Legislature(2001 - 2002)
05/03/2001 06:56 PM Senate FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
May 03, 2001
6:56 PM
TAPES
SFC-01 # 93, Side A
SFC 01 # 93, Side B
CALL TO ORDER
Co-Chair Pete Kelly re-convened the meeting at approximately 6:56
PM.
PRESENT
Senator Dave Donley, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Loren Leman
Senator Lyda Green
Senator Gary Wilken
Senator Lyman Hoffman
Senator Donny Olson
Senator Ward
Also Attending: REPRESENTATIVE JOE HAYES; CHRIS CHRISTENSEN,
Deputy Administrative Director, Alaska Court System; ROBERT
BUTTCANE, Legislative and Administrative Liaison, Division of
Juvenile Justice, Department of Health and Social Services; CANDACE
BROWER, Program Coordinator, Office of the Commissioner, Department
of Corrections; AV GROSS, Attorney representing the North Slope
Borough;
Attending via Teleconference: From Anchorage: BOB LOEFFLER,
Director, Division of Mining, Land and Water, Department of Natural
Resources;
SUMMARY INFORMATION
HB 101-CHARTER SCHOOLS
The bill moved from Committee.
SB 161-NO PAY FOR JUDGES UNTIL DECISION
The Committee adopted a committee substitute and heard from the
Alaska Court System. The bill moved from Committee.
SB 139-STATE WATER USE
The Committee heard from the Department of Natural Resources. A
committee substitute was adopted and amended with two amendments.
The fiscal note was amended and the bill moved from Committee.
SB 169-HATE CRIMES: AUTOMATIC WAIVER OF MINORS
The Committee heard from the Department of Health and Social
Services and the Department of Corrections. A committee substitute
was amended and adopted and the bill moved from Committee.
SB 186-MUNICIPAL TAX: PIPELINE PROP/G.O.BOND DEBT
The Committee heard from the sponsor and the North Slope Borough. A
committee substitute was adopted and the bill was held in
Committee.
HB 32-SEX CRIME AND PORNOGRAPHY FORFEITURES
The Committee heard from the sponsor and the bill was held in
Committee.
SENATE CS FOR CS FOR HOUSE BILL NO. 101(HES)
"An Act relating to charter schools; and providing for an
effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Donley stated that after conducting an investigation, he
was prepared to support this legislation.
Co-Chair Donley offered a motion to move SCS CS HB 101 (HES) from
Committee with two accompanying fiscal notes, one from the
Department of Education and Early Development, Teaching and
Learning Support for $1,425,000 and another from the Department of
Education and Early Development, K-12 Support for $609,800.
There was no objection and the bill MOVED from Committee.
CS FOR SENATE BILL NO. 161(JUD)
"An Act relating to the withholding of salary of justices,
judges, and magistrates; relating to prompt decisions by
justices, judges, and magistrates; and relating to judicial
retention elections for judicial officers; and providing for
an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Donley moved to adopt CS SB 161, 22-LS0009\X as a working
draft.
Without objection it was ADOPTED.
Co-Chair Donley stated that he has been working with Chris
Christensen from the Alaska Court System to develop this committee
substitute, which would improve the language in existing statute
regarding the six-month requirement for judicial decisions without
expanding it to apply to the appellate level. He explained the
committee substitute adopts a state policy indicating the State of
Alaska expects most trial court, and a majority of appellate court
decisions to be rendered within six months following oral arguments
of the case. He noted these goals are consistent with goals
announced by Chief Justice Dana Fabe.
Co-Chair Donley also pointed out the committee substitute provides
in statute, that the number of times a trial court justice has had
salary withheld due to outstanding cases beyond the six-month
deadline would appear in the Official Election Pamphlet (OEP) for
voter consideration when that judge's term is up for retention.
Co-Chair Donley continued the committee substitute stipulates that
8a report would be issued to the legislature listing the number of
pending judicial matters that have surpassed the deadline. He
stated this ensures that judges' salary warrant information is
provided to the public and to organizations such as the Judicial
Council, which he said has not always occurred. He explained the
inability for interested parties to obtain this information was due
to a decision made in the Department of Administration regarding
confidential personnel information.
CHRIS CHRISTENSEN, Deputy Administrative Director, Alaska Court
System, relayed the Chief Justice's appreciation of Co-Chair Donley
for listening to the court system concerns and for his efforts to
address those concerns on this matter.
Mr. Christensen stated the committee substitute, "does eliminate
all the problems, which we discussed at the last meeting regarding
the danger to the six month rule." He remarked that the intent
language is a "reasonable expression of the legislature's wishes,
given that it is the funding authority." He assured efforts are
made to accomplish the timely resolution of cases and the court
administration shares the legislature's interest in continuing the
process.
Co-Chair Donley offered a motion to move from Committee CS SB 161,
22-LS0009\X with new zero fiscal note from the Alaska Court System.
Senator Hoffman asked if Mr. Christensen had any opposition to the
committee substitute.
Mr. Christensen asserted he did not oppose the committee
substitute.
Without objection the bill MOVED from Committee.
CS FOR SENATE BILL NO. 139(RES)
"An Act relating to fees for certain uses of state water and
to the accounting and appropriation of those fees; relating to
authorizations for the temporary use of state water; making
other amendments to the Alaska Water Use Act; and providing
for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
AT EASE 7:03 PM / 7:04 PM
Senator Leman moved to adopt CS SB 139, 22-GS1087\P as a working
draft.
The committee substitute was ADOPTED without objection.
Amendment #1: This amendment makes the following changes to the
committee substitute.
Page 3, lines 23- 27:
Delete all material.
Insert a new bill section to read:
Sec. 4. AS 46.15.020(b) is amended to read:
(b) The commissioner shall
(1) adopt procedural and substantive regulations to
carry out the provisions of this chapter, taking into
consideration the responsibilities of the Department of
Environmental Conservation under AS 46.03 and the Department
of Fish and Game under AS 16;
(2) keep a public record of all applications for
permits and certificates and other documents filed in the
commissioner's office; and shall record all permits and
certificates and amendments and orders affecting them and
shall index them in accordance with the source of the water
and the name of the applicant or appropriator;
(3) cooperate with, assist, advise, and coordinate
plans with the federal, state, and local agencies, including
local soil and water conservation districts, in matters
relating to the appropriation, use, conservation, quality,
disposal, or control of waters and activities related thereto;
(4) prescribe fees or service charges for any public
service rendered consistent with AS 37.10.050 - 37.10.058,
except that the department may charge under regulations
adopted by the department an annual $50 administrative service
fee to maintain the water mana2ement program (5) before
February 1 of each year, prepare a report describing the
activities of the commissioner under AS 46.15.035 and
46.15.037; the commissioner shall notify the legislature that
the report is available; the report must include
(A) information on the number of
applications and appropriations for the removal of
water from one hydrological unit to another that were
requested and that were granted and on the amounts of
water involved;
(B) information on the number and location
of sales of water conducted by the commissioner and
on the volume of water sold;
(C) recommendations of the commissioner for
changes in state water law; and
(D) a description of state revenue and
expenses related to activities under AS 46.15.035 and
46.15.037."
Senator Green moved for adoption and referenced earlier discussion
regarding water rights and the involved parties in the state. She
shared that in communities with a large agricultural presence, the
local soil and water conservation districts are involved in the
process. The intent of this amendment, she explained, is to ensure
their remaining involvement.
AT EASE 7:06 PM / 7:07 PM
Senator Leman detailed the four changes made in the committee
substitute. The first, he said, is a technical change of "relating"
to "related" in the Section 2 title, "FINDINGS, POLICY, AND PURPOSE
RELATED TO AUTHORIZATIONS FOR CERTAIN TERMPORARY USES OF STATE
WATER." on page 2, line 21. He informed that language deleted from
page 4, following line 7, and on line 21, allowed the commissioner
to extend authorization for temporary use of water for an
additional five years. He noted this provision was removed in
response to concerns raised by Senator Wilken during the previous
hearing. He concluded with the replacement of "public health" with
"human health" on line 25. This, he said, is to make the
terminology consistent with that used by the United States
Environmental Protection Agency flood page, as well as the National
Institute of Health. He clarified that public health relates to
epidemiology and diseases whereas human health is related to the
effects of human activities and is more appropriate for this
legislation.
Senator Green explained that Amendment #1 replaces certain language
from a previous committee substitute, 22-GS1087\J, which the
Committee did not adopt, and provides that the commissioner shall
adopt procedural and substantive regulations to carry out the
provisions in the legislation.
Senator Green stated that additional language was recommended by
the bill drafter that requires the Department of Environmental
Conservation to submit an annual report to the legislature. She was
unsure how this relates to the current Version "P".
BOB LOEFFLER, Director, Division of Mining, Land and Water,
Department of Natural Resources, testified via teleconference from
Anchorage to the amendment. He stated the proposed language is
acceptable.
There was no objection and the amendment was ADOPTED.
Amendment #2: This amendment inserts language into Section 1 (c) on
page 2, line 17 of the committee substitute. The amended subsection
reads as follows.
(c) It is the policy of the legislature that the
Department of Natural Resources minimize:
(1) the required costs, including application fees,
on individuals and businesses withdrawing less than a
significant amount of water;
(2) consider providing a partial fee reduction for
water rights holders and applicants who have approved
irrigation management plans.
Senator Green moved for adoption.
Co-Chair Kelly objected for the purpose of discussion.
Senator Green noted this amendment was also prepared to the Version
J committee substitute. She read the inserted language of Section 1
(c)(2) and explained approval of irrigation management plans is the
current practice in the soil and water conservation districts, and
this provision allows the districts to obtain for credit for the
work already completed.
Mr. Loeffler commented there are a number of industries in addition
to agricultural activities that conserve water in a variety of
ways. He did not oppose the amendment.
Co-Chair Kelly removed his objection and the amendment was ADOPTED
without further objection.
Senator Green offered a motion to report the committee substitute
as amended from Committee.
Co-Chair Donley moved to amend the motion in order to amend the
fiscal note.
Without objection, Senator Green WITHDREW her motion.
Co-Chair Donley moved to amend the Department of Natural Resources
fiscal note dated April 12, 2001 to delete the addition of five
full-time positions in FY 02.
There was no objection and the fiscal note was AMENDED.
Senator Green again offered a motion to move from Committee, CS SB
139, 22-GS1087\P, as amended, with forthcoming zero fiscal note
from the Department of Natural Resources.
The bill MOVED from Committee without objection.
AT EASE 7:16 PM / 7:17 PM
SENATE BILL NO. 169
"An Act relating to the nonapplicability of the delinquency
laws to certain minors accused of certain crimes against
persons directed at certain victims."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Donley testified this legislation would be an addition to
current statute requiring waiver to adult court for certain
juveniles over the age of 16 charged with committing certain
offenses. He referenced a list of these offenses. [Copy on file.]
Co-Chair Donley informed that this bill adds Class A misdemeanor
and felony crimes of violence against a person motivated by race,
sex, color, creed, physical or mental disabilities, ancestry or
national origin, to the list of juvenile offenses mandated to adult
court.
Co-Chair Donley noted adult court proceedings are open to the
public, whereas in a juvenile case, the public would be unable to
learn the ruling and subsequent punishment. He added another
advantage to the legislation is that it "raises the level of this"
and helps to deter "this kind of despicable activity in the future"
by demonstrating to would-be offenders that there are consequences
for this conduct.
ROBERT BUTTCANE, Legislative and Administrative Liaison, Division
of Juvenile Justice, Department of Health and Social Services,
agreed with the sponsor that there is a need to communicate a
social value that "says hate crimes are not acceptable in this
state." However, he testified that the department does not favor
the expansion to the list of automatic waiver crimes, especially
for offenses that would involve low-level felonies and misdemeanor
offenses.
Mr. Buttcane stated that the juvenile system would impose "more
strenuous significant sanctions" for those low-level offenses then
what is currently imposed in the adult system. He explained that a
young person committing a misdemeanor offense in the adult system
would most likely receive a suspended jail sentence of only a few
days and perhaps a fine and community work service. On the
contrary, he stressed, young people who commit a crime of bias as
described above, and who's case is handled in the juvenile court
system, are required to participate in victim impact activities,
cultural sensitivity and, in the past, have been required to
complete a book report, write an essay or otherwise learn about
issues and challenges facing the targeted minority group. He added
that these offenders are required to complete "a number of hours"
of community work service specifically on behalf of the people
offended.
Mr. Buttcane continued that the juvenile system is better equipped
to deal with young offenders who have committed low-level felony
and misdemeanor offenses, especially, he stressed, when the same
crimes would be addressed with less intensity in the adult system.
Mr. Buttcane shared that the department recommends consideration of
the duel sentencing provision enacted into law in 1998. He
suggested expanding this to add a prosecution phase to the public
with the option to allow the court to enter a delinquency
disposition and to direct the delinquency system to process the
juvenile. At the same time, he elaborated, the court would
pronounce an adult sentence and if the juvenile failed to
successfully complete a delinquency process, the adult court could
impose a criminal sentence and the juvenile would be transferred to
the Department of Corrections.
Co-Chair Kelly clarified that a Class B felony, which is a crime
against a person, is currently contained in the duel sentencing
provision.
Mr. Buttcane affirmed, but noted this provision requires a prior
delinquency adjudication before it could be imposed.
Co-Chair Kelly asked what is the difference between a Class B
felony crime against a person and Class A misdemeanor crime against
a person.
Mr. Buttcane replied a Class A misdemeanor crime against a person
would include an assault in the fourth degree, which could apply to
"a wide range of behaviors, by words or conduct, placing another
person in fear, or causing physical injury not of a serious
nature." He gave examples as "bloodying somebody's nose and
bruising their arm."
Mr. Buttcane defined a Class B felony as possibly a sexual assault
in the second degree. He noted there were few Class B felony
charges.
Co-Chair Kelly expressed concern that a fourth-degree assault
charge "can be pretty meaningless." He asked for an expanded
definition of Class A misdemeanor crimes against a person.
Mr. Buttcane understood the intent of the legislation is to apply
to the offense that is included in the automatic waiver provision.
Co-Chair Kelly asked if theoretically, a 16-year old could be
mandated to adult court because "he scared another 16-year old."
Mr. Buttcane affirmed and noted, "It is conceivable this would meet
the conditions." However, he stressed the difficulty is whether a
prosecutor would take this type of case to court, and if not, the
juvenile system has no jurisdiction over the matter.
Mr. Buttcane continued listing crimes constituting a Class B
felony, as intentionally causing physical injury to a person by
means of a dangerous instrument. He noted the distinction between
second and first-degree assault pertains to the seriousness of the
injury in that first-degree assault would involve "serious,
protracted, impairment, life-threatening type injuries." He defined
sexual assault in the second degree as sexual contact without
consent, sexual contact with a person who is mentally incapable or
incapacitated, or sexual contact with a person who has been
entrusted to the care of the offender by law.
Co-Chair Kelly remarked the legislation is directed at the recent
paintball attack in Anchorage that targeted Native Alaskans. He
asked if these crimes are second-degree assault.
Mr. Buttcane answered that all three perpetrators involved were
charged with three counts of assault in the fourth degree.
Co-Chair Kelly asked if these cases were formally adjusted or
handled through adjudication.
Mr. Buttcane answered that delinquency petitions were filed against
the two juveniles involved and a criminal complaint was filed
against the one adult.
Co-Chair Kelly asked the maximum sentence the juveniles could
receive under the current system.
Mr. Buttcane responded the perpetrators could be institutionalized
at the McLaughlin Youth Center for a period not to exceed two years
th
or until their 19 birthday, or they could be placed on probation
for the same amount of time. He pointed out that these offenders
could receive up to two-year sentences, which is an advantage of
the juvenile system because regardless of the level of crime, the
delinquency disposition could be applied.
Mr. Buttcane shared that he has received an institutional order in
court for a young person who stole a pack of cigarettes, and that
juvenile spent two years at the McLaughlin facility. He qualified
there are many circumstances that lead the court in reaching a
finding, which he noted in this case, demonstrated this youth
required a high level of isolation and security. He noted the
circumstances in other cases could lead to a finding that the
offender would not be institutionalized and instead be supervised
in the community. He restated there is wide latitude in the
juvenile sentencing system that extends beyond the particular
offense to the various circumstances involved. He listed: response
to other treatment efforts, behavior in school, response to
parental supervision, substance abuse, mental capacity and other
factors as contributing to the circumstances in a case.
Mr. Buttcane stressed that a two-year sentence is the maximum that
could be imposed in the paint ball attack cases, and that it is
unlikely the offenders would be sentenced the full two years.
Co-Chair Kelly summarized the witness's statement that the
Administration does not support this bill.
Mr. Buttcane agreed that the Administration does not support any
increase to the list of automatic waivers, especially for low-level
crimes.
Mr. Buttcane commented that in the delinquency system, of those
crimes of hate or bias, some are related to the perceived sexual
orientation of the victim. He stressed that any expansion of
punishment guidelines for bias and hate crimes that does not
include a provision for sexual orientation is incomplete. He
recognized this is not currently included in the sentencing
aggravator, or the Human Rights Commission purview.
Co-Chair Kelly asked if the witness was saying that the
Administration would not support changes to the hate crime statutes
if sexual orientation were not included as a potential targeted
minority group.
Mr. Buttcane responded that he is unprepared to speak on behalf of
the Administration. However, he noted that other hate crime
legislation, HB 200 that was introduced by the governor, includes
hate crimes based on the sexual orientation of the victim.
Co-Chair Kelly asked if the governor's proposed hate crime
legislation contains a provision addressing juvenile offenders.
Mr. Buttcane answered it does and explains the legislation requires
the juvenile convicted of a hate crime to participate in some type
of sensitivity training.
Senator Ward asked if the Administration would support SB 169 if
sexual orientation were added to the list of targeted minorities.
Mr. Buttcane reiterated that the department does not support any
increase in the automatic waiver to adult court especially for
lower-level felony or misdemeanor crimes. He also reiterated that
any hate crime legislation that does not include bias related to
perceived or actual sexual orientation is considered incomplete.
Senator Ward opined that if Governor Knowles does not support this
legislation his actions are inconsistent with a statement made
during a press conference regarding the paint ball incident.
Mr. Buttcane specified that HB 200 provides that juveniles charged
with committing a hate crime are not moved to adult court, but
remain in the juvenile delinquency system. He noted this
legislation imposes minimum mandatory sentence requirements and
community work service hours.
Senator Ward asked if the offense is therefore not treated as a
criminal offense when committed by a juvenile.
Mr. Buttcane corrected that the matter is treated as a criminal act
but processed as a delinquency.
Co-Chair Kelly stated that Governor Knowles has been consistent
with regard to waiver of minors to adult court.
Senator Ward remarked that he has heard in the media over the past
three weeks that the governor considers that "hate crimes took a
special niche in the world." Senator Ward charged, "Now it comes
time to actually do something about it and he says 'oh, no we can't
bother the darlings.' It's kind of interesting."
Co-Chair Kelly commented, "the governor is taking a horrible
incident and he's trying to get broad sweeping change that has
nothing to do with that incident." Co-Chair Kelly remarked that it
is unfortunate that the Administration has made sexual orientation
a part of this matter. He therefore supported Co-Chair Donley's
legislation.
Co-Chair Donley asked if the paint ball incident would be
classified as a felony under current statute. He shared that when
he learned of the attack, he surmised the crime would be classified
as a Class C felony.
Mr. Buttcane responded that the Division of Juvenile Justice has
worked closely with the Department of Law to impose the highest
possible charges in the paint ball incident, which was assault in
the fourth degree. He informed that a paint ball gun does not
qualify as a dangerous instrument or weapon.
Co-Chair Kelly noted the sentence for conviction of assault in the
fourth degree could be up to two years in prison.
Mr. Buttcane affirmed a juvenile offender convicted of assault in
the fourth degree could be sentenced to the McLaughlin Youth
Facility for up to two years. He qualified it is improper for him
to make conjecture as to the outcome of this pending case, but made
a general statement that it is unlikely the offenders of these
types of crimes would be institutionalized. However, he stressed,
juveniles adjudicated in this type of crime would probably be
placed on probation and would see a probation officer on a weekly
basis, which would not occur in the adult criminal justice system.
Co-Chair Donley clarified the most that the perpetrators in the
paint ball incident could be charged with is a Class A misdemeanor
AT EASE 7:40 PM / 7:46 PM
Co-Chair Donley moved to amend and adopt CS SB 169, 22-LS0778\F.
The conceptual amendment deletes, "or a class A misdemeanor crime
against a person," in Section 1 (a)(4) on page 2, lines 18 and 19.
The amended language reads as follows.
(4) that is a felony crime against a person in which
the minor is alleged to have directed the conduct constituting
the crime at a victim because of that person's race, sex,
color, creed, physical or mental disability, ancestry, or
national origin.
New Text Underlined
Without objection the committee substitute was AMENDED and ADOPTED.
CANDACE BROWER, Program Coordinator, Office of the Commissioner,
Department of Corrections, testified in opposition to the bill for
the same reasons voiced by Mr. Buttcane. She appreciated the
amendment to remove misdemeanors from the list of hate crimes
waived to adult court, but thought the Class C felonies should be
removed as well. She expressed that when considering whether to
waive a juvenile charged of a crime to adult court; it must be done
with "great care and caution." She warned that committing juveniles
to adult court is a "slippery slope" because the adult system is
not conducive to addressing the needs of juveniles. She trusted the
juvenile justice system to "make these offenders accountable for
what they do and to intervene in their behaviors in a much more
appropriate way then we can."
Co-Chair Donley stated for the record that dual sentencing has not
been effective.
Senator Green repeated earlier comments she made in the Senate
Chambers that she would not support any legislation that contains
this language. She voiced concerns that the way this bill is
constructed it would never include "someone who attacked my
grandchildren nor many of the children of everyone in this room."
She stated she found this bill places "a very strange level of
scrutiny" on determining whether a crime is committed out of bias
or hatred. She didn't know how this could conclusively be
determined "unless someone is stupid enough to make a film of it"
as done by the perpetrators in the paint ball attack on Alaskan
Natives. She asserted that if the "result of a crime is harm,
damage, hurt, pain, suffering, etc., the result is the same."
Co-Chair Donley offered a motion to move from Committee, CS SB 169,
22-LS0778\F, as amended with new indeterminable fiscal note from
the Department of Corrections.
The bill MOVED from Committee without objection.
AT EASE 7:52 PM / 7:53 PM
SENATE BILL NO. 186
"An Act establishing a limit on the general obligation debt
that may be authorized and issued by home rule and general law
municipalities; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Donley moved to adopt CS SB 186, 22-LS0851\C as a working
draft.
There was no objection and the committee substitute was ADOPTED.
Co-Chair Donley testified this bill would set limits on bonding
exposure to local governments in Alaska by placing a $10,000 per
resident ceiling on municipal general obligation bond debt. He
noted the bill also limits the mil rate to one-percent for oil and
gas property tax for municipalities with a per capita assessed
value of property over $500,000.
Co-Chair Donley stated this legislation is partially in response to
the recent Bullock vs. State of Alaska, Alaska Supreme Court
decision. He noted this legislation would not impact any existing
bonded debt and would only apply to additional debt incurred by a
local government after the effective date.
Senator Wilken asked why the bill has no fiscal note other then the
indeterminable fiscal note and analysis submitted by the Department
of Revenue.
Co-Chair Donley surmised there would be a fiscal impact to the
state but that it would take several years before there was a major
impact.
Senator Wilken suggested the Committee could issue a fiscal note
for the Department of Revenue to assist in consideration of the
bill.
SFC 01 # 93, Side B 07:56 PM
AVRUM GROSS, Attorney representing the North Slope Borough,
testified to the 20 years he has represented the borough primarily
on this and related issues. He asserted this bill is aimed at the
North Slope Borough (NSB) as a result of the Bullock case and would
prohibit the borough from issuing any bonds for the next ten to 11
years. He added that it would prohibit the borough from refinancing
existing bonds even if lower interest rates could be procured,
which would save the borough money.
Mr. Gross told the Committee the bill contains language in the
committee substitute, which he did not understand.
Mr. Gross expressed, "You must realize that this is a life and
death bill as far as the North Slope Borough is concerned."
Mr. Gross gave a background on the statute this bill would change,
which he said came out of a legislative special session in 1973
called by Governor Bill Egan because delays to the Trans-Alaska
pipeline project were threatened. This special session, Mr. Gross
reminded, was called to resolve lawsuits filed by oil companies
against the state in response to legislation adopted during the
1972 regular legislative session that attempted to regulate the
pipeline in ways the oil companies "found offensive." He informed
that he was present at this special session as council to the
Atlantic Richfield Company.
Mr. Gross recounted the special session addressed the regulation of
the pipeline, which he said was removed and that the "state caved
in on its ability to regulate the pipeline." In addition, he
informed, the special session addressed the matter of taxation,
specifically property taxation of the values that would be created
by construction of the pipeline and related facilities along the
pipeline from the North Slope to Valdez. He stressed that other
taxes were already established to "make sure that the oil wealth
would be spread across all the citizens of the state." He listed
severance, income and royalties, as these taxes, noting they remain
in existence and generate revenues from oil production for the
state.
Mr. Gross pointed out two issues that arose in this special
session; "how much the oil companies should pay" and "who they
should pay it to." He stated that property taxes are traditionally
municipal taxes and are the way local governments are financed.
However, he stated, some argue that during the time of the special
session as well as in the present, that this was "too much for too
few" and that it would be unfair to let the citizens of the NSB,
Valdez, Fairbanks, and other communities along the pipeline route,
to tax these properties in the same manner other property is taxed
across the state. He listed salmon canneries in Kodiak and Bristol
Bay, and office buildings in Anchorage and noted these communities
do not share the revenue garnered from property taxes on these
properties with the state. The fact that one municipality has more
property than another, he stated, up to the point of the special
session had never been considered an issue.
Mr. Gross told the Committee the special legislative session
resulted in some compromises. He said the first agreement was that
oil companies would pay 20 mils tax to the state on all oil
properties and that any property tax paid to municipalities would
be credited against the 20 mils owed to the state. Secondly, he
noted municipalities with oil and gas properties within their
boundaries would be allowed to tax these properties to raise money
for their operating budgets under "a very complicated formula".
Co-Chair Kelly interjected to request the witness address his
earlier statement that there is a flaw in the bill regarding the
NSB ability to bond in the future.
Mr. Gross continued that the last element of the compromise is to
allow boroughs to issue bonds based on the fair market value of the
oil and gas property within their borders and without limits. He
said the specific intent was that the NSB, which he stressed was
specifically discussed in the legislature, would be able to bond,
realizing that prior to that time the borough had no assets on
which to base bonds. He emphasized the borough had no public
facilities and that the oil and gas activities are from a
nonrenewable resource.
Mr. Gross raised this issue, he said because the sponsor testified
that the intent of the legislature during the special session has
been ignored or mistaken. Mr. Gross countered that the intent of
the legislation adopted during the special session "is crystal
clear" in stating there is no limitations on the ability of
boroughs to issue bonds based on the value of property. In
addition, he said, it was specifically discussed during the special
session that the NSB would be allowed to issue bonds to, "try to
catch up to some of the things that every other municipality in the
state has had for years."
Mr. Gross gave an example of Ketchikan, which has had
infrastructure for about one hundred years, and has bonded over
that period of time to built schools, sewer systems, parks, etc.
and would continue to do so. He informed that prior to passage of
the legislation from the special session, the NSB had no sewers,
water systems, schools, public safety facilities, fire facilities
or any other infrastructure. He remarked that the legislature was
aware of this and specifically authorized the NSB to bond, knowing
that it would be "very expensive." The NSB, he said, has
subsequently issued many bonds totaling "a lot of money". He
emphasized that because the population in the borough is sparse,
and because of higher costs for infrastructure, the per capita
bonded indebtedness is "extremely high."
Mr. Gross addressed SB 186 before the Committee saying it purports
to prohibit boroughs from issuing bonds if they have a certain
level of per capita bonded indebtedness. He stressed this punishes
the NSB for "doing exactly what the legislature authorized it to
do." He expressed, The North Slope Borough would be prohibited from
issuing bonds for ten to eleven years; any bonds, of any kind, for
anything."
Mr. Gross continued that this bill would also prohibit the NSB from
refinancing any existing bonds. He pointed out that even if lower
interest rates were available, the borough could not take advantage
of them.
Mr. Gross remarked "this is a devastating bill for the North Slope
Borough," and requested the Committee give the legislation more
review. He told the members, "You are literally going to destroy
the bonding power of the NSB if you pass this" which is a "drastic
step to take in the name of helping state finances at this late
hour."
Co-Chair Kelly countered that the earlier legislature "could have
never imagined the extravagance" with which the residents of the
NSB would utilize this bonding authority "to the detriment to the
rest of the state." He remarked that if there are technical
problems with the bill he was interested in them. However, he
expressed, "I'm having a hard time buying in to the old 'poor North
Slope' and all they're doing is what everyone directed of them
because I don't think the people back then imagined what they'd use
their bonding power for."
Mr. Gross replied the NSB has utilized its bonding authority to
produce "the kind of life that people in Anchorage take for
granted." He stressed that most residents of the state take
infrastructure items, such as sewer for granted, but there were no
sewer systems on the North Slope. He emphasized the higher
construction costs in northern regions.
Co-Chair Kelly repeated his request that the witness address the
problem areas of SB 186 regarding refinancing of current bonds.
Mr. Gross emphasized that the entire bill was a problem. He
qualified he did not understand the first section, which was added
earlier in the day. He cited Sections 6 and 7 as prohibiting the
NSB from issuing new bonds or refinancing existing bonds even at
lower rates.
Co-Chair Donley offered that if there is a way to rewrite these
sections to allow refinancing ability without extending the terms
of the bonds, he surmised the Committee would be open to it. He
suggested the witness prepare such language to accomplish this
while maintaining the intent of the legislation.
Mr. Gross asked if the sponsor's concern is that the borough would
refinance its existing bonds. He asked what the sponsor wanted the
language to provide.
Co-Chair Donley responded, "The goal is very clear, to hold bonded
indebtedness down below $15,000 per capita." He said he does not
oppose allowing refinancing so long as it does not extend the
amount of time it would take to bring the debt below the proposed
maximum.
Mr. Gross replied that language allowing such, would address one of
his concerns with the bill.
Senator Wilken agreed that the 1973 legislation provided a vehicle
to allow the NSB to fund its infrastructure. He referenced an
analysis prepared by Fitch IBCA, Duff and Phelps [Portions of this
report are on file] He read, "The borough's significant current
capital needs are primarily to extend water and sewer and other
utility services to seven outlying villages, build schools and
complete mandated projects. Much of the infrastructure is funded so
future needs would decline from prior levels." Therefore, he
ascertained there is an ability to reduce the bonded indebtedness
of the borough.
Senator Wilken remarked that this issue would not concern him
except that it takes funds from the 20-mil tax rate imposed on oil
and gas properties. He pointed out that every dollar that goes to
the NSB to support debt is a dollar that is not deposited into the
general fund and distributed across the state.
Senator Wilken suggested the intent of the original legislation was
to prevent "pools of wealth," which he emphasized, creates "pools
of debt." He stated this is what has actually occurred in the last
30 years and remarked, "This is the disparity that I see that needs
to get fixed."
Senator Wilken informed that assessed value determines property
taxes and the economy in most of Alaska. He divided the number of
people by the full and true assessed value and calculated the
statewide average per person, not including the NSB, as $72,000. He
listed Fairbanks residents at approximately $57,700, Anchorage at
$63,000, Ketchikan at approximately $80,000, and the lowest amount
is in the Lake and Peninsula Borough at $38,000. He explained the
assessed value "engine" on the North Slope is $1,160,000 per
person, which is 16 times the statewide average. He did not think
the legislature, in 1973, envisioned this leverage on assessed
value, of which, 97 percent is from oil and gas property. He then
calculated the average debt per Alaskan is $2,573, including
residents of the NSB. On the contrary, he stated, the per capita
average of the NSB is $64,409, which is 20 times the statewide
average.
Senator Wilken surmised these figures are "so far out of reason"
and that he could not understand this. He explained the proposed
debt limit of $15,000 per capita is still five times the amount of
any other municipality. He pointed out that the community of St.
Paul has a per capita debt of $13,000, but is primarily because of
a large port project.
Senator Wilken opined that the Bullock vs. Alaska case is a message
from the court to the legislature that it is time to address the
issue.
Senator Wilken predicted, "This is a $100 million deal ten years
from now for the general fund." He stressed this legislation does
not "clamp down" on the NSB but rather gives an ability to fund
five times the amount of the remaining communities in Alaska."
Co-Chair Donley added that he did not believe in 1973 it was
envisioned that oil and gas property taxes would not provide the
full amount of property tax revenue. He also did not think the
earlier legislature predicted that the oil supply would last as
long as it has. He continued that in 1973 it was not understood
that one borough would develop a $490 million permanent fund
savings account. Therefore, he stressed many things have changed
since the adoption of the original bonding authority. He did not
find the argument that the original legislation was adopted 30
years ago and "it's worked great" persuasive because he did not
think it has worked great. This, he said, is because none of the
current conditions could have possibly been foreseen.
Mr. Gross responded that he did not testify that just because the
legislation was adopted 30 years ago it was great. Rather, he
remarked, it is unfair to retroactively determine that because the
NSB issued the amount of bonds it has, the borough could not issue
additional bonds for the next ten or eleven years. He stressed that
this legislation does not provide that the borough could issue up
to five times the amount of per capita bonded debt, as Senator
Wilken stated. Mr. Gross expressed the legislation instead
penalizes the borough for issuing bonds as the legislature
permitted.
Mr. Gross admitted that the concerns raised are valid. However, he
stressed that in 1973 the NSB had no tax base and that in 20 to 30
years it would again have no tax base after oil production has
ceased. He also noted the value of the oil and gas properties
decreases every year, resulting in less revenue, and remarked,
"that is all they have, and when it's gone, that's it." Therefore,
he informed that the borough has "a brief window of time" to make
capital improvements. He agreed that the borough has bonded
"enormously" but noted it would not be able to do so, regardless of
whether this legislation passes.
Co-Chair Kelly requested reviewing the refinancing issue and the
possibility of a "ramp down provision so these next eight to ten
years, there isn't just this brick wall that they run into." He
assured this was not the intention of the Committee. However, he
voiced concern that if proposed natural gas development occurs,
relative property taxes could be "sucked up" by the NSB, resulting
in a similar situation to this.
Co-Chair Kelly addressed the witness' comparison of infrastructure
of the NSB to that of Anchorage and Fairbanks, stressing there are
many amenities the NSB has that are not provided in other
municipalities. He said he does not begrudge NSB residents from
receiving these, but opined the current system has been abused. He
admitted there is disagreement between him and Mr. Gross on whether
there has been abuse.
Senator Olson requested an explanation of how the decision in the
Bullock vs. Alaska case and subsequent rulings are related to this
legislation.
Mr. Gross detailed the history of the case brought by Don Bullock,
a former employee of the Department of Revenue, that unsuccessfully
advocated that the manner in which the statutes governing taxation
of oil and gas properties in the NSB and other areas, were being
improperly interpreted. Mr. Bullock, according to Mr. Gross,
alleged that the administrators of the oil and gas property tax for
the past 25 years had been mistaken. Mr. Gross relayed that the
Alaska Supreme Court ruled it was plaintiff who was mistaken and
that the state officials administering the tax were correct.
Mr. Gross continued that some people hoped the court would rule in
favor of the plaintiff primarily because they felt the NSB was
getting too much money. He said this is the reason for SB 186,
which would change the law to reflect what had been hoped for in
the court decision.
Senator Olson shared that this raised more questions and he
requested time to consider them before action was taken on the
bill.
Co-Chair Kelly stated that the bill would be held for the purpose
of addressing the issue of refinancing of existing bonds.
Co-Chair Donley chaired remainder of the meeting.
Senator Wilken commented that he has a more optimistic view of the
future of the North Slope in twenty or thirty years.
Mr. Gross pointed out that he is the former chair of the governor's
Gas Pipeline Commission 1975 charged with determining the pipeline
route. He stated that he is therefore more pessimistic.
Senator Ward referenced the sponsor statement [copy on file], which
states that the NSB currently has approximately $65,000 per
resident for bond indebtedness and that this legislation reduces
that amount to $15,000. He asked if there was an amount between
these two that the borough could support.
Mr. Gross replied that any amount less than $65,000 would mean the
borough could not issue any bonds until the bonded indebtedness is
paid down to that level.
Co-Chair Donley announced the bill would be held to determine how
to allow refinancing without extending the date the bonds expire.
He also wanted to research the "ramp down" option that would limit
the amount of debt to no more than the statewide average. He
predicted this would allow for any emergencies. He stressed that
the NSB has a permanent fund that would "be the envy of any
community in America." Therefore, he ascertained the borough has
adequate resources with which to draw to fund any projects it is
prohibited from bonding.
Senator Wilken requested the Department of Revenue detail the
fiscal note further.
Co-Chair Donley ordered the bill HELD in Committee.
SENATE CS FOR CS FOR HOUSE BILL NO. 32(JUD)
"An Act relating to the forfeiture of property used to possess
or distribute child pornography, to commit indecent viewing or
photography, to commit a sex offense, or to solicit the
commission of, attempt to commit, or conspire to commit
possession or distribution of child pornography, indecent
viewing or photography, or a sexual offense."
This was the first hearing for this bill in the Senate Finance
Committee.
REPRESENTATIVE JOE HAYES read the sponsor statement into the record
as follows.
As the use of computers and the Internet expands so too do
crimes involving the use of these technologies. One area of
particular concern is sex crimes against children. Adults
prone to abusing children will use the Internet to solicit a
minor for sex or to set up a meeting with a child in order to
rape or abuse the child. Further, Many people, who are
inclined to distribute or view child pornography, are now
using their computers to do so. These are new technologies and
the state still has relatively few tools for dealing with
criminals using these technologies. HB 32 provides us with
another tool to use in combating sexual predators.
Across the country and at the federal level there are
forfeiture laws in place. Several other states already have
laws on the books specifically relating to the forfeiture of
computers used in sex crimes. The use of computers in sex
crimes is a national problem. As more and more states pass
forfeiture legislation it is becoming increasingly obvious
that this is a useful and valuable tool in the fight against
computer crimes.
HB 32 would make it possible for the police to stay on top of
this rapidly changing industry without spending more state
dollars. Advances in computer technologies seem to happen on a
daily basis. New technology can often "outwit" last year's
model, leaving the police at a large disadvantage in their
attempt to curb crimes committed with the aid of the newest
technology. In order for the police to combat computer and
Internet crimes effectively it is imperative that they be
constantly provided with new hardware.
Under AS 12.55.015(c) the court may award forfeited property
or a percentage of it to any municipal law enforcement agency
involved in the arrest or conviction of the defendant. This
would allow the courts to pass on seized property to the
police so that the police can stay up to date with available
technology in a cost-effective manner.
HB 32 is designed to help protect our children in a twofold
manner: 1) forfeiture is a proven tool in the fight against
crime, and 2) the forfeited property can be given to our local
law enforcement agencies in order to help make sure that they
have the necessary tools to protect our children. I ask for
your support in passing this legislation.
Representative Hayes pointed out changes to the intent language
made in the Senate Judiciary Committee, which cite case law to
"make it absolutely positively airtight" that the only equipment
that could be seized was that owned by the perpetrator and not by a
third party. He showed that Section 3 of the committee substitute
specifies that property owned by an employer could not be seized.
Representative Hayes referenced information provided showing some
cases that this new law would apply. He also referred to letters of
support and one letter in opposition to the bill from a nudist
organization [not provided] regarding their concerns with vehicle
forfeiture. He assured their concerns were addressed in the Senate
Judiciary committee substitute with language that specifies
computers as the only equipment that could be taken.
Representative Hayes then directed the Committee's attention to
other information regarding how forfeitures work as well as
statutes from other states. [Copies on file.] He noted this
legislation is "the most progressive" language on the West Coast of
the United States addressing these types of crimes.
Senator Ward asked if this legislation includes e-mail of
pornography materials.
Representative Hayes answered that it does not. He told of law
enforcement organizations that infiltrate Internet chat rooms and
other areas to locate suspected pedophiles and perpetrators of sex
crimes. He noted that if a person receives a pornographic e-mail
message, but deletes it and does not pass it along to another user,
that person would not be subject to the provisions of this law.
Senator Leman asked if the person who sent a pornographic e-mail
could be prosecuted and under this legislation, forfeits their
computer equipment.
Representative Hayes did not think so unless the intent is
distribution rather than a joke. He assured that this question has
been addressed in other committees.
Senator Leman hoped the forfeiture provision would apply saying
that it does happen occasionally.
Senator Green asked if the penalties proposed in the bill are in
addition to other punishment. She asserted, "this is a lot of work
to take someone's computer if they're not being punished."
Representative Hayes replied that only upon conviction as a sexual
predator could computer equipment could be seized.
Senator Ward asked about equipment belonging to the State of
Alaska.
Representative Hayes reiterated that the intent language inserted
by the Senate Judiciary Committee specifies legislative intent that
only equipment owned by the perpetrator could be seized. He stated
that equipment owned by an employer, parent, spouse, etc., of the
offender could not be confiscated.
Co-Chair Donley drew attention to the committee substitute
provision setting the procedure for the utilization of any
confiscated equipment.
Co-Chair Donley asked why there is no fiscal note from the
Department of Law.
Representative Hayes explained there would be no additional expense
to the Department of Law because conviction on child pornography
charges would automatically provide for equipment seizure without
the need for additional specific prosecution.
Senator Ward shared that Department of Public Safety Deputy
Commissioner Del Smith relayed to him that it is not against the
law to send an e-mail using another person's e-mail address.
Senator Ward suggested this legislation could be used to make such
a practice illegal.
Representative Hayes was unsure how this could be done since this
legislation is specifically directed to child pornography and sex
crimes. He again detailed the process of investigators entering
chat rooms using an alias as a child to attract child abusers.
Senator Ward ascertained this legislation is "pretty broad and
covers a lot of territory." He stated that having no law making it
illegal to send pornography using another person's e-mail address
"could be a problem." He gave a scenario of someone distributing
pornography from the governor's address.
Senator Hoffman suggested Senator Ward introduce new legislation to
address this matter.
Senator Ward wanted to hold the bill in Committee so he could draft
an amendment to make such a practice illegal. He also stated that
impersonating a public servant is shown to be against the law, but
is actually not, according to the Department of Public Safety.
Co-Chair Donley understood the concerns but did not think this
issue complied with the title of the bill.
Senator Ward asserted that he was certain, "the sponsor would want
to do whatever is necessary in order to protect the public from
these sexual predators."
Co-Chair Donley noted the bill has the support of the Committee and
requested the sponsor work with Senator Ward on addressing this
matter. He stated the bill would be reconsidered at the next
meeting.
Co-Chair Donley ordered the bill HELD in committee.
ADJOURNMENT
Co-Chair Donley adjourned the meeting at 08:42 PM
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