Legislature(1995 - 1996)
03/20/1996 01:30 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE JUDICIARY COMMITTEE March 20, 1996 1:30 p.m. MEMBERS PRESENT Senator Robin Taylor, Chairman Senator Lyda Green, Vice-Chairman Senator Mike Miller Senator Al Adams Senator Johnny Ellis MEMBERS ABSENT None COMMITTEE CALENDAR SENATE BILL NO. 270 "An Act relating to juveniles; relating to the jurisdiction of juvenile courts; relating to the release of juveniles; and relating to records concerning juveniles." CS FOR SENATE BILL NO. 207(CRA) "An Act authorizing the issuance and sale of revenue bonds to fund public wastewater systems, nonpoint source water pollution control projects, including solid waste management systems, and estuary conservation and management projects; authorizing the use of the Alaska clean water fund to pay and secure the bonds and to pay costs related to issuance and administration of the bonds; authorizing certain measures to secure payment of the bonds; and amending Rule 3, Alaska Rules of Civil Procedure." SENATE BILL NO. 279 "An Act relating to salmon classics and race classics." CS FOR HOUSE BILL NO. 370(JUD) "An Act relating to the provision of legal services at public expense." CS FOR SENATE BILL NO. 211(STA) "An Act relating to sexual assault; and relating to endangering the welfare of vulnerable adults." SENATE BILL NO. 277 "An Act relating to charitable gaming and gaming on state ferries; and providing for an effective date." CS FOR SENATE BILL NO. 156(HES) "An Act requiring a court to order parties involved in child custody or visitation matters to attend an educational presentation about mediation; and allowing the presentation to be through written materials when necessary." SENATE BILL NO. 268 "An Act relating to release before trial in cases involving controlled substances." SCHEDULED BUT NOT HEARD. PREVIOUS SENATE COMMITTEE ACTION SB 270 - See Judiciary minutes dated 2/26/96 and 3/11/96. SB 279 - No previous Senate committee action. SB 277 - No previous Senate committee action. SB 207 - See Community & Regional Affairs minutes dated 2/5/96, 2/14/96, and 2/21/96, and State Affairs minutes dated 2/29/96. SB 211 - See State Affairs minutes dated 3/7/96. SB 156 - See Health, Education & Social Services minutes dated 9/21/95, 10/20/95 and 2/21/96. WITNESS REGISTER Keith Kelton Alaska Dept. of Environmental Conservation 410 Willoughby Ave. Ste. 105 Juneau, AK 99801-1795 POSITION STATEMENT: Presented CSSB 207(CRA) for DEC and the Administration Marie Sansone Assistant Attorney General Department of Law P.O. Box 110300 Juneau, AK 99811-0300 POSITION STATEMENT : Answered questions on CSSB 207(CRA) Lee Sharp Bond Counsel Preston, Gates and Ellis 420 L St., Suite 400 Anchorage, AK 99501 POSITION STATEMENT: Answered questions on CSSB 207(CRA) Anne Carpeneti Assistant Attorney General Department of Law P.O. Box 110300 Juneau, AK 99811-0300 POSITION STATEMENT: Opposed SB 270 Diane Worley Division of Family and Youth Services (DFYS) Dept. of Health and Social Services P.O. Box 110630 Juneau, AK 99811-0630 POSITION STATEMENT: Opposed SB 270 Joe Ambrose Legislative Aide to Senator Taylor Alaska State Capitol Juneau, Alaska 99811-1182 POSITION STATEMENT: Testified for the sponsor of SB 277 Mary Magnuson National Association of Fundraising Ticket Manufacturing Minneapolis, MN POSITION STATEMENT: Opposed to SB 277 Tim Reed National Multiple Sclerosis Society 36115 Murray Lane Soldotna, AK POSITION STATEMENT: Asked questions about SB 277 Lois Pilifant Soldotna Senior Center 197 Park Ave. Soldotna, AK POSITION STATEMENT: Asked questions about SB 277 Mike Tibbles Legislative Aide to Senator Green Alaska State Capitol Juneau, Alaska 99811-1182 POSITION STATEMENT: Testified for sponsor of SB 156 ACTION NARRATIVE TAPE 96-23, SIDE A Number 001 CHAIRMAN ROBIN TAYLOR called the Judiciary Committee meeting to order at 1:52 p.m. All members were present. The first order of business before the committee was SB 270. SB 270 JUVENILE OFFENDER PROCEEDINGS & RECORDS SENATOR TAYLOR announced the committee heard SB 270 at a previous hearing and a committee substitute has been drafted. SENATOR MILLER moved adoption of the committee substitute (Luckhaupt, 3/13/96). SENATOR ADAMS objected and asked for a review of the changes made in the proposed committee substitute. SENATOR TAYLOR stated the sections pertaining to the disclosure of juvenile records have been removed in the proposed committee substitute in response to testimony from DFYS indicating it will lose $8 million in federal funding if juvenile records are opened. The proposed committee substitute allows municipalities to enact ordinances which would provide for a violation penalty of a fine of up to $300. SENATOR ADAMS requested DFYS' position on the proposed committee substitute. ANNE CARPENETI, Department of Law, stated the committee substitute removes the amendment to AS 47.10.060(e) which references in disclosed records under AS 47.10.090(f), and removes the amendment to AS 47.10.090 which would have allowed for public disclosure of records for juveniles aged 13 and over. Section 7 of SB 270 was removed which determined when a court could allow records to be sealed or opened. All of the provisions in the original bill amending AS 47.10.090 and AS 47.10.093, which deals with agency records, have been removed. SENATOR TAYLOR noted AS 47.10.092(b) - (g) and (k) have also been removed. MS. CARPENETI stated that is correct. SENATOR TAYLOR asked Ms. Carpeneti if any provisions remained in the proposed committee substitute that would jeopardize federal funds. MS. CARPENETI replied they did not. DIANE WORLEY, Director of DFYS, verified the proposed committee substitute does not jeopardize federal funding. SENATOR TAYLOR asked if there was continued objection to the adoption of the committee substitute. SENATOR ELLIS asked if a representative of the Court System could testify on the impact of the committee substitute. Number 143 SENATOR ADAMS asked for DFYS' position on the committee substitute. MS. WORLEY stated DFYS still opposes the bill, because of the automatic waiver to district court. DFYS would prefer cases be heard by hearing officers in the civil section of court, as opposed to waiving young children into adult courts. SENATOR TAYLOR commented that making hearing officers available in every community statewide would require a significant increase in cost. MS. WORLEY noted DFYS has been working with Representative Toohey on HB 474, and in discussions with the Municipality of Anchorage staff, they revealed they had intended to use hearing officers rather than district courts. She agreed that approach could incur additional costs for other communities who decide to use it but felt it is a more palatable option. Number 193 SENATOR TAYLOR advised that several communities already do this. He questioned whether DFYS has attempted to work with those particular communities. MS. WORLEY replied DFYS has not at this point. MS. CARPENETI discussed further departmental concerns about the measure. The Department of Law remains opposed to the waiver of juveniles for municipal offenses to district court, and opposes the imposition of bail for a delinquent who is detained. The bail provision would be new to law. According to the Juneau district attorney, the imposition of a large bail could increase the number of children incarcerated. This provision also conflicts with Delinquency Rule 12, and raises a question as to how it will work in relation to AS 47.10.140, which pertains to probable cause in terms of detention of a minor. AS 47.10.082 does not currently require probable cause, if a minor has committed an offense, before bail is imposed. DOL's last concern is with Section 4, which adds a chain of criteria to be used by the court system for sentencing, or disposing of, a juvenile case. The chain of criteria includes the consideration of community condemnation of the minor's conduct as a reaffirmation of societal norms, which is not relevant to delinquency cases. If the purpose is to rehabilitate the child, according to the Juvenile Code, this requirement would be a major departure from that goal. SENATOR TAYLOR believed Section 1 takes children out of that provision and questioned whether this bill will require all minors to go before a district court judge. MS. CARPENETI replied AS 47.10.082 applies to all delinquency cases, not just those that would be automatically waived if this measure passes. CHRIS CHRISTENSEN, general counsel to the Alaska Court System, responded to Senator Ellis' question. Most of the court system's concerns, reflected in the fiscal note for SB 270, pertained to the problem of trying to determine what would be public information in each record. By removing the records issues from SB 270, those concerns and related costs no longer exist, however giving municipalities the authority to create non-criminal offenses will have some impact on the court system and a new fiscal note will need to be submitted. Also, the imposition of bail for juveniles will double the hearing time, and because children's court is not set up to accept money of any kind, computer adjustments will have to be made. Number 265 SENATOR ELLIS questioned whether bail for juveniles will be comparable to the amount of bail ordered for adults. SENATOR TAYLOR remarked that if the maximum penalty for municipal violations is $300, the amount of bail for those offenses should not be very high. The release of minors provision also takes into account the release of class A felony offenders, and it is difficult to guess whether there will be a difference in the amount of bail ordered. SENATOR TAYLOR asked if there were further objections to the adoption of CSSB 270. There being none, the motion carried. SENATOR MILLER moved CSSB 270 out of committee with individual recommendations. SENATOR ADAMS objected due to the concerns raised by the Department of Law. SENATOR TAYLOR stated it is his hope the sponsor will work with the Department of Law to clarify those matters. The motion carried with Senators Taylor, Green and Miller voting "yea," and Senators Adams and Ellis voting "nay." SB 207 REVENUE BONDS: WATER & WASTE PROJECTS KEITH KELTON, representing the Department of Environmental Conservation (DEC), summarized the legislation as follows. Congress reauthorized the Clean Water Act (CWA) in 1987. Prior to that time grants were available for municipal construction of wastewater treatment facilities. Since 1987, the grant provision was substituted with a low interest loan program, which has been administered by DEC and expanded to include solid waste landfills. For the first few years of the loan program, state general funds continued to provide grant money, however in the last few years less direct grants have been made, and the demand for loans has increased dramatically. Twenty other states have programs providing low-interest loans financed by revenue bonds. MR. KELTON referred to charts and written material submitted to committee members to explain how the financing program would work. The Alaska Clean Water Fund was created by statute in 1989, and was capitalized by $80 million. The federal government matches the fund with 20 cents per state dollar. Of the $80 million, $50 million has gone to 20 year low interest loans. The remaining $30 million can be used as a corpus that can be used as collateral for revenue bonds. CSSB 207 would set up a bond redemption fund, would draw funds from the ACWF through the state bond committee and their financial trustees, and would allow them to issue bonds to investors. Monetary limits of $15 million per year and $150 million over a ten year period were placed on the fund in the Senate Community and Regional Affairs committee substitute. The advantage to creating the fund this year is that it allows the corpus, which is currently unobligated, to remain large enough to have a better leveraging effect when selling revenue bonds. DEC is currently obligating $12 million to $13 million per year so the $30 million corpus will be decreased substantially if CSSB 207 does not pass this year. Number 450 LEE SHARP, bond counsel, addressed a proposed amendment related to the cap on the issuance of bonds. The bond committee can issue revenue bonds for purposes other than the Clean Water Fund, but the committee substitute appears to limit that authority. The amendment adds references to clarify that the bonds referred to in the cap are only those issued under the Clean Water Act. The amendment also addresses questions about computations on the $150,000,000 cap such as whether the interest owed during this fiscal year or the interest owing to the payoff of the bond was to be included in the computation. Additionally, if a bond was issued with a floating interest rate, there would be no way to accurately compute that amount. The amendment clarifies that the principal amount is used for the computation. Furthermore the principal of a bond can mean two things: the remaining unpaid principal, or the original principal amount of the bond. The amendment clarifies the unpaid principal amount is to be used. It also clarifies whether refunding and refunded bonds are counted in the computations. MARIE SANSONE, Assistant Attorney General, explained three technical amendments: on page 4, line 6, insert the word "such" before the word "money;" on page 5, line 8, following "default to" delete "the" and insert "a;" on page 6, line 23, following "refunding" insert "bonds." SENATOR TAYLOR entertained a motion to adopt amendments one through four. SENATOR GREEN so moved. There being no objection, the amendments were adopted. Number 528 SENATOR TAYLOR noted a concern expressed by Tam Cook, Legal Counsel, that CSSB 207 runs significant constitutional risk in that it may violate art.9, sec. 8 of the Alaska Constitution. That section prohibits any state debt from being contracted unless authorized. MS. SANSONE responded that when drafting the bill with the bond counsel, a good deal of time was spent analyzing the constitutional limitations on debt; specifically whether this would be a general obligation or revenue bond and the necessity of voter approval, and other constitutional issues relating to bonds. The bond counsel prepared a letter which dealt with some of these questions. She and the bond counsel felt these bonds would be construed as a public enterprise of the state and would not fall within the constitutional limitations. SENATOR TAYLOR believed the words "public enterprise" are what Ms. Cook was referring to in her memo. He stated there is something to be said for the constitutional provision requiring voter approval, and noted that is a policy call separate from whether this bill is in compliance with that provision. MS. SANSONE commented under the Clean Water Act, the Clean Water Fund may be leveraged by either general obligation or revenue bonds. When designing the program with input from various agencies, the decision to use revenue bonds was made, and the bill was drafted carefully with full regard for all of the constitutional arguments. That policy decision was made by the Administration when designing this program and requesting legislation. She added there is a question as to whether voter approval would be required at the municipal level. SENATOR TAYLOR stated voter approval at the municipal level was his second question. MS. SANSONE replied it is her understanding that DEC does not currently require voter approval for the loans they are entering into with municipalities. She added that the bond counsel may disagree and feel a change would have to be made if the loans were funded with bond proceeds. SENATOR TAYLOR indicated no one wants to initiate this program only to have it run afoul because of constitutional problems. He believed people in most communities would be willing to vote for such things since they will be called upon to repay. MR. SHARP advised that Section 11 of the finance article of the Constitution provides an exception from the required vote for obligations of the state and municipalities, where the only security for the payment of the bonds is to be the revenues of an enterprise. This typically applies to utility situations. At the local government level, the water or sewer utility revenues would be pledged to pay the municipality's loan from the state, which does not require a municipal vote. One caveat is that there are some home rule municipalities that have charter provisions that require a vote even on a revenue issue, but they would be the only exceptions. On the question of policy, the municipality could put the issue to a vote, but would not be required to. SENATOR TAYLOR remarked the legislature could put a vote requirement in the bill. MR. SHARP stated that is correct. SENATOR TAYLOR asked if the bond committee is a public corporation. MR. SHARP replied it is not, but that does not keep it from being classified as an enterprise. The Municipal Bond Bank is a similar operation and falls under Section 11 as a revenue generating enterprise. It issues bonds and pledges to bondholders that repayment will be made from revenues received from making loans to municipalities. SENATOR TAYLOR asked if there is any case authority to establish what is or is not considered an enterprise. MR. SHARP noted in the early days of statehood when several bond issuing agencies were created their authority was challenged, but he did not recall any cases which focussed on that particular language. SENATOR TAYLOR believed the inclusion of an intent or purposes provision in the legislation that states the legislature finds, as a matter of fact, that the bond committee is an enterprise, would enhance the likelihood of the bill being found constitutional. He asked if it would be further enhanced by requiring a ballot. MR. SHARP replied that generally, a ballot for voter approval of a general obligation bond asks the voter to pledge the full faith and credit and taxing authority. If a municipality fails to make a payment, the bondholders can get judgment forcing the municipality to levy taxes to pay the bond. For a water or sewer system, there is no authority to require a municipality to levy any tax, it can look only to the revenues of the water or sewer system. If a vote was required there may be a question as to whether or not the legislature intends to make the municipalities issue general obligation bonds, or whether the legislature just wants voter approval of ordinary revenue bonds. He knew of only one municipality that requires a vote on revenue bonds. Regarding the inclusion of a policy or findings section, he suggested stating that the legislature views this program as the operation of a revenue generating enterprise. SENATOR TAYLOR asked Ms. Sansone to assist the committee in drafting such language to be considered at the next hearing. SB 279 CHARITABLE GAMING SALMON AND RACE CLASSIC SENATOR JOHN TORGERSON, sponsor of the measure, explained SB 279 authorizes the Seward Chamber of Commerce and the Sterling area senior citizens to sell tickets statewide for particular activities for fundraising purposes. The Seward Chamber of Commerce hosts a race up Mount Marathon, and holds a contest to guess the weight of the prize fish caught in its salmon derby. The Sterling Senior Citizens would like to hold a contest to guess the number of salmon going up the Kenai River. There were no questions for the sponsor. SENATOR TAYLOR asked Senator Torgerson what he thought the odds were of the bill moving from committee. SENATOR TORGERSON replied he would need to get his ticket book. SENATOR GREEN moved SB 279 out of committee with individual recommendations. There being no objection, the motion carried. HB 370 LEGAL SERVICES PROVIDED AT PUBLIC EXPENSE DEAN GUANELI, Assistant Attorney General, addressed a question raised at a previous committee hearing on when and how indigent people are granted public defender services. That question arose in the context of several murder investigations, particularly in the Anchorage area, where police were investigating a certain person. In the middle of the investigation, before the suspect was charged with a crime, the public defender took on the defense of the suspect and told police not to speak to him. Several members of the law enforcement community proposed changing the way public defenders are allowed to appoint themselves to represent people charged with criminal offenses. HB 370 is an attempt to provide a more uniform process for appointing legal representation by designating the judge to determine whether the person has adequate funds to hire an attorney. If the police want to talk to a person before that person is charged with a crime, the police can either stop questioning the person, or they can ask the judge to appoint an attorney at that point. Number 444 SENATOR TAYLOR noted Section 3 not only prohibits the agency from self appointing, but also removes the ability of law officers to notify the court or agency of the need for representation. He questioned why that ability should be removed from police officers. MR. GUANELI stated under current law the question of whether a person has a right to representation depends on a judicial determination of whether the person is indigent. Second, this situation often occurs in the middle of the night, and as a practical matter, to require police officers to call the agency at that time will not likely result in representation until the next day at the arraignment. SENATOR ADAMS questioned whether HB 370 violates art. 1, sec. 11 of the Alaska Constitution, as well as Criminal Rule 5B. MR. GUANELI replied the constitutional right to counsel has been interpreted to attach when charges have been filed. HB 370 reflects that constitutional standard. Criminal Rule 5B provides for the right to immediately communicate with an attorney or a friend after arrest. That right is also contained in Alaska statute. HB 370 does not deprive anyone of that right because it does not prevent anyone from calling an attorney. Number 398 SENATOR ADAMS commented the cost of finding and hiring an attorney in rural Alaska is very high, especially when the Republican Majority is trying to cut out Alaska Legal Services. SENATOR TAYLOR referred to a memo written by the drafter, Jerry Luckhaupt, to Representative Porter, indicating there are a few unique pre-arraignment situations that the Supreme Court has recognized as a critical stage at which point counsel would have to be provided. One is a post-arrest line-up situation. The Supreme Court has decided if the line-up is very close in time to when the criminal event occurred, one would not be allowed counsel, because of the exigent circumstances. If a line-up was not temporally proximate to the event, the person would have to have counsel appointed and available. That differs from the arraignment stage which could be one or two days later. MR. GUANELI agreed that is a valid point, and is another example of a situation where, if the police want to undertake that procedure, they would have to request a judge to assign an attorney. It's similar to a situation when the police might want to take a statement prior to an arraignment and the person refuses until he/she has spoken to an attorney. The police have the choice of either foregoing the procedure or asking a judge to make an appointment. SENATOR TAYLOR stated that was the reason for his original question about removing that ability from police officers in Section 3. MR. GUANELI referred to Section 2 and explained the police officer would have to request the district attorney make application to a judge for the appointment for a public defender. SENATOR TAYLOR replied that in at least two of the communities he represents, the police officer would have to contact the district attorney via a long distance phone call, and the district attorney might have to request a judge in a different town. Under current conditions, the police officer could ask the local magistrate. MR. GUANELI indicated from a logistical standpoint, he sees no problem in allowing the police to request a local magistrate. The main emphasis of HB 370 is that the determination of indigence be judicial. SENATOR TAYLOR stated it is the procedural aspect he is concerned about. When the investigation has focussed on a particular individual and the critical stages of the investigation is reached, all of the decisions about whether or not counsel should be appointed for the defendant are being made by the people prosecuting the defendant. This places a very high ethical burden upon the officer to make certain that critical evidence is being obtained, while simultaneously protecting the individual's constitutional right to representation. MR. GUANELI felt that to be a legitimate point but repeated the police have a choice and can either stop talking to the person, not do a line-up, or get the person an attorney. If that procedure is not followed, the police officer risks the ability to use evidence that is driving the investigation. SENATOR TAYLOR asked Representative Porter if he would object to reinstating the words "law enforcement officers" back into Section 3(a). REPRESENTATIVE PORTER did not object, and noted he drafted the bill from an urban perspective. Number 306 SENATOR ELLIS pointed out that the co-sponsor of HB 370 presented the measure as a money saving device which followed the recommendations of the Legislative Budget and Audit Committee, and asked Representative Porter if he agreed with that representation. REPRESENTATIVE PORTER replied he did and that is why the legislation has joint sponsorship. A section of the bill requires that the basis of the determination by the court of indigence be put on record. The problem found by the Budget and Audit Committee is that there is a differential application of the court rule on indigence throughout the state. In some areas the appointment of a public defender was automatic, regardless of qualifications, and in other areas it is very difficult. The opinion of the auditors was that there were more people being afforded public defenders than should be. Putting the basis for the appointment on the record would provide accountability. SENATOR TAYLOR added an earlier provision in the bill required the entire determination be placed on the record, now the bill only requires the court to put the basis for the determination on the record which eliminates recording the full findings and facts. REPRESENTATIVE PORTER stated the court system was opposed to recording the full determination because it would require the equivalent of a full extra hearing. SENATOR ELLIS asked if savings would result from fewer public defenders being appointed, or from being appointed later in the process. REPRESENTATIVE PORTER estimated the number of public defenders appointed when police are desiring an interrogation would not change considerably. He hoped a more appropriate determination would be made by the judge at the first formal appearance. SENATOR ELLIS asked Representative Porter if he agrees with Mr. Salemi's assessment that public defenders self appoint only in rare instances. REPRESENTATIVE PORTER stated from personal experience, he saw public defenders self appoint often enough to be of concern, and two officers he spoke with in Anchorage said the number of self appointments has increased. SENATOR ELLIS questioned whether Representative Porter was concerned that if HB 370 is enacted, legal counsel for indigent people at the time of interrogation might not be available. REPRESENTATIVE PORTER answered the critical stages that appear before the appearance in court where a prime suspect is entitled to counsel are well documented and, for years, law enforcement has had the ability to get an attorney or not proceed. If an attorney is not available, police officers may not proceed. If they do, they will lose whatever evidence they have gained as the result of that action, as well as anything they subsequently determine because of that evidence. SENATOR ELLIS contended that by removing the law enforcement officer's ability to notify a public defender the interrogation comes to a halt, and confession cannot be obtained at the time the suspect is under the most stress. REPRESENTATIVE PORTER did not think that the suggestion for change was that the police officer appoint, it is that the police officer may ask the court to appoint, as the court is responsible for that determination. SENATOR TAYLOR surmised the police officers' frustration is caused by the agency's aggressive style of self appointment and by the fact that the public defender agency has self appointed to represent a previous client on a second offense committed several years later. REPRESENTATIVE PORTER felt there was no doubt the public defender has an adequate method of getting policy throughout his offices, and if this bill becomes law, it would be known that they could not represent a person merely on the basis that person had been represented in the past. Number 200 SENATOR ELLIS submitted that HB 370 is based on the assumption that self appointment by the public defenders' office is a common occurrence, despite testimony both ways. He asked the committee to get an accurate number of those cases. SENATOR TAYLOR moved to amend page 2, line 9, to reinstate the words "the law enforcement officers concerned, upon commencement of detention," thereby deleting "the agency or" only. REPRESENTATIVE PORTER felt that language refers to more than just advising of rights. He suggested changing page 2, line 4, to read, "...when the prosecuting attorney or a law enforcement officer requests the court...." SENATOR TAYLOR modified the amendment to include on page 2, line 4, the words, "or a law enforcement officer." SENATOR ADAMS asked for clarification. SENATOR TAYLOR stated that change is both on line 4 and on line 10. There being no objection, the motion carried. SENATOR ELLIS asked the Chairman to request the number of self appointments from the Public Defenders' Agency. SENATOR TAYLOR agreed to do so and announced the bill would be held until Friday. SENATOR ADAMS asked if the sponsor recognizes that the only law enforcement officers in rural Alaska are VPSOs. The sponsor said yes. SB 211 VULNERABLE PEOPLE:NEGLECT/SUPPORT/ASSAULT SENATOR ELLIS, sponsor of SB 211, explained that SB 211 was drafted in response to an abuse case last December in which the Department of Law was unable to prosecute the offenders. SB 211 creates the new crime of endangering the welfare of a vulnerable adult committed by intentionally deserting a vulnerable adult, and criminal neglect of a vulnerable adult by failing to provide support to a vulnerable adult, and establishes penalties for those crimes. This measure will provide the Department of Law with the tools it needs to prosecute such crimes. The state has encouraged the growth of the new industry of assisted living and group homes for vulnerable people, including senior citizens, developmentally disabled adults, or any adults who are mentally or physically disabled in any way that makes them vulnerable. SENATOR TAYLOR thanked Senator Ellis for bringing this matter to the legislature's attention. He noted AARP has submitted a letter of strong support to the committee, as well as a significant amount of backup material and recommendations on elder abuse. SENATOR GREEN asked if SB 211 applies only to licensed agencies, or whether it extends to a neighbor or family member who takes care of a vulnerable adult in a more casual relationship. SENATOR ELLIS deferred that question to a representative of the Department of Law. He added the bill was crafted to address those facilities that present a potential liability to the state because they are licensed by the state. Number 034 ANNE CARPENETI stated the Department of Law supports SB 211. She did not believe the bill applies to persons other than those licensed by the state. It applies to relationships made by authority of law, which could be a guardianship, but not to less formal relationships between two people. CONNIE SIPE, Director of the Division of Senior Services, testified via teleconference in support of SB 211. SENATOR GREEN moved CSSB 211(STA) out of committee with individual recommendations. There being no objection, the motion carried. TAPE 96-24, SIDE B Number 020 SB 277 GAMING: FERRIES, VIDEO LOTTERY & MISC SENATOR TAYLOR moved adoption of a committee substitute. SENATOR ADAMS objected to the motion. SENATOR TAYLOR explained the committee substitute allows pulltab gaming to continue, videogaming to occur in the future, and videogaming on the ferries. JOE AMBROSE, legislative aide to Senator Taylor, sponsor of the measure, commented on the SB 277. The original version was designed to do away with pulltabs entirely, and replace them with video lottery machines. Charitable organizations statewide argued that many of the smaller operations would be negatively impacted by a total ban on pulltabs. The committee substitute is a compromise proposal that would still prohibit the funding of political activities by income derived from charitable gaming, including contributions to candidates for public office, or to groups that support candidates for public office. It would delete political and labor organizations from the definition of a bona fide civic or service organization qualifying for a charitable gaming permit. MR. AMBROSE continued. The main thrust of SB 277 is the introduction of video lottery machines. These machines will make charitable gaming in Alaska more accountable. They are capable of being linked to a central computer where a permanent record of all transactions can be kept. SB 277 directs that the proceeds of video lottery machines be distributed differently from those of pulltabs. Charities would retain 30 percent, 30 percent would go to the vendor, 15 percent would go to the state, and 25 percent would go to the municipality in which the machine is located. Proceeds from machines in unorganized boroughs outside municipalities would go to the state. If the Marine Highway System so desires, SB 277 provides it to license video lottery gaming on state ferries. Number 082 SENATOR ADAMS asked what entities can have permits, and whether permits can be sublet to another contractor. MR. AMBROSE replied the permittees are basically the same group that can currently sell pulltabs, with the exception of political and labor organizations. It does not impact pulltab operations currently in place. Regarding subletting permits, SB 277 prohibits the use of an operator. The videogaming machines would have to be located in a licensed premise; each premise would be limited to ten machines. SENATOR ELLIS asked about a reference made to this type of gambling as the "crack cocaine" of gaming. MR. AMBROSE responded he saw that reference today for the first time. SENATOR ELLIS questioned the payouts on existing pulltabs versus payouts on videogaming. To his knowledge, pulltab prizes are relatively low compared to videogame prizes. MR. AMBROSE stated SB 277 specifically defines the parameters of payouts and maintains the existing framework. SENATOR ELLIS inquired whether it makes the payout identical to current payouts for pulltab prizes. MR. AMBROSE deferred that question to the Director of the Division of Charitable Gaming. He added the intent was to maintain similar payouts while providing a more accountable mechanism to replace pulltabs, not to expand the whole area of gaming in Alaska. SENATOR ADAMS noted there is no fiscal note accompanying SB 277. MR. AMBROSE indicated the state ferries would become permittees if they were to become licensed, therefore a fund could be set up to use the income from the games on ferries for operations. SENATOR ADAMS asked how much revenue the permits would generate. MR. AMBROSE referred to a position statement submitted by the Marine Highway System which contended SB 277 would cost it money. The fiscal note for the original bill, which should be the same for the committee substitute, shows an annual revenue of $15,600 per vessel with three machines. The ferry system believes it will have to hire extra employees. Number 167 SENATOR ELLIS assumed the video machines offered a slot machine type of game on a video screen, and questioned whether the machines can be programmed to play all kinds of games not currently allowed under Alaska statute. MR. AMBROSE stated that the term "video lottery" would include video poker and video keno, but it would be up to the Division of Charitable Gaming to decide which games would be allowed. SENATOR ELLIS asserted that even though the bill is not intended to expand gambling in Alaska, it would grant to the executive branch the authority to do so. MR. AMBROSE stated he meant the bill would not up the stakes as far as payouts. The Department of Law has advised that SB 277 could have an impact on previous decisions made by the legislature. SENATOR ELLIS commented that the legislature staked out a fairly clear path last year in trying to limit gambling in the State of Alaska, and felt it is curious why this majority would want to grant to this executive the power to expand gambling in the state. Both the administration and the majority seemed to be of one mind on casinos and Monte Carlo Nights last year. SENATOR TAYLOR stated the original intent was to clean up the pulltab operations by creating more accountable transactions. Any member of the benefitted organization could get a print out showing exactly what was played. That approach met with tremendous opposition from charitable organizations. The use of video lottery games has worked very well in other states, such as North Dakota, and provides a financial base for those affected. He added he would not support the measure either if it will result in the executive branch using that as an excuse to provide a negotiated agreement with various other sovereigns as to where they may wish to create full casino-type gambling in Alaska. The whole question of where the state may or may not be going in the arena of gambling needs to be addressed as it was not resolved last year. Number 235 TIMOTHY REED, testifying via teleconference from Kenai, asked if a non-profit organization could own the video lottery machine outright and receive 60 percent of the revenues. SENATOR TAYLOR replied that is his understanding. MR. REED questioned how many machines a non-profit organization could own, and whether one game could be played per machine. SENATOR TAYLOR responded each permittee could have a total of ten permits, and the machines could be programmed to play any number of games, although only one game could be played at a time. MR. REED inquired about the percentages for the city and state. SENATOR TAYLOR answered those figures will generate significant revenues and may replace municipal assistance revenue sharing. He requested input on those amounts, as the percentage amounts are not fixed. LOIS PILIFANT, representing the Soldotna Senior Center, asked if all ten machines could be operated in one location. SENATOR TAYLOR agreed. MS. PILIFANT stated she was confused by the charitable organizations that were concerned that video lottery gaming would result in a loss of revenue since video gaming would only replace paper pull tabs. She believes paper pull tabs are harder to control and account for. SENATOR TAYLOR explained those organizations were concerned they would lose money because the pull tabs allow more customers access at one time, where ten video machines would allow only ten people to play at a time. MS. PILIFANT asserted several employees would be required to sell more than 10 pull tabs at a time, and such an operation would not be considered small. She noted the Soldotna Senior Center runs a small pull tab operation and raises most of its own operating revenue. It receives very little money from the Older Alaskans Commission. The video lottery games would require less paperwork and fewer employees. Number 330 MARY MAGNUSON, representing the National Association of Fundraising Ticket Manufacturers, a small trade association in Minnesota that produces pulltabs and bingo paper for charity gaming purposes, expressed concern about SB 277 because it will create economic problems for pulltab manufacturers. Currently five states allow some sort of video lottery gaming, primarily in bars, not necessarily for charitable purposes but to generate revenue for those states. Four other states allow video lottery gaming only at racetracks to stem the tide of declining pari-mutuel revenues. Seven or eight states have struggled with this issue in the last few years, and have rejected the notion of legalizing video lottery for the following reasons. Video lottery gaming typically involves an expansion of gambling: it is new, popular, and has attracted many businesses that might not otherwise be involved because of the revenues generated. The amount of money spent of video lottery gaming is generally higher than the amount spent on other forms of gambling. In Alaska, the per capita wagering on pull tabs and bingo is approximately $465 per capita per year, almost twice that of any other state. That amount is likely to increase with video lottery gaming. In Oregon, $717 is spent per capita on video lottery, and South Dakotans spend $625 per capita. States that have been faced with this issue have been concerned about expansion and that video lotteries separate the player from his/her money faster than any other form of gambling. MS. MAGNUSON advised that studies have shown that video gambling is the single most addictive form of gambling ever invented. Although all gambling is addictive, the higher incidence of compulsive gambling, pathological gambling, and problem gambling typically result from video gambling. She explained that is why it was termed the "crack cocaine" of gambling by a clinical worker in Las Vegas. The machines are designed to make it easy to stay at for a longer period of time and removes the social aspect of other games. Many states have had to implement problem gambling programs which are funded by the state. In Minnesota, that program gets $1.5 million per year and reaches only the tip of the iceberg in the problem gambling areas. MS. MAGNUSON explained the third reason states have been less likely to legalize video gambling in the last few years is because Louisiana was the last state to legalize video gambling in any kind of tavern environment in 1993. This year the newly elected governor has called a special session for the purpose of repealing the video gambling law, because of scandals involving organized crime infiltration and certain government officials, and other problems associated with video gambling. The governor plans to offer for local option riverboat gambling and land based casinos in New Orleans, and give the voters the opportunity to repeal all gambling within the state. States have had to look at these issues and make the public policy decision as to whether the social costs outweigh whatever benefits might be achieved through the legalization of video gambling. MS. MAGNUSON believed pulltabs are accountable as they contain serial numbers and bar codes. Electronic systems are available to accurately record products sold to each distributor and permittee in the state. She offered to work with regulators to increase accountability. SENATOR TAYLOR commended Ms. Magnuson for her discussion on the vicious nature of the competition. He added he has represented approximately 30 bars in the state. The single biggest problem for bar owners is that they are cash based businesses, with several employees handling cash before it is accounted for. Even though cash registers are more sophisticated, pulltabs are still sold out of shoeboxes. Employees are able to monitor how much prize money has been awarded and how much is available in the batch. He announced the bill would be held to wait for further comment. SB 156 MANDATORY MEDIATION:CHILD CUSTODY ISSUES MIKE TIBBLES, staff to Senator Green, sponsor of SB 156, explained the measure was introduced to help families resolve custody disputes through mediation rather than adjudication. Resolving issues before the courts is often expensive, confrontational, and competitive, and can lead to decisions which are contrary to the best interests of the child. Mediation leaves the decision making up to the parties involved. The committee's original intent was to mandate all individuals involved in a child custody dispute to attend mediation, however during Senate HES interim hearings, concerns were raised about the mandatory provision. To address those concerns, the bill provides for education on mediation and makes it voluntary. SENATOR ADAMS asked if the intent is to get information to both parties, and not to mandate mediation. MR. TIBBLES stated that is correct. SENATOR ADAMS moved and asked una nimous consent that SB 156 be moved out of committee with individual recommendations. There being no objections, the motion carried. SB 268 PRETRIAL RELEASE FOR DRUG OFFENSES SENATOR ADAMS repeated this bill attempts to fix something that is not broken. He asked if the Department of Law planned to submit further testimony on this bill. SENATOR TAYLOR announced the sponsor requested the bill be held until Friday. He adjourned the meeting at 3:10 p.m.