Legislature(2001 - 2002)

05/04/2001 05:22 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                     ALASKA STATE LEGISLATURE                                                                                   
                    SENATE JUDICIARY COMMITTEE                                                                                
                            May 4, 2001                                                                                         
                             5:22 p.m.                                                                                          
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Robin Taylor, Chair                                                                                                     
Senator John Cowdery                                                                                                            
Senator Gene Therriault                                                                                                         
Senator Johnny Ellis                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Dave Donley, Vice Chair                                                                                                 
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR HOUSE BILL NO. 49(FIN)                                                                                                   
"An Act extending the termination date of the Board of Parole; and                                                              
providing for an effective date."                                                                                               
     MOVED CSHB 49(FIN) OUT OF COMMITTEE                                                                                        
                                                                                                                                
CS FOR HOUSE BILL NO. 121(L&C)                                                                                                  
"An Act relating to the issuance of qualified charitable gift                                                                   
annuities."                                                                                                                     
     MOVED SCS CSHB 121(JUD) OUT OF COMMITTEE                                                                                   
                                                                                                                                
CS FOR HOUSE BILL NO. 184(JUD) am                                                                                               
"An Act relating to insurance; amending Rule 402, Alaska Rules of                                                               
Evidence; and providing for an effective date."                                                                                 
     HEARD AND HELD                                                                                                             
                                                                                                                                
CS FOR HOUSE CONCURRENT RESOLUTION NO. 17(RES)                                                                                  
Expressing the legislature's support for sale of a portion of                                                                   
Alaska's North Slope natural gas for electrical generation to power                                                             
data centers within the North Slope Borough.                                                                                    
     MOVED SCS CSHCR 17(JUD) OUT OF COMMITTEE                                                                                   
                                                                                                                                
CS FOR HOUSE BILL NO. 172(FIN) am                                                                                               
"An Act relating to therapeutic courts for offenders and to the                                                                 
authorized number of superior court judges."                                                                                    
          MOVED SCS CSHB 172(JUD) OUT OF COMMITTEE                                                                              
                                                                                                                                
CS FOR SENATE BILL NO. 191(L&C)                                                                                                 
"An Act relating to insurance pooling by air carriers."                                                                         
     HEARD AND HELD                                                                                                             
                                                                                                                                
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 120 am                                                                                    
"An Act adopting the National  Crime Prevention and Privacy Compact;                                                            
making criminal justice  information available to interested persons                                                            
and criminal  history record  information  available to the  public;                                                            
making  certain   conforming  amendments;   and  providing   for  an                                                            
effective date."                                                                                                                
     MOVED SSHB 120 am OUT OF COMMITTEE                                                                                         
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
HB 121 - See Labor and Commerce minutes dated 4/26/01.                                                                          
                                                                                                                                
HCR 17 - See Resources minutes dated 4/30/01.                                                                                   
                                                                                                                                
HB 172 - See Judiciary minutes dated 4/27/01.                                                                                   
                                                                                                                                
SB 191 - See Labor and Commerce minutes dated 4/17/01                                                                           
         4/24/01 and 5/1/01.                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Ms. Candace Brower, Program Coordinator                                                                                         
Office of the Commissioner                                                                                                      
Department of Corrections                                                                                                       
431 North Franklin, Suite 203                                                                                                   
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT:  Supported HB 49                                                                                          
                                                                                                                                
Ms. Amy Erickson                                                                                                                
Staff to Representative Lisa Murkowski                                                                                          
Alaska State Capitol                                                                                                            
Juneau, Alaska 99801-1182                                                                                                       
POSITION STATEMENT:  Introduced HB 121                                                                                        
                                                                                                                                
Ms. Gloria Glover, Chief Financial Examiner                                                                                     
Anchorage Field Office                                                                                                          
Department of Community & Economic Development                                                                                  
3601 C Street, Suite 1324                                                                                                       
Anchorage, Alaska 99503-5948                                                                                                    
POSITION STATEMENT:  Supported HB 121                                                                                         
                                                                                                                                
Mr. David G. Shaftel                                                                                                            
Alaska Community Foundation Board of Directors                                                                                  
3300 Providence                                                                                                                 
Anchorage, Alaska 99508                                                                                                         
POSITION STATEMENT:  Supported HB 121                                                                                         
                                                                                                                                
Mr. Jon Calder                                                                                                                  
No address provided                                                                                                             
POSITION STATEMENT:  Supported HB 121                                                                                         
                                                                                                                                
Mr. Bob Lohr, Director                                                                                                          
Division of Insurance                                                                                                           
Department of Community & Economic Development                                                                                  
3601 C Street, Suite 1324                                                                                                       
Anchorage, Alaska 99503-5948                                                                                                    
POSITION STATEMENT:  Supported HB 121                                                                                         
                                                                                                                                
Ms. Katie Campbell, Actuary L/H                                                                                                 
Division of Insurance                                                                                                           
Department of Community & Economic Development                                                                                  
3601 C Street, Suite 1324                                                                                                       
Anchorage, Alaska 99503-5948                                                                                                    
POSITION STATEMENT:  Testified on HB 121                                                                                      
                                                                                                                                
Representative Kevin Kott                                                                                                       
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Sponsor of HCR 17                                                                                        
                                                                                                                                
Mr. James Dodson, Vice President                                                                                                
Netricity, LLC                                                                                                                  
No address furnished                                                                                                            
POSITION STATEMENT:  Testified on HCR 17                                                                                      
                                                                                                                                
Mr. Thomas Wright                                                                                                               
Staff to Representative Brian Porter                                                                                            
Alaska State Capitol                                                                                                            
Juneau, Alaska 99801-1182                                                                                                       
POSITION STATEMENT:  Introduced HB 172                                                                                        
                                                                                                                                
Mr. Dean Guaneli                                                                                                                
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT:  Testified on HB 172                                                                                      
                                                                                                                                
Mr. Blair McCune                                                                                                                
Alaska Public Defender Agency                                                                                                   
No address furnished                                                                                                            
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Opposed to HB 172                                                                                        
                                                                                                                                
Mr. Bob Lohr, Director                                                                                                          
Division of Insurance                                                                                                           
Department of Community and Economic Development                                                                                
3601 C Street Ste 1324                                                                                                          
Anchorage, AK 99503-5948                                                                                                        
POSITION STATEMENT: Testified on SB 191                                                                                       
                                                                                                                                
Ms. Sarah McNair-Grove                                                                                                          
Division of Insurance                                                                                                           
Department of Community and Economic Development                                                                                
P.O. Box 110805                                                                                                                 
Juneau, AK 99811-0805                                                                                                           
POSITION STATEMENT: Testified on SB 191                                                                                       
                                                                                                                                
Representative John Coghill                                                                                                     
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Testified on HB 120                                                                                      
                                                                                                                                
Mr. Kenneth Bischoff, Director                                                                                                  
Division of Administrative Services                                                                                             
Department of Public Safety                                                                                                     
PO Box 111200                                                                                                                   
Juneau, AK  99811-1200                                                                                                          
POSITION STATEMENT:  Supported HB 120                                                                                         
                                                                                                                                
Ms. Diane Schenker, Criminal Justice Planner                                                                                    
Division of Administrative Services                                                                                             
5700 East Tudor Road                                                                                                            
Anchorage, Alaska 99507-1225                                                                                                    
POSITION STATEMENT:  Testified on HB 120                                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 01-29, SIDE A                                                                                                            
Number 001                                                                                                                      
                                                                                                                                
CHAIRMAN ROBIN TAYLOR called  the Senate Judiciary Committee meeting                                                          
to order  at 5:22  p.m.  Senator  Cowdery,  Senator Therriault,  and                                                            
Chairman Taylor  were present.  Senator  Ellis arrived at  5:26 p.m.                                                            
Chairman Taylor  announced the first  order of business would  be HB
49.                                                                                                                             
                                                                                                                                
                                                                                                                                
          HB  49-EXTEND TERMINATION DATE FOR BD OF PAROLE                                                                   
                                                                                                                              
Ms.  Candace  Brower, Legislative   Liaison for  the  Department  of                                                            
Corrections, explained  that the legislation extends the termination                                                            
date of the board of parole.  Originally the extension date was 2006                                                            
and the House  amended the date to maintain the parole  board in its                                                            
current status until 2008.                                                                                                      
                                                                                                                                
CHAIRMAN TAYLOR  announced that the CS before the  committee was the                                                            
House bill.                                                                                                                     
                                                                                                                                
SENATOR   THERRIAULT   asked   what   percentage   of  incarcerated                                                             
individuals comes before  the parole board and how the dynamics have                                                            
changed since mandatory minimums were instituted.                                                                               
                                                                                                                                
MS. BROWER did not know  that the percentage of individuals eligible                                                            
for discretionary  parole  had changed but  the number of  mandatory                                                            
paroles has increased with  the number of offenders. The workload on                                                            
the mandatory parole has  to do with the number of parole violators.                                                            
Individuals  who are released  on mandatory  parole have their  case                                                            
reviewed  by  a  parole   board  member  who  then  determines   the                                                            
supervisory requirements  for that offender. Because the paroles are                                                            
mandatory, there are some  parolees who are not successful and their                                                            
parole is revoked. At that  time, there is a full board adjudicatory                                                            
hearing.                                                                                                                        
                                                                                                                                
Although  she did  not  have any  figures,  she thought  the  annual                                                            
parole board report should  give percentages of discretionary parole                                                            
hearings held  as well as the number of mandatory  parole revocation                                                            
hearings.                                                                                                                       
                                                                                                                                
SENATOR  THERRIAULT  stated his  reason for  asking  stemmed from  a                                                            
constituent  who was  on probation  and  questioned the  need for  a                                                            
parole  board since  instituted mandatory  good  time and  mandatory                                                            
minimums had automated so much of the system.                                                                                   
                                                                                                                                
MS. BROWER responded  that there were still a significant  number of                                                            
discretionary parole hearings held.                                                                                             
                                                                                                                                
SENATOR  THERRIAULT  noted   that  the monetary   outlay  was  about                                                            
$450,000.00 per year.                                                                                                           
                                                                                                                                
MS. BROWER agreed.                                                                                                              
                                                                                                                                
CHAIRMAN  TAYLOR   asked  that  the  record  reflect   his  pleasure                                                            
regarding  the work  that  has been  done by  the  current and  past                                                            
parole boards. There has  been no abuse of discretion in this state,                                                            
which indicates that good judgment is being exercised.                                                                          
                                                                                                                                
SENATOR COWDERY  moved CSHB 49(FIN)  from committee with  individual                                                            
recommendations.                                                                                                                
                                                                                                                                
There being  no objection,  CSHB 49(FIN)  moved from committee  with                                                            
individual recommendations.                                                                                                     
                                                                                                                                
                                                                                                                                
            HB 121-QUALIFIED CHARITABLE GIFT ANNUITIES                                                                      
                                                                                                                                
                                                                                                                                
MS. AMY ERICKSON, staff  to Representative Lisa Murkowski, explained                                                            
gift annuities  as contractual  agreements  whereby a donor  makes a                                                            
gift to a charity  in exchange for a guaranteed annual  income. This                                                            
benefits the  donor by allowing them  to not only make the  gift but                                                            
also to  receive a  partial tax-free  lifetime  income. It  benefits                                                            
charities as  a means of raising funds.  On average, the  charitable                                                            
deduction equals one-half the gift.                                                                                             
                                                                                                                                
HB 121 is modeled legislation  that has been adopted by more than 30                                                            
other states.  It defines charitable gift annuities  and states that                                                            
they  are  not  insurance.  It  also  sets  a  $300,000.00   minimum                                                            
unrestricted   cash  requirement  and  limits  the  opportunity   to                                                            
established  charities that have been  in operation for three  years                                                            
or more.                                                                                                                        
                                                                                                                                
Number 565                                                                                                                      
                                                                                                                                
SENATOR THERRIAULT asked what would happen when the donor died.                                                                 
                                                                                                                                
MS. ERICKSON said all donors  would have to have named a beneficiary                                                            
to the  annuity and upon  the donor's death  they would receive  the                                                            
money.                                                                                                                          
                                                                                                                                
MS. GLORIA GLOVER,  Chief Financial Examiner with  the Department of                                                            
Community  &  Economic   Development,  testified   that  the  Alaska                                                            
Division  of Insurance supports  the legislation.  Although  current                                                            
Alaska statute  does not  address this type  of annuity separately,                                                             
gift annuities  sold  by charities  meeting certain  conditions  are                                                            
exempt from insurance regulation.  Charities must give notice to the                                                            
donor as well  as the Division of Insurance when they  begin issuing                                                            
these types of  contracts. Alaska Division of Insurance  provides no                                                            
information  about  the  solvency  or  the  product  but  there  are                                                            
penalties for not issuing the required notices.                                                                                 
                                                                                                                                
MR.  DAVID  G. SHAFTEL,  Alaska  Community  Foundation  (ACF)  board                                                            
member,  expressed general  support  for the bill  but outlined  one                                                            
concern. They are a relatively  new non-profit foundation whose main                                                            
focus  is to  support and  implement  charitable  giving in  Alaska.                                                            
Although they are endowed  for over one million dollars, they do not                                                            
have  $300,000.00 in  unrestricted  cash and  this  would make  them                                                            
ineligible to initiate a charitable gift annuity program.                                                                       
                                                                                                                                
He asked that  the committee add a  subsection that would  allow one                                                            
charitable institution  to guarantee annuity programs established by                                                            
another  charitable   institution  such  as  the  Alaska   Community                                                            
Foundation.  With that alternative,  ACF and  other new non-profits                                                             
could establish  a program  while also providing  the security  that                                                            
the Act requires.                                                                                                               
                                                                                                                                
CHAIRMAN  TAYLOR asked whether  he had  specific language  available                                                            
for the amendment.                                                                                                              
                                                                                                                                
Mr. Shaftel said he and  Gloria Glover had discussed and agreed upon                                                            
specific  language   and  Ms.  Erickson   should  have  it   in  her                                                            
possession.                                                                                                                     
                                                                                                                                
CHAIRMAN TAYLOR said his  staff would provide members with copies of                                                            
the proposed  changes and  the committee would  return to the  issue                                                            
after other testimony.                                                                                                          
                                                                                                                                
MR.  JON CALDER,  testified  in  support  of HB  121.  He wanted  to                                                            
clarify that when  a donor takes out a gift annuity  they are paid a                                                            
lifetime  income by the charity  with which  they took out  the gift                                                            
annuity.                                                                                                                        
                                                                                                                                
SENATOR  THERRIAULT referred  to supporting  literature in  the bill                                                            
packet that stated  that, "In addition you will receive  certain tax                                                            
advantages  which make your gift even  more valuable." He  wanted to                                                            
know how  the tax advantages  of the gift  accrue to the  individual                                                            
donor.                                                                                                                          
                                                                                                                                
MR. CALDER  explained that  when a person  takes out a gift  annuity                                                            
they get several benefits.  The donor receives the benefit of giving                                                            
the gift and a tax deduction  for the charitable portion of the gift                                                            
annuity. A  gift annuity is a legal  contract that is part  gift and                                                            
part return  of principal so some  of the money returned  every year                                                            
is tax-free. There is also  the charitable deduction in the year the                                                            
gift is made or it may be spread over five years.                                                                               
                                                                                                                                
SENATOR THERRIAULT  asked whether  the programs  could be set  up to                                                            
benefit any group or cause.                                                                                                     
                                                                                                                                
MR.  CALDER  responded  that  charities   have  been  offering  gift                                                            
annuities for  close to 90 years and  typically a donor takes  out a                                                            
gift annuity with a charity that they believe in or support.                                                                    
                                                                                                                                
SENATOR  THERRIAULT   asked  if  his   definition  of  charity   was                                                            
501(c)(3).                                                                                                                      
                                                                                                                                
MR. CALDER said that was correct.                                                                                               
                                                                                                                                
SENATOR THERRIAULT asked if it was only 501(c)(3) non-profits.                                                                  
                                                                                                                                
MR. CALDER  said USC  170(c) is also  listed in  the bill under  the                                                            
definition of  charitable contribution but normally  the bill is for                                                            
501 (c) that  "we normally think of  as a charitable organization."                                                             
                                                                                                                                
SENATOR THERRIAULT said  there are 501(c)(3)s that are not political                                                            
and 501(c)(4)s that are political.                                                                                              
                                                                                                                                
MR. CALDER  said that is  correct and "the  one this actually  again                                                            
this applies to  the 501(n-5) and then also 514(c)  5. So you have a                                                            
couple of them there."                                                                                                          
                                                                                                                                
SENATOR THERRIAULT  responded, "I'm  not sure if we're gathering  up                                                            
money with governmental support and pouring it into politics."                                                                  
                                                                                                                                
MR.  CALDER said  the qualified  charitable  gift  annuity means  an                                                            
annuity  as described  in  the code  as a  501 (n-5)  and a  514(c).                                                            
Normally a  gift annuity is for a  charitable organization  and they                                                            
are normally 501 (c).                                                                                                           
                                                                                                                                
SENATOR THERRIAULT said, "(c) (3) or (c) (4)?"                                                                                  
                                                                                                                                
MR. CALDER replied, "(c)(3)"                                                                                                    
                                                                                                                                
CHAIRMAN TAYLOR  pointed out that 501 (c)(3) is provided  on page 3,                                                            
at line 23 and  501(m)(5) is listed at line 25 and  514 (c)(5) is on                                                            
that  same  line and  170  (c) is  on  line 22.  He  shares  Senator                                                            
Therriault's concern.                                                                                                           
                                                                                                                                
He noted that  Mr. Shaftel's amendment was before  them and he asked                                                            
whether Representative Murkowski had any objection.                                                                             
                                                                                                                                
MS ERICKSON  stated she had no objection  but her preference  is the                                                            
model act.                                                                                                                      
                                                                                                                                
CHAIRMAN TAYLOR  moved the amendment as amendment  1 for the purpose                                                            
of discussion.  On  page 4,  after "years."  on line  1, remove  the                                                            
period and  add: "; or (C) a guarantee  that the obligations  of the                                                            
annuity  contract will  be  met by  a charitable  organization  that                                                            
meets the requirements of (A) and (B)."                                                                                         
                                                                                                                                
Number 1323                                                                                                                     
                                                                                                                                
SENATOR COWDERY  expressed confusion about a charitable  institution                                                            
sponsoring the  required $300,000 in unrestricted  funds. Could they                                                            
sponsor more than once with the same $300,000?                                                                                  
                                                                                                                                
MR. SHAFTEL responded  that a public charity would  be very cautious                                                            
about   providing  this   type  of   guarantee   because  they   are                                                            
underwriting   the  annuity  program.  He  agreed   that  using  the                                                            
unrestricted  $300,000  more that  once was  a concern  and  perhaps                                                            
there should be additional language to tighten the area.                                                                        
                                                                                                                                
Number 1480                                                                                                                     
                                                                                                                                
SENATOR  THERRIAULT   referred  to  the  definition   of  charitable                                                            
organization  on page 3, line 20 and  said "person" can be  a living                                                            
breathing  or a  corporation.  On  line 22  he wondered  whether  "a                                                            
person" meant  "a living breathing  person who this gift  was set up                                                            
to benefit?"                                                                                                                    
                                                                                                                                
SENATOR TAYLOR responded that it did.                                                                                           
                                                                                                                                
SENATOR THERRIAULT then  referred to (b) and confirmed that the only                                                            
group that  is allowed for the programs  to be set up to  benefit is                                                            
(c) (3)s.                                                                                                                       
                                                                                                                                
CHAIRMAN  TAYLOR  responded  affirmatively   allaying  the  concerns                                                            
expressed by Senator Therriault.                                                                                                
                                                                                                                                
SENATOR TAYLOR  asked whether there  was objection to amendment  one                                                            
and there was none.                                                                                                             
                                                                                                                                
Amendment 1 passed with no objection.                                                                                           
                                                                                                                                
SENATOR  COWDERY  moved  SCS  CSHB  121(JUD)   from  committee  with                                                            
accompanying fiscal notes and individual recommendations.                                                                       
                                                                                                                                
There being no objection, the bill moved from committee.                                                                        
                                                                                                                                
                                                                                                                                
                                                                                                                              
                 HB 184-INSURANCE CODE AMENDMENTS                                                                           
                                                                                                                                
SENATOR TAYLOR  announced he had suggested technical  amendments. In                                                            
a  hearing  on SB  138,  which  is the  same  bill,  the  department                                                            
explained  the  changes  to the  insurance  code.  He asked  for  an                                                            
explanation of the differences between the two bills.                                                                           
                                                                                                                                
MR. BOB LOHR,  Director of the Alaska  Division of Insurance,  spoke                                                            
in  support  of the  bill.  Privacy  provisions  received  the  most                                                            
discussion on SB 138 and  the House version of the bill incorporated                                                            
language  on  privacy  that  was  as  restrictive  as  the  National                                                            
Conference  of  Insurance  Legislators  model  language.  This is  a                                                            
higher  standard for  protection of  privacy  than the Gramm-Leach-                                                             
Bliley  Act Title  5 privacy  provisions provided  by  SB 138 as  it                                                            
moved from  Senate Labor & Commerce.  There is little opposition  to                                                            
the House version of SB 138.                                                                                                    
                                                                                                                                
Other  changes  include  authorizing  the  division  to  update  its                                                            
insurance investment  regulations,  which have not been updated  for                                                            
many years. There  are many sound investment products  on the market                                                            
that are categorized  as suspect because  they weren't in  existence                                                            
when the  laws were  adopted. The  House version  would allow  those                                                            
standards  to  be updated  by  regulation  and  outdated  investment                                                            
regulatory  language would  be repealed  resulting  in the  National                                                            
Association  of  Insurance  Commissioners  model law  on  investment                                                            
regulation.                                                                                                                     
                                                                                                                                
Another  change deals with  trust accounts.  Currently the  division                                                            
requires licensed  trust account producers  (agents and brokers)  to                                                            
ensure  that money going  to an  insurance company  for a policy  is                                                            
protected from  embezzlement. There is reciprocity  with the Federal                                                            
National Association of  Registered Agents and Brokers and if Alaska                                                            
maintains its present requirements  for its trust accounts, it would                                                            
probably  be declared non-reciprocal  and not  helped to qualify  to                                                            
avoid federal  takeover of  licensing. The  House version of  SB 138                                                            
would give the  division the authority to adopt regulations  to have                                                            
trust accounts  but would not be required to do so.  As a result, if                                                            
the reciprocity  provision arises, there is a mechanism  in the bill                                                            
to deal with it.                                                                                                                
                                                                                                                                
Committee  members  were also  provided  with  a list  of  technical                                                            
changes to HB 184.                                                                                                              
                                                                                                                                
CHAIRMAN TAYLOR called for a motion to amend.                                                                                   
                                                                                                                                
SENATOR  COWDERY  moved  amendment   one  to  insert  the  technical                                                            
amendments submitted by the division.                                                                                           
                                                                                                                                
CHAIRMAN TAYLOR objected for the purpose of an explanation.                                                                     
                                                                                                                                
MS. KATIE CAMPBELL, Life & Health Actuary for the Division of                                                                   
Insurance, gave an explanation of the non-substantive changes.                                                                  
Copies of these technical changes are found in amendment one of                                                                 
the bill file.                                                                                                                  
                                                                                                                                
CHAIRMAN TAYLOR asked for additional objections and there were                                                                  
none. Amendment 1 passed. There was no other testimony.                                                                         
                                                                                                                                
SENATOR COWDERY moved SCS CSHB 184(JUD) from committee with                                                                     
individual recommendations.                                                                                                     
                                                                                                                                
There was no objection and Chairman Taylor moved the bill from                                                                  
committee. [Before adjournment Chairman Taylor announced HB 184                                                                 
would be held in committee.]                                                                                                    
                                                                                                                                
                                                                                                                                
         HCR 17-SALE OF NATURAL GAS TO POWER DATA CENTERS                                                                   
                                                                                                                                
REPRESENTATIVE  PETE  KOTT,  reported   that  the  resolution  lends                                                            
legislative support  for the sale of royalty gas to  a company if it                                                            
is in the  best interests  of the state. The  gas would be  used for                                                            
electrical generation  to power data centers within  the North Slope                                                            
Borough. This  would create jobs and  provide long lasting  economic                                                            
diversity.  It is estimated  that  one trillion  of the 33  trillion                                                            
cubic feet of  gas from the North Slope would be used  over the next                                                            
25 years.                                                                                                                       
                                                                                                                                
SENATOR  THERRIAULT  pointed  out  that  the  "resolves"  support  a                                                            
competitive,  reasonable price but  the "WHEREAS" beginning  on page                                                            
2, line  2 states  that the commissioner  of  natural resources  may                                                            
determine that a competitive  bid is not in the best interest of the                                                            
state and  therefore  not required.  He asked why  there is  concern                                                            
with the competitive bid process.                                                                                               
                                                                                                                                
REPRESENTATIVE  KOTT responded that  there is just one company  that                                                            
has come forward  but if there was  another interested company  then                                                            
there could be a competitive bid.                                                                                               
                                                                                                                                
JAMES  DODSON, Netricity  LLC, testified  that the  language in  the                                                            
resolution  reflects  the  two  ways  the  commissioner  of  natural                                                            
resources is  able to sell gas leases.  The commissioner  may decide                                                            
not to  hold a competitive  sale due  to the lack  of market  or the                                                            
decision could be made to hold a competitive sale.                                                                              
                                                                                                                                
SENATOR THERRIAULT   questioned the wording  on page 1, lines 12 and                                                            
13 that stated that jobs  would be created in Anchorage and Nikiske.                                                            
He  pointed  out  that  since  modules  have   been  constructed  in                                                            
Fairbanks as well, he would  like to strike the words "Anchorage and                                                            
Nikiske" and replace them with "Alaska".                                                                                        
                                                                                                                                
REPRESENTATIVE KOTT had  no problem with the change stating that the                                                            
modules would  undoubtedly be built in the most efficient  location.                                                            
                                                                                                                                
Number 2189                                                                                                                     
                                                                                                                                
SENATOR  THERRIAULT  moved  amendment   1 striking   "Anchorage  and                                                            
Nikiske" from page 1, line 13 and inserting "Alaska".                                                                           
                                                                                                                                
There was no objection. Amendment 1 passed.                                                                                     
                                                                                                                                
SENATOR ELLIS  expressed support  for the  resolution and moved  SCS                                                            
CSHCR 17(JUD) from committee with unanimous consent.                                                                            
                                                                                                                                
There being no objection, the resolution moved from committee.                                                                  
                                                                                                                                
                                                                                                                                
                                                                                                                              
         HB 172-THERAPEUTIC COURTS/ SUPERIOR COURT JUDGES                                                                   
                                                                                                                                
CHAIRMAN TAYLOR  announced a committee substitute  and asked whether                                                            
Mr. Wright had reviewed the amendment.                                                                                          
                                                                                                                                
THOMAS WRIGHT,  Staff to  Representative Brian  Porter, reported  no                                                            
problem with the proposed change.                                                                                               
                                                                                                                                
CHAIRMAN TAYLOR  explained that on page 2 of the amended  version it                                                            
is established  that the  pilot sites for  the Anchorage and  Bethel                                                            
therapeutic  courts shall  be in effect  for three  years as  in the                                                            
original bill  but the activity of  the two courts has been  limited                                                            
to the Anchorage and Bethel venue districts.                                                                                    
                                                                                                                                
Venue districts  are geographic boundaries  that act as a  guideline                                                            
to determine in which superior court cases should be filed and                                                                  
are not the same as judicial districts.                                                                                         
                                                                                                                                
TAPE 01-29, SIDE B                                                                                                            
                                                                                                                                
SENATOR THERRIAULT  asked whether the change was an  attempt to deal                                                            
with the issue of someone  in the larger judicial district trying to                                                            
preempt  judges so  they  are able  to access  the  benefits of  the                                                            
therapeutic court as far as sentencing.                                                                                         
                                                                                                                                
CHAIRMAN  TAYLOR  responded  that  the  primary  concern  was  equal                                                            
protection.  The cases  evaluated had  three things  in common.  All                                                            
were time  limited,  all were experimental  and  all had  geographic                                                            
boundaries.                                                                                                                     
                                                                                                                                
The amendment  also intends that mandatory minimums  would no longer                                                            
be waived. Rather,  it is provided that the court  may find that the                                                            
rigorous nature of the  sentence imposed under the therapeutic court                                                            
is equal to or exceeds that imposed under mandatory minimums.                                                                   
                                                                                                                                
The changes  would provide for equal  protection and still  maintain                                                            
the original thrust of the program.                                                                                             
                                                                                                                                
MR. WRIGHT reported no objection to the amendment.                                                                              
                                                                                                                                
CHAIRMAN  TAYLOR directed attention  to page  4, lines 19-29  of the                                                            
work draft beginning  with "Imprisonment". The section  replaces the                                                            
portion  dealing  with  possible suspension   of the  imposition  of                                                            
sentencing.                                                                                                                     
                                                                                                                                
MR. WRIGHT said he would  have to defer to the department of law for                                                            
a comment.                                                                                                                      
                                                                                                                                
Number 2169                                                                                                                     
                                                                                                                                
MR. DEAN GUANELI,  Department of Law, said it appears  as though the                                                            
change requires that a  sentence be imposed according to current law                                                            
in 12.55 but after  some period of time, not limited  by rule 35 the                                                            
court can entertain a motion  for reduction of sentence. That motion                                                            
would be based on the same  considerations that were in the previous                                                            
version of the bill.                                                                                                            
                                                                                                                                
Line 25 of the work draft,  reading "(1) may not reduce the sentence                                                            
below  the mandatory  minimum sentence  for the  offense unless  the                                                            
court finds  that the defendant has  successfully complied  with and                                                            
completed  the treatment  plan and  that treatment  plan was  in its                                                            
totality as rigorous as  the minimum period of imprisonment," was in                                                            
the previous version and is acceptable.                                                                                         
                                                                                                                                
However,  the second  portion,  "(2)  may consider  the defendant's                                                             
compliance with  the treatment plan as a mitigation  factor under AS                                                            
12.55.155." may present  difficulty. Under the previous version, the                                                            
court  had the  option of  suspending  the entire  prison  sentence.                                                            
Because  mitigating   factors  would  only  allow   a  reduction  of                                                            
imprisonment to  be cut to half of the presumptive  term rather than                                                            
suspended altogether he  questioned the practical effect. The crimes                                                            
this court  would typically  hear  would be first  offense, class  C                                                            
felonies in which mitigating factors could go to zero.                                                                          
                                                                                                                                
CHAIRMAN TAYLOR agreed  and said the additional language anticipates                                                            
inpatient treatment  programs and  the Supreme Court has  ruled that                                                            
time  spent in  such a  program  equals time  spent  in jail.  First                                                            
offender,  class C driving  while intoxicated  (DWI) would  have the                                                            
opportunity to  have their sentence reduced to zero.  Although there                                                            
may be some benefit  to having jail time that must  be served, there                                                            
would  be  individual  inducement  to  going  into  the  program  if                                                            
enrollment reduced jail time.                                                                                                   
                                                                                                                                
MR. GUANELI didn't see  any problems but wanted to characterize some                                                            
of the testimony heard in other committees.                                                                                     
                                                                                                                                
First, some judges felt  that rather than imposing and then reducing                                                            
sentences,  they had more  leverage over an  offender if they  could                                                            
wait  to impose  sentence  until they  were  sure the  offender  was                                                            
complying  with certain  conditions.  In  contrast,  some felt  that                                                            
imposing  a sentence  and reducing  it  later gives  the offender  a                                                            
clear idea of how much they have to gain.                                                                                       
                                                                                                                                
From the  prosecutor's standpoint,  there was  no objection  but the                                                            
public  defender  was of  the opinion  that  a large  incentive  was                                                            
needed to  convince some  clients of the  benefits of going  through                                                            
the long and intense treatment.                                                                                                 
                                                                                                                                
CHAIRMAN TAYLOR reported  that there is adequate incentive available                                                            
to a superior  court judge  under a felony  count. He thought  there                                                            
was  a lot  of incentive  for  most to  be in  a program  whereby  a                                                            
minimum mandatory could be reduced to nothing.                                                                                  
                                                                                                                                
Number 1933                                                                                                                     
                                                                                                                                
MR. BLAIR  McCUNE, Alaska  Public  Defender Agency,  had not  seen a                                                            
copy of the changes but  he had concerns. Language on page 4 dealing                                                            
with  the judge  withholding  the  pronouncement  of the  period  of                                                            
imprisonment,  "kind of sets things off." He did not  understand the                                                            
reference  to rule 35 if  the sentence is  not actually pronounced.                                                             
Reference to mitigate  in 12.55 is troubling because  the mitigating                                                            
factors  are  narrowly   drawn.  To  his  knowledge,   there  is  no                                                            
mitigating  factor   that  he  knows  of  for  participating   in  a                                                            
therapeutic  court.  In  fact, most  mitigating  factors  would  not                                                            
apply.                                                                                                                          
                                                                                                                                
CHAIRMAN  TAYLOR responded  that the bill  "specifically  authorizes                                                            
the court to  consider the offenders  compliance with the  treatment                                                            
program as a mitigating factor under Alaska Statute 12.55.155."                                                                 
                                                                                                                                
MR.  McCUNE  said  that  does  not  fit  in  any  existing  list  of                                                            
mitigating factors.                                                                                                             
                                                                                                                                
CHAIRMAN  TAYLOR  said, "It  doesn't,  we're adding  it to  it in  a                                                            
special  piece of  legislation  just for  this court  just in  these                                                            
types of circumstances.  That's why we structured it the way we did.                                                            
You get into  therapeutic court you  get an extra ticket  to get out                                                            
of jail."                                                                                                                       
                                                                                                                                
MR. McCUNE said another  problem is that mitigating factors refer to                                                            
felony  offenses  and  may  reduce  presumptive  terms.   Mitigating                                                            
factors  are  listed in  but  12.55.155  and they  do  not apply  to                                                            
misdemeanor offenses.                                                                                                           
                                                                                                                                
CHAIRMAN  TAYLOR  said  they  were  not  talking  about misdemeanor                                                             
offenses.  Rather,  they were  talking  about  felony  cases in  the                                                            
superior court.                                                                                                                 
                                                                                                                                
MR. McCUNE  thought  some misdemeanor  defendants  with a  previous,                                                            
non-felony,  DWI  could still  be considered  because  the  superior                                                            
court  can  take jurisdiction  for  misdemeanors.  He  saw  problems                                                            
associated with  using reference to mitigating factors  under Alaska                                                            
Statute 12.55.                                                                                                                  
                                                                                                                                
His suggested  language  on the rigorous  nature  of the program  as                                                            
approximating  mandatory minimums was that the legislature  use this                                                            
in a separate  findings section, which would take  care of the equal                                                            
protection questions that might be raised.                                                                                      
                                                                                                                                
CHAIRMAN  TAYLOR responded  that  it was  placed so  that the  judge                                                            
would make the call as to whether is was as rigorous.                                                                           
                                                                                                                                
MR. McCUNE said  the preference of the Public Defender  Agency would                                                            
be to have it  worded the way it left the House because  it provides                                                            
a greater incentive.  Equal protection  concerns could be  addressed                                                            
in a separate finding and the statute left unchanged.                                                                           
                                                                                                                                
In summary:  He does not understand  reference to rule 35.  His main                                                            
concern  is reference  to Alaska  Statute  12.55 because  that  is a                                                            
narrow  type  of  action  that the  court  could  take  and  without                                                            
amending Alaska Statute  12.55.155 to apply to misdemeanors it would                                                            
not serve Chairman Taylor's intended purpose.                                                                                   
                                                                                                                                
CHAIRMAN TAYLOR  said he understood  his concerns and asked  whether                                                            
he had other questions or comments.                                                                                             
                                                                                                                                
MR. McCUNE  replied that  on page 4, lines  30-31, some individuals                                                             
might  not be  given credit  for  time served  and  the reason  that                                                            
language was included was  because of language on page 4, lines, 14-                                                            
18.                                                                                                                             
                                                                                                                                
CHAIRMAN TAYLOR asked which version he was referring to.                                                                        
                                                                                                                                
MR. McCUNE said he was looking at the L version.                                                                                
                                                                                                                                
CHAIRMAN TAYLOR said the committee was working on the T version.                                                                
                                                                                                                                
MR. McCUNE  said this was the area  where there are changes  made to                                                            
include rule 35 and the reference to mitigating factors.                                                                        
                                                                                                                                
CHAIRMAN TAYLOR asked for the reference again.                                                                                  
                                                                                                                                
MR. McCUNE  said he was referencing  version L, page 4, lines  14-18                                                            
and page, 4,  lines 30-31. Lines 30-31  make it so that a  defendant                                                            
may not  get credit for time  served but lines  14-18 give  them the                                                            
opportunity to lose mandatory minimum times.                                                                                    
                                                                                                                                
CHAIRMAN  TAYLOR said the  language on page  4, lines 14-18,  of his                                                            
version refer to probation.                                                                                                     
                                                                                                                                
MR. McCUNE said  he was referring to the last sentence  on paragraph                                                            
(i) that begins with "within 30 days after entry of the plea".                                                                  
                                                                                                                                
CHAIRMAN TAYLOR  said his paragraph (i) reads, "If  the defendant is                                                            
terminated from therapeutic  court," and asked whether that was what                                                            
he was talking about.                                                                                                           
                                                                                                                                
MR. McCUNE  responded  that he didn't  have a  paragraph that  began                                                            
that way.                                                                                                                       
                                                                                                                                
CHAIRMAN TAYLOR said the two versions were dissimilar.                                                                          
                                                                                                                                
MR. WRIGHT  interjected that his L  version was the one coming  from                                                            
House Judiciary  but changes  were made in  House Finance and  there                                                            
was also an amendment adopted on the floor of the House.                                                                        
                                                                                                                                
CHAIRMAN TAYLOR  agreed that the version  coming from the  House was                                                            
/O.a.                                                                                                                           
                                                                                                                                
MR. McCUNE had a different version altogether.                                                                                  
                                                                                                                                
SENATOR THERRIAULT  thought  the working version  could be  faxed to                                                            
Mr. McCune.                                                                                                                     
                                                                                                                                
MR. McCUNE provided his fax number.                                                                                             
                                                                                                                                
CHAIRMAN TAYLOR directed  a copy to be sent and announced they would                                                            
hold the bill until later in the meeting.                                                                                       
                                                                                                                                
MR. McCUNE  said perhaps Mr. Guaneli  understood his concerns  about                                                            
the reference to mitigating factors and AS 12.55.                                                                               
                                                                                                                                
MR. GUANELI  responded that he understood  the point but  he was not                                                            
sure about  the concern.  Perhaps  the mitigating  factors under  AS                                                            
12.55.55 don't  apply to misdemeanors but subsection  (1) does apply                                                            
and says, "you  can reduce it below  the mandatory minimum  if these                                                            
other things occur."  He  thought the reference to mitigating factor                                                            
is only a limitation  when there is a presumptive  term and you want                                                            
to limit  how  much the  judge can  reduce that  term.  It is not  a                                                            
limitation  in a misdemeanor case  because presumptive terms  do not                                                            
apply to  misdemeanors. With  this in mind,  he does not agree  with                                                            
Mr. McCune's concerns.                                                                                                          
                                                                                                                                
CHAIRMAN TAYLOR said he  was pleased to hear that because it was not                                                            
his  intention  to  obstruct  but  to provide  the  court  with  the                                                            
discretion to reduce the term to zero.                                                                                          
                                                                                                                                
Number 1185                                                                                                                     
                                                                                                                                
MR. McCUNE said he missed some of the changes.                                                                                  
                                                                                                                                
CHAIRMAN  TAYLOR  responded that  it  would be  hard  to follow  the                                                            
changes without having the document to examine.                                                                                 
                                                                                                                                
He would give  Mr. McCune time to examine the T version  and get his                                                            
comments on record before adjournment.                                                                                          
                                                                                                                                
SCS CSHB 172(JUD) was held until later in the meeting.                                                                          
                                                                                                                                
                                                                                                                                
           SB 191-JOINT AVIATION INSURANCE ARRANGEMENTS                                                                     
                                                                                                                                
Mr.  BOB  LOHR,  Director  Division  of  Insurance,   expressed  his                                                            
appreciation  to  the  committee   for including   the  division  of                                                            
insurance  in  developing   SB  191.  Although  a  number  of  their                                                            
suggestions  were  incorporated  in the  bill, his  testimony  would                                                            
focus on ways the bill could be strengthened.                                                                                   
   · Minimum surplus and capital requirements similar to those                                                                  
     required  of a domestic reciprocal insurer have  been added and                                                            
     is an important addition to the legislation.                                                                               
   · Aviation insurance will only work if it is adequately funded.                                                              
     Authorization for  an aviation joint insurance arrangement that                                                            
     is tied  to a congressional  or legislative  grant or  loan for                                                            
     reserves should be explored.                                                                                               
   · The term "admitted assets" used on page 3, line 31 in section                                                              
     21.77.040  should be defined  since the specific meaning  under                                                            
     title 21  would not apply. In title 21 it is  a term related to                                                            
     statutory   accounting  and  would  not  be  applicable.   They                                                            
     suggested  replacing  "admitted  assets"  with "cash  and  U.S.                                                            
     treasuries.                                                                                                                
   · They recommend that the aviation joint insurance arrangement                                                               
     be  required  to  notify  members  that the  insurance  is  not                                                            
     regulated  and they provide no guarantee of protection  in case                                                            
     of  insolvency. Language  in AS  12.34.080 could  be used  as a                                                            
     model.                                                                                                                     
                                                                                                                                
CHAIRMAN  TAYLOR offered  amendment  1 striking  the term  "admitted                                                            
assets" from page 3, line  31 and inserting "cash or U.S. treasury".                                                            
                                                                                                                                
SENATOR COWDERY moved amendment 1.                                                                                              
                                                                                                                                
CHAIRMAN TAYLOR asked for the next recommendation.                                                                              
                                                                                                                                
MR. LOHR said  the next recommendation was conceptual  in nature but                                                            
he was reading  from AS 24.34.080 relating to surplus  lines. In (c)                                                            
is  says, "a  producing  broker shall  execute  and  deliver to  the                                                            
surplus  lines broker not  later than  the end of  each month,  on a                                                            
form proscribed  by the director. A surplus lines  broker shall file                                                            
with the director  with a report required by (a) if  this section or                                                            
with the surplus  lines association  with the evidence of  insurance                                                            
required by (b)  of this section. The surplus lines  insurance first                                                            
placed  or renewed  in the  preceding  calendar month  an  affidavit                                                            
shall be  open to public  inspection. The  affidavit must contain  a                                                            
statement  by the producing  broker that  the insured was  expressly                                                            
informed  in writing before  the insurance  contractor coverage  was                                                            
bound that  the surplus lines insure  with whom the insurance  is to                                                            
be placed  is not  licensed  in this state,  is not  subject to  the                                                            
state's  supervision  and in  the  event of  the insolvency  of  the                                                            
surplus lines  insurer, losses will  not be covered under  AS 21.80,                                                            
the Alaska  Insurance  Guarantee Association  Act."  He thought  the                                                            
forgoing  could be adopted  for the purposes  of the aviation  joint                                                            
insurance arrangement.                                                                                                          
                                                                                                                                
CHAIRMAN TAYLOR  said "That's to basically take them  out from under                                                            
any coverage  provided to other carriers  because they are  licensed                                                            
and  here in  the state  and  that's their  kind of  solvency  pool,                                                            
right?"                                                                                                                         
                                                                                                                                
MR. LOHR  replied  that SB  191 already  takes them  out because  it                                                            
precludes the  division from exercising any regulatory  function. It                                                            
simply  notifies the  policyholders  of the fact  that the  coverage                                                            
does not exist.                                                                                                                 
                                                                                                                                
CHAIRMAN TAYLOR  asked him to draw  up the amendment and  they would                                                            
include it in the bill.                                                                                                         
                                                                                                                                
MR. LOHR agreed to do so.                                                                                                       
                                                                                                                                
SENATOR ELLIS  asked whether  he had an opinion  on the adequacy  of                                                            
the minimum capital and  surplus requirements set forth in the bill.                                                            
                                                                                                                                
MR.  LOHR  replied   that  the  requirements  are   drawn  from  the                                                            
reciprocal  chapter and,  at this  time, aviation  insurance is  the                                                            
riskiest  form of  insurance.  Because of  this, there  is need  for                                                            
additional  mechanisms even  though those  mechanisms face  the same                                                            
difficulties that existing  insurers face. Because there are so many                                                            
air crashes  in Alaska, there are  many insurers that are  unwilling                                                            
to write  policies here unless  it's with  companies that are  known                                                            
and present  little  risk. Safety  is certainly  an  element of  the                                                            
concern and  those requirements are  better than no capital  surplus                                                            
requirements  but  adequate  capitalization  is imperative.  If  one                                                            
crash stands  to wipe out  the capital surplus  of the entire  joint                                                            
insurance aviation  arrangement then this is a recipe  for disaster.                                                            
                                                                                                                                
SENATOR ELLIS  asked what would constitute adequate  capitalization.                                                            
                                                                                                                                
MR. LOHR thought the current  statutory requirement would have to be                                                            
doubled at a minimum.                                                                                                           
                                                                                                                                
SENATOR ELLIS  asked Chairman Taylor  for the basis for his  figures                                                            
for the capital and surplus requirements.                                                                                       
                                                                                                                                
CHAIRMAN  TAYLOR said  they were  the same as  reciprocal  insurance                                                            
carriers.                                                                                                                       
                                                                                                                                
Number 690                                                                                                                      
                                                                                                                                
SENATOR ELLIS  asked if it was realistic  to think that Congressman                                                             
Don Young would capitalize such a fund in Alaska.                                                                               
                                                                                                                                
CHAIRMAN TAYLOR replied  that Congressman Young was thinking about a                                                            
$500  million  figure,   which  is  much  higher  than   the  figure                                                            
legislators considered.                                                                                                         
                                                                                                                                
SENATOR ELLIS  asked whether  Mr. Lohr had  thought about  exempting                                                            
from his oversight the activity referred to on page 2, line 5.                                                                  
                                                                                                                                
MR.  LOHR   said  the  Alaska  Municipal   League  Joint   Insurance                                                            
Arrangement and other entities  currently operate successfully under                                                            
statute  without regulation  by the  division. He  thought it  was a                                                            
legislative  policy  call as  to whether  something  was within  the                                                            
scope of  Title 21 or not.  In terms of  early warning of  potential                                                            
problems,  Title 21  regulations are  effective  and problems  would                                                            
come to light sooner if  they were regulating than if they were not.                                                            
                                                                                                                                
Number 552                                                                                                                      
                                                                                                                                
SENATOR COWDERY  noted that building contractors were  interested in                                                            
a pool several years ago and wondered how that was working.                                                                     
                                                                                                                                
MR. LOHR didn't  believe the effort was carried to  fruition but the                                                            
concern at that time was adequacy of capitalization.                                                                            
                                                                                                                                
CHAIRMAN  TAYLOR agreed  that they  weren't able  to capitalize  the                                                            
effort.                                                                                                                         
                                                                                                                                
He directed SB 191 be held in committee.                                                                                        
                                                                                                                                
                                                                                                                                
Number 443                                                                                                                      
                                                                                                                                
                                                                                                                                
             HB 120-CRIME PREVENTION & PRIVACY COMPACT                                                                      
                                                                                                                              
                                                                                                                              
REPRESENTATIVE  John Coghill testified  that the sponsor  substitute                                                            
for HB 120  provides language for  a privacy compact between  Alaska                                                            
and  other states  and  the  federal government  to  facilitate  the                                                            
exchange of  criminal history records  information for non-criminal                                                             
purposes.  The compact would  be assumed by  statute rather  than by                                                            
reference.    Any changes  to  the  language  in the  compact  would                                                            
                                            th                                                                                  
necessitate  a state  review  to protect  10  Amendment  rights.  He                                                            
assured members that his  focus was to ensure that the compact could                                                            
never have authority over state.                                                                                                
                                                                                                                                
On pages 1  and 2 there are 10 criteria  for use of the information                                                             
and gives  authority for  receiving the  information to individuals                                                             
who   are   not   associated   with   law   enforcement.    Positive                                                            
identification  would be made using fingerprints that  are submitted                                                            
voluntarily.                                                                                                                    
                                                                                                                                
There are  five major purposes  for the compact  outlined on  page 7                                                            
that  provide  a  legal  framework  for  the  establishment  of  the                                                            
cooperative venture.                                                                                                            
                                                                                                                                
MR.  KEN  BISCHOFF,  Director  of  the  Division  of Administrative                                                             
Services for the Department  of Public Safety, stated strong support                                                            
for the  bill. The  department is  the repository  for all  criminal                                                            
history  records and  they process  about 30,000  fingerprint  based                                                            
criminal history checks.                                                                                                        
                                                                                                                                
TAPE 01-30, SIDE A                                                                                                            
                                                                                                                                
The  state  can  now access  federal  records  but  by  joining  the                                                            
compact, they  could directly access other states'  records as well.                                                            
This would  make accessible  40 percent of  the information  that is                                                            
currently  unavailable.  The compact  does  nothing  to change  what                                                            
individual    legislatures    approve   or    authorize    regarding                                                            
dissemination  laws. They can only use the information  as a compact                                                            
member  if the  Alaska legislature  authorizes  the  release of  the                                                            
information.  Examples of  areas in which  the information  would be                                                            
used  are for  school bus  drivers, day  care workers,  foster  care                                                            
licensing,  teacher  certification  and  nursing home  and  assisted                                                            
living workers.                                                                                                                 
                                                                                                                                
CHAIRMAN TAYLOR  asked who was currently being paid  to handle this.                                                            
                                                                                                                                
MR. BISCHOFF  replied that  there is a  criminal history  repository                                                            
staff in Anchorage headed  by criminal records bureau chief, Kathryn                                                            
Monfreda, who is a latent  fingerprint expert. Diane Schenker is the                                                            
criminal justice planner.                                                                                                       
                                                                                                                                
CHAIRMAN TAYLOR  thought they had  a retired trooper on contract  to                                                            
put the package together.                                                                                                       
                                                                                                                                
MR.  BISCHOFF  responded  they have  received  federal  and  general                                                            
funding through  the legislature to  begin the process of  rewriting                                                            
the Alaska Public  Safety Information Network. The  contract for the                                                            
project manager  was put to bid and awarded to a retired  major with                                                            
the troopers.  He's working  to develop a  new computer information                                                             
system that will  allow efficient national criminal  history checks.                                                            
                                                                                                                                
CHAIRMAN  TAYLOR  commented that  he  had seen  significant  funding                                                            
available for that.                                                                                                             
                                                                                                                                
MR. BISCHOFF  responded that the compact  under consideration  has a                                                            
zero fiscal note. The funding  referred to is for development of the                                                            
new system.                                                                                                                     
                                                                                                                                
CHAIRMAN TAYLOR said the  compact simply sets up the bureaucracy and                                                            
the rules for the bureaucracy  that makes up the compact. The actual                                                            
cost is for buying hardware  and software, setting up the system and                                                            
training people to use the system.                                                                                              
                                                                                                                                
MR. BISCHOFF  did not agree. The National  Privacy Compact  is based                                                            
on the Interstate  Identification Index network system  (III), which                                                            
is an FBI system. That  system was paid for and is a federal network                                                            
to which Alaska has access.                                                                                                     
                                                                                                                                
SENATOR THERRIAULT  asked whether  passage of the compact  obligates                                                            
the state to follow through and update the current system.                                                                      
                                                                                                                                
MR.  BISCHOFF  said passage  of  the  compact  carries no  legal  or                                                            
financial obligation  to replace the  system. However, the  computer                                                            
system  that was implemented  in 1984  is obsolete  and not  able to                                                            
meet  current demands.  Although  Alaska  has used  the  III for  35                                                            
years,  it has  just been  used for  law enforcement  purposes.  The                                                            
compact allows  access to that information for civil  purposes based                                                            
upon a set of rules outlined in the compact.                                                                                    
                                                                                                                                
CHAIRMAN TAYLOR asked who  would be able to use this information for                                                            
civil purposes.                                                                                                                 
                                                                                                                                
MR. BISCHOFF  replied it  would be the department  of public  safety                                                            
criminal records  bureau personal  who would send information  based                                                            
on fingerprint requests  from employers and regulatory agencies that                                                            
are authorized  to receive the information as set  forth in statute.                                                            
The  criminal records  bureau  is the  sole repository  and  control                                                            
point  for fingerprint  information  in Alaska and  every state  has                                                            
such a bureau.                                                                                                                  
                                                                                                                                
CHAIRMAN TAYLOR asked for  verification that this was to be used for                                                            
civil purposes.                                                                                                                 
                                                                                                                                
MR. BISCHOFF confirmed it was 100 percent for civil use.                                                                        
                                                                                                                                
CHAIRMAN TAYLOR asked about  provisions for violation of utilization                                                            
of  the  system  since individuals   have to  agree  to  have  their                                                            
fingerprints run through the system for civil purposes.                                                                         
                                                                                                                                
MS.   DIANE  SHENKER,   Criminal   Justice   Planner   Division   of                                                            
Administrative  Services for the Department  of Public Safety,  said                                                            
that  nothing in  the bill  changes  the law  for  violation of  the                                                            
system. State  law requires  an audit system  whereby use is  logged                                                            
and audited. Access may  be terminated and criminal charges referred                                                            
for violations  of release of confidential information.  The FBI has                                                            
similar provisions for action for violations.                                                                                   
                                                                                                                                
CHAIRMAN TAYLOR asked whether  there have been any violations and or                                                            
terminations of use.                                                                                                            
                                                                                                                                
MS. SHENKER  said there  have been both.  Violations are  discovered                                                            
through investigated  complaints and routine audits.  "A handful" of                                                            
violations   have  been   confirmed   since  they   instituted   the                                                            
accelerated  audit program in the  last several years. As  a result,                                                            
the individuals' access was terminated.                                                                                         
                                                                                                                                
CHAIRMAN TAYLOR commented  that although access was terminated, none                                                            
of the parties were fired. In fact, one violator was promoted.                                                                  
                                                                                                                                
MS. SHENKER  responded that in the  statute and regulations  for the                                                            
department  of public safety as a  repository, they do not  have the                                                            
authority  to terminate an  employee of another  agency but  they do                                                            
have  the authority  to terminate  access  to the  criminal  justice                                                            
information  system.   It's  up  to  the  employer  to  determine  a                                                            
particular personnel action.                                                                                                    
                                                                                                                                
MR. BISCHOFF  acknowledged the issues  that arose several  years ago                                                            
but wanted  to emphasize  that this  is a discrete  process  that is                                                            
easier  to  control.  Although  the  concerns  will  understandably                                                             
continue,  this is a civil  process and access  to the process  will                                                            
not  be widespread.  Through  a given  set of  rules,  his staff  in                                                            
Anchorage would process applicant checks in that shop.                                                                          
                                                                                                                                
CHAIRMAN TAYLOR  said he understood  but the network of information                                                             
that is available is being expanded.                                                                                            
                                                                                                                                
MR. BISCHOFF  responded that  the information  they have is  for law                                                            
enforcement  purposes and  could not  be provided  to employers  and                                                            
licensing agencies. Passage  of the bill would allow them to provide                                                            
information for those purposes.                                                                                                 
                                                                                                                                
CHAIRMAN TAYLOR  called for further questions or additional  witness                                                            
testimony  and received no  response. He asked  for the pleasure  of                                                            
the committee.                                                                                                                  
                                                                                                                                
SENATOR COWDERY  moved SSHB 120(am)  from committee with  individual                                                            
recommendations.                                                                                                                
                                                                                                                                
There being  no objection,  SSHB 120(am)  moved from committee  with                                                            
individual recommendations.                                                                                                     
                                                                                                                                
                                                                                                                                
CHAIRMAN TAYLOR  asked Mr. Blair McCune whether he  had reviewed the                                                            
T version of HB 172.                                                                                                            
                                                                                                                                
MR. McCUNE said he had  reviewed the T version and had no particular                                                            
objections  but did have some language  changes. On page  4, line 27                                                            
he suggested  striking  "was  in its totality  as  rigorous as"  and                                                            
substitute  "approximated the severity  of". Then on line  29, after                                                            
"mitigating  factor"  strike  "under AS  12.55.155"  and  substitute                                                            
"allowing a reduction of a sentence pursuant to 12.55.155(a)."                                                                  
                                                                                                                                
The first language  change would make it easier for  judges to apply                                                            
the  law. Criminal  law  frequently  speaks  of severe  and  lenient                                                            
sentences  and  "approximated"  gives the  judge  more interpretive                                                             
leeway then the  original language. The reasoning  behind the second                                                            
change is  rooted in  sections (e),  (f), and (g)  at the end  of AS                                                            
12.55.155  requiring clear  and convincing  proof of any  mitigating                                                            
factor. Limiting  reference to just section (a) solves  any tendency                                                            
of the  court to ask whether  clear and  convincing proof is  needed                                                            
that something is a mitigating factor.                                                                                          
                                                                                                                                
CHAIRMAN TAYLOR  asked Mr. Wright  whether he understood  and agreed                                                            
with the changes.                                                                                                               
                                                                                                                                
MR. WRIGHT thought the suggestions were appropriate.                                                                            
                                                                                                                                
SENATOR THERRIAULT  moved to  adopt \T version  dated 5/4/01  as the                                                            
working document. There was no objection.                                                                                       
                                                                                                                                
CHAIRMAN TAYLOR moved to  amend page 4, line 27 striking "was in its                                                            
totality as  rigorous as" and inserting  "approximated the  severity                                                            
of"  and on  page  4, line  29  striking "under  AS  12.55.155"  and                                                            
inserting  "allowing  a  reduction  of  a sentence  pursuant  to  AS                                                            
12.55.155(a)."                                                                                                                  
                                                                                                                                
There being no objection, Amendment 1 passed.                                                                                   
                                                                                                                                
CHAIRMAN TAYLOR asked if there were other suggestions.                                                                          
                                                                                                                                
MR. McCUNE said  they would like to see the language  as it came out                                                            
of the House  but if "this  is what the  committee is going  to pass                                                            
out we appreciate  the opportunity  to read this over and  make some                                                            
changes."                                                                                                                       
                                                                                                                                
CHAIRMAN  TAYLOR  acknowledged  the work  both  Mr. McCune  and  Mr.                                                            
Guaneli  had  done on  the  bill but  in  his  review of  the  equal                                                            
protection  information they submitted,  he though it was  essential                                                            
to have a geographic  boundary, a  time limitation and that  all the                                                            
minimum mandatory sentences not be dropped.                                                                                     
                                                                                                                                
He strongly  supports  the program  and hopes  it works  as well  as                                                            
anticipated.                                                                                                                    
                                                                                                                                
The  Chair  asked for  a  motion  to  move SCS  CSHB  172(JUD)  from                                                            
committee with individual recommendations.                                                                                      
                                                                                                                                
SENATOR THERRIAULT  asked whether an impact on the  fiscal notes was                                                            
anticipated because of the changes in the CS.                                                                                   
                                                                                                                                
CHAIRMAN TAYLOR thought there would be a reduction if anything. The                                                             
bill would go to finance next and they would address this question.                                                             
                                                                                                                                
SENATOR THERRIAULT apologized for his interruption and asked                                                                    
whether there had been a vote on moving the bill.                                                                               
                                                                                                                                
CHAIRMAN TAYLOR asked for objections and there was none.                                                                        
                                                                                                                                
SCS CSHB 172(JUD) moved from committee.                                                                                         
                                                                                                                                
                                                                                                                                
                 HB 184-INSURANCE CODE AMENDMENTS                                                                           
                                                                                                                              
CHAIRMAN TAYLOR announced he would hold HB 184 in committee [see                                                                
hearing of HB 184 above.] and adjourned the meeting at 7:22 p.m.                                                                
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects