Legislature(2005 - 2006)SENATE FINANCE 532

05/04/2006 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
= HB 307 KNIK RIVER PUBLIC USE AREA
Moved CSHB 307(RES) Out of Committee
+ HB 29 HEALTH CARE INSUR./COMP HEALTH INS. ASSN TELECONFERENCED
Moved CSHB 29(L&C)(title am) Out Cmte.
+ HB 446 PENALTY FOR UNLAWFUL TRADE PRACTICE TELECONFERENCED
Moved CSHB 446(JUD) Out of Committee
+ HB 326 USE OF LEWD MATERIAL AS HARASSMENT TELECONFERENCED
Moved SCS CSHB 326(JUD) Out of Committee
+ HB 41 ASSAULT ON SCHOOL EMPLOYEES/BUS DRIVERS TELECONFERENCED
Moved SCS CSHB 41(JUD) Out of Committee
+ HB 57 SALE OF STATE LAND TO ADJACENT LANDOWNERS TELECONFERENCED
Moved CSSSHB 57(FIN) Out of Committee
+ HB 419 REPEAL UNDERGROUND STORAGE TANK LAWS TELECONFERENCED
Moved HB 419 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                            MINUTES                                                                                           
                    SENATE FINANCE COMMITTEE                                                                                  
                          May 4, 2006                                                                                         
                           9:05 a.m.                                                                                          
                                                                                                                                
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair  Lyda  Green  convened   the  meeting  at  approximately                                                               
9:05:32 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                                                                                                             
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
Also Attending: REPRESENTATIVE  NORM ROKEBERG; REPRESENTATIVE BOB                                                             
LYNN; BEN  MULLIGAN, Staff to Representative  Bill Stoltze; LINDA                                                               
HALL, Director,  Division of  Insurance, Department  of Commerce,                                                               
Community  and  Economic  Development; CRAIG  JOHNSON,  Staff  to                                                               
Representative   Lesil   McGuire;    NANCY   MANLEY,   Staff   to                                                               
Representative Bob Lynn; MIKE  PAWLOWSKI, Staff to Representative                                                               
Kevin  Meyer;   TERRY  HARVEY,  Staff  to   Representative  Bruce                                                               
Weyhrauch;   SARAH   GILBERTSON,   Special   Assistant   to   the                                                               
Commissioner, Department  of Fish and Game;  KAREN LIDSTER, Staff                                                               
to  Representative   John  Coghill;  LARRY   DIETRICK,  Director,                                                               
Division   of  Spill   Prevention  &   Response,  Department   of                                                               
Environmental Conservation                                                                                                      
                                                                                                                                
Attending  via  Teleconference:   From  offnet  locations:  CECIL                                                             
BYKERK,   Executive   Director,   Alaska   Comprehensive   Health                                                               
Insurance   Association  (ACHIA);   BRIAN  ANGEL,   Counsel  with                                                               
American Family  Life Assurance Company  of Columbus  (AFLAC) and                                                               
Vice-Chair,  ACHIA Board  of  Directors;  DICK MYLIUS,  Director,                                                               
Division  of  Mining,  Land  and  Water,  Department  of  Natural                                                               
Resources; JOHN  SCHABEL; From  Anchorage: ED  SNIFFEN, Assistant                                                               
Attorney General, Department of Law                                                                                             
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
HB 307-KNIK RIVER PUBLIC USE AREA                                                                                               
                                                                                                                                
The Committee heard from the  bill's sponsor and adopted a Letter                                                               
of  Intent. The  bill  and  the Letter  of  Intent reported  from                                                               
Committee.                                                                                                                      
                                                                                                                                
HB 29-HEALTH CARE INSUR./ COMP HEALTH INS. ASSN                                                                                 
                                                                                                                                
The  Committee heard  from the  bill's sponsor,  the Division  of                                                               
Insurance,  Department   of  Commerce,  Community   and  Economic                                                               
Development,  and  representatives  of the  Alaska  Comprehensive                                                               
Health Insurance Association. The bill reported from Committee.                                                                 
                                                                                                                                
HB 446-PENALTY FOR UNLAWFUL TRADE PRACTICE                                                                                      
                                                                                                                                
The Committee  heard from the  bill's sponsor and  the Department                                                               
of Law. The bill reported from Committee.                                                                                       
                                                                                                                                
HB 326-USE OF LEWD MATERIAL AS HARASSMENT                                                                                       
                                                                                                                                
The Committee heard from the  bill's sponsor and the reported the                                                               
bill from Committee.                                                                                                            
                                                                                                                                
HB 41-ASSAULT ON SCHOOL EMPLOYEES/BUS DRIVERS                                                                                   
                                                                                                                                
The Committee  heard from the  bill's sponsor and  the Department                                                               
of Law. The bill reported from Committee.                                                                                       
                                                                                                                                
HB 57-SALE OF STATE LAND TO ADJACENT LANDOWNERS                                                                                 
                                                                                                                                
The Committee  heard from the  bill's sponsor, the  Department of                                                               
Natural Resources, and the Department  of Fish and Game. The bill                                                               
reported from Committee.                                                                                                        
                                                                                                                                
HB 419-REPEAL UNDERGROUND STORAGE TANK LAWS                                                                                     
                                                                                                                                
The Committee  heard from the  bill's sponsor and  the Department                                                               
of Environmental Conservation. The bill reported from Committee.                                                                
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 307(RES)                                                                                             
     "An Act creating the Knik River Public Use Area."                                                                          
                                                                                                                                
                                                                                                                                
This was the  second hearing for this bill in  the Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Green  announced that a Senate  Finance Committee Letter                                                               
of Intent  was developed  to address  concerns raised  by members                                                               
during the bill's first hearing.                                                                                                
                                                                                                                                
Co-Chair  Green moved  to adopt  the Committee  Letter of  Intent                                                               
(LOI) and read it into the record as follows.                                                                                   
                                                                                                                                
                           Letter of Intent                                                                                     
                       Senate Finance Committee                                                                                 
                            CS HB 307(RES)                                                                                      
                                                                                                                                
     It is the  intent of the 24th Alaska  State Legislature that                                                               
     the  Department of  Natural  Resources evaluate  instituting                                                               
     user  fees to  pay the  long term  costs for  management and                                                               
     necessary facilities  associated with the public  use of the                                                               
     Knik Public Use  Area established under House  Bill 307. The                                                               
     department should consider  such fees as a  component of the                                                               
     Management Plan that will be prepared under AS 41.23.190.                                                                  
                                                                                                                                
Senator Stedman  spoke in  opposition to  the establishment  of a                                                               
user fee program and, therefore, objected to adopting the LOI.                                                                  
                                                                                                                                
9:07:07 AM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken  pointed out  that  the  inclusion of  the  word                                                               
"evaluate"  was key  to  his  support of  the  LOI,  as it  would                                                               
require the  Department to  develop a plan,  which would  then be                                                               
presented to the Legislature for "some sort" of approval.                                                                       
                                                                                                                                
Co-Chair Green characterized  the Knik Public Use  Area (KPUA) as                                                               
an "unwieldy area" in which to  institute a user fee program, as,                                                               
rather than  being a park  at which  money could be  collected at                                                               
the  gate, this  is "an  open area"  with many  entry points.  An                                                               
appropriate  user fee  program must  be developed.  Options could                                                               
include the purchase  of a bumper sticker,  card, or certificate.                                                               
While  a  user  fee  program  "would not  be  an  easy  thing  to                                                               
implement", it is worthy of discussion.                                                                                         
                                                                                                                                
9:08:27 AM                                                                                                                    
                                                                                                                                
Senator Dyson,  while appreciating the  intent of the  LOI, asked                                                               
the sponsor's opinion of it.                                                                                                    
                                                                                                                                
9:08:35 AM                                                                                                                    
                                                                                                                                
BEN MULLIGAN,  Staff to Representative  Bill Stoltze,  the bill's                                                               
sponsor, noted  that Representative Stoltze was  comfortable with                                                               
the  language since  it specified  that the  implementation of  a                                                               
user  fee would  be "evaluated".  This language  would allow  any                                                               
proposed fee structure to be reviewed by the Legislature.                                                                       
                                                                                                                                
Senator Bunde  noted that  numerous user  fee programs  have been                                                               
successfully  implemented   in  the   State.  For   example,  the                                                               
Anchorage  Ski Club  sells a  pin to  generate money  to maintain                                                               
their  trails.  While  the  purchase of  the  pin  is  voluntary,                                                               
pressure is  exerted on users  to purchase  one. The State  has a                                                               
snowmobile registration fee that  generates money for snowmachine                                                               
trail maintenance.                                                                                                              
                                                                                                                                
Senator Bunde  pointed out that  this legislation would  not have                                                               
been  introduced   had  users   of  the   KPUA  area   been  more                                                               
responsible.  Implementation   of  a   user  fee   program  would                                                               
accomplish two  things: people  who paid the  fee "would  be less                                                               
tolerant of the scofflaws" and  the funds it generated would help                                                               
"care for the area".                                                                                                            
                                                                                                                                
9:10:29 AM                                                                                                                    
                                                                                                                                
Senator  Stedman was  disinterested  in establishing  a user  fee                                                               
precedence for areas  beyond the KPUA. The  prospect of requiring                                                               
people  to pay  user fees  or  to place  identifying stickers  on                                                               
their boats or  recreational vehicles to recreate,  hunt, or fish                                                               
on  State or  federal lands,  such  as the  United States  Forest                                                               
Service  managed land  in Southeast  Alaska, was  unappealing. He                                                               
was  "adamantly opposed"  to the  language in  the LOI.  It could                                                               
diminish the bill's ability to be adopted by the Legislature.                                                                   
                                                                                                                                
9:11:16 AM                                                                                                                    
                                                                                                                                
Senator  Bunde  pointed  out  that recreation  in  the  State  is                                                               
already  being   paid  for,   as  such   things  as   small  boat                                                               
registration fees  already exist. In order  to support recreation                                                               
programs, the  State must either  implement user fees  or utilize                                                               
the State's general funds.                                                                                                      
                                                                                                                                
Co-Chair  Green asked  whether Senator  Bunde  could suggest  any                                                               
alternate funding source.                                                                                                       
                                                                                                                                
Senator Bunde could not.                                                                                                        
                                                                                                                                
9:11:48 AM                                                                                                                    
                                                                                                                                
Senator Dyson noted that, for  a long time, hunters and fisherman                                                               
have  willingly purchased  fishing and  hunting licenses,  as the                                                               
proceeds  from  those licenses  are  used  to fund  research  and                                                               
resource  management   activities.  He   did  not   believe  that                                                               
implementing  a   fee  structure   in  the   KPUA  would   set  a                                                               
recreational use  fee precedent  because the  purpose of  the fee                                                               
would be to  limit damage being done  in the area and  to pay for                                                               
the cost of  policing it. He agreed with Co-Chair  Green that the                                                               
area was  difficult to  work with. The  proposal could  either be                                                               
considered "brilliant" or at a  minimum "a well thought out first                                                               
step" towards a solution.                                                                                                       
                                                                                                                                
Co-Chair  Green  added  that the  difficulty  in  addressing  the                                                               
concerns about the area is compounded  by the fact that it is "in                                                               
such close  proximity to where  people live". The "great  deal of                                                               
interest" in  how the  area should be  managed has  increased the                                                               
conflicts.                                                                                                                      
                                                                                                                                
Senator Stedman maintained his objection to adopting the LOI.                                                                   
                                                                                                                                
9:13:31 AM                                                                                                                    
                                                                                                                                
Senator Olson,  who was unfamiliar  with the area,  asked whether                                                               
implementing  a  user fee  would  assist  in deterring  "nuisance                                                               
behavior",  specifically  "the  discharging  of  firearms  in  an                                                               
unwise manner".                                                                                                                 
                                                                                                                                
Co-Chair  Green   responded  that   the  Department   of  Natural                                                               
Resources (DNR)  might hire "caretakers"  to police the  area for                                                               
illegal  activities,  particularly  during  evening  and  weekend                                                               
hours  when the  use  of  the area  is  the heaviest.  Additional                                                               
funding  might be  required  in the  future  to support  policing                                                               
efforts. While the State's general  fund is not typically used to                                                               
fund this type  of activity, this might be  "an exception because                                                               
it is  such a unique" and  heavily used area. While  the majority                                                               
of people using the area  are respectful and law-abiding, five to                                                               
ten percent of the users  are scofflaws. Peer pressure might have                                                               
some affect  were the  implementation of  a user  fee to  fail to                                                               
alter deviant behavior.                                                                                                         
                                                                                                                                
A roll call was taken on the motion to adopt the LOI.                                                                           
                                                                                                                                
IN  FAVOR: Senator  Bunde, Senator  Dyson,  Senator Hoffman,  Co-                                                               
Chair Wilken and Co-Chair Green                                                                                                 
                                                                                                                                
OPPOSED: Senator Stedman and Senator Olson                                                                                      
                                                                                                                                
The motion PASSED (5-2)                                                                                                         
                                                                                                                                
The Letter of Intent was ADOPTED.                                                                                               
                                                                                                                                
Senator Dyson  moved to  report the bill  and the  Senate Finance                                                               
Committee  Letter  of  Intent   from  Committee  with  individual                                                               
recommendations and accompanying fiscal note.                                                                                   
                                                                                                                                
Without  objection,  CS  HB  307(RES)   and  the  Senate  Finance                                                               
Committee Letter  of Intent were  REPORTED from Committee  with a                                                               
new $356,800  fiscal note dated  May 3, 2006 from  the Department                                                               
of Natural Resources.                                                                                                           
                                                                                                                                
AT EASE 9:16:18 AM / 9:16:38 AM                                                                                             
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 29(L&C)(title am)                                                                                    
     "An  Act  relating  to the  Comprehensive  Health  Insurance                                                               
     Association; granting  a 50 percent  premium tax  credit for                                                               
     assessments  against  members  of the  Comprehensive  Health                                                               
     Insurance   Association;   requiring  members   to   provide                                                               
     information to  the association's board of  directors or the                                                               
     director  of the  division  of  insurance; modifying  voting                                                               
     rights for the association  members by basing their exercise                                                               
     on a  member's share  of assessments; basing  assessments on                                                               
     major medical premiums; modifying  the manner of determining                                                               
     members'   liabilities   for   losses;  and   changing   the                                                               
     definition of "major medical" coverage  for purpose of state                                                               
     health  insurance  and  providing for  exclusions  to  major                                                               
     medical coverage."                                                                                                         
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
REPRESENTATIVE NORM  ROKEBERG, the  bill's sponsor,  informed the                                                               
Committee  this legislation  would change  the funding  mechanism                                                               
for  the   Alaska  Comprehensive  Health   Insurance  Association                                                               
(ACHIA), which serves as the  health "insurer of last resort" for                                                               
high-risk citizens  in the State.  ACHIA is a  federally mandated                                                               
program  under the  federal Employee  Retirement Income  Security                                                               
Act  of 1974  (ERISA). While  individuals participating  in ACHIA                                                               
contribute   toward  their   insurance   premiums,  any   premium                                                               
shortfall  is  provided  for  by  an  assessment  against  health                                                               
insurance underwriters  operating in  the State. This  bill would                                                               
make a minor change in that funding source process.                                                                             
                                                                                                                                
Representative Rokeberg  directed Committee members to  a handout                                                               
titled  "Insurers  Writing   Comprehensive  Health  Insurance  in                                                               
Alaska" [copy on file] which  depicted the market share of health                                                               
insurance providers operating in the  State in the year 2003. The                                                               
Alaska Division of Insurance conducts  such a survey on an annual                                                               
basis.  It is  "sobering" to  see  that Premera  Blue Cross  Blue                                                               
Shield  of Alaska  has  approximately 80  percent  of the  active                                                               
insurance market share in the State.                                                                                            
                                                                                                                                
9:18:22 AM                                                                                                                    
                                                                                                                                
Representative  Rokeberg  stated  that  one of  his  goals  as  a                                                               
legislator  was  to decrease  "the  barriers  for entry  for  new                                                               
underwriters to increase competition and  to enable and help pull                                                               
down rate  structures by enabling  better competition  within the                                                               
State. Basically, my ten-year quest has fundamentally failed."                                                                  
                                                                                                                                
Representative Rokeberg shared that  the annual assessment levied                                                               
against insurance underwriters to  "subsidize the ACHIA pool" has                                                               
been  approximately $3.5  million. This  is a  major concern,  as                                                               
there are large groups in  the ERISA pool, specifically organized                                                               
labor  groups,  which either  do  not  contribute or  pay  little                                                               
toward  the ACHIA  insurance premiums  fund. His  efforts to  get                                                               
these groups  "to pay more to  the pool" have been  resisted. The                                                               
situation  was further  compounded  in 1998  when  "the State  of                                                               
Alaska  allowed all  their bargaining  units to  step out  of the                                                               
major pool of the State of Alaska".                                                                                             
                                                                                                                                
9:19:36 AM                                                                                                                    
                                                                                                                                
Representative  Rokeberg referred  to an  April 20,  2006 handout                                                               
prepared  by ACHIA  [copy on  file] labeled  "ACHIA 1993  through                                                               
2005".  One of  the  three  pie charts  depicted  on the  handout                                                               
summarizes the  total dollar amount  received by ACHIA  from 1993                                                               
to   2005  from   its  three   financial  contributors:   Insurer                                                               
Assessments-State  Portion $1,364,000;  Participant Contributions                                                               
$17,049,335; and Insurer Assessments $29,186,000.                                                                               
                                                                                                                                
Representative  Rokeberg spoke  to the  pie chart  labeled "1998-                                                               
2005: Proforma  with HB29". This chart  depicted the contribution                                                               
the  State would  have  made to  ACHIA during  the  1998 to  2005                                                               
timeframe under  this legislation, which would  require the State                                                               
to participate at approximately a  one-third of cost ratio. Thus,                                                               
under the  provisions of  this bill, between  1998 and  2005, the                                                               
contribution  distribution would  have been:  State General  Fund                                                               
Contribution,     $12,900,000;     Participant     Contributions,                                                               
$14,861,088; and Insurer Assessments, $12,900,000.                                                                              
                                                                                                                                
Representative  Rokeberg spoke  to  the third  pie chart  labeled                                                               
"1998-2005: Proforma  Assuming State  Had Remained  Insured". Had                                                               
the State  not opted out  of the program  in 1998, it  would have                                                               
contributed  approximately   $10  million  of  the   $38  million                                                               
required.  The  breakout  would   have  been:  State  Portion  of                                                               
Assessments,     $10,320,000;      Participant     Contributions,                                                               
$14,861,088; and Remaining  Insurer Assessments, $15,480,000. The                                                               
conclusion from  this chart  is that "there  is a  huge shortfall                                                               
because  of the  reduction  of State  contributions." While  that                                                               
money  instead  benefited the  State's  general  fund, it  was  a                                                               
detriment to the ACHIA program.  There should equity in the ACHIA                                                               
funding.                                                                                                                        
                                                                                                                                
9:21:04 AM                                                                                                                    
                                                                                                                                
Representative Rokeberg  specified this  bill would  require "the                                                               
State  to  participate  in  the   funding"  of  the  program,  by                                                               
requiring  the  State  to  "allocate  one  half  of  the  [ACHIA]                                                               
assessment  …  in the  form  of  a  tax  credit to  the  [health]                                                               
insurance companies".                                                                                                           
                                                                                                                                
Representative  Rokeberg informed  the  Committee that  insurance                                                               
premium taxes  paid to the  State by insurance companies  are the                                                               
State's third  largest revenue source, the  first being petroleum                                                               
royalty taxes  and the second  being corporate income  taxes. The                                                               
State  received $47  million from  insurance  premium taxes  last                                                               
year and  the expectation is that  the taxes would amount  to $46                                                               
million  this  year. Health  insurance  companies  would pay  $11                                                               
million or approximately 25 percent of that amount.                                                                             
                                                                                                                                
Representative Rokeberg noted  this bill would not  impact the FY                                                               
2007  (FY 07)  budget as  assessments  are delayed  to allow  the                                                               
calculation to  be based  on actual costs.  Therefore, the  FY 07                                                               
tax credit  of approximately $1,750,000 would  affect the State's                                                               
FY  2008  general  fund.  The credit  amount  would  increase  or                                                               
decrease each year as determined  by the annual ACHIA assessment.                                                               
He noted that assessment levels are projected to increase.                                                                      
                                                                                                                                
9:22:57 AM                                                                                                                    
                                                                                                                                
Representative Rokeberg  proclaimed that this bill  would require                                                               
the State "to pick up their  fair share" of the ACHIA assessment.                                                               
The State  would join  32 other states  that either  partially or                                                               
fully  participate  in the  funding  of  this federally  mandated                                                               
program.                                                                                                                        
                                                                                                                                
9:23:48 AM                                                                                                                    
                                                                                                                                
Senator Dyson  understood this legislation would  not require the                                                               
State's  bargaining units'  insurance programs  to contribute  to                                                               
the ACHIA fund.                                                                                                                 
                                                                                                                                
Representative  Rokeberg  affirmed.  While  he had  in  the  past                                                               
suggested their  participation, this proposal would  specify that                                                               
"the State  as a whole" would  make the contribution in  the form                                                               
of a tax credit to the sources of the revenue.                                                                                  
                                                                                                                                
Co-Chair Green declared  that the bargaining units  chose not "to                                                               
participate  in  providing"  this  insurance  coverage  which  is                                                               
required by  federal and State  law. "That  was why I  fought the                                                               
State  becoming self  insured in  the first  place;" she  knew it                                                               
would be "unfair"  to remove "a huge chunk of  support of a State                                                               
mandated  program". Her  "prediction" that  some entity  would be                                                               
required to  provide 75  percent of the  funds necessary  for the                                                               
program has  come true, as  the number  of private payers  in the                                                               
State  is  limited.   Therefore,  "a  very  small   part  of  the                                                               
population"  is being  forced to  pay for  a State  and federally                                                               
mandated program, which  everyone could be "eligible  for at some                                                               
time of their life".                                                                                                            
                                                                                                                                
9:25:39 AM                                                                                                                    
                                                                                                                                
Senator Dyson  pointed out that  the State's "small  market" size                                                               
also  makes  the State  a  less  attractive place  for  insurance                                                               
companies  to provide  "consumer  directed care"  such as  health                                                               
savings accounts.  The availability of  such programs could  be a                                                               
part of  the solution. He  characterized the  insurance providers                                                               
operating in  the State  as "institutional  and not  available to                                                               
that which I see as a very responsible way of proceeding".                                                                      
                                                                                                                                
9:26:13 AM                                                                                                                    
                                                                                                                                
CECIL  BYKERK, Executive  Director,  Alaska Comprehensive  Health                                                               
Insurance  Association,  testified  via  teleconference  from  an                                                               
offnet location.  He has  been involved with  ACHIA since  it was                                                               
enacted  by the  State in  1992. ACHIA  is a  program that  could                                                               
serve all  Alaskans. The ACHIA  plan was  chosen by the  State as                                                               
"the solution"  to the federal  Health Insurance  Portability and                                                               
Accountability Act of  1996 (HIPAA) mandate that  each state must                                                               
provide all  residents of the  state access to  health insurance.                                                               
60 percent of the states adopted plans similar to ACHIA.                                                                        
                                                                                                                                
Mr. Bykerk  informed the Committee  that ACHIA has paid  out more                                                               
than  $45 million  in claims  since  1992. It  has collected  $17                                                               
million in  premiums from individuals  enrolled in it.  ACHIA has                                                               
allowed people  to manage  their own  care and  medical expenses.                                                               
Most  of  the  people  participating   in  ACHIA  and  HIPAA  are                                                               
uninsurable; otherwise they would  enroll in other less expensive                                                               
plans, as ACHIA premiums, at  140 percent of standard plan costs,                                                               
are significant.  Contrary to public  perception, ACHIA is  not a                                                               
Medicaid or  welfare program. Individuals enrolled  in ACHIA have                                                               
no or few  other health insurance options and  must contribute to                                                               
their coverage in order to participate  in the system. Due to the                                                               
out of  pocket expense, people  in the  ACHIA plan tend  to "stay                                                               
out of emergency rooms" unless the medical care is unavoidable.                                                                 
                                                                                                                                
Mr.  Bykerk  noted  that  ACHIA is  under  funded  because  ACHIA                                                               
participant premiums  must be kept  at an affordable  level. "The                                                               
shortfall is  made up by  assessing health insurers as  a percent                                                               
of their health insurance premium."  Thus, "individuals and small                                                               
businesses in  the State"  pay the  cost. "HB  29 will  ease this                                                               
burden".                                                                                                                        
                                                                                                                                
Mr. Bykerk  agreed that, in  a small but significant  manner, the                                                               
State's  participation in  funding ACHIA  would assist  in making                                                               
the State attractive  to new insurance companies.  In addition to                                                               
the  State's  small  population   and  the  geographic  distances                                                               
between  communities,  there  are  also  business  "barriers"  to                                                               
attracting new business. Easing the  burden of this program would                                                               
assist  in increasing  competition  in  the commercial  insurance                                                               
industry.                                                                                                                       
                                                                                                                                
Mr.  Bykerk  reiterated  that  approximately  two-thirds  of  the                                                               
states  that have  high-risk pools  such as  ACHIA support  their                                                               
programs with State general funds.                                                                                              
                                                                                                                                
9:31:10 AM                                                                                                                    
                                                                                                                                
Mr. Bykerk noted that recently  enacted federal legislation would                                                               
allow  ACHIA to  acquire  federal funding  assistance during  the                                                               
next   five  years.   "This  is   only  right"   considering  the                                                               
requirements placed  on the State  by HIPAA. The  federal support                                                               
would further reduce  the impact on both  the insurance companies                                                               
and  the  State's  contributions  to ACHIA.  He  noted  that  the                                                               
federal support is  not reflected in the  Department of Commerce,                                                               
Community and Economic Development  fiscal note #1. "All Alaskans                                                               
benefit  directly or  indirectly from  ACHIA." He  encouraged the                                                               
Committee to advance this legislation.                                                                                          
                                                                                                                                
9:32:29 AM                                                                                                                    
                                                                                                                                
BRIAN ANGEL, Counsel with American  Family Life Assurance Company                                                               
of  Columbus (AFLAC)  and Vice-Chair,  ACHIA Board  of Directors,                                                               
testified  via  teleconference  from   an  offnet  location.  "By                                                               
providing  access to  health coverage,  and putting  dollars into                                                               
the  health care  system,  and by  keeping  people off  Medicaid,                                                               
ACHIA truly does  benefit all Alaskans." Because  all citizens of                                                               
the State could benefit by  ACHIA, "we believe the most equitable                                                               
funding  approach  is  one  that   is  broad  based".  Currently,                                                               
however, the cost of the program  "is borne by a small segment of                                                               
the  population", those  individuals  and  small businesses  that                                                               
purchase  health insurance.  "By  broadening  the funding  base",                                                               
this bill  would ease the  burden on health  insurance consumers.                                                               
He  informed the  Committee  that the  ACHIA  Board of  Directors                                                               
fully supports  the bill, and  he urged the Committee  to advance                                                               
it.                                                                                                                             
                                                                                                                                
Co-Chair Green expressed her support of the bill.                                                                               
                                                                                                                                
9:34:40 AM                                                                                                                    
                                                                                                                                
LINDA  HALL,  Director,  Division  of  Insurance,  Department  of                                                               
Commerce,  Community  and  Economic Development,  concurred  with                                                               
Representative   Rokeberg's   and  the   ACHIA   representatives'                                                               
testimony on the bill.                                                                                                          
                                                                                                                                
Co-Chair  Wilken moved  to report  the bill  from Committee  with                                                               
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There being no  objection, CS HB 299(L&C)(title  am) was REPORTED                                                               
from Committee with previous zero  fiscal note #1 dated March 29,                                                               
2006  from the  Department  of Commerce,  Community and  Economic                                                               
Development.                                                                                                                    
                                                                                                                                
Co-Chair Green  knew people in  the Matanuska-Susitna  Valley who                                                               
have ACHIA  coverage. She  was "shocked to  learn" the  amount of                                                               
their  insurance  premiums. This  is  certainly  not a  "giveaway                                                               
plan".                                                                                                                          
                                                                                                                                
9:35:46 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 446(JUD)                                                                                             
     "An Act  relating to the  amount of  a civil penalty  for an                                                               
     unlawful  act  or  practice  in  the  conduct  of  trade  or                                                               
     commerce;  and eliminating  mandatory continuances  in these                                                               
     matters after issuance of an injunction."                                                                                  
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
9:36:03 AM                                                                                                                    
                                                                                                                                
CRAIG JOHNSON, Staff to Representative  Lesil McGuire, the bill's                                                               
sponsor,  stated this  legislation  would  update State  consumer                                                               
protection laws.  Civil penalty  amounts have not  been increased                                                               
since the bill's  enactment in the 1970s. This  bill would adjust                                                               
penalty levels to reflect inflation.                                                                                            
                                                                                                                                
In response to  a remark from Co-Chair Green,  Mr. Johnson stated                                                               
that, in  addition to  adjusting the fine  levels to  account for                                                               
inflation,  the   increased  fine   levels  would   provide  more                                                               
substance to the  Department of Law's effort  to address consumer                                                               
fraud cases.                                                                                                                    
                                                                                                                                
9:37:27 AM                                                                                                                    
                                                                                                                                
ED  SNIFFEN,  Assistant  Attorney  General,  Department  of  Law,                                                               
testified  via   teleconference  from   Anchorage.  One   of  his                                                               
responsibilities  is  the  enforcement of  the  State's  Consumer                                                               
Protection  Act. This  legislation would  "make a  correction" to                                                               
the  civil   penalty  levels  specified   in  State   Statute  by                                                               
increasing the maximum allowable  penalty from $5,000 to $25,000.                                                               
In  addition,  the legislation  would  mandate  a $1,000  minimum                                                               
fine.  This  would  provide  the  Department  "more  teeth"  when                                                               
dealing with "offenders who aren't  really worried about breaking                                                               
the law because  they know if they pay back  the money" that they                                                               
received illegally, they might currently  only be subjected to "a                                                               
little  scolding  from  the   Department".  The  proposed  $1,000                                                               
mandatory  minimum fine  level could  be a  serious deterrent  to                                                               
those  considering  fraudulent  activities. In  addition  to  the                                                               
minimum penalty, the  bill, in general, would  expand the "tools"                                                               
available to the Department's "small enforcement section".                                                                      
                                                                                                                                
Senator Olson asked whether there was opposition to the bill.                                                                   
                                                                                                                                
Mr. Johnson responded in the negative.                                                                                          
                                                                                                                                
Co-Chair  Wilken moved  to report  the bill  from Committee  with                                                               
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being  no objection,  CS  HB  446(JUD) was  REPORTED  from                                                               
Committee with  previous zero fiscal  note #1 dated  February 21,                                                               
2006 from the  Alaska Court System and  indeterminate fiscal note                                                               
#3  dated  March  15,  2006  from  the  House  Finance  Committee                                                               
pertaining to the Department of Law.                                                                                            
                                                                                                                                
9:40:16 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 326(JUD)                                                                               
     "An Act relating to the definition of the crime of                                                                         
     harassment; and providing for an effective date."                                                                          
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
9:40:26 AM                                                                                                                    
                                                                                                                                
MICHAEL  PAWLOWSKI,  Staff  to Representative  Kevin  Meyer,  the                                                               
bill's sponsor, stated this legislation  was developed to address                                                               
a  loophole  in existing  State  harassment  statutes, which  was                                                               
brought  to Representative  Meyer's attention  by a  constituent.                                                               
Previously adopted legislation  addressed harassment conducted by                                                               
electronic communications, but did  not address harassment by the                                                               
publishing and posting of photographs and other lewd materials.                                                                 
                                                                                                                                
Mr.   Pawlowski  disclosed   that   the   situation  brought   to                                                               
Representative  Meyer's attention  involved a  woman who  allowed                                                               
her  boyfriend  to take  pictures  of  her. Because  the  picture                                                               
taking  was consensual,  it  did not  violate  any lewd  material                                                               
laws.  However,  after  the   relationship  terminated,  the  ex-                                                               
boyfriend printed  pictures of the  woman and posted  them around                                                               
the  University of  Alaska  Fairbanks  campus. Nothing  currently                                                               
exists  in State  law to  prohibit this  action. Thus,  this bill                                                               
would  expand  State  Statutes  to  include  "the  publishing  or                                                               
posting of  lewd pictures  to the  definition of  harassment". In                                                               
other  words, the  use of  intimate pictures  to bully,  annoy or                                                               
harass someone would  be prohibited. Adoption of  this bill would                                                               
not incur  any fiscal impact  on the  State, as evidenced  by the                                                               
three zero fiscal notes accompanying it.                                                                                        
                                                                                                                                
9:41:47 AM                                                                                                                    
                                                                                                                                
Senator Bunde understood therefore  that this bill would prohibit                                                               
the sharing  of intimate  pictures with  strangers, even  had the                                                               
person in the picture initially consented to being photographed.                                                                
                                                                                                                                
Mr.  Pawlowski concurred.  "The intent  of the  person doing  the                                                               
harassing is what matters". This  bill would apply to a situation                                                               
in which  the person  publishing or  posting pictures  of someone                                                               
intended to  harass or annoy that  person. While he had  used the                                                               
word  "lewd"  in  his  comments,  the  "terms  are  more  clearly                                                               
defined" in State Statute.                                                                                                      
                                                                                                                                
Co-Chair  Wilken moved  to report  the bill  from Committee  with                                                               
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There being  no objection, SCS  CS HB 326(JUD) was  REPORTED from                                                               
Committee with three  previous zero fiscal notes:  fiscal note #1                                                               
dated January 13, 2006 from  the Alaska Court System; fiscal note                                                               
#2 dated January 26, 2006 from  the Department of Law; and fiscal                                                               
note  #3 dated  January 17,  2006 from  the Department  of Public                                                               
Safety.                                                                                                                         
                                                                                                                                
9:43:44 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 41(JUD)                                                                                
     "An Act relating to minimum  periods of imprisonment for the                                                               
     crime of  assault in the  fourth degree committed  on school                                                               
     grounds, on  a school bus,  at a school-sponsored  event, or                                                               
     at certain school district administration offices."                                                                        
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  BOB  LYNN,  the   bill's  sponsor,  informed  the                                                               
Committee that this bill had  passed the House of Representatives                                                               
with a  unanimous vote of  the members present. He  supported the                                                               
title  change adopted  by the  Senate  Judiciary Committee  which                                                               
expanded the scope  of an assault against a person  to include an                                                               
assault occurring "on  school grounds, on a school  bus", and "at                                                               
a school sponsored event".                                                                                                      
                                                                                                                                
Representative Lynn pointed out that  the bill would also require                                                               
a  person convicted  of a  misdemeanor assault  occurring at  the                                                               
aforementioned locations to receive  a mandatory minimum sentence                                                               
of 60  days. This bill  would complement HB 88-CRIM  LAW: MINORS,                                                               
SCHOOLS, DRUGS, SENTENCES, which was  recently signed into law by                                                               
Governor  Frank Murkowski.  This bill  would address  misdemeanor                                                               
assaults, while  HB 88  would address  felony assaults  on school                                                               
employees made with a deadly weapon.                                                                                            
                                                                                                                                
Representative Lynn contended that  the mandatory 60-day sentence                                                               
specified  in  this  bill  was  an  "appropriate"  sentence.  The                                                               
message must  be sent that  assaults on school grounds  would not                                                               
be tolerated.                                                                                                                   
                                                                                                                                
Representative  Lynn  disclosed  that,  being  a  retired  public                                                               
school teacher;  he personally understood "how  dangerous working                                                               
on   school  premises   could  sometimes   be".  He   noted  that                                                               
representatives from the Department  of Law, the Anchorage School                                                               
District, and the  Alaska Association of School  Boards, which is                                                               
on  record in  support  of  the bill,  were  available to  answer                                                               
questions. He urged the Committee to advance the bill.                                                                          
                                                                                                                                
AT EASE: 9:46:23 AM / 9:46:35 AM                                                                                                
                                                                                                                                
Co-Chair Green appreciated  the work conducted on  this bill. She                                                               
directed  members'  attention  to a  Mat-Su  Valley  Frontiersman                                                               
newspaper  article titled  "Police: Student  urged into  fight by                                                               
mother" [copy  on file]  about a Wasilla  middle student  who was                                                               
urged  by  her  mother  and  another  adult  to  assault  another                                                               
student. The  school district  found they  could not  take action                                                               
against  the adults  for their  involvement.  She mentioned  that                                                               
Senator  Ralph  Seekins  has  also  recognized  the  validity  in                                                               
addressing such  a situation. Passage  of this  legislation would                                                               
delight school  districts for it  would provide them  the ability                                                               
to adequately address assault situations in the future.                                                                         
                                                                                                                                
Senator Stedman  asked whether the bill's  language might subject                                                               
junior high  or high school  boys who  might "get a  little rough                                                               
with each  other" when settling issues  to 60 days in  jail, were                                                               
such action to occur on school grounds.                                                                                         
                                                                                                                                
NANCY  MANLEY,  Staff to  Representative  Lynn,  deferred to  the                                                               
Department of Law.                                                                                                              
                                                                                                                                
ANNE  CARPENETI,  Assistant   Attorney  General,  Legal  Services                                                               
Section-Juneau,  Criminal  Division,  Department of  Law,  stated                                                               
that the situation "would depend  on the circumstances". Students                                                               
fighting at  a school-sponsored  event would  be subject  to this                                                               
provision if "we could prove  beyond a reasonable doubt that they                                                               
were assaulting each other".                                                                                                    
                                                                                                                                
Senator Stedman  questioned the  "leeway" a  judge might  have in                                                               
dealing with these  situations. "More often than  we'd like", the                                                               
reality is that such behavior does occur with young adults.                                                                     
                                                                                                                                
Ms. Carpeneti  understood the Senator's concern,  as she recalled                                                               
from her  high school experience  that "kids did push  each other                                                               
around".   However,   "it   would  be   unlikely"   under   those                                                               
circumstances that an assault charge  would be issued "unless the                                                               
fight was very serious".                                                                                                        
                                                                                                                                
Ms.  Carpeneti clarified,  that, were  there cause  to prosecute,                                                               
youth  under the  age of  18 would  be prosecuted  under juvenile                                                               
law. This provisions in this bill  would apply to people 18 years                                                               
of age or older.                                                                                                                
                                                                                                                                
Co-Chair  Green  pointed  out  that  internal  school  discipline                                                               
policies involving the principal,  the student's parents, and the                                                               
school's disciplinary committee would  first address an in-school                                                               
event.                                                                                                                          
                                                                                                                                
Ms.  Carpeneti anticipated  that juveniles  would be  involved in                                                               
"the vast  majority" of these situations.  This legislation would                                                               
not be applicable in those cases.                                                                                               
                                                                                                                                
Senator Bunde  noted that a school  confrontation that "escalated                                                               
to a  really extreme  situation" could be  charged as  an assault                                                               
under  existing criminal  law. To  that point,  he asked  whether                                                               
this bill would impact existing assault laws.                                                                                   
                                                                                                                                
Ms. Carpeneti  stated this legislation would  not affect existing                                                               
law. "There  is already  an aggravating factor  for this  kind of                                                               
conduct on  school grounds  that applied  to all  felony assaults                                                               
against a person".                                                                                                              
                                                                                                                                
Senator  Bunde  asked  whether this  bill  would  "increase  that                                                               
punishment" in the case of "a student upon student assault".                                                                    
                                                                                                                                
Ms. Carpeneti  expressed that this  legislation would  not affect                                                               
juveniles; it would not apply to people under the age of 18.                                                                    
                                                                                                                                
Senator  Bunde  shared "a  very  unfortunate  event" in  which  a                                                               
parent  attending   their  child's   hockey  game   in  Anchorage                                                               
assaulted a  juvenile referee. He asked  whether this legislation                                                               
would  be  applicable to  such  a  situation  were it  a  school-                                                               
sponsored event.                                                                                                                
                                                                                                                                
Ms. Carpeneti affirmed it would. "It would apply to the adult".                                                                 
                                                                                                                                
Co-Chair Green  referred to language  in Section 1(d)(1)  and (2)                                                               
of the bill,  beginning on page 1  line 6 through page  2 line 7,                                                               
which specified this legislation would  be applicable to a person                                                               
"who knowingly  directed the conduct constituting  the offense at                                                               
a uniformed  or otherwise clearly identified  peace officer, fire                                                               
fighter,  correctional employee",  emergency medical  technician,                                                               
paramedic, ambulance attendant, or  other emergency responder who                                                               
was engaged in the performance of  official duties at the time of                                                               
the assault or person on school  grounds or at a school sponsored                                                               
event.                                                                                                                          
                                                                                                                                
Ms. Carpeneti affirmed.                                                                                                         
                                                                                                                                
Co-Chair  Green continued  that, rather  than the  target of  the                                                               
bill to  be two kids fighting  on a school playground,  the focus                                                               
of  the  bill would  be  to  provide  legal recourse  for  school                                                               
officials in  such cases as  that detailed in  the aforementioned                                                               
newspaper article about  the adult who "spurred the  child on" to                                                               
fight. The  school district was  frustrated when it found  it had                                                               
no  legal recourse  against the  adult. She  apologized, had  her                                                               
earlier remarks misled the discussion.                                                                                          
                                                                                                                                
Co-Chair  Wilken moved  to report  the bill  from Committee  with                                                               
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There being  no objection,  SCS CS HB  41(FIN) was  REPORTED from                                                               
Committee with three  previous zero fiscal notes:  fiscal note #6                                                               
dated  January 28,  2006 from  the Department  of Administration;                                                               
fiscal  note #7  dated January  30, 2006  from the  Department of                                                               
Law;  and  fiscal  note  #8  dated  January  30,  2006  from  the                                                               
Department of Public Safety.                                                                                                    
                                                                                                                                
AT EASE 9:54:39 AM / 9:58:27 AM                                                                                                 
                                                                                                                                
                                                                                                                                
     CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 57(FIN)                                                                       
     "An Act relating to the sale of certain state land to                                                                      
     adjacent landowners."                                                                                                      
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
9:58:50 AM                                                                                                                    
                                                                                                                                
TERRY  HARVEY,  Staff  to  Representative  Bruce  Weyhrauch,  the                                                               
bill's sponsor, explained the bill  would revise State Statute to                                                               
allow the  Department of  Natural Resources  to negotiate  with a                                                               
private landowner  the sale of a  parcel of State land,  20 acres                                                               
or smaller,  which was  surrounded by land  held by  that private                                                               
landowner. These land parcels are  unique in that the only access                                                               
to  these  parcels  would  be   through  the  private  landowners                                                               
property. This  negatively impacts  the ability  of the  State to                                                               
sell the land to another entity.                                                                                                
                                                                                                                                
Mr. Harvey  noted that Representative Weyhrauch  has been working                                                               
with Representative  Bill Thomas in  regards to such a  parcel of                                                               
land  in Haines,  which is  in  Representative Thomas's  election                                                               
district. A  person in Haines  has been  working for 30  years on                                                               
developing his land  for a mining operation, which  would be open                                                               
to the public. That individual's  property completely surrounds a                                                               
pre-Statehood mining claim that  has reverted to State ownership.                                                               
The  individual in  this  situation "should  be  allowed to  work                                                               
directly  with the  State,"  as  it would  remove  the burden  of                                                               
advertising and survey work he would  be required to pay for were                                                               
he  to attempt  to purchase  the land  through the  typical State                                                               
land disposal process.                                                                                                          
                                                                                                                                
10:00:27 AM                                                                                                                   
                                                                                                                                
Mr. Harvey noted that Dick  Mylius, Director, Division of Mining,                                                               
Land and  Water, Department of  Natural Resources,  was available                                                               
to answer  technical questions about  the bill.  Sarah Gilbertson                                                               
with  the Department  of  Fish  and Game  was  also available  to                                                               
address public access  issues that might arise were  the State to                                                               
engage in such  a sale. The Haines landowner,  John Schnabel, was                                                               
also available to discuss his situation.                                                                                        
                                                                                                                                
10:01:03 AM                                                                                                                   
                                                                                                                                
Senator Bunde  asked whether a  survey would be required  on such                                                               
parcels.                                                                                                                        
                                                                                                                                
Mr.  Harvey assumed  a  survey would  be  required. However,  the                                                               
direct negotiation sale process  would forego the advertising and                                                               
other requirements for someone in Mr. Schnabel's position.                                                                      
                                                                                                                                
Senator Bunde,  agreeing to the  uniqueness of there  being State                                                               
land  surrounded  by privately  held  land,  asked whether  other                                                               
private landowners were seeking to acquire such land.                                                                           
                                                                                                                                
Mr.  Harvey  understood  there were  other  cases,  however,  Mr.                                                               
Schnabel was the  only one seeking to purchase such  land at this                                                               
time.                                                                                                                           
                                                                                                                                
That being  the case,  Senator Bunde declared  this "seems  to be                                                               
kinda pushing the edge of special interest legislation".                                                                        
                                                                                                                                
Co-Chair Green asked whether this  situation might be referred to                                                               
as "an in-holding".                                                                                                             
                                                                                                                                
Mr. Harvey responded in the affirmative.                                                                                        
                                                                                                                                
Co-Chair  Green characterized  this situation  as "a  reverse in-                                                               
holding". There are numerous parcels  of "in-holding" land in the                                                               
State with access issues.                                                                                                       
                                                                                                                                
10:02:40 AM                                                                                                                   
                                                                                                                                
DICK  MYLIUS,  Director,  Division  of Mining,  Land  and  Water,                                                               
Department  of Natural  Resources,  testified via  teleconference                                                               
from  an  offnet  location. This  legislation  would  change  the                                                               
State's  "preference rights"  statutes. Typically  State land  is                                                               
sold  through a  competitive  process through  which any  Alaskan                                                               
could   participate.   However,   "preference  rights   are   the                                                               
exception" as they  allow the State to negotiate a  sale with one                                                               
individual.   Typically  this   process  is   utilized  when   an                                                               
individual  legally occupies  the land  and has  made significant                                                               
investments on the property.                                                                                                    
                                                                                                                                
Mr. Mylius  stated that  the preference  rights process  could be                                                               
expanded to  allow State land,  which is surrounded  by privately                                                               
held  land, such  as the  aforementioned  land in  Haines, to  be                                                               
sold.  Such  land would  be  unattractive  to  others, as  it  is                                                               
inaccessible.                                                                                                                   
                                                                                                                                
Mr. Mylius stated  that this legislation would  include such land                                                               
in an  existing "remnant" preference  rights statute  that allows                                                               
the State to negotiate the sale  of a small parcel of land within                                                               
a municipality  to an  individual. A  best use  interest finding,                                                               
land survey, and appraisal would  be required, and the land would                                                               
be  sold at  fair market  value. He  noted that  the Haines  land                                                               
exceeds the  parcel size  currently specified  in the  statute. A                                                               
survey has already been conducted on the parcel.                                                                                
                                                                                                                                
Mr.  Mylius noted  that, while  the land  in Haines  is the  only                                                               
known parcel, there could be  others, considering the size of the                                                               
State and the amount of land the State owns.                                                                                    
                                                                                                                                
Senator  Bunde  questioned the  claim  that  such land  would  be                                                               
inaccessible,  as  he  understood  an existing  State  law  would                                                               
require granting right-of-way access to land.                                                                                   
                                                                                                                                
10:06:32 AM                                                                                                                   
                                                                                                                                
Mr. Mylius  clarified that the law  was specific to land  sold by                                                               
the State; the State would be  required to insure there was legal                                                               
access to  any land  it sold.  A private  landowner would  not be                                                               
required to provide  legal access to land sold by  the State; the                                                               
purchaser  would  be  required  to negotiate  directly  with  the                                                               
private landowner  for access. He  was unsure whether  the access                                                               
requirement  was required  by  State law,  as  the Department  of                                                               
Natural Resources  provides access to  land it sells as  a matter                                                               
of policy.                                                                                                                      
                                                                                                                                
Senator Bunde  asked whether  the land  might qualify  for access                                                               
under  the  provisions  of  the  State's  RS  2477  rights-of-way                                                               
project.                                                                                                                        
                                                                                                                                
Mr. Mylius  understood there was a  RS 2477 route near  or on the                                                               
Haines parcel. Its  exact location has not been  confirmed, as it                                                               
has  not  been  surveyed.  While RS  2477  "would  provide  trail                                                               
access, one  of the problems with  RS 2477 is it's  not unlimited                                                               
access" and  there are other [unspecified]  RS 2477 restrictions.                                                               
Thus, it  is unclear as  to whether the  RS 2477 access  would be                                                               
sufficient to allow  development of the land. While  the route is                                                               
recognized under  State law,  it has not  been recognized  by the                                                               
court system  and thus, at this  point, could not be  relied upon                                                               
to provide legal access to the land.                                                                                            
                                                                                                                                
Senator  Bunde  appreciated  Mr. Schnabel's  situation,  however,                                                               
suggested the bill be referred  to the Senate Judiciary Committee                                                               
so  his   concern  about  whether   this  was   special  interest                                                               
legislation could be addressed.                                                                                                 
                                                                                                                                
10:08:50 AM                                                                                                                   
                                                                                                                                
Senator  Stedman furthered  Senator Bunde's  access question,  by                                                               
asking  whether  "prescriptive  easements",  which  are  used  to                                                               
acquire access across property that  is privately owned, could be                                                               
utilized in these cases.                                                                                                        
                                                                                                                                
10:09:27 AM                                                                                                                   
                                                                                                                                
Mr.  Mylius, noting  he  was  not proficient  in  the subject  of                                                               
prescriptive  easements  (PEs),  explained that  the  court  must                                                               
approve  PEs. The  Court  would  require seven  to  ten years  of                                                               
actual documented  use as well as  documentation proclaiming that                                                               
no one had  attempted to block the access. Nothing  like that has                                                               
been filed  in the Haines  case. The Department could  attempt to                                                               
establish  a PE,  however,  it  would be  "a  time consuming  and                                                               
expensive process" with an unforeseeable outcome.                                                                               
                                                                                                                                
Senator   Stedman  informed   the  Committee   that,  while   the                                                               
Department felt  there could  be other  similar parcels  like the                                                               
Haines land, no  inventory of parcels had been  provided when the                                                               
bill was heard in the Senate Resources Committee.                                                                               
                                                                                                                                
Co-Chair Green  assumed there could  be other parcels of  land to                                                               
which this  bill would  apply, particularly  in areas  where road                                                               
construction has occurred.                                                                                                      
                                                                                                                                
Senator Olson  understood that the  bill's previous  committee of                                                               
referral had  considered an amendment sponsored  by Senator Ralph                                                               
Seekins.                                                                                                                        
                                                                                                                                
Mr.  Harvey communicated  that it  was not  until after  the bill                                                               
reported from  the Senate Resources  Committee, that  the sponsor                                                               
became aware  Senator Seekins had some  legal concerns pertaining                                                               
to  the  differences  between  a direct  preference  sale  to  an                                                               
individual  and  the  State's   typical  land  disposal  process.                                                               
Representative Weyhrauch  understood that the  Senator's concerns                                                               
arose because he did not have  the benefit of hearing Mr. Mylius'                                                               
testimony. No amendments have been requested.                                                                                   
                                                                                                                                
Co-Chair Green opined  that the key language in the  bill is that                                                               
"the director  'may' allow the  land" in  question to be  sold to                                                               
the  adjoining  landowner  through  the  direct  preference  sale                                                               
option. This language  is located in Section 1(7) page  3 lines 1                                                               
though  11  of the  bill.  In  other  words, the  director  would                                                               
determine whether to allow this process to transpire.                                                                           
                                                                                                                                
Mr. Harvey  noted that  Sarah Gilbertson  with the  Department of                                                               
Fish and Game  would explain the efforts taken  to address public                                                               
access concerns.                                                                                                                
                                                                                                                                
10:13:25 AM                                                                                                                   
                                                                                                                                
SARAH   GILBERTSON,  Special   Assistant  to   the  Commissioner,                                                               
Department of  Fish and  Game, announced  that the  Department is                                                               
aware of  numerous parcels  of land  in the  State to  which this                                                               
legislation could apply.  Some of these parcels  "are State owned                                                               
land that is  adjacent to a waterway" such as  a stream or river.                                                               
The surrounding  land is either  privately or federally  owned in                                                               
these cases. The Department's primary  concern with these parcels                                                               
of land was to preserve Alaskans' ability to access the water.                                                                  
                                                                                                                                
Ms.  Gilbertson  stated  that   the  Department's  concerns  were                                                               
addressed  by  adding  the  requirement  that  a  best  interests                                                               
finding  be determined,  as specified  in  Section 1(7)(b)(A)  on                                                               
page 3  line 5 of  the bill. The  inclusion of the  best interest                                                               
findings would  ensure that the  access to waterways  issue would                                                               
be addressed.                                                                                                                   
                                                                                                                                
Co-Chair Green asked  for confirmation that the  addition of that                                                               
language appeased the concerns of the Department.                                                                               
                                                                                                                                
Ms. Gilbertson affirmed.                                                                                                        
                                                                                                                                
AT EASE 10:14:54 AM / 10:15:58 AM                                                                                           
                                                                                                                                
Co-Chair Green  appreciated the work  that has been  conducted on                                                               
the issue.                                                                                                                      
                                                                                                                                
10:16:26 AM                                                                                                                   
                                                                                                                                
JOHN  SCHNABEL, the  owner of  84 acres  of land  surrounding the                                                               
State  parcel in  Haines, testified  via  teleconference from  an                                                               
offnet location. His attempts to  purchase the State parcel began                                                               
in 1980,  and the  effort has been  very challenging.  He pointed                                                               
out that  in separate  efforts to purchase  other State  land via                                                               
the public  outcry auction, he  was held  financially responsible                                                               
for the land surveys and  advertising notices. Even though he had                                                               
paid those  expenses, other people  had the right to  bid against                                                               
him without any financial obligation.                                                                                           
                                                                                                                                
Mr.  Schnabel said  he planned  to develop  the 84  acres into  a                                                               
wilderness and gold panning experience  for tourists. His concern                                                               
is that  a conflicting activity  might present itself on  the 13-                                                               
acres  parcel of  land within  his development,  were it  sold to                                                               
another individual at  an outcry auction. This  bill would assist                                                               
in making his development plans "secure".                                                                                       
                                                                                                                                
Co-Chair  Wilken moved  to report  the bill  from Committee  with                                                               
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
Without objection, CS  SS HB 57(FIN) was  REPORTED from Committee                                                               
with previous  indeterminate fiscal note  #1 dated April  4, 2006                                                               
from the Department of Natural Resources.                                                                                       
                                                                                                                                
10:18:30 AM                                                                                                                   
                                                                                                                                
                                                                                                                                
     HOUSE BILL NO. 419                                                                                                         
     "An Act repealing the Board  of Storage Tank Assistance, the                                                               
     underground storage  tank revolving loan fund,  and the tank                                                               
     cleanup   loan   program;    repealing   certain   reporting                                                               
     requirements relating to  underground petroleum storage tank                                                               
     systems; making conforming amendments;  and providing for an                                                               
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Green read the bill's title.                                                                                           
                                                                                                                                
10:18:52 AM                                                                                                                   
                                                                                                                                
KAREN LIDSTER,  Staff to Representative John  Coghill, the bill's                                                               
sponsor,  stated that,  in order  to  meet federal  Environmental                                                               
Protection Agency (EPA)  guidelines regarding underground storage                                                               
tanks, the Legislature,  in 1990, approved HB  220, which created                                                               
the Underground Storage Tank Program  (USTP) and the Storage Tank                                                               
Assistance Fund (STAF) grant program.  Grant applications to STAF                                                               
were prioritized on criteria established  by the Board of Storage                                                               
Tank Assistance (BSTA).                                                                                                         
                                                                                                                                
Ms. Lidster  stated that  USTP was phased  out shortly  after the                                                               
EPA underground  storage tank program  ended, and the  STAF grant                                                               
program was  converted to the Underground  Storage Tank Revolving                                                               
Loan Fund  (STRLF) in the  year 2002. However, the  initial grant                                                               
program  was "extremely  successful" and  when STRLF  was created                                                               
there were  no applicants for  its funds. With the  transition to                                                               
STRLF, there was no reason  to continue the BSTA. Therefore, this                                                               
bill would  modify "the end date  for the Board [of  Storage Tank                                                               
Assistance]  in order  to be  consistent  with the  end date  for                                                               
formal  termination of  the loan  program." It  would in  essence                                                               
eliminate statutes and regulations that are no longer required.                                                                 
                                                                                                                                
10:20:49 AM                                                                                                                   
                                                                                                                                
Senator  Bunde  asked for  further  clarification  of the  reason                                                               
STRLF did not receive any  applications, specifically whether the                                                               
funds provided by  STAF had adequately addressed  the entirety of                                                               
underground tanks or whether the  transition from a grant program                                                               
to a loan program caused the decrease in applicants.                                                                            
                                                                                                                                
Ms. Lidster  deferred to  Larry Dietrick  with the  Department of                                                               
Environmental Conservation.                                                                                                     
                                                                                                                                
10:21:22 AM                                                                                                                   
                                                                                                                                
Senator  Bunde  clarified  his question  as  whether  there  were                                                               
storage  tanks still  needing to  be addressed  and whether  they                                                               
were not being  cleaned up because the program changed  to a loan                                                               
program.                                                                                                                        
                                                                                                                                
10:21:36 AM                                                                                                                   
                                                                                                                                
LARRY  DIETRICK,   Director,  Division  of  Spill   Prevention  &                                                               
Response, Department  of Environmental Conservation,  stated that                                                               
6,000 of  the 7,000 underground  storage tanks in the  State have                                                               
been removed.  The balance of  the tanks was upgraded  to current                                                               
requirements. The effort  has cost $43 million. This  "was a very                                                               
significant program", and the hope  is that it negated the threat                                                               
from underground storage tank pollutants.                                                                                       
                                                                                                                                
Senator Bunde  understood therefore that the  deteriorating tanks                                                               
were "eliminated".                                                                                                              
                                                                                                                                
Mr. Dietrick affirmed.                                                                                                          
                                                                                                                                
Senator Olson asked whether the  term "eliminated" meant that the                                                               
tanks  were  actually removed  or  were  simply "not  being  used                                                               
anymore".                                                                                                                       
                                                                                                                                
Mr. Dietrick stated that 6,000 tanks were physically removed.                                                                   
                                                                                                                                
Senator Olson asked whether the  program addressed both under and                                                               
above ground storage tanks.                                                                                                     
                                                                                                                                
Mr.  Dietrick   responded  that   the  program  was   limited  to                                                               
underground storage tanks.                                                                                                      
                                                                                                                                
Senator Hoffman  asked whether restoring  the program to  a grant                                                               
program would generate further applicants.                                                                                      
                                                                                                                                
Mr. Dietrick  expressed that continuing  the grant program  as it                                                               
was originally  designed, which was  to remove tanks  not meeting                                                               
EPA standards,  would not generate additional  applicants, as all                                                               
of the tanks were either removed or updated.                                                                                    
                                                                                                                                
Co-Chair Green opined that Senator  Hoffman appeared to be having                                                               
difficulty believing that.                                                                                                      
                                                                                                                                
Senator  Bunde  shared  Senator Hoffman's  sentiment.  "If  there                                                               
wasn't a free lunch, they wouldn't be standing in line."                                                                        
                                                                                                                                
Co-Chair Green  voiced being  encouraged that  "we are  ending an                                                               
era".                                                                                                                           
                                                                                                                                
10:24:30 AM                                                                                                                   
                                                                                                                                
Senator Olson asked whether the  underground storage tank program                                                               
pertained to both water and petroleum product tanks.                                                                            
                                                                                                                                
Mr. Dietrick  stated that  the program  was limited  to petroleum                                                               
product tanks.                                                                                                                  
                                                                                                                                
Co-Chair  Wilken moved  to report  the bill  from Committee  with                                                               
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being no  objection, HB  419 was  REPORTED from  Committee                                                               
with previous zero  fiscal note #1 dated March 21,  2006 from the                                                               
Department of Environmental Conservation.                                                                                       
                                                                                                                                
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Lyda Green adjourned the meeting at 10:25:48 AM.                                                                       

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