Legislature(2017 - 2018)SENATE FINANCE 532

04/23/2018 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Moved CSHB 267(RES) Out of Committee
                 SENATE FINANCE COMMITTEE                                                                                       
                      April 23, 2018                                                                                            
                         1:51 p.m.                                                                                              
1:51:35 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair  MacKinnon  called  the  Senate  Finance  Committee                                                                    
meeting to order at 1:51 p.m.                                                                                                   
MEMBERS PRESENT                                                                                                               
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Click Bishop, Vice-Chair                                                                                                
Senator Peter Micciche                                                                                                          
Senator Donny Olson                                                                                                             
Senator Gary Stevens                                                                                                            
MEMBERS ABSENT                                                                                                                
Senator Natasha von Imhof                                                                                                       
ALSO PRESENT                                                                                                                  
Tim Clark,  Staff, Representative  Bryce Edgmon;  Brandon S.                                                                    
Spanos,  Deputy   Director,  Tax  Division,   Department  of                                                                    
Revenue;   Representative  Matt   Claman,  Sponsor;   Lizzie                                                                    
Kubitz,  Staff, Representative  Matt Claman;  Nikole Nelson,                                                                    
Executive Director, Alaska Legal Services Corporation.                                                                          
PRESENT VIA TELECONFERENCE                                                                                                    
Tom Brookover, Director, Sport  Fish Division, Department of                                                                    
Fish and Game, Anchorage;  Kathryn Monfreda, Chief, Criminal                                                                    
Records  and Identification  Bureau,  Division of  Statewide                                                                    
Services,  Department of  Public  Safety, Anchorage;  Emilie                                                                    
Beasley, Self, Matanuska-Susitna Borough.                                                                                       
HB 106    CIVIL LEGAL SERVICES FUND                                                                                             
          HB 106 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
CSHB 219(JUD)                                                                                                                   
         CRIM HIST CHECK: ST EMPLOYEES/CONTRACTORS                                                                              
          CSHB 219(JUD) was HEARD and  HELD in committee for                                                                    
          further consideration.                                                                                                
CSHB 267(RES)                                                                                                                   
          RELEASE HUNTING/FISHING RECORDS TO MUNI                                                                               
          CSHB 267(RES)  was REPORTED out of  committee with                                                                    
          three  "do  pass"  recommendations and  three  "no                                                                    
          recommendation";  and  with  one new  fiscal  note                                                                    
          from  the   Department  of  Fish  and   Game;  one                                                                    
          previously published zero  fiscal note: FN 1(DFG);                                                                    
          and one  previously published fiscal  impact note:                                                                    
          FN2 (CED).                                                                                                            
CS FOR HOUSE BILL NO. 267(RES)                                                                                                
     "An  Act  requiring  the  release  of  certain  records                                                                    
     relating to big game  hunters, guided hunts, and guided                                                                    
     sport   fishing   activities  to   municipalities   for                                                                    
     verification  of taxes  payable; and  providing for  an                                                                    
     effective date."                                                                                                           
Co-Chair  MacKinnon reported  that the  bill was  previously                                                                    
heard in committee on April  16, 2018 and during the morning                                                                    
meeting on April 23, 2018.                                                                                                      
1:53:23 PM                                                                                                                    
Senator Micciche  relayed concerns over  the confidentiality                                                                    
of log  book information.  He asked for  specifics regarding                                                                    
log  book  information  and whether  the  information  would                                                                    
remain  confidential when  the  municipalities received  the                                                                    
TOM BROOKOVER, DIRECTOR, SPORT  FISH DIVISION, DEPARTMENT OF                                                                    
FISH  AND  GAME,  ANCHORAGE (via  teleconference),  answered                                                                    
that  the  division  collected  the  information  through  a                                                                    
program  that  required  sportfishing  business  owners  and                                                                    
guides  to register  with the  Department of  Fish and  Game                                                                    
(DFG) and  to complete  a log book.  He delineated  that the                                                                    
program  included  two  guide  books;  one  for  salt  water                                                                    
fishing  and one  for  fresh water  fishing.  He listed  the                                                                    
required information:  The Division of Motor  Vehicles (DMV)                                                                    
boat  registration number  or the  United States  (US) Coast                                                                    
Guard number  along with the locations  where guide services                                                                    
were provided;  data for the  specific angler  including the                                                                    
name  or  license  number, the  catch  species,  and  number                                                                    
harvested. The sport fishing  business owner was responsible                                                                    
for turning the log book  over to the division. He furthered                                                                    
that the  program was  in place since  2005. The  purpose of                                                                    
the  program  was to  collect  data  needed for  management,                                                                    
conservation  of   the  resource,  and  regulation   of  the                                                                    
industry.  He pointed  out that  the  division conducted  an                                                                    
Annual  Statewide  Harvest  Survey (ASHS)  from  guided  and                                                                    
unguided  anglers  and  on-site  creel  surveys  (or  angler                                                                    
interviews) at specific sites on  specific times in addition                                                                    
to the logbook  program. He indicated that  the creel survey                                                                    
and the  logbooks provided  detailed information  versus the                                                                    
generalized   information  collected   via  the   ASHS.  The                                                                    
logbooks were a significant source  of data due to the level                                                                    
of  specificity provided.  In some  cases, it  was the  only                                                                    
information collected  and the  department wanted  to ensure                                                                    
the "integrity  and quality"  of the  data. He  related that                                                                    
the division questioned what purpose  the logbook data would                                                                    
serve  the municipalities.  The division  used the  data for                                                                    
fishery  management,   conservation,  and   guided  activity                                                                    
regulation, which was different  from the assumed purpose of                                                                    
verifying municipal tax reporting.  He voiced the division's                                                                    
concern regarding  the proposed  use of  the data  and noted                                                                    
that the  division was uncertain  about the  consequences of                                                                    
providing the information to municipalities.                                                                                    
1:58:50 PM                                                                                                                    
Senator  Micciche  ascertained  that  the  logbook  location                                                                    
information did  not require GPS  data and the  location was                                                                    
only  identified by  name of  the  waterbody. Mr.  Brookover                                                                    
replied  in the  affirmative and  added that  the freshwater                                                                    
logbook  requested the  name of  lake, stream,  or river  by                                                                    
area,  and the  salt water  location was  identified through                                                                    
coded  areas. The  division provided  a  prescribed list  of                                                                    
locations for both fresh or saltwater.                                                                                          
Senator   Micciche   informed   the   committee   that   the                                                                    
information  was protected  through  AS 11.56.850,  Official                                                                    
Misconduct statutes,  and carried a Class  A misdemeanor for                                                                    
violations  and   AS  11.56.860,   relating  to   Misuse  of                                                                    
Confidential  Information another  Class  A misdemeanor.  He                                                                    
deduced that the  only reason the data would be  used was to                                                                    
determine  the number  of days  of service  provided to  the                                                                    
client and if it matched the tax information.                                                                                   
2:00:43 PM                                                                                                                    
TIM  CLARK, STAFF,  REPRESENTATIVE  BRYCE EDGMON,  confirmed                                                                    
that   Senator  Micciche's   statements  were   correct  and                                                                    
indicated    that    the    consequences    for    breaching                                                                    
confidentiality at the municipal level was "serious."                                                                           
Co-Chair  MacKinnon  asked Mr.  Brookover  if  the data  the                                                                    
division  would share  with a  municipality would  contain a                                                                    
warning  against misuse.  Mr. Brookover  responded that  the                                                                    
division would  supply the information  in a  summary format                                                                    
as opposed  to the  logbook sheets  and was  consistent with                                                                    
how DFG  supplied other types  of requested  information. He                                                                    
was  uncertain   how  or   if  a   warning  in   respect  to                                                                    
confidentiality would be addressed.                                                                                             
Senator Micciche  understood that  the information  would be                                                                    
aggregated and  include the  total number  of trips  but not                                                                    
the  exact   locations.  He  asked  for   confirmation.  Mr.                                                                    
Brookover  answered in  the affirmative.  He noted  that the                                                                    
bill  used  the words  "may  release  records" and  did  not                                                                    
include  details   about  the  level  of   specificity.  The                                                                    
division  would  initially  aggregate   the  data,  but  the                                                                    
specificity  depended on  the municipalities  needs and  how                                                                    
the  activities  were  taxed.  However,  the  bill  did  not                                                                    
prohibit  the  division  from responding  to  more  specific                                                                    
requests, if  the tax  policy was  detailed and  taxed items                                                                    
like  the  number of  anglers,  specific  location, or  time                                                                    
periods.  He summarized  that the  division would  aggregate                                                                    
the  information but  provide more  detailed information  by                                                                    
request.   Senator  Micciche   emphasized  that   the  state                                                                    
"protected tax payer information  in every other aspect" and                                                                    
warned that  he would "watch"  the flow of  information. The                                                                    
legislative intent was not  to provide specific information.                                                                    
He understood that the intent of  the bill was for data that                                                                    
provided "an aggregated cross check" of information.                                                                            
2:04:40 PM                                                                                                                    
Co-Chair  MacKinnon corrected  his statement  and read  from                                                                    
the bill:                                                                                                                       
     The bill shall make hunting records and activity                                                                           
     reports available to a municipality that levels a tax                                                                      
     on those activities if  the information concerned hunts                                                                    
     or   activities  occurring   within   the  four   years                                                                    
     proceeding the date and  the municipalities request the                                                                    
     records for the purpose  of verifying taxes payable and                                                                    
     the municipality agree  to maintain the confidentiality                                                                    
     of the records.                                                                                                            
Co-Chair  MacKinnon   added  that  the   municipality  would                                                                    
receive specific information,  which was the only  way a tax                                                                    
audit could proceed.                                                                                                            
Mr.  Clark relayed  that the  municipality  the sponsor  had                                                                    
been working  closely with  employed a  simple flat  tax per                                                                    
day  on  the  fishing  and  hunting  activities  within  its                                                                    
Vice-Chair  Bishop   referenced  testimony  that   the  lost                                                                    
revenue amounted  to between $50 thousand  and $100 thousand                                                                    
in the Lake  and Peninsula Borough. He asked  whether he was                                                                    
correct. Mr. Clark replied in the affirmative.                                                                                  
Co-Chair MacKinnon  alerted that a  fee would be  charged to                                                                    
the  municipality that  requested  the data.  She asked  Mr.                                                                    
Brookover whether the 4-year's  prior information was easily                                                                    
accessible.  Mr.   Brookover  replied  that  the   data  was                                                                    
available,  but the  division would  need  to configure  the                                                                    
data  base  and  develop  the   summary  reports  to  enable                                                                    
responses  to the  request.  He noted  the  fiscal note  had                                                                    
identified  the  implementation  costs.  Co-Chair  MacKinnon                                                                    
asked  whether  DFG would  have  to  reenter the  data.  Mr.                                                                    
Brookover responded in the negative  and reiterated that the                                                                    
summary reporting function would  need to be created because                                                                    
a municipal  boundary did not match  the division's location                                                                    
boundaries but the data itself existed.                                                                                         
2:08:21 PM                                                                                                                    
Co-Chair MacKinnon cited page 1,  line 10 under AS 08.54.760                                                                    
(b) and  noted the  words, "The  department shall  make hunt                                                                    
records and  activity reports available    She turned  to AS                                                                    
16.05.815(a)  on  page 2,  lines  20  and  21 and  read  the                                                                    
following,  "The   department  and  the   Alaska  Commercial                                                                    
Fisheries  Entry Commission  may release?"  She asked  about                                                                    
the differences  between the  use of  "may" or  "shall." Mr.                                                                    
Clark was  uncertain. He  guessed that use  of the  term for                                                                    
the provision related to sport  fishing "fit most logically"                                                                    
with  existing statute  and  the  hunting records  provision                                                                    
was drafted as a new section.                                                                                                   
Co-Chair  MacKinnon  observed  that the  provision  was  not                                                                    
exclusive to sport  fishing and read the  following from the                                                                    
bill,  "?  the  landings  of  fish,  shellfish,  or  fishery                                                                    
products,  and  annual  statistical  reports  of  fishermen,                                                                    
buyers,  and  processors?"  She inquired  whether  the  area                                                                    
where the  fish was caught  would be provided to  the taxing                                                                    
authority.  Mr.  Clark  responded   that  when  the  statute                                                                    
corresponded  specifically to  the logbook  information, the                                                                    
answer was  in the affirmative. The  logbook information was                                                                    
providing  the municipality  confirmation that  the activity                                                                    
took  place  within  its  jurisdiction.  Co-Chair  MacKinnon                                                                    
wondered  whether that  applied to  commercial fishers.  Mr.                                                                    
Clark  replied that  the part  of  the provision  concerning                                                                    
commercial fishers  was long existing  and related  to large                                                                    
regions  where the  commercial  fishery  harvest was  landed                                                                    
versus where it was caught.                                                                                                     
2:11:13 PM                                                                                                                    
Senator Stevens  listed the  three areas  in the  state that                                                                    
collected the type  of tax; the Lake  and Peninsula Borough,                                                                    
Sitka,  and  Yakutat.  He  noted that  Yakutat  was  in  his                                                                    
district and thought that the tax  was a per day tax and the                                                                    
aggregate summary  would be adequate.  He asked  whether Mr.                                                                    
Clark knew  how Yakutat structured  its tax. He  voiced that                                                                    
Yakutat  only received  half of  the  amount of  tax it  was                                                                    
owed. Mr.  Clark recalled  testimony from  Yakutat's manager                                                                    
that the tax was like a severance tax.                                                                                          
2:13:00 PM                                                                                                                    
Vice-Chair  Bishop  MOVED to  REPORT  CSHB  267(RES) out  of                                                                    
committee with  individual recommendations  and accompanying                                                                    
fiscal notes. There being NO OBJECTION, it was so ordered.                                                                      
CSHB 267(RES) was  REPORTED out of committee  with three "do                                                                    
pass"  recommendations and  three  "no recommendation";  and                                                                    
with one  new fiscal  note from the  Department of  Fish and                                                                    
Game; one previously published zero  fiscal note: FN 1(DFG);                                                                    
and one previously published fiscal impact note: FN2 (CED).                                                                     
2:13:25 PM                                                                                                                    
AT EASE                                                                                                                         
2:15:55 PM                                                                                                                    
CS FOR HOUSE BILL NO. 219(JUD)                                                                                                
     "An   Act   relating    to   background   investigation                                                                    
     requirements  for  state  employees  whose  job  duties                                                                    
     require  access  to  certain federal  tax  information;                                                                    
     relating  to current  or  prospective contractors  with                                                                    
     the   state  with   access  to   certain  federal   tax                                                                    
     information;  establishing  state personnel  procedures                                                                    
     required  for employee  access to  certain federal  tax                                                                    
    information; and providing for an effective date."                                                                          
2:16:37 PM                                                                                                                    
BRANDON   S.   SPANOS,   DEPUTY  DIRECTOR,   TAX   DIVISION,                                                                    
DEPARTMENT  OF REVENUE,  presented  the  bill. He  explained                                                                    
that  HB   219  authorized  agencies  to   mandate  national                                                                    
criminal    history    record     checks    that    included                                                                    
fingerprinting,   for   state  employees   and   contractors                                                                    
accessing  certain  federal  tax information.  The  Internal                                                                    
Revenue  Service's (IRS)  "Publication  1075" (published  by                                                                    
the  Department of  the Treasury,  Internal Revenue  Service                                                                    
and updated  September 30, 2016) specified  the requirements                                                                    
that state and local agencies  must follow to obtain certain                                                                    
federal  tax  information directly  from  the  IRS. The  IRS                                                                    
enacted  the  measures  to  safeguard  the  information.  He                                                                    
related   that  the   bill   applied   primarily  to   three                                                                    
departments:  The  Department   of  Revenue,  Child  Support                                                                    
Services Division  and the Tax  Division; the  Department of                                                                    
Labor and  Workforce Development (DLWD), and  the Department                                                                    
of  Health and  Social Services  (DHSS). He  reiterated that                                                                    
the 2016  update for Publication 1075  required the criminal                                                                    
history  record  checks  that included  fingerprinting.  The                                                                    
state implemented  the background checks but  needed further                                                                    
authority  to  require  fingerprinting. He  summarized  that                                                                    
essentially,   the   bill  authorized   the   fingerprinting                                                                    
requirement.   The  fingerprints   were  submitted   to  the                                                                    
Department  of Public  Safety  (DPS) who  sent  them to  the                                                                    
Federal  Bureau  of  Investigation (FBI)  for  the  national                                                                    
criminal history check.                                                                                                         
2:18:53 PM                                                                                                                    
Mr. Spanos discussed the Sectional Analysis (copy on file):                                                                     
     Section 1                                                                                                                  
     Amends AS 12.62.400 by adding a new subsection.                                                                            
     This will require an agency  to submit the fingerprints                                                                    
     of  current  or  prospective employees  or  contractors                                                                    
     whose  job   duties  require  access  to   federal  tax                                                                    
     information   (defined   in  AS   39.55.015(e)(3)   and                                                                    
     36.30.960(d)(3))  to the  Department  of Public  Safety                                                                    
     for submission  to the Federal Bureau  of Investigation                                                                    
     to obtain a criminal  history record. Defines "agency",                                                                    
     "employee" and "contractor".                                                                                               
     Section 2                                                                                                                  
     Amends AS 36.30 by adding a new section.                                                                                   
     This  section  establishes state  personnel  procedures                                                                    
     for obtaining  and submitting fingerprints  for current                                                                    
     or  prospective  contractors  if a  contract  with  the                                                                    
     state  requires  access  to  federal  tax  information.                                                                    
     Defines   "agency",  "contractor"   and  "federal   tax                                                                    
     Section 3                                                                                                                  
     Amends AS 39 by adding a new chapter.                                                                                      
     This new  chapter addresses state  personnel procedures                                                                    
     related to federal tax information.                                                                                        
     Adds AS 39.55.010                                                                                                          
     This section  explains the purpose of  the chapter-- to                                                                    
     establish   procedures   to   safeguard   federal   tax                                                                    
     information   which  will   apply  to   a  current   or                                                                    
     prospective  state employee  whose  job duties  require                                                                    
     access to federal tax information.                                                                                         
     Adds AS 39.55.015                                                                                                          
     This  section requires  current  and prospective  state                                                                    
     employees whose  job duties  require access  to federal                                                                    
     tax  information to  provide information  to an  agency                                                                    
     for  a  state  and  national  criminal  history  record                                                                    
     check.  Defines  "agency",   "employee",  "federal  tax                                                                    
     information", "return", and "return information".                                                                          
     Section 4                                                                                                                  
     Provides the effective date of July 1, 2018.                                                                               
Senator Stevens asked what areas  of the state the employees                                                                    
that required  fingerprinting were located. Mr.  Spanos only                                                                    
knew the location  of the DOR employees  that were primarily                                                                    
located  in  Anchorage  and  Juneau.   He  offered  that  an                                                                    
employee  could  go  to  any   law  enforcement  agency  for                                                                    
Co-Chair MacKinnon  asked whether  the Office  of Children's                                                                    
Services was affected  by the bill. Mr. Spanos  did not know                                                                    
the answer.                                                                                                                     
Vice-Chair  Bishop  wondered  what  the  procedure  was  for                                                                    
sending fingerprints to the FBI.                                                                                                
2:22:43 PM                                                                                                                    
KATHRYN    MONFREDA,    CHIEF,    CRIMINAL    RECORDS    AND                                                                    
IDENTIFICATION  BUREAU,  DIVISION   OF  STATEWIDE  SERVICES,                                                                    
DEPARTMENT    OF     PUBLIC    SAFETY,     ANCHORAGE    (via                                                                    
teleconference), explained that  fingerprints for employment                                                                    
or licensing  purposes were  received as  a "rolled"  set of                                                                    
fingerprints  on  a  "hard   card  format."  The  department                                                                    
digitized the fingerprints and compared  them in the state's                                                                    
system  that was  a consortium  of 8  states systems  in one                                                                    
shared    database.    Subsequently,    they    were    sent                                                                    
electronically to the FBI for  the background check. The FBI                                                                    
destroyed the  fingerprints after  the background  check was                                                                    
Co-Chair MacKinnon OPENED public testimony.                                                                                     
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
2:24:35 PM                                                                                                                    
Vice-Chair Bishop  addressed the fiscal notes.  He noted the                                                                    
four zero fiscal notes accompanying  the bill. The first was                                                                    
for DOC,  allocated to  Administrative Services,  FN6 (COR),                                                                    
the  second  was  for   DHSS,  allocated  to  Administrative                                                                    
Support  Services, FN7  (DHS), and  the third  was for  DPS,                                                                    
allocated to  Criminal Justice Information  Systems Program,                                                                    
FN9 (DPS). Lastly, he pointed  to the DLWD zero fiscal note,                                                                    
FN6 (LWF)  allocated to  Unemployment Insurance  and relayed                                                                    
that  the  anticipated  cost would  be  covered  within  the                                                                    
current budget through federal funds.  He continued with the                                                                    
fiscal impact  note for  DOR, FN10  (REV), allocated  to the                                                                    
Tax Division  in the amount of  $4.8 thousand for FY  19 and                                                                    
$500 in the outyears. He read  from the analysis on the page                                                                    
2 of the fiscal note:                                                                                                           
     This  bill  authorizes   state  agencies  that  receive                                                                    
     Federal  Tax  Information   (FTI)  to  undergo  federal                                                                    
     background checks  as now  required in  IRS Publication                                                                    
     1075.  Background  checks  would be  conducted  on  all                                                                    
     current and  new employees  at a cost  of $47  for each                                                                    
     completed investigation.                                                                                                   
     The Tax  Division estimates that 102  employees will be                                                                    
     fingerprinted in  the first year, and  approximately 10                                                                    
     employees in subsequent years.                                                                                             
Co-Chair  MacKinnon  asked  whether  DOR had  to  adopt  new                                                                    
regulations  with passage  of  the  legislation. Mr.  Spanos                                                                    
answered in  the negative. Co-Chair MacKinnon  asked why the                                                                    
department  did not  calculate the  cost of  fingerprints as                                                                    
revenue  on the  fiscal note.  Mr. Spanos  replied that  the                                                                    
cost  of  fingerprinting  did not  change  the  department's                                                                    
revenue. He  added that  losing the  ability to  receive the                                                                    
federal   information   would      negatively   impact   the                                                                    
department.  Co-Chair  MacKinnon  inquired whether  DOR  was                                                                    
charging  anyone  to   perform  fingerprinting.  Mr.  Spanos                                                                    
responded  that DOR  planned to  pay for  the fingerprinting                                                                    
and not charge the employees.                                                                                                   
2:27:07 PM                                                                                                                    
AT EASE                                                                                                                         
2:29:07 PM                                                                                                                    
Vice-Chair Bishop  pointed to the following  from the fiscal                                                                    
note,  "An updated  background check  will also  be required                                                                    
every   ten   years."   He    assumed   that   did   include                                                                    
fingerprinting.  Mr.  Spanos  replied  in  the  affirmative.                                                                    
Vice-Chair Bishop  asked what changed on  fingerprints after                                                                    
10  years. Mr.  Spanos responded  that he  thought the  same                                                                    
thing   and  considered   maintaining   a   record  of   the                                                                    
fingerprints  for  resubmission  if possible.  However,  the                                                                    
background checks were required every 10 years.                                                                                 
Co-Chair  MacKinnon  noted that  some  of  the fiscal  notes                                                                    
reported  that  fingerprinting cost  $47  per  set, and  the                                                                    
Legislative  Finance Division  (LFD) believed  that a  small                                                                    
amount of  revenue would  be generated  from fingerprinting.                                                                    
However,  she understood  that Mr.  Spanos stated  DOR would                                                                    
not  charge  employees  for fingerprinting.  She  wanted  to                                                                    
discuss the issue of  storing someone's personal information                                                                    
and any liability  issue that might result for  the state as                                                                    
a result.  She requested  further review  of the  DPS fiscal                                                                    
2:31:16 PM                                                                                                                    
Vice-Chair  Bishop pointed  to  one last  DOR fiscal  impact                                                                    
note  allocated to  the Child  Support Services  Division in                                                                    
the amount  of $10 thousand for  FY 19 and $1.5  thousand in                                                                    
the  outyears.  He  mentioned  that  $6.6  thousand  was  in                                                                    
Federal  Receipts   and  the  remaining  $3.4   thousand  in                                                                    
Undesignated General  Funds (UGF).  He read  from page  2 of                                                                    
the analysis:                                                                                                                   
     The Child  Support Services Division has  196 employees                                                                    
     who  will  be  fingerprinted  in the  first  year,  and                                                                    
     approximately 32 employees  each subsequent year. Every                                                                    
     10   years,   background   checks  must   be   renewed.                                                                    
     Background  checks would  be conducted  on all  current                                                                    
     and new employees  at a cost of $47  for each completed                                                                    
Vice-Chair  Bishop relayed  that he  had concerns  regarding                                                                    
what happened to the background  check information after ten                                                                    
Co-Chair  MacKinnon  questioned   whether  regulations  were                                                                    
necessary for  the Division of  Child Support  Services with                                                                    
passage of the bill. She  purported that the fiscal note did                                                                    
not speak to the question.                                                                                                      
2:33:04 PM                                                                                                                    
Co-Chair  MacKinnon  returned to  the  DPS  fiscal note  and                                                                    
asked  Ms.   Monfreda  to   comment  regarding   storage  of                                                                    
employee's background information for  ten years and the FBI                                                                    
destruction  of fingerprints.  She  referred  to an  earlier                                                                    
version of  the DPS fiscal  note that reported  revenue from                                                                    
the  collection  of  fingerprints. Ms.  Monfreda  reiterated                                                                    
that the department's  fiscal note was zero  because the fee                                                                    
collected for  processing the fingerprints was  equal to the                                                                    
cost  charged by  the  FBI, which  billed  DPS monthly.  She                                                                    
continued that the  reason for the 10 year  renewal was that                                                                    
fingerprints changed through the  aging process or were worn                                                                    
down.   She   reiterated   that  the   FBI   destroyed   the                                                                    
fingerprints and  DPS stored the  fingerprints. Fingerprints                                                                    
over  one-year old  were unacceptable  to the  FBI. Co-Chair                                                                    
MacKinnon confirmed  that DPS was storing  the fingerprints.                                                                    
Ms. Monfreda replied in the affirmative.                                                                                        
CSHB 219(JUD)  was HEARD and  HELD in committee  for further                                                                    
2:35:20 PM                                                                                                                    
AT EASE                                                                                                                         
2:35:51 PM                                                                                                                    
HOUSE BILL NO. 106                                                                                                            
     "An Act allowing appropriations to the civil legal                                                                         
     services fund from court filing fees."                                                                                     
2:36:22 PM                                                                                                                    
REPRESENTATIVE MATT  CLAMAN, SPONSOR, thanked  the committee                                                                    
for  hearing  the bill.  He  explained  the legislation.  He                                                                    
communicated that the bill  would safeguard Alaskans' access                                                                    
to  the  civil  justice  system by  creating  a  stable  and                                                                    
sustainable mechanism for funding  the Alaska Legal Services                                                                    
Corporation (ALSC),  protecting those  who cannot  afford to                                                                    
hire an  attorney of  their own. The  ALSC provided  help to                                                                    
seniors, veterans,  disabled Alaskans, children,  low income                                                                    
workers,  consumers,  and  domestic  violence  victims.  The                                                                    
Senate  Judiciary  Committee  Substitute [SCS  HB  106(JUD)]                                                                    
allowed  the legislature  to appropriate  5  percent of  the                                                                    
filing  fees paid  to  the Alaska  Court  System during  the                                                                    
previous fiscal  year into the already  existing Civil Legal                                                                    
Services Fund.  He furthered  that the  fund was  created in                                                                    
2007  with  bipartisan support  to  help  ensure that  civil                                                                    
legal   aid   was   available  to   Alaska's   disadvantaged                                                                    
population.  He elaborated  that deposits  to the  fund were                                                                    
generated from  15 percent of  civil punitive  damage awards                                                                    
at the  discretion of the  legislature. The  legislature was                                                                    
authorized  to distribute  the funds  to organizations  that                                                                    
provided  civil legal  services to  low income  Alaskans. In                                                                    
2011, ALSC received its only  appropriation from the fund in                                                                    
the amount of $110 thousand.  The amount was insufficient to                                                                    
address the critical unmet need  for civil legal assistance.                                                                    
He noted that in 2017  the attorney general reported that in                                                                    
the last  four years the  state only collected  $15 thousand                                                                    
in  punitive damages.  He furthered  that  the Alaska  Legal                                                                    
Services  Corporation  was established  in  1967  and was  a                                                                    
nonprofit charitable  501(c)(3), whose funding comes  from a                                                                    
variety of state, federal, and private sources.                                                                                 
Representative  Claman  continued   that  the  Alaska  Legal                                                                    
Services Corporation  endeavored to  serve a  growing number                                                                    
of eligible  applicants. Since 1984, the  number of Alaskans                                                                    
who  qualified for  legal services  had  more than  doubled,                                                                    
from  41,000   to  over  100,000.  Currently,   the  state's                                                                    
contribution to ALSC  was only a fraction of what  it was 30                                                                    
years ago. The state appropriated  $1.2 million in 1984 with                                                                    
the appropriation  declining to  $450 thousand in  2016. The                                                                    
corporation  had  to turn  away  hundreds  of families  each                                                                    
year. The legislation attempted  to bridge the civil justice                                                                    
gap by  stabilizing ALSC funding  and providing  civil legal                                                                    
aid to all Alaskans, not just the few who can afford it.                                                                        
Representative Claman relayed  from personal experience that                                                                    
his  former law  practice  had volunteered  for many  years,                                                                    
working  with the  ALSC  performing  intake interviews  with                                                                    
clients and received  a Bar Association award  for its work.                                                                    
He personally  observed that ALSC's demand  for services was                                                                    
much  higher than  they could  provide  and underscored  the                                                                    
importance of the bill.                                                                                                         
2:40:13 PM                                                                                                                    
LIZZIE KUBITZ, STAFF,  REPRESENTATIVE MATT CLAMAN, explained                                                                    
the Sectional Analysis (copy on file):                                                                                          
     Section 1                                                                                                                  
     Amends  AS  37.05.590  relating   to  the  Civil  Legal                                                                    
     Services  Fund by  inserting  language that  authorizes                                                                    
     the legislature to appropriate up  to 25 percent of the                                                                    
     filing fees received by the  Alaska Court System during                                                                    
     the  previous  fiscal  year into  the  already  created                                                                    
     Civil Legal Services Fund.                                                                                                 
2:42:36 PM                                                                                                                    
Co-Chair MacKinnon OPENED public testimony.                                                                                     
2:42:55 PM                                                                                                                    
NIKOLE  NELSON, EXECUTIVE  DIRECTOR,  ALASKA LEGAL  SERVICES                                                                    
CORPORATION, shared that the ALSC  was a non-profit law firm                                                                    
dedicated to ensuring access to  justice for all Alaskans in                                                                    
the  civil legal  system. The  corporation strove  to bridge                                                                    
Alaska's civil justice  gap for 50 years.  She explained why                                                                    
it was vital  to support civil legal aid.  She conveyed that                                                                    
both  the state  and  federal  constitutions guaranteed  due                                                                    
process and  equal protection under the  law. However, civil                                                                    
legal  aid   was  significantly   lacking  and   created  an                                                                    
"enormous justice gap" between  individuals who needed civil                                                                    
legal aid  and those that  could attain it. She  voiced that                                                                    
the mission  of ALSC was to  ensure fairness for all  in the                                                                    
civil justice  system. She  delineated that  the corporation                                                                    
provided legal  help in protecting  individuals' livelihood,                                                                    
health,  safety,  and   families.  The  corporation  offered                                                                    
direct  advice  and  representation  as  well  as  self-help                                                                    
information  for the  public. The  corporation maintained  a                                                                    
hotline  for advice  and  provided  community education  and                                                                    
clinics.  The  corporation had  11  regional  offices and  6                                                                    
medical  legal partnerships  that enabled  it to  expand its                                                                    
reach  statewide. The  offices  were  located in  Anchorage,                                                                    
Juneau,  Fairbanks,   Kotzebue,  Ketchikan,   Nome,  Bethel,                                                                    
Dillingham,  Kenai, Palmer,  Utqiagvik,  Sitka, and  Kodiak.                                                                  
Each  office  was  staffed  locally and  relied  on  a  vast                                                                    
network  of pro  bono volunteers  due to  limited resources.                                                                    
She  described the  type  of clients  the  ALSC served.  She                                                                    
elucidated that  women who suffered  spousal abuse  often in                                                                    
front of their children, or  a grandfather who supported his                                                                    
grandchildren and  was afraid  of losing his  home due  to a                                                                    
predatory lender, or  a commercial fisher who  spent her all                                                                    
money on  boat repair  and the  boat subsequently  caught on                                                                    
fire,  or  a  disabled   veteran  denied  federal  Veteran's                                                                    
Affairs  benefits  were  all examples  of  individuals  that                                                                    
asked ALSC for help on a  daily basis. She emphasized that a                                                                    
civil  legal  solution  existed for  all  the  problems  she                                                                    
described and the constitutional  right for a criminal court                                                                    
appointed attorney was not extended to civil cases.                                                                             
Ms. Nelson continued that the  ALSC was at the "forefront of                                                                    
fighting the epidemic of domestic  violence that plagued the                                                                    
state, serving over 500 victims  per year." In addition, the                                                                    
corporation   protected   over   1000  seniors   and   their                                                                    
caregivers and  assisted with wills, probates,  and power of                                                                    
attorney.  The corporation  helped over 500 hundred veterans                                                                    
and 300  disabled individuals gain access  to healthcare and                                                                    
benefits and  350 families fend off  foreclosure and illegal                                                                    
evictions. The  ALSC made civil  legal services  a "reality"                                                                    
for  rural Alaskans,  which represented  over 40  percent of                                                                    
its clients  in 182  different communities.  The corporation                                                                    
assisted over  3000 families and 7000  individuals with more                                                                    
than 43 thousand visits to  its website and 2000 individuals                                                                    
attended its  clinics and self-help  workshops. She  noted a                                                                    
2012  study  by the  Alaska  Mental  Health Trust  Authority                                                                    
(AMHTA), which found that for  every dollar invested in ALSC                                                                    
it returned  $5 to  the state. She  relayed that  ALSC saved                                                                    
the state $600 thousand  in avoided emergency shelter costs,                                                                    
$2.6  million for  domestic violence  victims' medical  care                                                                    
and counseling costs and helped  disperse federal funds into                                                                    
the economy by assisting  those that earned federal benefits                                                                    
receive them.                                                                                                                   
2:48:31 PM                                                                                                                    
Ms. Nelson  furthered her testimony.  She relayed  that ALSC                                                                    
turned away  hundreds of families last  year with compelling                                                                    
needs at  the rate of one  for every one family  served. She                                                                    
emphasized  that  the rejected  cases  had  merit and  civil                                                                    
recourse  was  available  but  ALSC  lacked  the  staff  and                                                                    
resources  to  assist  those  in  need.  She  stressed  that                                                                    
funding  had  not  kept  pace with  the  growing  need.  The                                                                    
corporation was  "incredibly cost efficient" and  80 percent                                                                    
of cases  were resolved out  of court with the  average case                                                                    
costing $600. She  reported that the starting  salary for an                                                                    
Anchorage   attorney  was   $44  thousand   per  year.   The                                                                    
corporation leveraged the resources  of donated office space                                                                    
and   over  $500   thousand  in   volunteer  services.   She                                                                    
emphasized that  HB 106  would help  bridge the  justice gap                                                                    
and ensure that the principle  of "justice for all" remained                                                                    
a priority.                                                                                                                     
Senator  Olson  was  impressed  by ALSC  and  the  pro  bono                                                                    
services  it  received.  He  asked   how  many  law  offices                                                                    
provided pro bono services in  the state. Ms. Nelson replied                                                                    
that the corporation had a  pool of approximately 850 active                                                                    
pro bono  attorneys each year. Senator  Olson inquired about                                                                    
the  number  of attorneys  ALSC  had  on staff.  Ms.  Nelson                                                                    
responded that ALSC had 35 attorneys.                                                                                           
Senator Micciche  voiced that sometimes  the state  was sued                                                                    
by  ALSC  on behalf  of  clients.  He  asked how  often  the                                                                    
corporation  sued  the  state  and  to  discuss  under  what                                                                    
circumstances  ALSC  was  prohibited  from  practicing.  Ms.                                                                    
Nelson  answered  that "on  occasion"  the  ALSC took  cases                                                                    
where the  state was the  opposing party. She  reported that                                                                    
the  number of  affirmative lawsuits  against the  state was                                                                    
less than 10  out of the 3.3 thousand cases  each year. Most                                                                    
often  the  corporation  was   helping  individuals  in  the                                                                    
"defensive  position." She  added that  the corporation  was                                                                    
prohibited  via federal  regulation from  providing services                                                                    
for controversial matters like  abortion related services or                                                                    
gerrymandering  cases   etc.  In  addition.  the   ALSC  was                                                                    
prohibited from competing  with the private bar  and did not                                                                    
take  on fee  generating  services such  as personal  injury                                                                    
cases.   She  offered   to  provide   a  complete   list  of                                                                    
2:54:01 PM                                                                                                                    
Vice-Chair  Bishop appreciated  Ms.  Nelson's testimony  and                                                                    
was supportive of the service the ALSC provided.                                                                                
Senator  Micciche noted  that the  list of  restrictions was                                                                    
included  in  the member's  bill  packets  [titled "  Alaska                                                                    
Legal Services  Corporation Restrictions on Cases]  (copy on                                                                    
2:54:34 PM                                                                                                                    
Co-Chair MacKinnon OPENED public testimony.                                                                                     
EMILIE BEASLEY,  SELF, MATSU (via teleconference),  spoke in                                                                    
support of the  bill. She reported that she was  73 years of                                                                    
age,  lived in  the  state  since 1977,  and  served in  the                                                                    
Marine  Corps. She  explained that  ALSC  helped her  remain                                                                    
safe in  her home  from a family  member who  threatened her                                                                    
life. She appreciated the respectful  attitude of ALSC staff                                                                    
and the  representation in court.  She urged support  of the                                                                    
bill to help protect senior citizens.                                                                                           
2:55:32 PM                                                                                                                    
Vice-Chair  Bishop thanked  Ms. Beasley  for her  service to                                                                    
the country.                                                                                                                    
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
2:56:00 PM                                                                                                                    
AT EASE                                                                                                                         
2:56:33 PM                                                                                                                    
Co-Chair  MacKinnon indicated  that  a new  fiscal note  was                                                                    
requested from  the Office of  Management and  Budget (OMB).                                                                    
She announced that amendments were due the following day by                                                                     
5pm and that amendments for HB 219 were due the following                                                                       
day by noon.                                                                                                                    
HB 106 was HEARD and HELD in committee for further                                                                              
2:57:59 PM                                                                                                                    
The meeting was adjourned at 2:57 p.m.                                                                                          

Document Name Date/Time Subjects
HB106 Additional Document-HFIN Questions Memo 2.22.18.pdf SFIN 4/23/2018 1:30:00 PM
HB 106
HB106 Sectional Analysis ver D 2.22.18.pdf SFIN 4/23/2018 1:30:00 PM
HB 106
HB106 Additional Document-SJUD Questions Memo 2.22.18.pdf SFIN 4/23/2018 1:30:00 PM
HB 106
HB106 Sponsor Statement 2.22.18.pdf SFIN 4/23/2018 1:30:00 PM
HB 106
HB106 Supporting Document-Letters of Support 2.22.18.pdf SFIN 4/23/2018 1:30:00 PM
HB 106
HB106 Updated Sectional Analysis ver D 4.23.18.pdf SFIN 4/23/2018 1:30:00 PM
HB 106
HB106 Updated Sponsor Statement 4.23.18.pdf SFIN 4/23/2018 1:30:00 PM
HB 106