Legislature(2001 - 2002)
03/15/2002 09:10 AM 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
March 15, 2002
9:10 AM
TAPES
SFC-02 # 33, Side A
SFC 02 # 33, Side B
SFC 02 # 34, Side A
CALL TO ORDER
Co-Chair Dave Donley convened the meeting at approximately 9:10 AM.
PRESENT
Senator Dave Donley, Co-Chair
Senator Jerry Ward, Vice Chair
Senator Loren Leman
Senator Lyda Green
Senator Gary Wilken
Senator Alan Austerman
Senator Lyman Hoffman
Also Attending: REPRESENTATIVE NORM ROKEBERG; BARBARA RITCHIE,
Deputy Attorney General, Department of Law; DWAYNE PEEPLES,
Director, Division of Administrative Services, Department of
Corrections; JANET SEITZ, staff for Representative Rokeberg; DOUG
WOOLIVER, Administrative Attorney, Office of the Administrative
Director, Alaska Court System; ERIC YOULD, Executive Director of
ARECA Trade Association for the Electric Utility Industry in
Alaska; NEERA KOHLER, President and CEO, Alaska Village Electric
Cooperative, Incorporated; BOB POE, Executive Director, Alaska
Industrial Development & Export Authority and Alaska Energy
Authority
Attending via Teleconference: From Anchorage: DAVID JONES;
Assistant Attorney General, Governmental Affairs Section, Civil
Division, Department of Law; DIANE WENDLANDT, Manager, Division of
Collections, Department of Law
SUMMARY INFORMATION
SB 292-SUPPLEMENTAL APPROPRIATIONS
The Committee heard testimony from the Department of Corrections
and the Department of Law regarding a lawsuit filed against the
state. The bill was held in Committee.
SB 347-ALCOHOLIC BEVERAGE TAX
The Committee considered two amendments and adopted one. The bill
was reported out of Committee.
HB 4-MOTOR VEHICLES & DRUNK DRIVING
The Committee heard from the sponsor, adopted a committee
substitute, and considered and adopted three amendments. The bill
was held in Committee.
SB 185-PCE BASED ON HIGHEST COST
The Committee heard from the Alaska Industrial Development & Export
Authority and took public testimony on the bill. The bill was held
in Committee.
SB 339-INCREASE CRIMINAL FINES
The Committee heard testimony on this bill and the bill was
reported out of Committee.
SENATE BILL NO. 292
"An Act making supplemental and other appropriations; amending
appropriations; making appropriations to capitalize funds; and
providing for an effective date."
This was the fourth hearing for this bill in the Senate Finance
Committee.
Co-Chair Donley stated the Committee would hear from Department of
Corrections and Department of Law staff directly involved in the
Dr. Harold claims case against the State. Co-Chair Donley noted the
Governor's FY 02 Supplemental Budget contains a request to fund a
settlement of Harold vs. State. He announced that the Committee is
developing a policy requiring staff directly involved in cases such
as this be available to answer questions, in addition to the
traditional presentation by the Department of Law.
BARBARA RITCHIE, Deputy Attorney General, Civil Division,
Department of Law, noted she is involved in the case at the
Department of Law level.
DWAYNE PEEPLES, Director, Division of Administrative Services,
Department of Corrections; stated he is the supervisor of the human
resource labor relations operations for the Department of
Corrections, where the termination of Doctor Harold was processed.
Senator Ward requested the Department supply the Committee with a
copy of the newsletter that Dr. Harold distributed to nurses.
DAVID JONES; Assistant Attorney General, Governmental Affairs
Section, Civil Division, Department of Law and the attorney
directly involved in the case, testified via teleconference from
Anchorage, and stated he would provide a copy of the letter to the
Committee.
Co-Chair Donley inquired as to why the State should pay this claim.
Mr. Jones responded this was a very difficult case and voiced that
the Department acted appropriately. He informed the Committee the
Department was restructuring its health care programs for the
institutions and had hired Dr. Harold to implement the new program;
however, Dr. Harold was proving "resistant" to the proposed
changes. Mr. Jones stated that although "it was clear that this was
not an employment relationship that was going to work out," the
Department was operating under significant time and financial
restraints in accomplishing the restructuring.
Mr. Jones stated that one of Dr. Harold's lawsuits cites being a
"whistle blower" as a reason for his dismissal. Mr. Jones stated
this and other claims have not been proven to be factual.
Mr. Jones informed the Committee that "whistle blower" cases are
difficult to defend as they require analysis of managers involved
in the case, and that it "is hard to convince someone who is
convinced that they are being retaliated against" that is not the
case. He stressed there is always the chance that the judge or jury
may side with the employee. He declared these are some of the
reasons the Department recommends settling with Dr. Harold.
Co-Chair Donley asked why progressive discipline actions were not
taken.
Mr. Peeples informed the Committee that specific plans and
instructions were provided to Dr. Harold during several meetings.
Mr. Peeples stated the Department discussed the direction of the
program with Dr. Harold and instructed him not to continue his
resistance to the plan. He was put on notice several times and had
several discussions with the Commissioner regarding the
Department's "displeasure" with his behavior and actions.
Mr. Peeples continued that in dealing with an employee at this
level, " …a doctor in a highly paid, exempt position…" progressive
disciplinary actions involving conducting multiple hearings and
discussions were not deemed necessary.
Co-Chair Donley inquired as to who was Dr. Harold's immediate
supervisor.
Mr. Peeples stated that Dr. Harold's supervisor was Mel Henry,
Health Care Administrator, Office of the Commissioner, Department
of Corrections.
Co-Chair Donley inquired who made the decision to terminate Dr.
Harold.
Mr. Peeples stated that after consultation with himself, and the
Human Resource Labor Relations Operations Division, the
commissioner made the decision.
Co-Chair Donley voiced support for the goal of making the
Department more efficient and cost effective; however, stressed
that progressive disciplinary actions are important, "even for
upper level positions," as it might help avoid these types of
scenarios.
Senator Green asked if Co-Chair Donley considers the progressive
disciplinary process applicable to all fully exempt personnel.
Co-Chair Donley remarked it would be "wise to use progressive
discipline in the process."
Senator Green respectfully disagreed, and stated she does not
support any change in employment law for exempt status employees.
Co-Chair Donley concurred with Senator Green's comments; however
reiterated, at times, a record in the file might save the state
some money.
Senator Green stated that even if a specified process was followed,
when it gets into a court situation, conditions differ.
Co-Chair Donley re-stated to the Department of Law that it is the
intent of the Committee to have personnel directly involved in
issues, testify before the Committee.
The bill was HELD in Committee.
AT EASE: 9:22 AM / 9:23 AM
SENATE BILL NO. 347
"An Act relating to taxation."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Donley stated the Committee has been working with the
Department of Revenue to address technical drafting needs; however,
a title change could be addressed.
Senator Hoffman stated the title "should be left as broad as
possible" in order for other measures to be added to address the
state's fiscal gap.
AT EASE 9:24 AM / 9:27 AM
Amendment #1: This amendment changes the bill title to read as
follows.
"An act relating to alcoholic beverages."
Senator Leman moved for adoption.
Senator Hoffman objected.
A roll call was taken on the motion.
IN FAVOR: Senator Green, Senator Austerman, Senator Leman, Senator
Ward, Co-Chair Donley, Senator Wilken
OPPOSED: Senator Hoffman
ABSENT: Co-Chair Kelly, Senator Olson
The motion PASSED (6-1-2)
AT EASE 9:36 AM/ 9:38 AM
Amendment #2: This amendment amends the title to read as follows.
"An act relating to alcoholic beverages; and providing
for an effective date."
This amendment also inserts a new section on page 3, following line
4 to read as follows.
*Sec. 5. The uncodified law of the State of Alaska is
amended by adding a new section to read:
CONDITIONAL EFFECT. This Act takes effect only if a
version of SJR 23, proposing amendments to the Constitution of
the State of Alaska relating to an appropriation limit and a
spending limit, is passed by the legislature and approved by
the voters during the 2002 general election.
*Sec.6. If this Act takes effect under sec.5, it takes
effect on January 1, 2003.
Senator Ward stated this amendment would send "a clear message" to
the voters of Alaska, that if the budget is passed with a two
percent increase as currently projected, it "would trigger an
alcohol tax" and perhaps other taxes including a sales tax. He
stated that the alcohol tax increase in this bill would go into
effect if the people of the State approved a constitutional
spending limit as specified in SJR 23.
Senator Ward reiterated that the people of the State want to have
"restraints" in government, and he wants to let people know that
"the State of Alaska is going to live within its means." He
furthered, "at the end of this year, we're going to reach into the
budget reserve account, and still not live within our means." He
continued that SJR 23 would give the voters a chance to vote on a
constitutional spending limit, and he stressed that if the citizens
of the State approve a limit, the Legislature is going to have to
prioritize projects and make difficult decisions about which
projects to fund.
Senator Ward voiced appreciation for the efforts of those people
working to "promote sobriety and reduce the terrible" effects of
alcohol. He continued that the "affects of alcohol are a lot more
devastating than cigarettes." He opined the Legislature "passed a
cigarette tax, and all that happened was more government," and
"more government is one of the most harmful things that is
happening to Alaska right now…it is making people dependent, they
believe there is an obligation of cradle to grave, and it causes
harm. We need to get a handle on government" and help encourage
growth in our economy. He summarized this alcohol tax, without a
spending limit, "doesn't reduce, it doesn't restrict, and it just
takes more spending and puts it on top of an open checking
account."
Senator Ward moved for the adoption of Amendment #2.
Senator Wilken objected to the motion.
Senator Austerman noted there is other legislation that addresses
"larger based taxes," and this amendment, if passed, should be
reworded to include passage of SJR 23 "and/or SJR 33." He explained
that SJR 33 would impose a limit on the level of income or sales
taxes.
Senator Hoffman questioned the effectiveness of SJR 23. He stated
the Legislature needs to "bridge the gap" and work toward "gaining
the people's trust" by responsibly using the revenue generated from
taxes. He continued that "this amendment seems meaningless, as it
just affects whether this tax goes into effect or not."
Senator Ward responded that Senator Hoffman is correct in saying
the Legislature needs to work to gain people's trust, and he
declared, "I don't trust us to reduce the budget." He stressed he
would not be introducing this amendment if he believed the
Legislature or the Administration could live within its means.
Senator Ward stated this discussion involves "creating money" by
taking money from people who drink alcohol. He voiced his support
for this tax; however, believes the money generated would be "spent
on more government just like the tobacco money was," and he
believes this amendment would help make the government operate
within its means.
Senator Leman stated he does not support this amendment, as this
bill and SJR 23 are both important measures, and combining them
might "complicate" efforts. He remarked he is confident the voters
would approve SJR 23. He voiced support of Senator Ward's comments,
but did not believe this would be the best way to proceed.
Senator Hoffman stated the Legislature has made efforts to control
spending, and noted the State of Alaska was the only state to
reduce government in the 1990's.
Senator Ward remarked that Alaska spends more "public money" per
capita than any other state. He stressed that the Legislature
should reduce the size of government now before the state's
resources are depleted. He reiterated that Alaska is "spending too
much," and a spending limit is necessary to make the government
reduce spending.
Senator Austerman voiced appreciation of the discussion and
stressed the need for the state to have a long-term fiscal plan. He
asserted the Legislature must work "as a group to prioritize," and
warned that until spending is prioritized, the Legislature would
never be able to live within the means of a budget. He contended
that these types of conversations would continue every year if a
long-term plan is not in place.
Co-Chair Donley voiced appreciation for all the comments; however,
noted he does not wish to "link" this bill with SJR 23.
A roll call was taken on the motion.
IN FAVOR: Senator Green, Senator Ward
OPPOSED: Senator Hoffman, Senator Leman, Senator Wilken, Senator
Austerman, Co-Chair Donley
ABSENT: Co-Chair Kelly, Senator Olson
The motion FAILED (5-2-2)
Senator Leman suggested the Committee consider taxing low alcohol
content beverages, including ciders, at a separate rate; however,
if that were the case, the Committee should hear testimony before
taking any action.
Senator Green asked if the revenue generated from this bill would
fund a specific program or would be deposited into the general
fund.
AT EASE 9:54 AM / 9:55 AM
Co-Chair Donley responded that revenues generated from this tax
would be general funds.
Senator Wilken inquired as to how the calculations on the chart
distributed by Co-Chair Donley titled "% Proposed Tax of Total
$4.25 Drink Price" [copy on file] were determined.
Senator Austerman stated the chart appears to reflect the
percentage increase per drink generated by the proposed tax.
Senator Wilken noted that retailer margins and patrons costs need
to be factored into the percentage increase. He calculated that
under existing law, the tax is approximately 4.3 percent of the
cost of a $4.00 drink, and under the new law, it would be about 13
percent. He stated the cost of a $4.00 drink, with the retail
margin factored at 100 percent and the patron costs factored in,
would increase approximately 10 percent.
Senator Leman made a motion to move SB 347 as amended from
Committee with the accompanying fiscal note.
Senator Hoffman objected to the bill based on the title restriction
and the targeting of a single industry for taxation.
Senator Leman stated there are "other vehicles" in the House of
Representatives and in the Senate pertaining to Alaska's fiscal
challenge.
Senator Austerman again stressed the need for a long-range plan;
however, voiced support for this bill because of the "industry set
of woes the State of Alaska has, driven by the consumption of
alcohol." He stated this tax could help address these expenses.
Senator Hoffman, referring to Senator Leman's comment "that there
are other vehicles out there;" stated that if he were assured that
other tax measures were forthcoming and would be passed, he might
withdraw his objection.
Senator Green stressed her opposition to this discussion inferring
that the revenue generated from this tax would support programs
"that combat alcoholism" instead of being designated as general
funds. She stated that taxes are intended to raise revenue, not to
"penalize" people.
SFC 02 # 33, Side B 10:02 AM
Senator Austerman agreed that the revenue generated from this tax
would be general fund money; which could fund a wide variety of
alcohol related programs.
A roll call was taken on the motion.
IN FAVOR: Senator Leman, Senator Austerman, Senator Green, Senator
Wilken, Co-Chair Donley
OPPOSED: Senator Hoffman
ABSENT: Senator Ward, Senator Olson, Co-Chair Kelly
The motion PASSED (5-1-3)
CS SB 347(FIN) was REPORTED from Committee with a new fiscal note
dated 3/10/02 in the amount of $74.5 from the Department of
Revenue.
SENATE CS FOR CS FOR HOUSE BILL NO. 4(JUD)
"An Act relating to motor vehicles and to operating a motor
vehicle, aircraft, or watercraft; and providing for an
effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
REPRESENTATIVE NORM ROKEBERG, sponsor of the bill, explained this
bill maintains efforts to increase penalties and treatment programs
within the Department of Corrections in addition to a forfeiture
provision and confiscation of license plates. He stated these would
further the efforts to enforce existing state laws and protect the
public. He noted the accompanying fiscal notes are designed to
reflect the cost of implementing the program, and place the burden
of the costs on the offender through forfeiture of vehicle and an
increase in the level of fines.
Senator Austerman moved to adopt SCS CS HB 4, 22\LS0046\V as a
working draft.
There were no objections, and the committee substitute was ADOPTED
as a working draft.
Amendment #4: This amendment deletes the language on page 14, lines
9-16 as follows.
"Sec. 22. AS 28.15.291 is amended by adding a new subsection to
read:
(d) Notwithstanding other provisions in this title, a
municipality may adopt an ordinance providing for the
impoundment or forfeiture of a motor vehicle involved in the
commission of an offense described under this section or an
ordinance with elements substantially similar to an offense
described under this section. An ordinance adopted under this
subsection may be more stringent than or the same as but may not
be less stringent than provisions under this title or
regulations adopted under this title.
It additionally inserts new language to read as follows.
"*Sec. 22. AS 28.15.291(b) is amended to read:
(b) Upon conviction under (a) of this section, the court
(1) shall impose a minimum sentence of imprisonment
(A) if the person has not been previously
convicted, of not less than 10 days with 10 days
suspended, including a mandatory condition of
probation that the defendant complete not less than
80 hours of community work service;
(B) if the person has been previously
convicted, of not less than 10 days;
(C) if the person's driver's license,
privilege to drive, or privilege to obtain a
license was revoked under circumstances described
in AS 28.15.181(c)(1), or if the person was driving
in violation of a limited license issued under AS
28.15.201(d) following that revocation, of not less
than 20 days with 10 days suspended, and a fine of
not less than $500, including a mandatory condition
of probation that the defendant complete not less
than 80 hours of community work service;
(D) if the person's driver's license,
privilege to drive, or privilege to obtain a
license was revoked under circumstances described
in AS 28.15.181(c)(2), (3), or (4) or if the person
was driving in violation of a limited license
issued under AS 28.15.201(d) following that
revocation, of not less than 30 days and a fine of
note less than $1,000;
(2) may impose additional conditions of probation;
(3) may not
(A) suspend execution of sentence or grant
probation except on condition that the person serve
a minimum term of imprisonment and perform required
community work service as provided in (1) of this
subsection;
(B) suspend imposition of sentence; [AND]
(4) shall revoke the person's license, privilege to
drive, or privilege to obtain a license, and the
person may not be issued a new license or a limited
license nor may the privilege to drive or obtain a
license be restored for an additional period of not
less than 90 days after the date that the person
would have been entitled to restoration of driving
privileges;
(5) may order that the motor vehicle that was used
in commission of the offense be forfeited under AS
28.35.036; and
(6) shall, if the person has been previously
convicted under this section,
(A) order the motor vehicle used in the
commission of the offense forfeited under AS
38.35.036 or may order the motor vehicle taken to
the owner's residence or property and immobilized
for the period of time that the person's driver's
license is revoked; the court shall also require
the person to pay any administrative costs of
keeping the motor vehicle immobilized; or
(B) two or more times, order the motor vehicle
used in the commission of the offense forfeited
under AS 28.35.036."
This amendment inserts statutory reference of AS 28.15.291(b) where
applicable in the remainder of the bill.
Co-Chair Donley moved for adoption of Amendment #4.
Representative Rokeberg explained that Amendment #4 adds language
to the vehicle forfeiture provision.
JANET SEITZ, Staff to Representative Rokeberg, explained this
amendment would "maintain the current driving while license
suspended" provision and adds language addressing vehicle
forfeitures.
Senator Hoffman asked for clarification that when a driver is
convicted of a second offense for driving with a suspended license,
the vehicle would be forfeited.
Representative Rokeberg stated one purpose for offering this
amendment is to allow the Department of Corrections to assess the
costs incurred by the forfeiture.
Co-Chair Donley explained that fiscal notes have been difficult to
project for this bill, and once the bill is further defined through
the adoption of amendments, updated fiscal notes would be
forthcoming.
Senator Hoffman asked what would occur if a person is arrested a
second time for driving with a revoked license; but is not driving
a car they own.
Representative Rokeberg stated that the co-owner could re-register
the vehicle in their own name.
Senator Green asked for verification this would occur after the
incident.
Representative Rokeberg confirmed this is correct as one condition
of this offense mandates that the license plate be removed from the
car. He clarified that the re-registering would occur after this
procedure.
Senator Hoffman asked what would happen if the offense involves a
car the offender has borrowed from an unknowing and uninvolved
individual.
Ms. Seitz stated there is a provision allowing that owner to
retrieve the vehicle. She stated she would supply that information
to Senator Hoffman.
Co-Chair Donley reiterated that once a final committee substitute
is drafted, the "appropriate fiscal notes" would be forthcoming.
Representative Rokeberg voiced support of Co-Chair Donley's
comments and stated the intent of these amendments is to draft the
bill and develop the fiscal notes accordingly.
There were no objections, and Amendment #4 was ADOPTED.
Amendment #5: This amendment deletes the language on page 14, lines
9-16 as follows.
"Sec. 22. AS 28.15.291 is amended by adding a new subsection to
read:
(d) Notwithstanding other provisions in this title, a
municipality may adopt an ordinance providing for the
impoundment or forfeiture of a motor vehicle involved in the
commission of an offense described under this section or an
ordinance with elements substantially similar to an offense
described under this section. An ordinance adopted under this
subsection may be more stringent than or the same as but may not
be less stringent than provisions under this title or
regulations adopted under this title.
Senator Leman moved for adoption of Amendment #5.
Representative Rokeberg stated Amendment #5 deletes redundant
language in the bill concerning a municipality's ability to adopt
language regarding the impoundment or forfeiture of a vehicle
involved in an offense.
Senator Green remarked Amendment #5 contains information included
in Amendment #4.
Senator Leman stated that because Amendment #4 has been adopted,
Amendment #5 is WITHDRAWN.
Amendment #6: This amendment deletes language on Page 20, line 6-9
and inserts new language to read as follows.
"Information complied under this subsection is confidential
and may only be used in connection with court proceedings
involving the defendant's treatment, including use by a court
in sentencing a person convicted under this section, or by an
officer of the court in preparing a presentence report for the
use of the court in sentencing a person convicted under this
section."
This amendment also deletes "may" on Page 22, line 27 and inserts
"shall [MAY]" to read:
(4) shall [MAY] order [AS A CONDITION OF PROBATION OR PAROLE]
In addition, this amendment deletes language on page 29, lines 13-
16 and inserts new language to read as follows.
"
"Information complied under this subsection is confidential
and may only be used in connection with court proceedings
involving the defendant's treatment, including use by a court
in sentencing a person convicted under this section, or by an
officer of the court in preparing a presentence report for the
use of the court in sentencing a person convicted under this
section."
On page 32, line 11, this amendment deletes "may" and inserts
"shall [MAY]" to read:
(6) the court shall [MAY] also order forfeiture under AS
28.35.036, of the motor vehicle, [OR] aircraft, or watercraft
used in the commission of the offense, subject to remission
under AS 28.35.037; and
On page 32, line 14, this amendment inserts "the court" following
"7" to read:
(7) the court shall order the department to revoke the
registration for any vehicle registered by the department in
the name of the person convicted under this subsection: if a
person convicted under this subsection is a registered co-
owner of a vehicle, the department shall reissue the vehicle
registration and omit the name of the person convicted under
this subsection.
Senator Leman moved for adoption of Amendment #6.
Representative Rokeberg explained Amendment #6 introduces into the
bill, language allowing the Court the ability to access prior
treatment history in sentencing and presentencing reports.
Representative Rokeberg continued that inserting the word "shall"
places mandatory forfeiture in the felony Driving While Intoxicated
(DWI) section only.
Senator Green inquired if Amendment #6 would generate a fiscal
note.
Representative Rokeberg responded, "other forfeiture provisions
would trigger" the fiscal notes; however, all of the bill's
components would be discussed in committee.
There was no objection and Amendment #6 was ADOPTED.
Amendment #7: This amendment deletes language on page 35, lines 18-
19 and inserts new language to read as follows.
(c) Upon forfeiture of a motor vehicle, aircraft, or
watercraft, the court shall require the
(1) surrender of the registration and certificate of
title of that motor vehicle; the registration and certificate
of title shall be delivered to the department;
(2) owner of the motor vehicle, aircraft, or watercraft
to pay all administrative costs incurred by the state in
forfeiting the motor vehicle, aircraft, or watercraft,
including costs incurred by the department, law enforcement
personnel, or the court system.
Senator Leman moved for adoption of Amendment #7.
Representative Rokeberg stated this amendment would "provide a
statutory basis mandating that offenders pay all administrative,
law enforcement, and court system's costs relating to any vehicle
forfeiture." He affirmed a fiscal note would be generated to
reflect this.
There were no objections, and Amendment #7 was ADOPTED.
Co-Chair Donley recommended these amendments be incorporated into a
new committee substitute. He stated he would wait until updated
fiscal notes were generated before furthering Amendments #1, #2,
and #3.
Senator Hoffman inquired if Amendment #7 changes the language
appropriately.
Senator Green echoed Senator Hoffman comments.
Co-Chair Donley stated it would be the sponsor's discretion as to
how the amendments are worded.
Co-Chair Donley noted he would not be presenting Amendment #1. He
explained Amendment #2 would modify the amount of time required for
maintaining proof of fiscal insurance responsibility based on an
"escalating scale" on the number of DWI's a person has, and also
require proof of insurance when a vehicle is registered. He noted
that currently, proof of insurance is not required unless a person
is subject to special statute. He continued that each DWI
conviction would require proof of insurance for a longer period of
time.
Co-Chair Donley clarified that vehicle insurance is mandatory in
the State of Alaska, but individuals with DWI convictions would be
required to produce proof of insurance at registration.
Senator Green asked if proof of insurance would be required when a
vehicle is registered or when a driver's license is renewed.
Co-Chair Donley stated the intent is to require proof of insurance
at the time of vehicle registration; however, this would be
confirmed before Amendment #2 is furthered.
Senator Wilken stated proof of insurance is required at
registration or re-registration; however, currently no one is
required to produce proof of insurance, but instead signs a
declaration on the registration form verifying that insurance is in
place.
Co-Chair Donley stated that SR 22 is a form that requires the
insurance company to notify the state if insurance coverage is
cancelled.
Co-Chair Donley clarified that if a person is subject to SR 22
requirements as a result of being in an accident and not having
insurance, or convicted of a DWI, or if a vehicle judgment or claim
has not been paid, that individual has to produce physical proof of
insurance.
Senator Green inquired how proof of insurance is processed at
places other than a Division of Motor Vehicles facility.
Senator Wilken stated there are numerous state-approved locations
at which vehicles could be registered.
Representative Rokeberg explained the requirement to present
physical proof of insurance is identified on the registration forms
of those to whom it applies.
Representative Rokeberg voiced support for the amendment, and
continued that the State does not require insurance company
notification when individuals drop their vehicle insurance coverage
because it is "extraordinarily expensive" to manage.
Senator Green opined the State's enforcement of mandatory insurance
coverage has been minimal.
Senator Green asked for more information on Amendment #2 before the
Committee considers it.
Co-Chair Donley stated he would hold Amendment #2.
DOUG WOOLIVER, Administrative Attorney, Alaska Court System, stated
the Court System's fiscal note projects approximately 800
additional hearings a year in the District Courts as the result of
the provision for mandatory vehicle forfeiture. He stated if an
amendment passes regarding vehicle forfeitures for "driving while
license is suspended," the result would be approximately an
additional 1,000 hearings.
The bill was HELD in Committee.
SENATE BILL NO. 185
"An Act relating to the basis for determining eligibility for
and the amount of power cost equalization payments; and
providing for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
ERIC YOULD, Executive Director, Trade Association for the Electric
Utility Industry in Alaska (ARECA), testified that ARECA is a
"strong supporter of the Power Cost Equalization (PCE) program" as
it provides a strong economic stimulus to rural Alaska where the
cost of electricity is "four times higher" than the cost of
electricity in urban areas, "yet disposable income is so low." He
stated the ARECA Board of Directors is presenting a resolution
[copy on file] dated Feb 22, 2002 to the Committee that "strongly
opposes" SB 185. He stated if SB 185 were passed, it would
significantly curtail the PCE program and hurt the economy of rural
Alaska.
Mr. Yould continued that legislation being discussed in the United
States Congress might financially assist the PCE Endowment Fund and
passage of SB 185 "would shut the gate and curtail the amount of
funding" that might be forthcoming. On behalf of ARECA, he
"strongly recommended" that the Alaska Legislature not change the
PCE funding formula.
MEERA KOHLER, President and CEO, Alaska Village Electric Co-op
(AVEC), testified in opposition to SB 185. She stated that the
Legislature has reduced funding for the PCE program numerous times
since its inception in 1984, and currently rural electric consumers
collectively pay approximately 80 percent of the "extremely high
cost of electricity" with the PCE program paying the balance of 20
percent. Ms. Kohler stated "the much needed construction of basic
infrastructure such as water and sewer facilities and health
clinics" has increased the demand for power in the rural areas. She
informed the Committee these improvements have been almost
exclusively funded with federal grants and other sources. She
stressed that the State's creation of the PCE Endowment Fund two
years ago has provided rural residents a "powerful tool to take to
Washington D.C." to persuade the United States Congress to allocate
additional funds to enable the Endowment Fund to be self-
sufficient. She urged the Committee to not amend the PCE formula at
this time.
BOB POE, Executive Director of Alaska Industrial Development &
Export Authority (AIDEA) and Alaska Energy Authority (AEA)
commented his Department has been conducting an analysis of
different options for the PCE program. He referenced legislative
"findings stating the purpose of PCE is to provide affordable
energy as essential for the economic and social well being of
Alaska." He continued that the high "cost of power is a significant
detriment to economic development in Rural Alaska."
SFC 02 # 34, Side A 10:51 AM
Mr. Poe commented the economic health of Rural Alaska has an affect
on the commerce of other parts of the State. He detailed some of
the effects on Anchorage: Rural Alaska accounts for 20 percent of
all goods and services sold; accounts for one in eight jobs; 50
percent of all construction work by Anchorage and Mat-Su companies;
and 100 percent of resource extraction. He stressed there is a huge
economic connection between rural and urban Alaska.
Mr. Poe stated there is " a self-interest" factor in the urban
support of the PCE program.
Mr. Poe contended that if both economies benefit from this
connection, then modifications to provide incentives to reduce the
cost of power in rural Alaska should be considered. He encouraged
the Committee to give the PCE program more time to be further
analyzed.
Mr. Poe stated if Anchorage, Juneau, and Fairbanks were removed
from the cost of power in Alaska analysis, then the comparative
base would not accurately represent what the cost of power is
throughout the State.
Senator Hoffman summarized if the cost of power in Anchorage,
Juneau, and Fairbanks were removed from the PCE analysis, what
would remain would be the highest costs of power in the state and
therefore would not result in a PCE program.
Co-Chair Donley clarified it would be "the highest costs" of those
places that are not included in the PCE program, and this would be
"much fairer," as currently the PCE program "subsidizes below what
some people have to pay who aren't eligible for PCE."
Senator Leman voiced three concerns: a cash flow stream that did
not materialize as promised when the program was restructured in
1999; the fact that communities not eligible for the PCE program
are paying more than the subsidized PCE rate; and the question of
how to provide incentives to reduce the costs of generating and
delivering power in the rural areas.
Senator Leman stated the Legislature is attempting "to fit all this
together in a policy statement and have it make sense."
Mr. Poe commented that the endowment fund losses were a result of
the stock market.
Mr. Poe informed the Committee that 79 percent of all rural
ratepayers are eligible for the PCE program and the remaining 21
percent are businesses or other non-eligible entities. He stated
that the eligible group uses only 29 percent of the eligible
kilowatt-hours.
Senator Leman clarified that his cash flow concern involved the
National Petroleum Reserve Alaska (NPR-A) funding, that "was
offered in good faith, received in good faith and did not
materialize," as a contribution to the endowment fund. He stated
this resulted in a shortfall in funding revenues.
RECESS 11:00 AM / 3:03 PM
DENNIS WATSON, Mayor of Craig, testified offnet from Craig and
urged the Committee to make no changes to the PCE program. He
stated, "Rural Alaska has always considered that our part of the
pie of the oil revenues, was the PCE" and the endowment fund is
what they hoped would support the PCE "in perpetuity."
ALAN JOSEPH, Vice President, Association of Village Council
Presidents, testified offnet from Bethel in opposition to SB 185.
He stated the downturn in the fishing industry has affected the
economy in the region and any reduction in the PCE assistance the
Yukon Kuskoquim Delta region would contribute negatively to the
situation.
MARLENE MOTO, testified offnet from Deerling, in opposition to SB
185. She stated that reductions to the PCE program would make
electricity too expensive and people in rural regions are "having a
hard time paying bills" now.
ERIC HANNEN, General Manager, Alaska Power & Telephone (AP&T),
testified via teleconference from Tok on behalf of Don Mayhan, Vice
President of Operations of AP&T. Mr. Hannen stated that AP&T serves
approximately 6,000 customers in 20 rural communities, and the
current cost of power in rural Alaska is approximately four times
more expensive than power in urban Alaska. He contended that rural
area incomes are half of the income level of urban areas and there
are very few job opportunities. He stated that the residents' fixed
incomes could not absorb a 25 percent increase in the cost of
power. Rural communities "have been encouraged to raise their
standards of living" and such things as water and sewer treatment
plants have been constructed and all require power to operate,
especially in the winter months. He voiced opposition to SB 185 and
stated it would decrease the standard of living in Rural Alaska,
reduce power consumption, and decrease business margins resulting
in an increase of rates with the overall result of a "downward
spiral."
CHARLIE WALLS, Manager of Nushagak Cooperative testified via
teleconference from Dillingham in opposition to SB 185. He stated
if SB 185 were passed, the result "would essentially drop
Dillingham off the rolls of the PCE," and would cause real hardship
to the residents who "are at the mercy of oil prices" and have no
other power supply options such as access to hydropower. He
stressed that "now is not the time to change the formula."
ALAN JOSEPH, testified offnet from Bethel on behalf for Arthur J.
Lake, President of the Association of Village Council. He read Mr.
Lake's prepared testimony [copy on file] in opposition to SB 185.
The bill was HELD in Committee.
RECESS 3:20 PM / 3:27 PM
SENATE BILL NO. 339
"An Act increasing fines for certain criminal offenses."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Donley explained this bill's intent is to increase
criminal fines. He informed the Committee that individual fines
have not been modified since 1978 and corporation fines have not
been increased since 1990.
DIANE WENDLANDT, Manager, Division of Collections, Department of
Law, testified via teleconference from Anchorage to answer
questions concerning this bill.
Senator Hoffman inquired as to the Administration's position on
this bill.
Ms. Wendlandt commented she is an attorney involved in the
collection of criminal fines and does not know the Administration's
position.
Co-Chair Donley stated, "these fines are challenging to collect;"
however, it is important that "the fine is high enough to be both a
deterrent and a penalty." He expressed "it is appropriate to have a
higher level of criminal fines," as a deterrent and to address "the
cost to the criminal justice system." He referenced the breakout
[copy on file] of fines for various crimes in other states.
Senator Ward offered a motion to move SB 339 from Committee with
accompanying fiscal notes.
Senator Green opined that these fines are "incredibly high" and
asked "if there is any point" to which fines are raised where they
become "meaningless."
Co-Chair Donley gave examples of where higher levels of fines might
be appropriate deterrents.
Senator Green asked if there is an option for lower fines.
Ms. Wendlandt stated she is not aware of a minimum for fines, as
her Division is not supplied detailed information on what offense
correlate to each fine from the Court System. She mentioned that
Judges "enter a very large range" of fines.
Co-Chair Donley voiced there are standards; however, the Court
System has the discretion to demonstrate "flexibility depending on
financial status of a person" and the crime that is committed. He
mentioned that the Committee could opt for lower fine levels or a
"reduced step up."
Senator Austerman stated the fines in this bill are "permissive" as
presented.
Senator Hoffman contended there are "years of inflation" to factor
in and that, when comparing the proposed level of fines to fines in
other states, the fines seem appropriate.
Co-Chair Donley stated the actual rate of inflation since the last
individual fine modification is 216 percent.
Senator Hoffman noted the proposed fines in the bill are
approximately four times higher than the current levels.
Co-Chair Donley voiced that the fines proposed in the bill are
"similar to the higher end of the rates" used by other states. He
reiterated that the Committee could lower the fines.
Senator Ward again voiced his motion to adopt the bill with
individual recommendations and accompanying fiscal notes. He
concurred with Senator Austerman's comments that the proposed fines
are permissive and would give judges "a tool" to use in determining
the appropriate level of fines.
There being no objection, SB 339 was REPORTED out of Committee with
a new zero fiscal note dated 3/15/02 from the Department of Law and
a new indeterminate fiscal note, dated 3/15/02 from the Department
of Administration.
ADJOURNMENT
Co-Chair Dave Donley adjourned the meeting at 03:45 PM.
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