification information. Such a  warrant would be difficult to                                                               
secure if the person was not a suspect in the crime.                                                                            
                                                                                                                                
9:15:43 AM                                                                                                                    
                                                                                                                                
Senator  Dyson  asked if  the  process  for obtaining  a  warrant                                                               
includes presenting the situation to a judge.                                                                                   
                                                                                                                                
9:15:56 AM                                                                                                                    
                                                                                                                                
Mr.  Heun affirmed,  but  stressed  this action  would  not be  a                                                               
preferred option.                                                                                                               
                                                                                                                                
9:16:03 AM                                                                                                                    
                                                                                                                                
DEAN GUANELI,  Chief Assistant  Attorney General,  Legal Services                                                               
Section, Criminal  Division, Department of Law,  testified to the                                                               
correctness of the previous witness'  assertion that the duration                                                               
of detention would only be as  long as required to determine what                                                               
the individual  witnessed. If  the person  had not  seen anything                                                               
relevant to the crime that occurred,  he or she would be released                                                               
soon  thereafter. Mr.  Guaneli expected  the length  of detention                                                               
would be  minutes rather than  hours. Suspects could be  held for                                                               
longer periods, but  witnesses could only be held  long enough to                                                               
gather   information.   Courts   would    require   this   as   a                                                               
constitutional matter.                                                                                                          
                                                                                                                                
Mr.  Guaneli  then   spoke  to  the  necessity   to  obtain  both                                                               
photographs  and fingerprints  of  the witness.  The database  of                                                               
known   fingerprints   that   would    be   used   to   determine                                                               
identification is  limited to those arrested  for crimes, certain                                                               
job applicants,  state license  holders, etc.  If a  subpoena was                                                               
issued and  the witness  failed to appear,  the ability  of using                                                               
fingerprints to assist  in locating the person  would be limited.                                                               
Photographs would  better assist law enforcement  in locating the                                                               
witness.                                                                                                                        
                                                                                                                                
9:18:57 AM                                                                                                                    
                                                                                                                                
Senator  Olson   asked  how  this  legislation   would  apply  in                                                               
situations involving  a "distraught" witness in  which the victim                                                               
was a loved one.                                                                                                                
                                                                                                                                
9:19:36 AM                                                                                                                    
                                                                                                                                
Mr.  Guaneli   replied  that  police  encounter   this  situation                                                               
frequently and  consideration is given to  the circumstances. The                                                               
witness is  allowed to  accompany the victim  to the  hospital if                                                               
necessary.  This  legislation would  apply  to  those wanting  to                                                               
leave the scene of a crime specifically to avoid identification.                                                                
                                                                                                                                
9:20:25 AM                                                                                                                    
                                                                                                                                
Senator Bunde offered a motion  to report CS SB 206, 24-LS1197\X,                                                               
from  Committee with  individual recommendations  and new  fiscal                                                               
notes.                                                                                                                          
                                                                                                                                
There  was no  objection  and  CS SB  206  (FIN)  was MOVED  from                                                               
Committee  with four  new zero  fiscal notes:  one dated  3/17/06                                                               
from the  Department of  Administration, Public  Defender Agency;                                                               
one dated  3/20/06 from the Department  of Administration, Office                                                               
of  Public Advocacy;  one dated  3/17/06 from  the Department  of                                                               
Law; and one dated 3/19/06 from the Department of Corrections.                                                                  
                                                                                                                                
9:20:53 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 222(JUD)                                                                                            
     "An Act relating to breaches  of security involving personal                                                               
     information,  credit   report  security   freezes,  consumer                                                               
     credit  monitoring, credit  accuracy,  protection of  social                                                               
     security numbers, disposal  of records, factual declarations                                                               
     of  innocence after  identity theft,  filing police  reports                                                               
     regarding identity theft,  furnishing consumer credit header                                                               
     information,  and  truncation  of   credit  and  debit  card                                                               
     information;  and amending  Rule 60,  Alaska Rules  of Civil                                                               
     Procedure."                                                                                                                
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
SENATOR  GENE  THERRIAULT,  Co-Sponsor  of the  bill,  noted  the                                                               
increase  in  instances  of  identity theft  in  Alaska  and  the                                                               
nation.   He  and   Senator  Gretchen   Guess  identified   model                                                               
legislation  in  other  states  and  each  introduced  bills  for                                                               
consideration for  Alaska. They decided to  combine their efforts                                                               
and co-sponsor one bill.                                                                                                        
                                                                                                                                
Senator  Therriault explained  this  bill would  "put on  notice"                                                               
those  who are  "in the  business" of  collecting, utilizing  and                                                               
brokering people's  personal information. These  businesses would                                                               
be required  to undertake certain protections  of the information                                                               
they  control. The  bill  outlines  violations, definitions,  and                                                               
manners in which  documents must be maintained  and destroyed, to                                                               
protect  information from  being stolen  for illicit  use in  the                                                               
"modern economy".                                                                                                               
                                                                                                                                
9:23:22 AM                                                                                                                    
                                                                                                                                
SENATOR  GRETCHEN GUESS  detailed  the bill  sections. Section  1                                                               
would amend  AS 45 by adding  a new chapter to  read: Chapter 48,                                                               
Personal Information Protection Act.                                                                                            
                                                                                                                                
Senator Guess outlined the articles  of the new chapter beginning                                                               
with   Article  1,   Breach   of   Security  Involving   Personal                                                               
Information, which  provides that  the holder of  an individual's                                                               
personal information must alert that  individual of any breach of                                                               
security. The article also defines breach of security.                                                                          
                                                                                                                                
9:24:13 AM                                                                                                                    
                                                                                                                                
Senator  Guess  stated that  Article  2,  Credit Report  Security                                                               
Freeze, allows a  person to prohibit a  consumer credit reporting                                                               
agency  from   releasing  information  without   express  written                                                               
authorization of the consumer.                                                                                                  
                                                                                                                                
9:24:29 AM                                                                                                                    
                                                                                                                                
Senator  Guess  noted  Article  3,  Consumer  Credit  Monitoring;                                                               
Credit  Accuracy,  grants  Alaskans  increased  assess  to  their                                                               
credit reports in  a "reasonable fashion" as well  as the ability                                                               
to correct errors.                                                                                                              
                                                                                                                                
9:24:54 AM                                                                                                                    
                                                                                                                                
Senator Guess  pointed out that  Article 4, Protection  of Social                                                               
Security Number, specifies  instances in which a  person could be                                                               
required  to provide  their social  security number  and how  and                                                               
when that number could be used, sold, etc.                                                                                      
                                                                                                                                
9:25:16 AM                                                                                                                    
                                                                                                                                
Senator  Guess  informed that  Article  5,  Disposal of  Records,                                                               
provides how personal information must be handled and disposed.                                                                 
                                                                                                                                
9:25:32 AM                                                                                                                    
                                                                                                                                
Senator  Guess  explained  Article   6,  Factual  Declaration  of                                                               
Innocence  after  Identity Theft;  Right  to  File Police  Report                                                               
Regarding Identity  Theft, allows a  victim of identity  theft to                                                               
declare their  innocence of accumulated  debt in a court  of law.                                                               
This article  also allows an  individual to file a  police report                                                               
in their  resident jurisdiction even  if the crime  was committed                                                               
elsewhere. Many  federal provisions pertaining to  identity theft                                                               
do not go into affect without a police report.                                                                                  
                                                                                                                                
9:26:18 AM                                                                                                                    
                                                                                                                                
Senator Guess  continued with Article  7, Consumer  Credit Header                                                               
Information,  which relates  to  the social  security number  and                                                               
prohibits the selling  of credit header information  for the sole                                                               
purpose of the sale. Such  transactions must first be permissible                                                               
under federal law.                                                                                                              
                                                                                                                                
9:26:45 AM                                                                                                                    
                                                                                                                                
Senator  Guess   stated  that  Article  8,   Truncation  of  Card                                                               
Information, provides  that printed  material only list  the last                                                               
five digits of credit cards and debit cards.                                                                                    
                                                                                                                                
9:27:02 AM                                                                                                                    
                                                                                                                                
Senator Guess noted Article 9,  General Provisions, includes many                                                               
definitions as they apply to this bill.                                                                                         
                                                                                                                                
9:27:10 AM                                                                                                                    
                                                                                                                                
Senator  Guess commented  on  the extensive  efforts  of the  co-                                                               
sponsors to resolve as many  issues as possible for the different                                                               
stakeholders.                                                                                                                   
                                                                                                                                
Senator  Guess  told  of  a   policy  decision  she  and  Senator                                                               
Therriault  agreed   upon  to  not   provide  "carve   outs",  or                                                               
exemptions, for  any specific industry or  entity. Rather, issues                                                               
would be  resolved for all  parties. It  would be unfair  to hold                                                               
different groups  to different standards. This  decision resulted                                                               
in fiscal notes from State  agencies, as government would be held                                                               
to the same liability standards.                                                                                                
                                                                                                                                
9:28:30 AM                                                                                                                    
                                                                                                                                
Senator Stedman  referenced the language of  subparagraph (a) (5)                                                               
of Section 45.48.400. Use of  social security number., in Article                                                               
4  on  page 16,  lines  7  through  18. This  subparagraph  would                                                               
prohibit printing  of an individual's  social security  number on                                                               
material mailed  to the individual  unless provided by law  or is                                                               
included  on an  application or  necessary for  verification. The                                                               
social security number, if printed,  could not be visible without                                                               
the envelope containing the information being opened.                                                                           
                                                                                                                                
Senator Stedman  asked if a  financial institution  that utilizes                                                               
social  security numbers  embedded  in account  numbers would  be                                                               
required to change the customer's account number.                                                                               
                                                                                                                                
9:29:15 AM                                                                                                                    
                                                                                                                                
Senator  Guess  replied  that  if   the  institution  planned  to                                                               
disclose  that account  number  or print  the  account number  on                                                               
material  in   a  manner   other  than   provided  for   in  Sec.                                                               
48.48.400(a)(5), the account number would  have to be changed. No                                                               
stakeholder has advised the co-sponsors  that it utilizes account                                                               
numbers with social security numbers  embedded, although that may                                                               
have been a past practice. This practice is not safe.                                                                           
                                                                                                                                
9:29:52 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green  understood  that  some group  health  plans  use                                                               
social security numbers as identification numbers.                                                                              
                                                                                                                                
9:29:58 AM                                                                                                                    
                                                                                                                                
Senator  Guess  agreed  this had  been  practiced;  however  most                                                               
carriers have changed their methods.                                                                                            
                                                                                                                                
9:30:19 AM                                                                                                                    
                                                                                                                                
Senator Stedman again  asked if account numbers would  have to be                                                               
changed.                                                                                                                        
                                                                                                                                
9:30:26 AM                                                                                                                    
                                                                                                                                
Senator Guess affirmed  this would be required unless  a state or                                                               
federal law required the use of the social security number.                                                                     
                                                                                                                                
9:30:39 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green  asked if  this  provision  pertains to  material                                                               
enclosed or to information exposed on the outside of mailings.                                                                  
                                                                                                                                
9:30:52 AM                                                                                                                    
                                                                                                                                
Senator  Guess  responded  that  the  information  could  not  be                                                               
included unless federal law requires  the social security number,                                                               
or the sender could send  the information in an enclosed mailing.                                                               
A postcard would not be allowed.                                                                                                
                                                                                                                                
9:31:11 AM                                                                                                                    
                                                                                                                                
Senator  Stedman requested  clarification  as account  statements                                                               
are  mailed  in  enclosed   envelopes,  whether  social  security                                                               
numbers were embedded in the account number or not.                                                                             
                                                                                                                                
9:32:04 AM                                                                                                                    
                                                                                                                                
Senator  Guess  answered the  account  numbers  must be  changed,                                                               
unless State or federal law  required the social security number,                                                               
or unless the party received consent of the account holder.                                                                     
                                                                                                                                
Senator Guess surmised that this  would likely apply in the event                                                               
the social security was obvious.                                                                                                
                                                                                                                                
9:33:37 AM                                                                                                                    
                                                                                                                                
Senator   Stedman  understood   that  many   changes  have   been                                                               
undertaken  to   eliminate  the  embedding  of   social  security                                                               
numbers; however  many older accounts continue  to contain social                                                               
security  numbers  in  the  account number.  He  again  asked  if                                                               
industry  would  be  forced  to review  and  change  these  older                                                               
account numbers.                                                                                                                
                                                                                                                                
9:34:14 AM                                                                                                                    
                                                                                                                                
Senator  Guess  responded  that for  a  business  that  practices                                                               
disclosure  of social  security numbers,  the provisions  of this                                                               
bill would  apply. If  a social security  number is  contained in                                                               
the business's  system and linked  to an account number,  but the                                                               
social security  number were not  disclosed either  separately or                                                               
as  part of  the account  number,  the account  number would  not                                                               
require changing.                                                                                                               
                                                                                                                                
9:34:52 AM                                                                                                                    
                                                                                                                                
Co-Chair Green  asked if in  discussions on this issue  the point                                                               
had been  raised that this is  "a little late". She  provides her                                                               
social security number frequently.                                                                                              
                                                                                                                                
9:35:15 AM                                                                                                                    
                                                                                                                                
Senator  Therriault  remarked that  the  ability  to collect  and                                                               
transfer information electronically has  expanded. People used to                                                               
print  social  security numbers  on  their  checks and  otherwise                                                               
provided their  number regularly. However,  he had not  given his                                                               
number in  years. Social security  numbers are no  longer printed                                                               
on driver's licenses.                                                                                                           
                                                                                                                                
9:35:46 AM                                                                                                                    
                                                                                                                                
Co-Chair Green  countered that every  visit to a  doctor involves                                                               
the utilization of a social security number.                                                                                    
                                                                                                                                
9:35:52 AM                                                                                                                    
                                                                                                                                
Senator  Therriault  informed  that  industry  is  responding  to                                                               
threats of identity  theft and social security  numbers are being                                                               
removed from  disclosed information.  This is occurring  in other                                                               
transactions  as well.  For example,  entire credit  card numbers                                                               
are no  longer always  printed on  receipts. Industry  is "slowly                                                               
correcting".                                                                                                                    
                                                                                                                                
9:36:41 AM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken referenced  Sec. 45.48.850.  Truncation of  care                                                               
information  of Article  8, on  page 23,  lines 2  through 5.  He                                                               
related  that  federal law  stipulates  that  entire credit  card                                                               
numbers could not  be printed as of January 1,  2005. He asked if                                                               
the inclusion of  this provision is State statute  is intended to                                                               
reinforce  the federal  law,  or whether  it  serves a  different                                                               
purpose.                                                                                                                        
                                                                                                                                
9:37:39 AM                                                                                                                    
                                                                                                                                
Senator Guess was  unaware of the federal law  and would research                                                               
the matter.  The practice is  occurring currently,  and therefore                                                               
some  vendors have  received an  exemption or  are violating  the                                                               
law.                                                                                                                            
                                                                                                                                
9:38:06 AM                                                                                                                    
                                                                                                                                
Co-Chair Wilken  did not oppose the  proposed language, surmising                                                               
it  would "serve  as  a reminder".  While  recently traveling  in                                                               
Canada,  he noticed  that  his entire  credit  card numbers  were                                                               
printed   on   receipts.  This   has   also   occurred  in   some                                                               
establishments stateside.                                                                                                       
                                                                                                                                
9:39:07 AM                                                                                                                    
                                                                                                                                
Co-Chair Green admitted  this provision was included  in the bill                                                               
at her  request. A member  of her staff had  experienced receipts                                                               
with the  entire number  printed and  had expressed  concern. She                                                               
would also research the matter.                                                                                                 
                                                                                                                                
9:40:12 AM                                                                                                                    
                                                                                                                                
ED SNIFFEN, Assistant  Attorney General, Commercial/Fair Business                                                               
Section,  Department of  Law, testified  via teleconference  from                                                               
Anchorage to  the extensive comments made  to previous committees                                                               
hearing   this  bill.   The   co-sponsors   have  addressed   the                                                               
Department's  concerns about  the  ability of  State agencies  to                                                               
operate.  Information  must  be  accessed and  disclosed  in  the                                                               
course   of  State   business,   including   student  loans   and                                                               
collections. Instances exist in  which information must be shared                                                               
with non-governmental  entities for  reasons not covered  in law,                                                               
but are essential nonetheless.                                                                                                  
                                                                                                                                
9:42:35 AM                                                                                                                    
                                                                                                                                
Mr.  Sniffen also  spoke  to the  State's  binding liability  for                                                               
damages to  third parties in  the event of noncompliance  to this                                                               
law.  While  the  Department  does   not  oppose  the  compliance                                                               
requirements,  the   liability  provision  would   not  encourage                                                               
compliance  but  would  require   the  State  to  defend  against                                                               
frivolous lawsuits.  If methods were provided  for individuals to                                                               
sue the State, such suits would be made.                                                                                        
                                                                                                                                
Mr. Sniffen pointed out that  the State does not generate revenue                                                               
from the  sale of  private information.  The information  is only                                                               
utilized for conducting government business.                                                                                    
                                                                                                                                
9:43:44 AM                                                                                                                    
                                                                                                                                
STEVE   CLEARY,  Executive   Director,  Alaska   Public  Interest                                                               
Research  Group,  testified  via  teleconference  from  Anchorage                                                               
about the organization, which supported  this bill. He told of an                                                               
incident involving Choice Point,  Inc. alerting many Americans of                                                               
a   potential  leak   of  personal   information.  Many   similar                                                               
incidences have  occurred since  involving other  businesses. The                                                               
notification process  is very important. The  Group also supports                                                               
the credit  report freeze  provision that  would prevent  a thief                                                               
from  receiving  credit  using stolen  identity.  He  related  an                                                               
instance  in  which  a  person  inadvertently  provided  personal                                                               
information  to  a possible  "fisher"  and  subsequently made  an                                                               
immediate  freeze  on  her  credit report  until  the  issue  was                                                               
resolved. This  practice is beneficial  to business,  as billions                                                               
of  dollars are  lost  each  year from  this  sort of  fraudulent                                                               
actions.                                                                                                                        
                                                                                                                                
9:47:08 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green asked  the name  of the  company involved  in the                                                               
first major security breach.                                                                                                    
                                                                                                                                
Mr. Cleary answered Choice Point,  Inc. is a company operating in                                                               
the  state   of  Georgia  that  inadvertently   released  private                                                               
information.                                                                                                                    
                                                                                                                                
9:47:31 AM                                                                                                                    
                                                                                                                                
PAT  LUBY, Director,  AARP-Alaska,  testified via  teleconference                                                               
from  Anchorage in  support of  this bill.  The organization  has                                                               
multiple consumer  affairs records  from its members  relating to                                                               
identity theft. He encouraged passage of the bill.                                                                              
                                                                                                                                
9:48:26 AM                                                                                                                    
                                                                                                                                
KENTON  BRINE,   Northwest  Region  Manager,   Property  Casualty                                                               
Insurers  Association of  America,  testified via  teleconference                                                               
from  an offnet  location that  the trade  association represents                                                               
more than 1,000 insurance companies  that write nearly 41 percent                                                               
of   the  property   casualty  policies   in  the   country.  The                                                               
Association  had  expressed  concerns with  this  legislation  in                                                               
other committees.  Approximately 40 other states  have considered                                                               
or  were  considering  measures   intended  to  protect  consumer                                                               
information  from unauthorized  access or  exposure, or  to allow                                                               
consumers  to freeze  access to  their credit  information. Also,                                                               
legislation is under  consideration in the US  Congress to create                                                               
a national standard.                                                                                                            
                                                                                                                                
Mr.  Brine  informed of  the  federal  Fair and  Accurate  Credit                                                               
Transaction Act, or  FACT ACT of 2003,  which includes provisions                                                               
intended to  help consumers fight  identity theft, to  assure the                                                               
credit  history  items  identified  as fraudulent  would  not  be                                                               
considered against  the consumer during the  course of legitimate                                                               
business  transactions, and  to ensure  that victims  of identity                                                               
theft would continue to qualify  for goods and services dependant                                                               
on credit information.                                                                                                          
                                                                                                                                
Mr. Brine  explained that the  FACT ACT allows any  consumer with                                                               
reason to  believe he  or she  is a victim  of identity  theft to                                                               
request that a  fraud alert be placed on their  credit file. This                                                               
would  inform users  of the  report that  the information  on the                                                               
credit file  could be inaccurate  and that  further investigation                                                               
could  be  warranted. These  consumers  could  also request  that                                                               
items  identified  as fraudulent  be  blocked  from appearing  on                                                               
their   credit  report.   The  advantage   of  blocking   certain                                                               
information  over  freezing  an  entire report  would  allow  the                                                               
consumer to  continue to qualify  for credit based on  their true                                                               
history.                                                                                                                        
                                                                                                                                
Mr.  Brine stressed  that  a lack  of  uniformity between  states                                                               
could  cause  difficulties   for  financial  services  companies,                                                               
including insurers' efforts to effectively serve customers.                                                                     
                                                                                                                                
Mr.  Brine relayed  that  insurance  companies have  successfully                                                               
sought  exemptions in  several other  states considering  similar                                                               
legislation to allow credit freezes.                                                                                            
                                                                                                                                
Mr.  Brine indicated  he would  submit  suggested amendments  for                                                               
consideration.                                                                                                                  
                                                                                                                                
9:54:49 AM                                                                                                                    
                                                                                                                                
JOHN  GEORGE, American  Council  of Life  Insurers, testified  in                                                               
Juneau that  life insurers  are financial  institutions carefully                                                               
controlled  by  the Division  of  Insurance  and through  federal                                                               
regulations.  The State  has adopted  regulations  that are  more                                                               
restrictive  than  federal law.  The  companies  do not  sell  or                                                               
purchase  personal identification  information, but  rather share                                                               
the   information  internally   with  financial   partners.  This                                                               
information is utilized to insure against fraud.                                                                                
                                                                                                                                
Mr.  George gave  an example  of a  person who  purchased a  life                                                               
insurance  policy  while  residing   in  the  state  of  Florida,                                                               
relocating  several times  in the  course  of his  life to  other                                                               
states  before  passing away  many  years  later in  Alaska.  The                                                               
identity  of this  policyholder  must be  verified  so the  claim                                                               
could be  paid. He gave  another example of a  husband purchasing                                                               
multiple policies from  different carriers on his  wife, who then                                                               
disappears  or  dies  unexpectedly.  In  such  an  instance,  the                                                               
policies  must  be complied  to  assist  in an  investigation  of                                                               
possible crimes.                                                                                                                
                                                                                                                                
Mr. George relayed  that an exemption for  the insurance industry                                                               
would be  appropriate because it  is already controlled  and does                                                               
not buy or sell personal information.                                                                                           
                                                                                                                                
9:58:16 AM                                                                                                                    
                                                                                                                                
Senator Olson asked if the witness did not support the bill.                                                                    
                                                                                                                                
9:58:24 AM                                                                                                                    
                                                                                                                                
Mr. George  responded that the  life insurance  industry strongly                                                               
supports  identification  protection  and   the  use  of  account                                                               
numbers  different from  social  security  numbers. However,  the                                                               
adoption of alternative numbers could  result in their wide usage                                                               
and subsequent  theft. Aside from DNA,  fingerprinting or retinal                                                               
scanning, accurate identification is not guaranteed.                                                                            
                                                                                                                                
9:59:44 AM                                                                                                                    
                                                                                                                                
Senator Bunde thought the issue  had been addressed in the Senate                                                               
Labor and Commerce Committee.                                                                                                   
                                                                                                                                
9:59:58 AM                                                                                                                    
                                                                                                                                
Mr. George  replied that provisions  are included in the  bill to                                                               
allow access  to a  social security  number in  instances legally                                                               
required by  State and federal  law. However, he was  unsure that                                                               
existing  statutes would  apply to  every instance  in which  the                                                               
insurance industry  would need the information.  Often the social                                                               
security numbers are required to  report payments to the Internal                                                               
Revenue Service.                                                                                                                
                                                                                                                                
10:00:43 AM                                                                                                                   
                                                                                                                                
DIANE   BARRANS,  Executive   Director,   Alaska  Commission   on                                                               
Postsecondary Education  (ACPE), testified  in Juneau,  reading a                                                               
statement into the record as follows.                                                                                           
                                                                                                                                
     While the Commission is already in compliance with a number                                                                
     of the information security elements of the bill, we do                                                                    
     have significant  concerns about the provisions  relating to                                                               
     the  collection  and use  of  social  security numbers.  The                                                               
     current provisions  constitute a potential  major impairment                                                               
     of ACPE's  ability to efficiently and  effectively carry out                                                               
     its administrative responsibilities  for state financial aid                                                               
     programs.  Specifically,  (page  6,   lines  25  to  27)  AS                                                               
     45.48.400(b) Unless  expressly required by federal  or state                                                               
     law, a  person may  not sell, lease,  loan, trade,  rent, or                                                               
     otherwise  disclose an  individual's social  security number                                                               
     to a  third party for  any purpose without  the individual's                                                               
     written consent.                                                                                                           
                                                                                                                                
     Currently,  ACPE  uses  the  SSN   as  one  of  several  key                                                               
     identifiers  in a  multi-point ID  protocol when  performing                                                               
     statutorily  required  servicing  processes  which  include:                                                               
     insuring the identity of the  applicant, review of applicant                                                               
     credit  history,  review   for  relevant  selective  service                                                               
     status,  review for  child support  delinquency, garnishment                                                               
     of wages  and/or PFDs, skip tracing,  credit reporting, etc.                                                               
     These matches are made with  both federal and state entities                                                               
     as  well  as  with private  postsecondary  institutions  and                                                               
     other  non-governmental   third  parties  critical   to  the                                                               
     process.                                                                                                                   
                                                                                                                                
     Collection  of   SSNs  is   absolutely  critical   to  these                                                               
     processes  and yet,  the act  of collecting  the SSN  is not                                                               
     expressly required  by law, it  is performing  the processes                                                               
     that is required.                                                                                                          
                                                                                                                                
     Current  language  contained  in the  state  education  loan                                                               
     Master Promissory  Note (MPN) includes an  important notices                                                               
     section,  which advises  applicants that  submission of  the                                                               
     SSN  is required  to  participate in  the  loan program.  It                                                               
     further advises  them, generally, how  the SSN will  be used                                                               
     as an  identifier, when  needed and  appropriate, throughout                                                               
     the life of the loan.  While the promissory note does state:                                                               
     "Information Sharing I authorize  the release of information                                                               
     pertinent  to  my  loans…etc.",   it  does  not  contain  an                                                               
     explicit statement  relating to  release of the  SSN. Should                                                               
     this  phrasing  issue  be  subject  to  litigation  and  the                                                               
     language  deemed to  be deficient,  I  cannot estimate  what                                                               
     costs could  come from a  class action. The current  MPN has                                                               
     been in use for the past four years.                                                                                       
                                                                                                                                
     For  the Commission  to  have  to require  new  MPNs of  all                                                               
     current borrowers is estimated to  cost in excess of $50,000                                                               
     in  printing,  distribution  and staff  time  explaining  to                                                               
     borrowers  and participating  institutions why  the existing                                                               
     MPN must  be replaced.  There would  also be  the intangible                                                               
     cost  to   the  organization,  of  putting   our  customers'                                                               
     confidence  in  the  organization  at risk.  Since  we  also                                                               
     operate as a lender under  the federal program, should we be                                                               
     able to  comply with  federal credit  reporting requirements                                                               
     the financial losses to the  Alaska Student Loan Corporation                                                               
     could  be  in the  millions.  Federal  loan volume  for  the                                                               
     current  loan  year is  estimated  to  be approximately  $27                                                               
     million and represents  slightly less than 40%  of our total                                                               
     loan volume.                                                                                                               
                                                                                                                                
     The other two sections of  related concern are 45.48.410 and                                                               
     45.48.415. While 45.48.410 appears  to provide agencies with                                                               
     the ability to create  SSN-related "law" through regulation,                                                               
     as  it currently  reads,  that ability  is  limited to  this                                                               
     single  section. Should  we attempt  to provide  all of  the                                                               
     requisite  authority  to   support  critical  administrative                                                               
     processes,  I  am  very  concerned  that,  if  subjected  to                                                               
     litigation by a disgruntled  borrower, the courts would take                                                               
     a  strict  reading of  the  statute  and disallow  any  such                                                               
     regulation  that  was  not   supported  by  clear  statutory                                                               
     authority.                                                                                                                 
                                                                                                                                
     It  is  also  relevant  to note  that  the  legislature  has                                                               
     expressly charged ACPE with acting  as an enterprise agency,                                                               
     using a  business model to  generate revenue for  the state.                                                               
     However, by  prohibiting a  state agency  from asking  for a                                                               
     SSN, but  not extending that prohibition  to other entities,                                                               
     the  proposed  language in  45.48.410  not  only results  in                                                               
     significantly  increased  cost  for ACPE  -  and  associated                                                               
     decreases  in ACPE's  ability to  generate  revenue for  the                                                               
     state - but  also results in ACPE not being  able to compete                                                               
     with out-of-state  organizations that actively  market their                                                               
     loans  to Alaska's  students, costing  those students  more,                                                               
     decreasing state  revenues, and  resulting in an  outflow of                                                               
     education loan repayment dollars to other states.                                                                          
                                                                                                                                
     Finally,  ACPE's business  process is  already subject  to a                                                               
     variety of federal consumer  protection laws including: Fair                                                               
     Debt  Collection Practices  Act (FDCPA);  Telephone Consumer                                                               
     Protection  Act (TCPA);  Fair Credit  Reporting Act  (FCRA);                                                               
     Patriot  Act  (for  OFAC  compliance);  Gramm  Leach  Bliley                                                               
     (GLB):  Fair  and Accurate  Credit  Act  (FACT ACT);  Alaska                                                               
     Privacy Act;  Alaska statutes and regulations  governing the                                                               
     education loan programs;  Truth in Lending Act as  well as a                                                               
     variety  of  federal and  state  laws  relative to  consumer                                                               
     information protection, identity  theft, payment processing,                                                               
     debt  collection,  and  related financial  information.  The                                                               
     additional  requirements  placed  on   the  agency  by  this                                                               
     legislation certainly adds complexity  to compliance, due to                                                               
     possible  conflicts,  without  adding  meaningfully  to  the                                                               
     protection of our customers.                                                                                               
                                                                                                                                
     If it is  not possible to altogether exempt  ACPE from these                                                               
     referenced  requirements,  then appropriate  amendments  are                                                               
     necessary   to  avoid   devastating   consequences  to   our                                                               
     operations, our ability to operate  as an enterprise agency,                                                               
     and  - most  important  - our  ability  to support  Alaska's                                                               
     students and institutions of higher education.                                                                             
                                                                                                                                
10:05:53 AM                                                                                                                   
                                                                                                                                
Senator Therriault informed  that in the course  of the committee                                                               
hearing process, 26  formal changes have been  adopted to address                                                               
stakeholder  concerns.  A  new  committee  substitute  was  being                                                               
drafted  to further  address issues  and would  be submitted  for                                                               
consideration.  He invited  Committee members  to participate  in                                                               
this process.                                                                                                                   
                                                                                                                                
Senator Therriault pointed  out however that a  decision was made                                                               
by the Senate Labor and Commerce  Committee as well as the Senate                                                               
Judiciary Committee to not treat  State agencies differently than                                                               
businesses.                                                                                                                     
                                                                                                                                
10:07:24 AM                                                                                                                   
                                                                                                                                
Senator Guess referenced testimony  from the Alaska Commission on                                                               
Postsecondary   Education  and   Department   of  Law   testimony                                                               
regarding social  security numbers. The co-sponsors  had prepared                                                               
amendments intended  to address the  concerns but had  decided to                                                               
delay  their introduction  to allow  the changes  to be  combined                                                               
with other planned changes currently being drafted.                                                                             
                                                                                                                                
Senator  Guess disclosed  that  the  co-sponsors were  continuing                                                               
communications with  life insurance  carriers to  accommodate the                                                               
specific needs  of that  industry. She  disagreed that  it should                                                               
receive  a special  exemption and  instead  supported efforts  to                                                               
draft language  to clarify how  the provisions of the  bill would                                                               
apply unless otherwise provided in law.                                                                                         
                                                                                                                                
10:08:54 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green  directed  members  to  submit  any  concerns  or                                                               
recommendations  to  her office  to  be  transmitted to  the  co-                                                               
sponsors.                                                                                                                       
                                                                                                                                
Co-Chair Green ordered the bill HELD in Committee.                                                                              
                                                                                                                                
10:09:11 AM                                                                                                                   
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 284(JUD)                                                                                            
     "An  Act relating  to  sentencing for  the  commission of  a                                                               
     felony while under the influence of alcohol."                                                                              
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
10:09:44 AM                                                                                                                   
                                                                                                                                
Senator Therriault, sponsor of the  bill, stated this legislation                                                               
would provide aide  for law enforcement and  courts in addressing                                                               
a  societal  problem. He  read  the  sponsor statement  into  the                                                               
record as follows.                                                                                                              
                                                                                                                                
     In the  interest of public  safety and reducing the  rate of                                                               
     recidivism   among  certain   violent   offenders,  I   have                                                               
     introduced Senate Bill  284 giving judges a  new option when                                                               
     sentencing  felons who  commit crimes  against persons.  (AS                                                               
     11.41)                                                                                                                     
                                                                                                                                
     In  instances that  clear and  convincing  evidence shows  a                                                               
     long-term pattern  of alcohol abuse as  a major contributing                                                               
     factor  in  the commission  of  a  violent crime  against  a                                                               
     person, or in  the case of extreme DUI  convictions, a judge                                                               
     may impose  as a condition  of sentencing, up to  a lifetime                                                               
     prohibition on the use of alcohol.                                                                                         
                                                                                                                                
     This  legislation  is  intended  to  accomplish  three  main                                                               
     objectives.  The  first  is  to allow  courts  to  remove  a                                                               
     controlled  substance  from  those  who have  a  long  track                                                               
     record of  being dangerous when  they use it. The  second is                                                               
     to  prevent  future  acts  of  violence  by  establishing  a                                                               
     different  threshold for  re-arrest  before actual  violence                                                               
     may  occur.  The  third  goal is  to  establish  a  lifelong                                                               
     deterrent  to  offenders  who  might be  tempted  to  use  a                                                               
     substance that unleashes their violent nature.                                                                             
                                                                                                                                
10:11:35 AM                                                                                                                   
                                                                                                                                
Senator  Therriault informed  that he  has collaborated  with the                                                               
Department of Law to shorten the  bill. The Division of Legal and                                                               
Research  Services  drafter  agrees the  new  language  structure                                                               
would be sensible and prepared a new committee substitute.                                                                      
                                                                                                                                
10:12:13 AM                                                                                                                   
                                                                                                                                
Co-Chair Green suggested the  proposed committee substitute could                                                               
be  distributed at  this  time  to allow  members  to review  the                                                               
changes. She agreed the current version was repetitive.                                                                         
                                                                                                                                
10:13:30 AM                                                                                                                   
                                                                                                                                
Senator   Therriault  explained   that  the   proposed  committee                                                               
substitute summarizes the references to other statutes.                                                                         
                                                                                                                                
10:13:52 AM                                                                                                                   
                                                                                                                                
Co-Chair  Wilken  offered  a  motion  to adopt  CS  SB  284,  24-                                                               
LS0581\L, as a working document.                                                                                                
                                                                                                                                
There was  no objection and CS  SB 284, Version "L",  was ADOPTED                                                               
as a working document.                                                                                                          
                                                                                                                                
10:14:14 AM                                                                                                                   
                                                                                                                                
ANNE  CARPENETI,  Assistant   Attorney  General,  Legal  Services                                                               
Section,  Criminal Division,  Department  of  Law, explained  the                                                               
shortened  committee  substitute.   Judges  need  the  guidelines                                                               
provided in this legislation. The Department supports this bill.                                                                
                                                                                                                                
10:15:38 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green   indicated  she   would  review   the  committee                                                               
substitute.  When  she first  learned  of  this effort,  she  was                                                               
skeptical it  could be  successful. She  has since  concluded the                                                               
guidelines could be helpful.                                                                                                    
                                                                                                                                
The bill was HELD in Committee.                                                                                                 
                                                                                                                                
10:16:05 AM                                                                                                                   
                                                                                                                                
                                                                                                                                
     CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 274(FIN)                                                                      
     "An Act relating to the practice of accounting; and                                                                        
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
10:16:13 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE MIKE  HAWKER, sponsor of the  bill, testified that                                                               
Alaska's accounting  statues were  written in 1960  through 1962.                                                               
Many accounting  practices have changed since  that time. Efforts                                                               
are  underway  nationally  to  standardize  accounting  practices                                                               
including education and licensing  requirements. The Alaska Board                                                               
of Public  Accountants has been  collaborating with  the American                                                               
Institute of  Certified Public  Accountants to  implement changes                                                               
to  comply  with the  Uniform  Accountancy  Act, written  by  the                                                               
Institute.  This  bill  represents  the first  portion  of  those                                                               
efforts.                                                                                                                        
                                                                                                                                
Representative Hawker  stated that most  of the language  in this                                                               
lengthy   legislation  is   technical,   conforming  to   current                                                               
standards.                                                                                                                      
                                                                                                                                
Representative  Hawker  informed  of the  shortage  of  qualified                                                               
Certified  Public Accountants  (CPA) in  Alaska. This  bill would                                                               
grant practice privileges  to out of state  accountants under the                                                               
Standard    of   Substantial    Equivalency.   The    reciprocity                                                               
requirements  are designed  to encourage  accountants to  work in                                                               
Alaska   by  not   requiring  them   to  redo   any  professional                                                               
credentials.                                                                                                                    
                                                                                                                                
Representative Hawker  told of the  current requirement  that all                                                               
communications  to the  accounting  community  must be  conducted                                                               
through  certified  mail.   At  the  request  of   the  Board  of                                                               
Accountancy  this provision  would be  repealed and  would reduce                                                               
operating costs of the Board by $6,000 to $8,000 a year.                                                                        
                                                                                                                                
Representative Hawker  emphasized the  public reliance  on audits                                                               
attesting  to  the  correctness   of  financial  statements.  The                                                               
national trend has been to  increase regulation and management of                                                               
CPAs performing  attest functions.  This bill would  mandate that                                                               
professional  accountants   undergo  peer  reviews,   a  practice                                                               
currently in  regulation. However,  regulations do not  include a                                                               
definition of  attesting, nor  do they provide  for a  process of                                                               
writing  regulations  to  address   attesting.  This  bill  would                                                               
require the Board of Accountancy  to develop regulations defining                                                               
attest functions  and providing special oversight  of accountants                                                               
who perform those functions.                                                                                                    
                                                                                                                                
10:21:40 AM                                                                                                                   
                                                                                                                                
Representative  Hawker  relayed  attempts within  the  accounting                                                               
community  in  Alaska  to  change practices  to  conform  to  the                                                               
national Uniform Accountancy  Act. Some have been  eager to fully                                                               
conform, while others  were reluctant to make  changes. The Board                                                               
held  internal  and  public  hearings   on  the  issue  and  this                                                               
legislation represents compromises made  to the various concerns.                                                               
Those  accountants  who  had  opposed  making  any  changes  were                                                               
satisfied with the proposal and  expressed willingness to see the                                                               
results.                                                                                                                        
                                                                                                                                
Representative Hawker  explained that the delayed  effective date                                                               
of the  statutory changes is  January 1, 2008.  Regulations could                                                               
be written  in the meantime  and, if deemed  necessary, statutory                                                               
changes could be offered in the next legislative session.                                                                       
                                                                                                                                
Representative Hawker  described the  support for this  bill from                                                               
different factions of industry.                                                                                                 
                                                                                                                                
10:23:59 AM                                                                                                                   
                                                                                                                                
Senator  Olson   remarked  that   businesses  are   dependant  on                                                               
accountants. He asked if any  negative criticism to this bill has                                                               
been voiced from business representatives.                                                                                      
                                                                                                                                
10:24:19 AM                                                                                                                   
                                                                                                                                
Representative Hawker had heard of  no negative comments with the                                                               
exception of  comments raised  by independent  accountants, those                                                               
who are not certified. Those concerns have been addressed.                                                                      
                                                                                                                                
10:24:34 AM                                                                                                                   
                                                                                                                                
Senator  Olson asked  if his  accountant would  therefore support                                                               
this legislation.                                                                                                               
                                                                                                                                
10:24:41 AM                                                                                                                   
                                                                                                                                
Representative  Hawker responded  this  would depend  on who  his                                                               
accountant  is. Those  who  have been  actively  involved in  the                                                               
process have reached agreement on the provisions in the bill.                                                                   
                                                                                                                                
10:25:12 AM                                                                                                                   
                                                                                                                                
Representative  Hawker  noted  that  the  oldest  member  of  the                                                               
association  supports  this  bill. This  person  represented  the                                                               
anchor  of the  "old school"  approach. Through  the process,  he                                                               
became supportive of  allowing regulations to be  adopted, and if                                                               
those regulations proved effective,  he would support their being                                                               
codified.                                                                                                                       
                                                                                                                                
Representative  Hawker predicted  this bill  would likely  not be                                                               
the  last  legislation  addressing   changes  to  the  accounting                                                               
statutes.                                                                                                                       
                                                                                                                                
10:26:18 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green  recalled the  dissent  when  these changes  were                                                               
originally proposed.                                                                                                            
                                                                                                                                
10:26:26 AM                                                                                                                   
                                                                                                                                
DAN   KENNEDY,  Certified   Public   Accountant,  testified   via                                                               
teleconference  from Mat-Su,  acknowledging  that  this issue  is                                                               
relatively  insignificant in  comparison to  other issues  before                                                               
the  legislature.  He supported  this  bill,  a modernization  of                                                               
Alaska's  accounting procedures  that would  align with  40 other                                                               
states.  This  legislation  represents a  compromise  within  the                                                               
accounting  profession.  He  had advocated  for  more  aggressive                                                               
changes, including  a reduction of the  activity requirements for                                                               
becoming  a CPA.  Currently  an accountant  must  work under  the                                                               
supervision of  a CPA  for two  years. Alaska  is the  only state                                                               
with this requirement. He had  recommended one year of supervised                                                               
practice.                                                                                                                       
                                                                                                                                
Mr. Kennedy  defined the peer review  process as an audit  of the                                                               
auditors, which would strengthen  the profession. Therefore, only                                                               
one year  of supervised  practice is  necessary. However,  he was                                                               
willing to compromise on this item  in the interest of passage of                                                               
this legislation.                                                                                                               
                                                                                                                                
10:30:18 AM                                                                                                                   
                                                                                                                                
Senator Bunde offered a motion  to report the bill from Committee                                                               
with individual recommendations and accompanying fiscal note.                                                                   
                                                                                                                                
Without  objection HB  274  was MOVED  from  Committee with  zero                                                               
fiscal note  #1 from  the Department  of Commerce,  Community and                                                               
Economic Development.                                                                                                           
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Lyda Green adjourned the meeting at 10:31:09 AM                                                                      

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