Legislature(1993 - 1994)
04/11/1994 01:50 PM Senate JUD
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE JUDICIARY COMMITTEE
April 11, 1994
1:50 p.m.
MEMBERS PRESENT
Senator Robin Taylor, Chairman
Senator Rick Halford, Vice-Chairman
Senator George Jacko
Senator Dave Donley
Senator Suzanne Little
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 327
"An Act amending the motor fuel tax to establish a different tax
levy on residual fuel oil used in and on watercraft; and providing
for an effective date."
SENATE BILL NO. 302
"An Act relating to the establishment, modification, and
enforcement of support orders and the determination of parentage in
situations involving more than one state; amending Alaska Rule of
Administration 9; amending Alaska Rule of Civil Procedure 82; and
providing for an effective date."
SENATE BILL NO. 362
"An Act relating to insurance, to the licensing, accreditation,
examination, regulation, and solvency of persons engaged in the
insurance business, including insurers, nonadmitted insurers,
purchasing groups, risk retention groups, and United States
branches of alien insurers; relating to the management of and the
filing of reports by persons licensed or otherwise doing business
under the insurance code; amending Alaska Rule of Civil Procedure
45; and providing for an effective date."
SENATE BILL NO. 332
"An Act relating to the method of calculating the weight of live
marijuana plants for purposes of applying controlled substance laws
and amending the definition of `marijuana'."
SENATE BILL NO. 349
"An Act amending Alaska Rule of Criminal Procedure 6(r) relating to
admissibility of hearsay evidence by peace officers before the
grand jury."
SENATE BILL NO. 350
"An Act relating to a defendant's violation of conditions of
release; and providing for an effective date."
SENATE BILL NO. 351
"An Act amending Alaska Rule of Evidence 404, relating to the
admissibility of certain character evidence in court proceedings."
SENATE BILL NO. 353
"An Act amending Alaska Rule of Criminal Procedure 24(d) relating
to peremptory challenges of jurors in felony criminal proceedings."
PREVIOUS SENATE COMMITTEE ACTION
SB 327 - See Transportation minutes dated 3/10/94 and 3/31/94.
SB 302 - See State Affairs minutes dated 3/21/94, 3/23/94, and
3/28/94.
SB 362 - See Labor & Commerce minutes dated 3/29/94 and 3/31/94.
SB 332 - See Judiciary minutes dated 2/11/94, 3/11/94,
and 4/8/94.
SB 349 - See State Affairs minutes dated 3/14/94, and
Judiciary minutes dated 3/25/94, 4/8/94.
SB 350 - See State Affairs minutes dated 3/14/94, and
Judiciary minutes dated 3/25/94, 4/8/94.
SB 351 - See State Affairs minutes dated 3/14/94, and
Judiciary minutes dated 3/25/94, 4/8/94.
SB 353 - See State Affairs minutes dated 3/14/94, and
Judiciary minutes dated 3/25/94, 4/8/94.
WITNESS REGISTER
Ray Gillespie, Representing Petro Marine Services
9478 Riverside Court
Juneau, AK 99801
POSITION STATEMENT: Offered information on SB 327
John Mallonee, Deputy Director
Child Support Enforcement Division
Department of Revenue
550 W. 7th, Suite 312
Juneau, AK 99501-3556
POSITION STATEMENT: Offered information in support of SB 302
Donna Page, Senior Hearing Officer
Department of Revenue
P.O. Box 110400
Juneau, AK 99811-0400
POSITION STATEMENT: Responded to questions on SB 302
Laraine Derr, Deputy Commissioner
Department of Revenue
P.O. Box 110400
Juneau, AK 99811-0400
POSITION STATEMENT: Supports SB 302
David Walsh, Director
Division of Insurance
Department of Commerce & Economic Development
P.O. Box 110805
Juneau, AK 99811-0805
POSITION STATEMENT: Offered information on SB 362
Barbara Thurston, Chief Actuary
Division of Insurance
Department of Commerce & Economic Development
P.O. Box 110805
Juneau, AK 99811-0805
POSITION STATEMENT: Answered questions on SB 362
ACTION NARRATIVE
TAPE 94-34, SIDE A
Number 001
CHAIRMAN ROBIN TAYLOR called the Judiciary Committee meeting to
order at 1:50 p.m. He brought SB 327 (TAX ON RESIDUAL MARINE FUEL L
OIL) before the committee as the first order of business.
SENATOR LITTLE explained the legislation allows the state to do
some creative economic development. Currently, the state charges
5 cents per gallon for residual fuel, and SB 327 would allow the
state to continue to collect the 5 cents per gallon for the
residual fuel until the existing amount of tax has been collected.
The historical amount has been approximately $205,000, and after
that amount is collected, the bill would allow for the tax to go to
1 cent per gallon. She said dropping the tax to 1 cent per gallon
will create an incentive for cruise ships to purchase their fuel in
Seward.
Number 080
RAY GILLESPIE, representing Petro Marine Services, said Petro
Marine is based in Seward, and their marketing director, Jim Burns,
worked with the cruise industry to try to develop a new market for
bunker fuels. He said the purpose of the legislation is to expand
the market by making the product more competitive without costing
the state treasury any money.
SENATOR LITTLE noted that Sitka is very enthused about the
legislation as it may create some economic opportunities there as
well.
Number 136
SENATOR LITTLE moved that SB 327 be passed out of committee with
individual recommendations. Hearing no objection, it was so
ordered.
Number 140
SENATOR TAYLOR brought SB 302 (UNIFORM INTERSTATE FAMILY SUPPORT
ACT) before the committee as the next order of business.
JOHN MALLONEE, Deputy Director, Child Support Enforcement Division,
Department of Revenue, said SB 302 addresses one of the most
complex and complicated areas of child support. Passage of the
legislation will improve services to case parties involved in the
interstate enforcement of child support orders by clarifying the
process and moving to a one order system honored by all states
which have passed this uniform law. Currently, eight states have
passed this uniform law and 25 other states have it in their
current session.
Mr. Mallonee said that while the bill contains many provisions, the
most significant is the one maintaining only one valid order at one
time. Under the current interstate laws, there can be several
orders in effect at one time in several states. This creates much
confusion - obligors can be paying and be current in one state and
have arrears and not be meeting their child support payments in
other states because there is not one order in effect at one time.
Number 182
SENATOR LITTLE asked if this Act is a mandate of the federal
government. MR. MALLONEE answered that it has not been mandated by
the federal government at this time. Uniform Law Commissioners,
who look at laws that need to be uniform throughout the states,
have recommended passage of this particular law and repealing the
Uniform Reciprocal Enforcement of Support Act (URESA).
SENATOR LITTLE asked if there has been any opposition to the
legislation. MR. MALLONEE answered that he does not know of any
opposition to it, although an attorney in Anchorage, who represents
a group of obligors, has suggested some minor changes to it.
Number 214
There were several questions raised on the waiving by a "tribunal"
of the petitioner's filing fee or other costs. DONNA PAGE, Senior
Hearing Officer, Department of Revenue, clarified that the bill was
drafted using the word "tribunal" because, currently, child support
is established both by the courts and by the agency. Right now,
URESA is not used very much by the agency because in order to use
URESA, they have to go to court and that causes a huge backlog of
their work in trying to get it through the court system. She
explained if the word "tribunal" is used and the agency is included
in this Act, as opposed to the way it is done in URESA, the agency
will use the Act and in a much more expeditious manner
administratively establish child support in an interstate case. If
a state has jurisdiction over a child support case, another state
cannot create another child support order. The child support
agency can be the entity that takes another state's order and
enforces it or modifies it if that is appropriate. MR. MALLONEE
added that the modification must come from the state that has
continued exclusive jurisdiction in the case.
Number 340
Mr. Mallonee and Ms. Page responded to several questions from
committee members on how the information is currently shared
between states, how this Act will enable the state to function
better in collecting child support payments, and how a state gains
jurisdiction over a child support case.
Number 500
SENATOR LITTLE asked for an explanation of the term "default
order." MR. MALLONEE responded that in the establishment of a
notice of finding a financial responsibility, the number one thing
that the agency does is attempt to locate information on what an
individual makes by checking Department of Labor statistics, as
well as requesting information from the person. A default order is
only set once they have no information. The courts do the same
thing, and in many cases, they set it using a $60,000 figure. If
they ask the person to provide financial information and they do
not, the court normally sets it using $60,000, which is the maximum
in the guidelines.
Number 531
SENATOR TAYLOR commented that he understands the concern and the
desire to make certain that people conduct themselves in an
appropriate fashion, but he thinks the entire weight of the State
of Alaska, the Attorney General's office and the Child Support
Enforcement Agency are set up for one purpose only and that is to
gain money.
Number 590
SENATOR HALFORD asked what would happen if the word "tribunal" were
changed to "court" throughout the bill. MS. PAGE responded that
she thought that the situation would be the same as it is now. She
thinks it is necessary to have it "tribunal" in order to make it
easy for the administrative agency to administratively respond to
interstate cases. If they can't, they have other statutes that
allow them to do what they are doing now, and that is to establish
an Alaska order every time they've got an interstate case.
TAPE 94-34, SIDE B
Number 050
SENATOR HALFORD said it is absolutely asinine to have a minimum
payment level of $50, which is nothing, and the obligor is getting
money under the table to avoid having to pay more child support,
while at the same time, he is driving around in a new truck. He
suggested it would be better to go back into the 90.3 statute and
rewrite new minimum and maximum payments, and say that is the
degree of motion that the system has got. He added that the court
has said that in the case of that set of rules, they would like to
see that done.
Number 068
LARAINE DERR, Deputy Commissioner, Department of Revenue, said she
just recently assumed the administrative responsibility for child
support, and she thinks there are problems in every area. She
stated this bill is one way of starting to fix an interstate
problem and addresses the problem of an individual having multiple
court orders and which one should be followed.
Number 115
SENATOR HALFORD stated the current system is a mess and he is not
willing to make a system work any better that is not worth fixing.
Number 130
SENATOR TAYLOR asked Mr. Mallonee to comment on the federal aspects
of the program. MR. MALLONEE said 66 percent of operating expenses
of the entire child support program is federally funded. They also
receive incentives anywhere from 6 to 10 percent based on the AFDC
collections that they return, of which 50 percent goes to the state
to replace its share of the AFDC and 50 percent goes to the federal
government to replace their share of the AFDC. In most cases, they
have more than 100 percent of their budgeted expenses covered by
federal funds. Therefore, the federal government has laid down
some fairly significant rules in the child support area based on
giving funding to these programs. He reiterated that this
particular program is not mandated by the federal government, as
yet, but he suspects that before too many more years the federal
government will mandate this program or something similar. He also
agreed that there are a lot of problems within the system, and one
of the most complicated ones that creates a lot of confusion and
hardship to a lot of people is the interstate one.
Number 160
There being no further testimony or questions on SB 302, SENATOR
TAYLOR stated he would like to hold the bill in committee to take
a closer look at it.
Number 170
SENATOR TAYLOR brought SB 362 (OMNIBUS INSURANCE REFORM) before the he
committee as the next order of business.
DAVID WALSH, Director, Division of Insurance, Department of
Commerce & Economic Development, said SB 362 is a combination of
small but not controversial items contained in one bill. The bill
has a zero fiscal note.
SB 362 contains items in three areas: (1) small, but substantive
changes in Title 21; (2) small NAIC models; and (3) provisions that
would allow the division, when there are no outstanding obligation,
to accept the surrender of a certificate of authority.
Mr. Walsh noted the division had provided, for the committee's
information, a sectional analysis of the bill, as well as a side-
by-side analysis of the bill where the statutes were changed.
Mr. Walsh also pointed out that the division had two requirements
for any items to be in the bill. The main one was that they be
absolutely noncontroversial, and, secondly, that they not be part
of any larger bill, which is why separate legislation relating to
risk-based capital was introduced.
Number 225
Responding to a question from Senator Taylor, Mr. Walsh said a
provision in the bill clarifies what the risk retention groups do
and reduces the number of hurdles that they have to jump through.
He added that there are very few risk retention groups in the
state, but the ones that exist are very pleased with the change.
Number 260
SENATOR DONLEY asked for an explanation on the provision relating
to consumer credit insurance. DAVE WALSH responded that credit
insurance is one of the most problematic areas that they regulate,
and the bill allows the division to establish some regulations and
is a first step in what they hope is going to be a solution. In
the past, Alaska has been listed as among the worst states for
credit insurance. BARBARA THURSTON, Chief Actuary, Division of
Insurance, added that the main thing it does is it increases the
disclosures that need to made to consumers. It also adds a 30-day
period where the consumer can look at the policy and change his
mind.
Number 335
SENATOR TAYLOR asked if would be possible to impose a requirement
that no bank, credit bureau, or lending institution may profit in
any way from the sale, brokerage, or whatever, of any policy of
insurance. MR. WALSH acknowledged that such a provision could be
added to the bill if that was the will of the committee. However,
the division didn't want to come in with a bill as big as SB 362
with anything that was going to generate a lot of controversy and
a lot of contention.
SENATOR TAYLOR inquired what change was made to Alaska Rule of
Civil Procedure 45. MR. WALSH answered that the change came from
the Department of Law. There was concern that the division does
get proprietary information in conjunction with an exam. If the
division has proprietary information, information which,
essentially, does not belong to them, but belongs to the company
itself, this stops a collateral attack to obtain the information
from the division. There is concern that without this kind of
section, the division will be forced into litigation to get the
kind of information it needs from the companies.
Number 475
SENATOR DONLEY asked if there were any provisions in the bill
relating to automobile insurance. MR. WALSH directed attention to
Section 53 which, he said, clarifies some of the ambiguities in
this type of insurance and levels the playing field for the
consumer.
Number 625
SENATOR JACKO referred to Section 30 wherein it provides that the
director may adopt regulations for additional education or
experience. He asked Mr. Walsh how much additional education or
experience he perceived would be required and how this would affect
people who live in places where there aren't educational
experiences provided. MR. WALSH replied that it is a section that
the independent agents and brokers have wanted for a long time. It
allows the adoption of continuing education regulations. Part of
it is to allow for the fact that there are a significant number of
agents and brokers in rural Alaska, and allows for doing their
continuing education by viewing video tapes at home or even
teleconference kinds of courses. SENATOR JACKO suggested putting
the provision in statute rather than having it as a regulation.
Number 677
SENATOR TAYLOR commented there is large movement in the Legislature
called "tort reform," and this is second large bill on insurance
reform he has seen, and they raise a lot of serious questions.
TAPE 94-35, SIDE A
Number 010
SENATOR DONLEY asked if the statutes provide that insurance agents
cannot discount their fees, and if those fees are statutorily fixed
fees. MR. WALSH answered that the fees are not fixed by statute,
but the statute does provide that an agent cannot discount their
commission. The fees are set by the companies. He noted that
there are only a couple of states that allow any type of cutting
commissions, etc. He said that, ultimately, discounting is a
policy decision that the Legislature makes, and, if the Legislature
wishes to allow discounting, they will regulate it the way the
Legislature wants them to. However, it is not something that the
division believes is good because they want a level playing field
for all consumers similarly situated.
Number 105
SENATOR DONLEY asked what the division's policy was in approving
commission rates. MS. THURSTON responded that there is very little
variation in commission rates. Basically, the companies have to
compete for the business, and the way they do that, in most cases,
is to keep the premiums lower. As long as the commissions are
within the normal bounds, the division generally approves it, and
they do routinely question commissions that look out of line.
There was further discussion between committee members and Mr.
Walsh concerning contingency fees, discounting and commission
rates. Mr. Walsh said they would do some research and put some
information together for the committee's information.
There being no further witnesses to testify on SB 362, SENATOR
TAYLOR thanked the Division of Insurance for their participation
and assistance. He stated the bill would be held in committee for
further work.
Number 245
SENATOR TAYLOR brought SB 332 (POSSESSION OF 25 LIVE MARIJUANA
PLANTS) before the committee and directed attention to a proposed
committee substitute. He said the committee substitute changes the
dried weight concept to 25 plants or more, and that the Department
of Law agreed with the change.
SENATOR JACKO moved that CSSB 332(JUD) be adopted. Hearing no
objection, the motion carried.
SENATOR LITTLE moved that CSSB 332(JUD) be passed out of committee
with individual recommendations. Hearing no objection, it was so
ordered.
Number 301
SENATOR TAYLOR brought SB 349 (GRAND JURY EVIDENCE BY POLICE
OFFICERS) before the committee and directed attention to a
committee substitute which encompasses changes made as a result of
testimony at a previous hearing on the legislation. He said
language was added at the bottom of page 2 which provides that the
defendant was the one that had to bear the burden of showing that
he had suffered prejudice to substantial rights.
SENATOR HALFORD moved that CSSB 349(JUD) be adopted. Hearing no
objection, the motion carried.
SENATOR HALFORD moved and asked unanimous consent that CSSB
349(JUD) be passed out of committee with individual
recommendations. Hearing no objection, it was so ordered.
Number 325
SENATOR TAYLOR brought SB 350 (ARREST FOR VIOLATING RELEASE
CONDITIONS) before the committee as the next order of business. He
said it was his understanding that there was no request on the part
of any member of the committee to make any changes to the original
bill.
SENATOR HALFORD moved and asked unanimous consent that SB 350 be
passed out of committee with individual recommendations. Hearing
no objection, it was so ordered.
Number 351
SENATOR TAYLOR brought SB 351 (CHARACTER EVIDENCE IN CRIMINAL
TRIALS) before the committee as the next order of business.
SENATOR DONLEY moved that SB 351 be passed out of committee with
individual recommendations. Hearing no objection, it was so
ordered.
Number 360
SENATOR TAYLOR brought SB 353 (PEREMPTORY CHALLENGE OF JURORS)
before the committee as the final order of business and directed
attention to a proposed committee substitute. The original bill
would have reduced the number of preemptory challenges from 10 to
6, and the committee substitute makes both sides equal by changing
it to 10 and 10.
SENATOR DONLEY moved that CSSB 353(JUD) be adopted. Hearing no
objection, the motion carried.
SENATOR LITTLE moved that CSSB 353 (JUD) be passed out of committee
with individual recommendations. Hearing no objection, it was so
ordered.
There being no further business to come before the committee, the
meeting was adjourned at 3:55 p.m.
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