Legislature(2001 - 2002)
05/04/2001 05:22 PM Senate JUD
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* first hearing in first committee of referral
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+ 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.
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