Legislature(2001 - 2002)

02/12/2002 03:40 PM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                    
                 SENATE STATE AFFAIRS COMMITTEE                                                                               
                        February 12, 2002                                                                                       
                            3:40 p.m.                                                                                           
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Gene Therriault, Chair                                                                                                  
Senator Randy Phillips, Vice Chair                                                                                              
Senator Ben Stevens                                                                                                             
Senator Bettye Davis                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Rick Halford                                                                                                            
                                                                                                                              
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 267                                                                                                             
"An Act establishing the Alaska veterans'  memorial endowment fund                                                              
and providing for credits against  certain taxes for contributions                                                              
to  that  fund;   relating  to  other  tax  credits   for  certain                                                              
contributions; and providing for an effective date."                                                                            
     MOVED SB 267 OUT OF COMMITTEE                                                                                              
                                                                                                                                
SENATE BILL NO. 268                                                                                                             
"An  Act relating  to  the  issuance of  state-guaranteed  revenue                                                              
bonds  by  the  Alaska  Housing  Finance  Corporation  to  finance                                                              
mortgages for qualifying veterans;  and providing for an effective                                                              
date."                                                                                                                          
     MOVED SB 268 OUT OF COMMITTEE                                                                                              
                                                                                                                                
SENATE BILL NO. 236                                                                                                             
"An Act making supplemental and other  appropriations for homeland                                                              
security; and providing for an effective date."                                                                                 
     SCHEDULED BUT NOT HEARD                                                                                                    
                                                                                                                                
     SENATE BILL NO. 238                                                                                                        
     "An Act relating to state plans and programs for the safety                                                                
and  security  of  facilities  and   systems  in  the  state;  and                                                              
providing for an effective date."                                                                                               
          MOVED CSSB 238(STA) OUT OF COMMITTEE                                                                                  
                                                                                                                                
     SENATE BILL NO. 240                                                                                                        
     "An Act relating to the crimes of damaging an oil or gas                                                                   
pipeline   or   supporting  facility,   criminal   mischief,   and                                                              
terroristic   threatening;  making   conforming  amendments;   and                                                              
providing for an effective date."                                                                                               
          MOVED CSSB 240(STA) OUT OF COMMITTEE                                                                                  
                                                                                                                                
     SENATE JOINT RESOLUTION NO. 31                                                                                             
     Urging the United States Congress to permit the use of tax                                                                 
exempt bonds to fund loans for veterans who served after 1976.                                                                  
          MOVED CSSJR 31(STA) OUT OF COMMITTEE                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                              
SB 267 - No previous action to record.                                                                                          
SB 268 - No previous action to record.                                                                                          
SB 236 - See State Affairs minutes dated 1/31/02.                                                                               
SB 238 - See State Affairs minutes dated 1/24/02, 1/31/02.                                                                      
SB 240 - See State Affairs minutes dated 1/24/02, 1/31/02.                                                                      
SJR 31 - See State Affairs minutes dated 2/7/02                                                                                 
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Senator Jerry Ward                                                                                                              
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: SJR 31 sponsor                                                                                            
                                                                                                                                
John Bitney                                                                                                                     
Alaska Housing Finance Corporation (AHFC)                                                                                       
4300 Boniface Parkway                                                                                                           
Anchorage, AK 99510                                                                                                             
POSITION STATEMENT: Testified on SB 268                                                                                       
                                                                                                                                
Laddie Shaw                                                                                                                     
Department of Military &                                                                                                        
  Veterans Affairs                                                                                                              
PO Box 5800                                                                                                                     
Ft Richardson, AK  99505-0800                                                                                                   
POSITION STATEMENT:  Testified on SB 267                                                                                      
                                                                                                                                
Pat Carothers                                                                                                                   
Alaska Veterans Advisory Council                                                                                                
Juneau, AK 99801                                                                                                                
POSITION STATEMENT: Testified on SB 267                                                                                       
                                                                                                                                
Neil Slotnick                                                                                                                   
Deputy Commissioner                                                                                                             
Department of Revenue                                                                                                           
PO Box 110400                                                                                                                   
Juneau, AK  99811-0400                                                                                                          
                                                                                                                                
                                                                                                                                
Frank Richards                                                                                                                  
State Maintenance Engineer                                                                                                      
Department of Transportation &                                                                                                  
  Public Facilities                                                                                                             
3132 Channel Dr.                                                                                                                
Juneau, AK  99801-7898                                                                                                          
POSITION STATEMENT:  Testified on SB 238                                                                                      
                                                                                                                                
John Steiner                                                                                                                    
Eagle River, AK 99517                                                                                                           
POSITION STATEMENT:  Testified via teleconference on SB 238                                                                   
                                                                                                                                
Joe Balash                                                                                                                      
Staff to Senate State Affairs Committee                                                                                         
Alaska State Capitol Room 121                                                                                                   
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Explained proposed CS for SB 240                                                                          
                                                                                                                                
Annie Carpeneti                                                                                                                 
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT: Testified on SB 240                                                                                       
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 02-7, SIDE A                                                                                                             
                                                                                                                                
CHAIRMAN  GENE   THERRIAULT  called   the  Senate  State   Affairs                                                            
Committee  meeting to  order at  3:40 p.m.  Present were  Senators                                                              
Davis, Stevens, Phillips and Chairman Therriault.                                                                               
                                                                                                                                
The first order of business was SJR 31.                                                                                         
                                                                                                                                
                                                                                                                                
         SJR 31-TAX EXEMPT BONDS TO FUND VETERANS LOANS                                                                     
                                                                                                                                
CHAIRMAN  THERRIAULT   announced  there  was  a   proposed  CS  in                                                              
committee member's packets.                                                                                                     
                                                                                                                                
SENATOR JERRY WARD,  sponsor, explained this resolution  urges the                                                              
United States  Congress to  support H.R. 959  and S. 615  to amend                                                              
the  Internal Revenue  code  to allow  veteran  home  loans to  be                                                              
issued to veterans that have served after 1977.                                                                                 
                                                                                                                                
CHAIRMAN THERRIAULT said his staff  has spoken with Senator Ward's                                                              
staff  to  discuss  the  proposed   CS.  First,  a  reference  was                                                              
corrected and  then one  "WHEREAS" was deleted.  His view  is that                                                              
they are asking Congress for favorable  action on the H.R. 959 and                                                              
S. 615 so any hint of antagonism should be avoided.                                                                             
                                                                                                                                
SENATOR WARD endorsed the CS then said:                                                                                         
        However, in  the eyes of some veterans,  I believe                                                                      
        that   some  past   Congresses   have  been   very                                                                      
        antagonistic and  not supportive of  veterans. For                                                                      
        veterans to  place their life on the line  and for                                                                      
        Congress  not to  do something as  simple as  home                                                                      
        ownership, yes, I might be  a little bit disturbed                                                                      
        in their action in the past  and many veterans are                                                                      
        too.  However, I  don't mind  being  polite if  it                                                                      
        gets the job accomplished.                                                                                              
                                                                                                                                
SENATOR  THERRIAULT said  that is  what he  is trying  to keep  in                                                              
mind.                                                                                                                           
                                                                                                                                
He asked  whether members  had questions for  John Bitney  of AHFC                                                              
regarding the housing loan method and there were none.                                                                          
                                                                                                                                
He extended  his apologies  to Senator Ward  for not giving  him a                                                              
copy of the CS  earlier but the draft amendment  was finished just                                                              
before the  meeting convened.  The CS simply  changes the  tone of                                                              
the "WHEREAS" on  page 2 lines 15 through 18.  The amendment reads                                                              
as follows:                                                                                                                     
                                                                                                                                
        BE IT RESOLVED that the Alaska State Legislature                                                                      
                                th                                                                                              
     respectfully  urges the 107   United States  Congress to                                                                   
     support  H.R. 959 and  S. 615 to  remove the portion  of                                                                   
     the  Internal Revenue  Code  which restricts  access  to                                                                   
     state  veterans'  home loan  programs  for veterans  who                                                                   
     served after  1976 so they and their families  may enjoy                                                                   
     the same benefits as their earlier counterparts.                                                                           
                                                                                                                                
SENATOR PHILLIPS made  a motion to adopt the  committee substitute                                                              
22-LS097\C Cook  2/12/02 as the  working document. There  being no                                                              
objection, the motion was adopted.                                                                                              
                                                                                                                                
SENATOR PHILLIPS  made a  motion to  adopt the proposed  amendment                                                              
#1. There being no objection, amendment #1 was adopted.                                                                         
                                                                                                                                
There was no additional testimony.                                                                                              
                                                                                                                                
CHAIRMAN  THERRIAULT called  attention  to the  zero fiscal  note.                                                              
There were no further questions or amendments.                                                                                  
                                                                                                                                
He asked for the will of the committee.                                                                                         
                                                                                                                                
SENATOR  PHILLIPS made  a motion  to move CSSJR  31(STA) and  zero                                                              
fiscal note from committee with individual recommendations.                                                                     
                                                                                                                                
There  being no  objection, CSSJR  31(STA) and  fiscal note  moved                                                              
from committee with individual recommendations.                                                                                 
                                                                                                                                
                                                                                                                                
          SB 268-GUARANTEED REVENUE BONDS FOR VETERANS                                                                      
                                                                                                                                
                                                                                                                                
JOHN BITNEY from the Alaska Housing  Finance Corporation explained                                                              
that Alaska  is one of  five states that  qualifies to  issue tax-                                                              
exempt bonds under  the IRS code. The bonds are  issued to provide                                                              
home  mortgages for  qualified veterans.  This  program defines  a                                                              
qualified  veteran as  someone  who served  in  the United  States                                                              
Armed  Services prior  to  January  1, 1977.  Because  there is  a                                                              
diminishing pool  of qualified veterans, they anticipate  that the                                                              
next requested  $500 million bond  authorization will be  the last                                                              
unless Congress  takes action as  requested by SJR 31.  The nature                                                              
of  the tax  exemption in  the IRS  code requires  that the  state                                                              
provide a guarantee  behind the bonds. SB 268  takes that question                                                              
to the  general election  ballot for  the voters  to approve  as a                                                              
general obligation of the state.  As a matter of record, he stated                                                              
this  does  not  cost  the state  money  from  the  treasury.  The                                                              
structure  is  such that  the  mortgages  that the  bond  proceeds                                                              
purchase are pledged  against the debt and are used  to repay that                                                              
debt.  This guarantee  helps  the  state to  qualify  for the  tax                                                              
exemption  but it  does not  cost the  state. In  the view of  the                                                              
rating  agencies,  this  structure  does  not  limit  the  state's                                                              
general obligation bond capacity.                                                                                               
                                                                                                                                
He said it  is a good program  and he asked the committee  to take                                                              
favorable action.                                                                                                               
                                                                                                                                
CHAIRMAN  THERRIAULT  asked  if  he  would  be  back  to  ask  for                                                              
increased  authorization if  Congress acts  favorably on  H.R. 959                                                              
and S. 615 because this bill wouldn't cover the expected demand.                                                                
                                                                                                                                
MR. BITNEY replied he would probably  be back in 2004 if the bills                                                              
pass,  but if  Congress did  not take  action, this  authorization                                                              
would last until  about 2010 when the program  would most probably                                                              
end.                                                                                                                            
                                                                                                                                
CHAIRMAN THERRIAULT  noted the fiscal  notes from the  Division of                                                              
Elections and AHFC.                                                                                                             
                                                                                                                                
There was no further testimony and  no amendments were offered. He                                                              
asked for the will of the committee.                                                                                            
                                                                                                                                
SENATOR PHILLIPS asked  to be exempt from voting  to move the bill                                                              
because he works  for the state's largest mortgage  company and it                                                              
might be perceived that he is benefiting.                                                                                       
                                                                                                                                
CHAIRMAN THERRIAULT  thanked him  for his disclosure  but objected                                                              
to his exemption.                                                                                                               
                                                                                                                                
SENATOR PHILLIPS made a motion to  move SB 268 and attached fiscal                                                              
notes from committee with individual recommendations.                                                                           
                                                                                                                                
There being no objection, SB 268 moved from committee.                                                                          
                                                                                                                                
                                                                                                                                
           SB 267-ALASKA VETERANS' MEM.ENDOWMENT FUND                                                                       
                                                                                                                              
LADDY  SHAW, state  director for  the Department  of Military  and                                                              
Veterans  Affairs,  described the  bill  as  a grant  program  for                                                              
maintenance, repair,  replacement, enhancement of and  addition to                                                              
any veteran's memorials or monuments  to veterans and the military                                                              
in the state.                                                                                                                   
                                                                                                                                
The bill  proposes to finance  the fund through  appropriations as                                                              
well  as contributions  that will  be eligible  for certain  state                                                              
corporate tax credits.                                                                                                          
                                                                                                                                
Presently they  have $125,000.00  in the bank  and are  working to                                                              
collect  another $20,000.00  that  is already  pledged. They  have                                                              
offered that $20,000.00  to the Vietnam Veteran's  Moving Wall for                                                              
coming to Alaska and as a part of  a nationwide non-profit program                                                              
to provide information about Vietnam veterans.                                                                                  
                                                                                                                                
He said  he represents 68,000  veterans and about  30,000 military                                                              
members in  the state. They  are asking  the committee to  pass SB                                                              
267  thus giving  these  people  the  honor and  recognition  they                                                              
deserve.                                                                                                                        
                                                                                                                                
SENATOR PHILLIPS  commented it  meant a lot  to him personally  to                                                              
see the Moving Vietnam Wall at the Parks Strip in August.                                                                       
                                                                                                                                
MR.  SHAW agreed  that  having  the wall  in  the state  was  very                                                              
meaningful.  He said  that  although they  have  had a  tremendous                                                              
amount of volunteer  help, a number of memorials  are in disrepair                                                              
and there is no  money for their repair or for  new memorials such                                                              
as  one  to  honor the  Alaska  Territorial  Guard.  Some  private                                                              
individuals feel strongly enough  that they are going out on their                                                              
own to ask for donations.                                                                                                       
                                                                                                                                
When they  came up  with the  present idea  as an initiative  they                                                              
were overwhelmed with  the support they received.  Any support the                                                              
committee is able to give would be appreciated.                                                                                 
                                                                                                                                
SENATOR  PHILLIPS asked  whether the monument  for the  Lend-Lease                                                              
Act would qualify.                                                                                                              
                                                                                                                                
MR. SHAW  said construction or repair  of any monument  that deals                                                              
with any area of military and veterans'  affairs would be covered.                                                              
                                                                                                                                
SENATOR PHILLIPS  commented he  hopes it  would fit because  there                                                              
were a lot of men and women involved in that effort.                                                                            
                                                                                                                                
CHAIRMAN  THERRIAULT said  this just  adds another  option to  the                                                              
existing tax  exemption but he wasn't  clear which tax  types this                                                              
credit applies against.                                                                                                         
                                                                                                                                
MR.  SHAW asked  that the  representative from  the Department  of                                                              
Revenue answer those questions.                                                                                                 
                                                                                                                                
MR. NEIL SLOTNICK,  deputy commissioner of Department  of Revenue,                                                              
informed  members  the tax  credit  applies  against a  number  of                                                              
types. It  is the insurance premiums  tax AS 21.89,  the corporate                                                              
income tax AS 43.20,  oil and gas severance tax AS  43.55, oil and                                                              
gas  property tax  AS  43.56, mining  and  license  tax AS  43.65,                                                              
fisheries  business  tax AS  43.75  and the  fish  landing tax  AS                                                              
43.77.                                                                                                                          
                                                                                                                                
CHAIRMAN  THERRIAULT explained  that you  get 50  percent of  your                                                              
first $100,000.00  and 100 percent of your second  $100,000.00 for                                                              
a total  of $150,000.00.  You may  only get this  once in  any tax                                                              
year from  any of the  sources. Basically,  this allows  people to                                                              
direct their  tax dollars to a  specific purpose. This  is allowed                                                              
in education  as well  and now  the corporations  will be  able to                                                              
choose between the two options.                                                                                                 
                                                                                                                                
There were  no further  questions on  the technical mechanisms  of                                                              
the bill.                                                                                                                       
                                                                                                                                
PAT CAROTHERS,  Chairman of the Alaska Veterans  Advisory Council,                                                              
said he was present to solicit support to move the bill forward.                                                                
                                                                                                                                
There was no further testimony.                                                                                                 
                                                                                                                                
CHAIRMAN THERRIAULT  noted there was no prepared CS  and he had no                                                              
amendments.                                                                                                                     
                                                                                                                                
SENATOR PHILLIPS  made a  motion to move  SB 267 and  fiscal notes                                                              
from committee with individual recommendations.                                                                                 
                                                                                                                                
There being no objection, SB 267 move from committee.                                                                           
                                                                                                                                
                                                                                                                                
            SB 238-SECURITY OF FACILITIES AND SYSTEMS                                                                       
                                                                                                                                
CHAIRMAN  THERRIAULT announced  there was  a proposed  CS. In  the                                                              
original  bill  there  was  discussion   in  Section  1  regarding                                                              
granting the  Department of  Transportation and Public  Facilities                                                              
(DOT/PF)  the power  to  levy fines  at  airport facilities.  This                                                              
section  was dropped.  In Section  3 there was  concern about  the                                                              
language exempting  orders from the Administrative  Procedures Act                                                              
(APA)  to boards  and commissions  that  have regulation  adoption                                                              
authority. Language  granting the authority to exempt  orders from                                                              
APA was dropped.                                                                                                                
                                                                                                                                
FRANK RICHARDS,  maintenance engineer  for the DOT/PF,  apologized                                                              
for   the  confusion   within  the   DOT/PF   for  not   providing                                                              
clarification to some of the questions  raised at the last hearing                                                              
of the bill.                                                                                                                    
                                                                                                                                
He said  he would like  to address Sections  1 and 3 as  they were                                                              
written in the original bill and  perhaps provide clarification to                                                              
Section  1 so  members  could  understand, from  the  department's                                                              
perspective,  where they have  had difficulties administering  the                                                              
Federal Aviation Administration (FAA)  mandated security programs.                                                              
                                                                                                                                
The FAA requires 18 airports in Alaska  to have security programs.                                                              
Two  of those  airports are  in Anchorage  and  Fairbanks and  the                                                              
remaining 16  make up the  rural system. There  is not an  on site                                                              
FAA security  coordinator at these  rural airports so  the airport                                                              
operator is responsible  for administering the  security programs.                                                              
When there  are violations  of the programs,  the airport  is held                                                              
responsible. Under the new revisions  to part 107, which went into                                                              
effect in November  2001, the FAA now has the ability  to cite the                                                              
airport and individual violators.                                                                                               
                                                                                                                                
Although  the DOT/PF is  charged with  administering the  security                                                              
programs, they  have no enforcement  abilities. If they  observe a                                                              
violation they  have no ability to  deter those violations  in the                                                              
future.                                                                                                                         
                                                                                                                                
Where law  enforcement officers  are available,  they are  able to                                                              
charge  violators  with  a  misdemeanor  with  a  maximum  $500.00                                                              
criminal  violation.  SB 238  would  allow  them to  impose  civil                                                              
administrative  penalties   of  up  to  $1,100.00   per  incident.                                                              
Currently, the FAA  may assess a civil penalty of  up to $1,100.00                                                              
against the  DOT/PF for  violating any  of the security  programs.                                                              
Although the FAA  considers the DOT/PF to be the  violator, nearly                                                              
all  violations are  the  result of  action  by an  employee of  a                                                              
tenant or  contractor.  At the international  airports where  they                                                              
have law  enforcement capabilities,  they are  able to  restrict a                                                              
violator's  access badge,  but they  are  not anxious  to do  this                                                              
because it essentially takes away their livelihood.                                                                             
                                                                                                                                
They  would   like  to   identify  violations   and  then   attach                                                              
appropriate  fines  to  those  violations.   The  scale  would  be                                                              
graduated  and the  most  serious violators  would  be levied  the                                                              
$1,100.00 fine.                                                                                                                 
                                                                                                                                
Rural airports receive  security inspections about once  a year so                                                              
for  the majority  of  the time  there  is no  federal  oversight.                                                              
Nonetheless,  the requirements are  in place at  all times.  It is                                                              
their hope  that the  bill with  Section 1  would move forward  to                                                              
help them provide a better operation of the airport system.                                                                     
                                                                                                                                
MR.  RICHARDS  brought  up  the treatment  of  Section  3  in  the                                                              
proposed CS.                                                                                                                    
                                                                                                                                
CHAIRMAN  THERRIAULT  stated he  spoke  with Senator  Cowdery  and                                                              
advised   him  that   the  bill   would  probably   move  to   the                                                              
Transportation  Committee without Section  3. He recommended  that                                                              
Mr. Richards argue  that transportation related  issue before that                                                              
committee.                                                                                                                      
                                                                                                                                
He  then disagreed  with  the  DOT/PF's  reluctance to  remove  an                                                              
individual's security  badge for  security violations. This  is an                                                              
effective method  of getting compliance and individuals  that have                                                              
compliance difficulties  might be better  off in a  different type                                                              
of job. He didn't see a problem using that available mechanism.                                                                 
                                                                                                                                
MR. RICHARDS replied it is a matter  of progressive discipline. If                                                              
an employee is  escorting someone without a badge  and that person                                                              
leaves  a  secure  door  open,  the   person  with  the  badge  is                                                              
responsible  for that  act. Taking  that  individual's badge  away                                                              
limits their  access to  a secure area  and therefore  limits them                                                              
from doing  their job. They  felt they that  if they were  able to                                                              
levy  a  civil  penalty,  that  would   limit  their  unacceptable                                                              
behavior without  putting them out  of a job. Across  the country,                                                              
it is those minor violations that  are the most prevalent security                                                              
breaches.                                                                                                                       
                                                                                                                                
CHAIRMAN THERRIAULT  asked whether the state couldn't  pass a fine                                                              
down to  the contractor  if the violator  was an employee  of that                                                              
contractor.                                                                                                                     
                                                                                                                                
MR. RICHARDS agreed  they could do so. Under the  new part 107 for                                                              
airport security, the  FAA is able to cite the airport  as well as                                                              
the individual.  The individual includes  not only the  person but                                                              
the employer.                                                                                                                   
                                                                                                                                
CHAIRMAN  THERRIAULT   asked  if   other  committee   members  had                                                              
questions regarding  the section  the proposed  CS drops  from the                                                              
bill.                                                                                                                           
                                                                                                                                
SENATOR STEVENS  said he  was still unclear  why he might  want to                                                              
return to the original version of  the bill. Everything is already                                                              
in place  and Section  1 simply  gives authority  to the  state to                                                              
levy a  fine on FAA  requirements. This  is why he  requested that                                                              
Section  1 be removed  originally.  It gives authority  to  levy a                                                              
fine based  on an  FAA requirement  not a  state requirement.  The                                                              
contract the DOT/PF  has with the tenant says that  if they are in                                                              
violation of  an FAA code  they will  pay. He's in  full agreement                                                              
with that, but  doesn't understand why the DOT/PF  still wants the                                                              
authority to levy a fine when there  is already a criminal fine, a                                                              
civil fine and the ability to remove a violator's badge.                                                                        
                                                                                                                                
MR. RICHARDS replied  the major problems have come  from the rural                                                              
airports  that  have  no  law  enforcement  officers  in  security                                                              
positions. Normally,  there are just three or  four individuals at                                                              
these small airports and they perform  security functions, airport                                                              
rescue and fire  fighting functions and equipment  operation. They                                                              
are charged with  administering security programs and  at times it                                                              
is difficult for  them when they have airport  tenants with badges                                                              
who have been given security training  but they are not complying.                                                              
                                                                                                                                
CHAIRMAN THERRIAULT asked if they are state employees.                                                                          
                                                                                                                                
MR.  RICHARDS  told  him state  employees  are  administering  the                                                              
security program, but  it's the tenant or general  public that may                                                              
violate the security plan.                                                                                                      
                                                                                                                                
SENATOR  STEVENS said  that's his  point of concern.  Each  of the                                                              
regional operators would  have the authority to levy  a fine based                                                              
on an  FAA regulation  not a state  regulation. There's  already a                                                              
contract in  place with  the tenant that  says if you  violate you                                                              
will  be  subject  to  FAA  sanctions.  This  gives  the  regional                                                              
operator the  ability to levy a  fine based on  his interpretation                                                              
of a violation of a federal law and  circumvents the contract that                                                              
is already in place. He recommended moving the CS as drafted.                                                                   
                                                                                                                                
CHAIRMAN  THERRIAULT said  he drafted  the  CS so  there could  be                                                              
forward movement on  parts of the bill they could  agree upon. Mr.                                                              
Richards would have the opportunity  to argue his point before the                                                              
Senate Transportation Committee.                                                                                                
                                                                                                                                
He asked Mr. Steiner from the Anchorage  Attorney General's office                                                              
whether he had something to add to the discussion.                                                                              
                                                                                                                                
JOHN STEINER testified via teleconference  that his priority tasks                                                              
are  to  represent  the  Anchorage   and  Fairbanks  International                                                              
Airports but he also provides assistance  and support to the rural                                                              
airports. In that capacity, he is  very familiar with the security                                                              
situation. One of  the reasons the civil penalties  were requested                                                              
was  because the  FAA  has traditionally  penalized  the State  of                                                              
Alaska whenever there  is a tenant or employee  security violation                                                              
and these violations go down on the state's record.                                                                             
                                                                                                                                
SIDE B                                                                                                                          
                                                                                                                                
Even though  Senator Stevens was  correct in stating that  the FAA                                                              
can now penalize  individuals, they believe the  airport will also                                                              
be   penalized  for   any  contractor   violation  because   those                                                              
individuals  are carrying out  the airport  security plan.  One of                                                              
the difficulties with the current  situation is that the penalties                                                              
are either very  onerous or very cumbersome. There  is no question                                                              
the airport  needs a mechanism to  ensure that violations  such as                                                              
security doors  being left ajar don't  happen; but for  someone to                                                              
lose their job or be thrown in jail  because of such an infraction                                                              
is  too harsh.  Graduated penalties  would be  more effective  and                                                              
easier to use.                                                                                                                  
                                                                                                                                
There were no questions for the witness.                                                                                        
                                                                                                                                
SENATOR  STEVENS  made a  motion  to adopt  22-GS2091\C  Bannister                                                              
2/12/02 as the working document. There was no objection.                                                                        
                                                                                                                                
CHAIRMAN  THERRIAULT  stated  he  had no  prepared  amendments  to                                                              
either the  original bill or  the CS and  there was a  zero fiscal                                                              
note from the DOT/PF.  He noted the title of the  bill changed but                                                              
it is  a little  broader making it  possible for  Section 1  to be                                                              
reinserted in a subsequent hearing in another committee.                                                                        
                                                                                                                                
He asked for the will of the committee.                                                                                         
                                                                                                                                
SENATOR  STEVENS made  a  motion  to move  CSSB  238(STA) and  the                                                              
fiscal note from committee with individual  recommendations. There                                                              
being no objection, the bill moved out of committee.                                                                            
                                                                                                                                
             SB 236-HOMELAND SECURITY APPROPRIATIONS                                                                        
                                                                                                                              
CHAIRMAN  THERRIAULT  announced they  have  received  a series  of                                                              
spreadsheets  from  legislative   finance  that  separate  capital                                                              
budget items from the 2002 and 2003  budget items. They hadn't had                                                              
the opportunity to  thoroughly analyze them so the  bill would not                                                              
be heard that day.                                                                                                              
                                                                                                                                
                                                                                                                                
         SB 240-TERRORISTIC THREATENING/PIPELINE DAMAGE                                                                     
                                                                                                                                
CHAIRMAN THERRIAULT announced there is a proposed CS for SB 240.                                                                
                                                                                                                                
JOE BALASH,  Staff to  Senate State  Affairs Committee,  explained                                                              
the work  draft does two things.  First, it adopts  the amendments                                                              
that  the Department  of  Law  recommended in  previous  hearings.                                                              
Those have to do with making damaging  pipeline or facilities part                                                              
of  the  conspiracy  statutes. It  also  incorporated  changes  to                                                              
murder in the first degree.                                                                                                     
                                                                                                                                
The major  change occurs  on page  4 where  the criminal  mischief                                                              
statutes   are  discussed.   Originally,  a   separate  crime   of                                                              
intentionally damaging  a pipeline or  an oil or gas  facility was                                                              
created as  a class A felony.  Under current law,  that particular                                                              
crime is criminal  mischief in the first degree  and classified as                                                              
a class  B felony. Rather  than create  a separate law,  they made                                                              
criminal  mischief   in  the  first  degree  a   class  A  felony,                                                              
accomplishing  the  same  thing.   All  the  other  crimes  within                                                              
criminal mischief in  the first degree meet the  requirements of a                                                              
class  A felony,  which  made it  easier to  move  that crime  up.                                                              
Problems arose in  criminal mischief in the second  degree because                                                              
part of criminal  mischief in the second degree  is tampering with                                                              
a  pipeline  or  oil  and gas  facility.  That  is  something  the                                                              
department  wanted to  move  up in  classification  to  a class  B                                                              
felony. The  only way to do that  was to pull everything  else out                                                              
of second degree  and put them into third degree.  This eventually                                                              
resulted in  a cascading  effect when  third degree became  fourth                                                              
degree  and  fourth  degree  became   fifth  degree.  All  of  the                                                              
classifications of  felonies and misdemeanors also  moved down the                                                              
scale.  All the  changes  in references  in  various statutes  are                                                              
reflected in the CS.                                                                                                            
                                                                                                                                
CHAIRMAN THERRIAULT  reminded members that the  Attorney General's                                                              
office had suggested that the original  bill structure would avoid                                                              
the cascading and renumbering effect.  However, the result of that                                                              
troubled  the  legislative  legal  counsel  because  the  existing                                                              
criminal  mischief  section would  have  this  new law  tacked  on                                                              
instead  of  incorporated  into  the  list.  The  CS  follows  the                                                              
suggestions  of  the  legislative   legal  drafters  to  keep  the                                                              
statutory structure as clean as possible.                                                                                       
                                                                                                                                
He asked if members had questions  for Mr. Balash on the structure                                                              
of the CS.                                                                                                                      
                                                                                                                                
SENATOR  STEVENS asked  if there  are already  guidelines for  the                                                              
fourth and fifth degrees.                                                                                                       
                                                                                                                                
MR. BALASH  said that  would be  a more  appropriate question  for                                                              
Mrs. Carpeneti.                                                                                                                 
                                                                                                                                
ANNIE CARPENETI  from the  Department of Law  said the  crimes are                                                              
simply  being  reclassified. She  added  it  does not  change  the                                                              
sentencing provisions for the cascading offenses.                                                                               
                                                                                                                                
SENATOR STEVENS said  he can certainly understand  bringing in gas                                                              
pipeline  or  oil  pipeline  supporting  facility  but  questioned                                                              
including  an airline  or  commercial vehicle.  He  asked if  this                                                              
means  that anything  that is  done  to an  aircraft that  exceeds                                                              
$500.00  is   automatically  a  second-degree   criminal  mischief                                                              
violation.                                                                                                                      
                                                                                                                                
He said he was referring to page  5, Section 9 and wondered if the                                                              
reference to an airplane includes both private and commercial.                                                                  
                                                                                                                                
MRS. CARPENETI  said  this is existing  law and  does include  all                                                              
aircraft. Currently  this is a class C felony and  she thought the                                                              
original drafters  of the  criminal code intended  for this  to be                                                              
broad based because  of the potential harm to  people and property                                                              
when anyone tampers with aircraft.                                                                                              
                                                                                                                                
SENATOR  STEVENS  thought  there  should  be  varying  degrees  of                                                              
punishment based on the size of the aircraft.                                                                                   
                                                                                                                                
CHAIRMAN  THERRIAULT offered  the  thought that  whether  it is  a                                                              
Cessna or  a larger aircraft there  is the potential for  the loss                                                              
of life.                                                                                                                        
                                                                                                                                
SENATOR STEVENS responded  one is a catastrophic loss  of life and                                                              
one  could  be criminal  mischief.  In  his  opinion, there  is  a                                                              
difference between the intent to  damage an aircraft that is worth                                                              
$50,000.00  to  $100,000.00  versus   a  60  passenger  or  larger                                                              
airline.                                                                                                                        
                                                                                                                                
MRS. CARPENETI  said the  scheme of  criminal mischief  does allow                                                              
for that. There is charging discretion  in the prosecutor's office                                                              
to account for the differences in harm to people and property.                                                                  
                                                                                                                                
CHAIRMAN THERRIAULT  asked if she agrees that the  CS contains the                                                              
substance of what the Department of Law suggested.                                                                              
                                                                                                                                
MRS. CARPENETI thanked  the Chairman and said they  are in support                                                              
of the  substantive changes  and understand  the rationale  behind                                                              
setting it up this way.                                                                                                         
                                                                                                                                
There was no further testimony.                                                                                                 
                                                                                                                                
CHAIRMAN THERRIAULT asked for a motion.                                                                                         
                                                                                                                                
SENATOR DAVIS  made a  motion to  adopt the 22-GS2097\F  Luckhaupt                                                              
2/12/02 version as the working document.                                                                                        
                                                                                                                                
There was no objection.                                                                                                         
                                                                                                                                
SENATOR  THERRIAULT noted  there were no  proposed amendments  and                                                              
the  fiscal  notes from  the  Department  of  Law and  the  Public                                                              
Defender Agency were zero.                                                                                                      
                                                                                                                                
He asked for the will of the committee.                                                                                         
                                                                                                                                
SENATOR DAVIS made  a motion to move CSSB 240(STA)  and two fiscal                                                              
notes from committee with individual recommendations.                                                                           
                                                                                                                                
There being no objection, CSSB 240(STA) moved from committee.                                                                   
                                                                                                                                
There  being no  further business  to come  before the  committee,                                                              
Chairman Therriault adjourned the meeting at 4:45 p.m.                                                                          
                                                                                                                                
                                                                                                                                

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