01/25/2007 09:00 AM Senate STATE AFFAIRS
| Audio | Topic | 
|---|---|
| Start | |
| SB45 | |
| SB25 | |
| Adjourn | 
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 45 | TELECONFERENCED | |
| *+ | SB 7 | TELECONFERENCED | |
| *+ | SB 25 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | SB 36 | ||
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE STATE AFFAIRS STANDING COMMITTEE                                                                           
                        January 25, 2007                                                                                        
                           8:59 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lesil McGuire, Chair                                                                                                    
Senator Gary Stevens, Vice Chair                                                                                                
Senator Hollis French                                                                                                           
Senator Lyda Green                                                                                                              
Senator Con Bunde                                                                                                               
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 45                                                                                                              
"An Act relating to murder in the first degree."                                                                                
     HEARD AND HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 25                                                                                                              
"An Act relating to the state budget and to planning and reports                                                                
regarding state finances and operations; and providing for an                                                                   
effective date."                                                                                                                
     MOVED CSSB 25(STA) OUT OF COMMITTEE                                                                                        
                                                                                                                                
SENATE BILL NO. 7                                                                                                               
"An Act relating to the voting rights of felons."                                                                               
     BILL HEARING CANCELED                                                                                                      
                                                                                                                                
SENATE BILL NO. 36                                                                                                              
"An Act relating to sentencing for the commission of certain                                                                    
offenses influenced by alcohol and to the offense of consumption                                                                
of alcohol in violation of sentence."                                                                                           
     SCHEDULED BUT NOT HEARD                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB  45                                                                                                                  
SHORT TITLE: PEACE OFFICER CONVICTED OF MURDER                                                                                  
SPONSOR(S): SENATOR(S) OLSON                                                                                                    
                                                                                                                                
01/16/07       (S)       PREFILE RELEASED 1/12/07                                                                               
01/16/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/07       (S)       STA, JUD                                                                                               
01/25/07       (S)       STA AT 9:00 AM BELTZ 211                                                                               
                                                                                                                                
BILL: SB  25                                                                                                                  
SHORT TITLE: STATE PLANNING AND BUDGET                                                                                          
SPONSOR(S): SENATOR(S) DYSON                                                                                                    
                                                                                                                                
01/16/07       (S)       PREFILE RELEASED 1/5/07                                                                                
01/16/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/07       (S)       STA, FIN                                                                                               
01/25/07       (S)       STA AT 9:00 AM BELTZ 211                                                                               
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
DAVID GRAY, staff                                                                                                               
to SENATOR DONNY OLSON                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented SB 45 on behalf of Senator Olson.                                                               
                                                                                                                                
WALT MONEGAN, Commissioner                                                                                                      
Department of Public Safety                                                                                                     
Juneau, AK  99811-1200                                                                                                          
POSITION STATEMENT: Expressed some concern regarding SB 45.                                                                 
                                                                                                                                
LORETTA BULLARD, President                                                                                                      
Kawerak, Inc.                                                                                                                   
Nome, Alaska                                                                                                                    
POSITION STATEMENT: Spoke in favor of SB 45.                                                                                
                                                                                                                                
GAIL SHUBERT, Executive Vice President                                                                                          
and General Council                                                                                                             
Bering Straits Native Corporation                                                                                               
Nome, Alaska                                                                                                                    
POSITION STATEMENT: Spoke in favor of SB 45.                                                                                
                                                                                                                                
SENATOR FRED DYSON                                                                                                              
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented SB 25 as sponsor.                                                                               
                                                                                                                                
LUCKY SHULTZ, Staff                                                                                                             
to Senator Fred Dyson                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented SB 25.                                                                                          
                                                                                                                                
JACK KREINHEDER, Chief Analyst                                                                                                  
Office of Management and Budget                                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Opposed aspects of SB 25.                                                                                 
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  LESIL MCGUIRE  called the  Senate  State Affairs  Standing                                                             
Committee meeting to order at  8:59:54 AM. Senators Green, Bunde,                                                             
Stevens, French, and McGuire were present.                                                                                      
                                                                                                                                
            SB 45-PEACE OFFICER CONVICTED OF MURDER                                                                           
                                                                                                                                
CHAIR MCGUIRE announced the consideration of SB 45.                                                                             
                                                                                                                                
DAVID GRAY,  staff to Senator  Donny Olson,  said SB 45  is "near                                                               
and dear"  to Senator Olson's  district. It mandates  the maximum                                                               
sentence for  a peace  officer who is  convicted of  first degree                                                               
murder and stems  from a case in Nome where  a young woman [Sonya                                                               
Ivanoff] was murdered  [by a peace officer].  She was well-liked,                                                               
he  said, and  it tore  up  the region.  The trial  was moved  to                                                               
Kotzebue,   and  the   peace   officer   was  convicted.   During                                                               
sentencing,  the  state's  prosecutor   noted  that  the  maximum                                                               
mandatory  sentence  is  given  to anyone  who  murders  a  peace                                                               
officer. SB  45 is the compliment  to that law and  states that a                                                               
peace officer  should be held  to a higher standard  for "extreme                                                               
misconduct of this nature."                                                                                                     
                                                                                                                                
9:02:16 AM                                                                                                                    
MR.  GRAY   said  the  residents   in  the  region   have  almost                                                               
unanimously come forward to request this legislation.                                                                           
                                                                                                                                
SENATOR BUNDE  said the man was  sentenced to 99 years,  and this                                                               
is  what the  bill  asks for-without  judicial discretion--so  it                                                               
would not have changed the outcome of the trial.                                                                                
                                                                                                                                
MR. GRAY  said the bill will  have no effect on  what occurred in                                                               
Nome,  but  many  residents  requested  that  any  peace  officer                                                               
convicted of first degree murder face the maximum sentencing.                                                                   
                                                                                                                                
9:03:39 AM                                                                                                                    
WALT  MONEGAN, Commissioner,  Department of  Public Safety,  said                                                               
the law  may create  unintended consequences. He  said he  is not                                                               
concerned about the  punishment for a peace  officer who violates                                                               
the law, "but rather the way  it's currently worded." He spoke of                                                               
the  complicated  case of  an  officer  shooting a  suspect,  and                                                               
expressed concern about a defense or  a civil action. He said the                                                               
wording should  be worked  on. A police  officer, trained  in the                                                               
use of deadly  force, does not have the intent  to shoot to kill.                                                               
Officers are  trained to  shoot the center  mass, or  the biggest                                                               
portion of  the person, which  will most likely "stop  the fight"                                                               
or hit  the target. He noted  that a trooper or  officer is often                                                               
confronted with  imperfect information and  has to make  a split-                                                               
second  decision. It  is analyzed  later  in the  safety of  full                                                               
daylight, he stated.                                                                                                            
                                                                                                                                
9:07:13 AM                                                                                                                    
COMMISSIONER MONEGAN  said investigators  try to  understand what                                                               
the  officer  knew  at  the  time  to  determine  if  policy  was                                                               
violated. In cases  where other defendants are  brought to trial,                                                               
"I   could   see   it   being   complicated   by   some   defense                                                               
attorneys…citing that  ll.41.100, murder in  the first  degree. A                                                               
person commits  the crime of murder  if [there is] the  intent to                                                               
cause death of  another person." If someone pulls a  weapon on an                                                               
officer  who is  trained  to respond  by  hitting "center  mass",                                                               
there is a high likelihood to  cause death, he said. Officers and                                                               
troopers are trained to deploy two  rounds into the chest area of                                                               
an armed suspect, and if that  person is still standing, they are                                                               
trained to  shoot either  for the  head or  hips, and  that could                                                               
certainly be  viewed as  the intent  to cause  death. He  said he                                                               
understands  the spirit  of the  legislation,  and anyone  should                                                               
face the consequences of criminal acts,  but he would hate to see                                                               
the bill cause hesitation for officers who are "confronted."                                                                    
                                                                                                                                
9:09:39 AM                                                                                                                    
COMMISSIONER MONEGAN gave the example  of a man planning to shoot                                                               
his girlfriend in Anchorage. He  saw a man of similar description                                                               
and asked for identification. Commissioner  Monegan had been told                                                               
that the person  was a mental patient, a  convicted armed robber,                                                               
and had a  warrant out for sexual assault. The  man reached for a                                                               
handgun, and Commissioner Monegan went through a quick decision-                                                                
making process  on whether to shoot  the suspect or not.  He said                                                               
SB  45 may  create  another  decision to  be  made  in a  similar                                                               
situation,  and when  someone hesitates,  someone gets  hurts, he                                                               
opined. He asked  the committee to consider an  aggravator in the                                                               
bill,  so if  the individual  who commits  the crime  is a  peace                                                               
officer, "that  would be  added as  an aggravator  versus clearly                                                               
lining it out as it is now."                                                                                                    
                                                                                                                                
9:14:11 AM                                                                                                                    
CHAIR MCGUIRE said that is a  good point. State law requires that                                                               
a trial  for an aggravator  be a separate  trial, "but it  may be                                                               
warranted."                                                                                                                     
                                                                                                                                
MR.  GRAY  said Senator  Olson  does  not  want to  interfere  or                                                               
inhibit  the police  office. This  is a  different situation,  he                                                               
added, a predator situation.                                                                                                    
                                                                                                                                
9:15:03 AM                                                                                                                    
SENATOR  FRENCH   said  the  bill  is   interesting  and  touchy.                                                               
Currently a  police officer who commits  a murder faces 20  to 99                                                               
years in  jail, so the bill  "does not introduce a  new calculus,                                                               
it just  increases the severity of  it." He said he  didn't think                                                               
aggravators   properly  apply   to  unclassified   felonies.  The                                                               
sentence for  murder in the first  degree is 20 to  99 years with                                                               
or without  any aggravators, so  that is  not a "viable  out" for                                                               
the committee. He asked if there  is a difference between a peace                                                               
officer being "on  duty" or "being engaged in  the performance of                                                               
official duties."                                                                                                               
                                                                                                                                
MR. GRAY said  he doubts that a difference was  considered in the                                                               
drafting of the bill, and it is open for consideration.                                                                         
                                                                                                                                
9:17:29 AM                                                                                                                    
LORETTA BULLARD,  President, Kawerak, Inc, Nome,  said Kawerak is                                                               
a regional  non-profit corporation and  supports SB 45.  She said                                                               
the  entire community  was horrified  and  devastated when  Sonya                                                               
Ivanoff--a  beautiful,  vibrant  and promising  young  woman--was                                                               
murdered. When  a police  officer came  under suspicion,  she was                                                               
thankful that  the Alaska State  Troopers were called  in. During                                                               
sentencing there  were family  and friends  of the  defendant who                                                               
were  advocating for  the minimum  sentence. She  said there  was                                                               
much concern  that the offender  could get a short  jail sentence                                                               
with time off for good behavior  and early parole. People turn to                                                               
peace officers in times of need,  and the offender "failed in his                                                               
capacity as  a sworn police  officer and  as a human  being," she                                                               
said.  The bill  would ensure  that peace  officers convicted  of                                                               
first  degree murder  while  on duty  would  receive a  mandatory                                                               
sentence  of  99   years.  She  said  AS   33.19.90  removes  the                                                               
possibility  of  being  eligible  for  discretionary  parole  for                                                               
crimes listed in  AS 12.55.125; however, there  is no prohibition                                                               
against early release  for good behavior which could  result in a                                                               
reduction of  time served by  one third, and she  recommended the                                                               
language  be amended  to not  allow early  release. She  said she                                                               
provided  the committee  with resolutions  from  Kawerak and  the                                                               
Norton Sound Health Corporation board in support of SB 45.                                                                      
                                                                                                                                
9:20:41 AM                                                                                                                    
SENATOR BUNDE  asked if  an off-duty  officer witnesses  a crime,                                                               
does his  or her oath require  the officer to take  some official                                                               
action or act as an officer.                                                                                                    
                                                                                                                                
COMMISSIONER MONEGAN said yes, and  it is called "under the color                                                               
of authority". Taking some action is expected, he stated.                                                                       
                                                                                                                                
SENATOR BUNDE said that basically an officer is never off duty.                                                                 
                                                                                                                                
COMMISSIONER MONEGAN said  he believes in the intent  of the bill                                                               
because  police officers  are symbols  of  high standards.  There                                                               
should be screening in hiring, but  things can go awry. He stated                                                               
that  those  who   decide  to  violate  the  law   must  be  held                                                               
accountable, especially those in  positions of trust, like police                                                               
officers.  There  are two  different  issues,  and one  issue  is                                                               
"using your job to be a  predator, and that is totally criminal."                                                               
The  other  issue  is  if  the  law  could  cause  hesitation  or                                                               
confusion by  officers responding to  a situation. He  said there                                                               
is no criminal intent when  an officer responds with deadly force                                                               
to  defend themselves  or somebody  else.  The wording  of SB  45                                                               
could easily be interpreted "to be  that way." It would be better                                                               
to word the bill "in an aggravator sense."                                                                                      
                                                                                                                                
9:24:37 AM                                                                                                                    
SENATOR BUNDE  asked about cases  where other officers  have been                                                               
charged with murder in the line of duty.                                                                                        
                                                                                                                                
COMMISSIONER MONEGAN  said he cannot  think of any  in Anchorage.                                                               
He  said, "What  I'm anticipating  would be,  more so,  the civil                                                               
actions afterwards,"  like the case  of O.J. Simpson who  was not                                                               
convicted but  the power of law  was used in the  civil case. The                                                               
Anchorage police  department has  been sued for  taking someone's                                                               
life, he noted.  The bill could be used "to  confuse the issue on                                                               
other defendants that were taken into  custody if one of them had                                                               
been killed."  It opens up  more on the  civil side, but  that is                                                               
his  intuitive  feeling, he  said.  He  stated that  his  biggest                                                               
concern is the hesitation that might  occur to an officer who has                                                               
to choose to  use deadly force. This  bill may be in  the back of                                                               
their minds, he said.                                                                                                           
                                                                                                                                
9:27:15 AM                                                                                                                    
CHAIR MCGUIRE asked  about any police officer  being charged with                                                               
murder in such  circumstances, and she said it  wouldn't be first                                                               
degree murder but second degree  murder or manslaughter. Officers                                                               
are  taught to  stop the  suspect from  moving forward,  and that                                                               
does not constitute first degree murder.                                                                                        
                                                                                                                                
9:28:21 AM                                                                                                                    
RICK  SVOBODNY,   Chief  Assistant  Attorney   General,  Criminal                                                               
Division, Department of  Law, said he prosecuted  the offender in                                                               
the Nome  case, and the man  is the only police  office in Alaska                                                               
ever charged with murder in the  first or second degree. It was a                                                               
unique case.  He said the state  would always have to  prove that                                                               
the  officer acted  with  the  intent to  kill.  Looking at  self                                                               
defense  and  other  types  of   justification  makes  it  highly                                                               
unlikely that a police officer  would ever be charged with murder                                                               
in the  first or second degree  if responding to a  situation. An                                                               
officer  acting  with  wanton   disregard,  like  shooting  at  a                                                               
shoplifter in a crowded mall  and killing someone, may be charged                                                               
with manslaughter.                                                                                                              
                                                                                                                                
9:30:26 AM                                                                                                                    
SENATOR GREEN asked if the  expectations for peace officers would                                                               
be the same whether they are on or off duty.                                                                                    
                                                                                                                                
MR. SVOBODNY said that what happened  in Nome is the officer used                                                               
his authority to  get a 19-year-old girl into his  patrol car and                                                               
into "a  situation where he  could ultimately kill her."  The way                                                               
the  bill is  drafted now,  it would  apply, for  example, to  an                                                               
officer  who was  on  duty and  had  a fight  with  his wife  and                                                               
intentionally killed her,  even though he did not  use his police                                                               
authority to  do so. "I  think that  the language about  being on                                                               
duty needs to be tightened up a little bit."                                                                                    
                                                                                                                                
9:32:08 AM                                                                                                                    
CHAIR MCGUIRE noted  that an officer could be off  duty and still                                                               
use the color of authority to  commit such a crime, "and it would                                                               
be equally as offensive." She asked for better language.                                                                        
                                                                                                                                
MR. SVOBODNY said  the language the chair just used  may be good:                                                               
"use of the color of his authority."                                                                                            
                                                                                                                                
9:32:42 AM                                                                                                                    
SENATOR  FRENCH asked  if it  was proved  that the  Nome incident                                                               
took place while the man was on duty.                                                                                           
                                                                                                                                
MR. SVOBODNY said, yes he was on duty.                                                                                          
                                                                                                                                
9:33:17 AM                                                                                                                    
SENATOR  STEVENS  said  it  was  a terrible  case  and  the  only                                                               
incidence of its  type in Alaska. He asked about  such a predator                                                               
being hired  and suggested that  weeding out predators "is  a big                                                               
issue as well."                                                                                                                 
                                                                                                                                
COMMISSIONER MONEGAN said  it depends on how  strict a department                                                               
is on  following their own  guidelines for background  checks and                                                               
other  screening. He  said his  profession tries  to do  the best                                                               
possible job, but some issues,  especially deviant sexuality, are                                                               
buried  and  undisclosed.  He  said   it  takes  persistence  and                                                               
thorough background checks.                                                                                                     
                                                                                                                                
9:34:56 AM                                                                                                                    
SENATOR STEVENS said is sounds  like there were several incidents                                                               
prior to  the murder in  which girls  were taken into  the police                                                               
car. "How can  we do a better  job to make sure  that people like                                                               
this are not in uniform?"                                                                                                       
                                                                                                                                
COMMISSIONER  MONEGAN said  he agrees  and assumes  Nome has  now                                                               
looked  at their  screening process.  He spoke  of a  case of  an                                                               
officer  having  pornography  on  his computer  where  there  was                                                               
nothing  in  his  background  that would  have  disclosed  it.  A                                                               
person's latent  tendencies can  come out  after being  hired, he                                                               
said. He  asked if SB  45 could  place the following  language on                                                               
page 2, line  9: the defendant is a peace  officer who acted with                                                               
criminal intent and  under the color of authority at  the time of                                                               
the murder.  He said  that would  separate incidents  of criminal                                                               
intent from deployment of deadly force without criminal intent.                                                                 
                                                                                                                                
9:37:42 AM                                                                                                                    
MR. SVOBODNY  said this is  a sentencing provision,  and culpable                                                               
mental  states--intent to  kill  the person--would  be under  the                                                               
charging provisions. He  thinks the language of  acting under the                                                               
color  of  authority  is  good,  but he  does  not  know  of  any                                                               
sentencing provision that provides for  a person's state of mind.                                                               
"I  think we  can work  out  language that  covers what  everyone                                                               
wants," he stated.                                                                                                              
                                                                                                                                
9:38:41 AM                                                                                                                    
CHAIR  MCGUIRE   said  she  understands   Commissioner  Monegan's                                                               
concern  with the  public  relations issue.  "You  don't want  an                                                               
officer to have  one more thing to think about  to hesitate." The                                                               
language needs  to be  clear that  it is for  the abuse  of one's                                                               
color of authority, she stated.                                                                                                 
                                                                                                                                
SENATOR STEVENS  asked when a  police officer is ever  not acting                                                               
under the color of authority.  "People would always be aware this                                                               
person was a police officer whether he's in uniform or not."                                                                    
                                                                                                                                
9:39:52 AM                                                                                                                    
MR. SVOBODNY noted the example he  gave of an officer on duty who                                                               
killed  his wife  in a  domestic dispute  but was  not using  the                                                               
authority of his position to do so.                                                                                             
                                                                                                                                
SENATOR STEVENS  said everyone  in Nome knew  the offender  was a                                                               
police officer.                                                                                                                 
                                                                                                                                
SENATOR FRENCH  suggested the following language:  "the defendant                                                               
is  a  peace officer  who  acts  contrary to  established  police                                                               
practices  and  under  color  of  the authority  of  his  or  her                                                               
position to commit the murder."                                                                                                 
                                                                                                                                
9:41:21 AM                                                                                                                    
COMMISSIONER  MONEGAN  said something  like  that  would work  or                                                               
"anything  like that  that  clearly says  the  officer is  acting                                                               
within their scope of duties…versus totally outside the law."                                                                   
                                                                                                                                
9:41:49 AM                                                                                                                    
CHAIR  MCGUIRE said  the  committee  is all  headed  in the  same                                                               
direction.                                                                                                                      
                                                                                                                                
GAIL  SHUBERT,  Executive  Vice President  and  General  Council,                                                               
Bering Straits Native  Corporation, said her niece  is married to                                                               
Sonya Ivanoff's  brother. Ms.  Ivanoff was in  her prime  and was                                                               
well-liked,  and  the  Bering  Straits   board  took  her  murder                                                               
seriously and adopted the first  resolution in support of what it                                                               
called the Sonya Ivanoff law. One  of the fundamental duties of a                                                               
law enforcement officer  is to protect the  community and respect                                                               
constitutional  rights. She  said  that the  board believes  that                                                               
peace officers should be held  to a higher standard. The incident                                                               
set a tidal wave of distrust  of law enforcement officers and the                                                               
judicial system  through the Native community  of western Alaska.                                                               
She noted that the prosecutor  in the trial, Mr. Svobodny, opined                                                               
that  murder  by an  officer  on  duty  should mandate  the  same                                                               
sentence--99  years--that  is  imposed  on a  person  killing  an                                                               
officer  on  duty. The  presiding  judge  agreed and  "thankfully                                                               
imposed the  maximum sentence of  99 years." She  highlighted the                                                               
fact that  SB 45 only  relates to  an officer convicted  of first                                                               
degree murder, "and  presumably that police officer  would have a                                                               
jury of 12 who would hear  the facts and circumstances and decide                                                               
whether, in  fact, murder in  the first degree is  an appropriate                                                               
conviction." Ms. Shubert  requested that the law  be entitled the                                                               
Sonya Ivanoff law.                                                                                                              
                                                                                                                                
9:46:05 AM                                                                                                                    
CHAIR MCGUIRE  spoke of  how awful  and gut-wrenching  the murder                                                               
was and how the people in  Nome felt abandoned. "We will get some                                                               
version of this  bill through." She said it was  good the justice                                                               
system did  respond in this case  and give the officer  a 99-year                                                               
sentence. This bill  will insure the same sentence  every time an                                                               
officer uses the color of authority to commit murder, she said.                                                                 
                                                                                                                                
SENATOR  BUNDE  asked if  anyone  in  the position  of  authority                                                               
should be brought under this, including teachers and clergy.                                                                    
                                                                                                                                
CHAIR MCGUIRE said  it is not a  bad idea. SB 45  will be brought                                                               
up on Tuesday "with an eye toward the amendments."                                                                              
                                                                                                                                
9:48:33 AM                                                                                                                    
                                                                                                                                
                SB  25-STATE PLANNING AND BUDGET                                                                            
                                                                                                                                
CHAIR MCGUIRE announced the consideration of SB 25.                                                                             
                                                                                                                                
SENATOR FRED  DYSON, Alaska  State Legislature,  introduced Lucky                                                               
Shultz. He  said all  of the  members have  discussed what  to do                                                               
regarding  a state  financial  plan,  and SB  25  is largely  Mr.                                                               
Shultz's work.  This bill asks  that the administration  reveal a                                                               
25-year plan for Alaska's financial affairs.                                                                                    
                                                                                                                                
9:50:43 AM                                                                                                                    
LUCKY SHULTZ, staff to Senator Dyson,  said SB 25 does not make a                                                               
plan but  asks the  governor to  create a  25-year plan.  He said                                                               
that  across  the  nation  more  people want  to  know  what  our                                                               
government  is  doing  "and  how  we're going  to  take  care  of                                                               
issues." He  noted that he  has helped corporations  put together                                                               
strategic plans, and  many times those plans  were not successful                                                               
"because  we didn't  know what  we were  doing and  what we  were                                                               
looking for in  the future." For the past couple  of years he has                                                               
heard  many Alaskans  ask what  the state's  long range  plan is.                                                               
"And  my response  has  to  be, either  we're  not  very good  at                                                               
communicating what  our long  range plan  is or  we don't  have a                                                               
long range plan." This bill  would require the governor to report                                                               
the  key elements  of  a  long range  plan,  including costs  and                                                               
revenues. He quoted the retired  publisher of the Ketchikan Daily                                                               
News, saying  Alaskans need  a plan. He  said Medicaid  costs are                                                               
rising, and there will be  huge shortfalls in retirement benefits                                                               
nationwide. He  said the retirement/health care  plans alone will                                                               
cost a trillion dollars across the  country. He said that half of                                                               
the  500  biggest  companies  will  lose  half  of  their  senior                                                               
managers in five  years. Civil service will  have trouble finding                                                               
people to run the government, he noted.                                                                                         
                                                                                                                                
9:53:45 AM                                                                                                                    
MR. SHULTZ said the European  commission has an energy efficiency                                                               
action plan  to reduce energy  consumption by 20  percent. Brazil                                                               
has an  80-year plan, Bp  has a  50-year plan, and  many Japanese                                                               
companies  have 100-year  plans.  He showed  a  chart called  the                                                               
gully  chart of  Alaska's declining  oil and  gas revenue.  A gas                                                               
pipeline will likely take 10  years before providing revenue. The                                                               
Alaska  Department of  Natural Resources  (DNR) provided  a chart                                                               
showing  a decline  in oil  production and  revenue. He  spoke of                                                               
Medicaid costs by  the year 2015, "all of a  sudden seniors start                                                               
escalating." He said,  in 2018, seniors "surpass  spending of any                                                               
other age  group in  Alaska." The population  is aging.  He noted                                                               
that, "for the first time  in recent history," elderly people are                                                               
moving  to  Alaska. He  said  they  are  doing so  for  different                                                               
reasons including: to be with  their children; because Alaska has                                                               
better  road  infrastructure  now;  and "partly  because  of  the                                                               
hospitals  and   partly  because  of  entertainment."   Costs  of                                                               
Medicaid are  going up, he  noted. Alaska's share of  Medicaid is                                                               
going to go from $350 million  to over $2 billion by 2025 because                                                               
of  the growing  number of  seniors, the  fact that  seniors have                                                               
higher costs for  Medicaid, Medicaid costs are going  up, and the                                                               
federal government is reducing their share of Medicaid.                                                                         
                                                                                                                                
9:57:23 AM                                                                                                                    
MR. SHULTZ said  the state needs to look ahead.  By 2025 the fy08                                                               
budget  allocation  for  health  takes  up  almost  half  of  all                                                               
allocations, he  said, and if  money for education is  added, all                                                               
the other departments  are squeezed even more. "How  are we going                                                               
to balance our budget when  education and health are consuming so                                                               
much of  the budget?" he  asked. He  estimated there will  be $10                                                               
billion needed  for unfunded  liabilities of  Alaska's retirement                                                               
systems.  He  said  Alaska  now  has  $950  million  in  deferred                                                               
maintenance,  and the  University  of Alaska  is  asking for  $67                                                               
million per year  for the next several years  to address deferred                                                               
maintenance, "so,  again, the  question is, how  are we  going to                                                               
handle it?"  SB 25 asks  the governor for the  projected revenues                                                               
by source  and expenditures  for the  next 25  years and  how the                                                               
budget  will be  balanced. He  said Medicaid  is just  one little                                                               
element.  Mr. Shultz  asked what  happens  when expenditures  are                                                               
projected to  exceed revenues. He noted  that the gas line  is at                                                               
least ten  years away,  and the chart  shows that  Alaska already                                                               
has a  problem. What happens  if the revenue, like  the petroleum                                                               
tax, is forestalled a year?  He told the committee that Venezuela                                                               
and Brazil are planning a  7,700-mile natural gas pipeline across                                                               
South America,  more than  twice the  size of  Alaska's potential                                                               
pipeline. A shortage of steel and  welders could be a problem for                                                               
Alaska.  The bill  asks  for  a debt  analysis;  growing debt  is                                                               
serviced out of the general  fund. "What is [the governor's] plan                                                               
for   managing  that   debt?   What's   the  strategy?   Unfunded                                                               
liabilities-how  much  per  year?  Are we  going  to  do  several                                                               
hundred million dollar contributions every year? Don't know."                                                                   
                                                                                                                                
10:01:23 AM                                                                                                                   
MR. SHULTZ  asked what actions  the legislature should  take, and                                                               
by when, to  make the governor's plan work. The  bill will become                                                               
effective on  July 1,  so the information  will be  required next                                                               
January. "It will take at  least that long, and perhaps longer…to                                                               
get the information  that I'm looking for in this  bill." He said                                                               
that the legislature is facing  unprecedented fiscal pressures as                                                               
legislatures do everywhere, and "the time for action is now."                                                                   
                                                                                                                                
10:02:03 AM                                                                                                                   
SENATOR BUNDE said the Department of  Labor has a chart of Alaska                                                               
demographics showing the  smallest cohort will be  30 to 50-year-                                                               
old  workers.  He  asked  the  chart to  be  incorporated  as  it                                                               
indicates another salient factor in the need to plan ahead.                                                                     
                                                                                                                                
10:02:45 AM                                                                                                                   
SENATOR  FRENCH said  the  bill  is a  great  idea that  deserves                                                               
thought, but he asked how  the governor can realistically project                                                               
beyond  his or  her  administration.  "How do  you  get a  report                                                               
that's…worth  the  paper  it's  printed  on  when  the  political                                                               
landscape changes every four years?"  Income can be projected but                                                               
expenditures are politically driven, he stated.                                                                                 
                                                                                                                                
MR. SHULTZ  said no one can  know costs and revenue  in 25 years.                                                               
His   hope  is   to  institutionalize   a  presentation   to  the                                                               
legislature  every January.  If a  new governor  plans to  change                                                               
everything,  "part of  this  bill  says your  going  tell us  the                                                               
assumptions  that  you're  basing   these  projections  on."  The                                                               
legislature can challenge those assumptions  or not, he said. The                                                               
state can't  just look at next  year and hope for  the best after                                                               
that. Currently the governor is  required to give the legislature                                                               
a budget for  one year, "and when we're looking  at things like a                                                               
gas  pipeline and  [petroleum production  tax]  that impacts  the                                                               
state for 20,  30, or 50 years  into the future, we  need to have                                                               
the  full picture…to  make informed  decisions."  If an  incoming                                                               
administration  changes  things,  the  legislature  can  disagree                                                               
during the January briefing sessions, he stated.                                                                                
                                                                                                                                
10:05:23 AM                                                                                                                   
SENATOR DYSON  said economics is  not a dismal science  and there                                                               
are  good tools  for analyzing.  He said  that the  Department of                                                               
Revenue   has    always   overestimated   oil    production   and                                                               
underestimated  oil  prices.  There  are  patterns  to  see  when                                                               
looking  back.  The  legislature   will  be  asking  the  current                                                               
governor  if   her  budget  is   sustainable  at   predicted  oil                                                               
production  and  prices. He  surmised  that  it is  probably  not                                                               
sustainable, so the  legislature needs to ask for a  plan of what                                                               
to do until the next sugar  daddy shows up. This bill should help                                                               
get away from  the past strategies of hope or  hide. He explained                                                               
the hope  strategy as a  fairy godmother rescuing the  state from                                                               
its financial irresponsibility.  He said "all of  us" are getting                                                               
more  cynical   about  "miraculous  deliverances  from   our  own                                                               
irresponsibilities." The other strategy is  to hide the impending                                                               
problems  by spending  the money  that is  political popular  and                                                               
letting the  next administration  face "the  stinky stuff  in the                                                               
closet." He  said problems will  not be  hidden under SB  25, and                                                               
the legislature and  governor have to answer the  question of how                                                               
the state is going to pay for expenditures.                                                                                     
                                                                                                                                
10:08:41 AM                                                                                                                   
SENATOR  STEVENS   said  the   information  will   be  enormously                                                               
valuable, but it seems very costly.                                                                                             
                                                                                                                                
MR. SHULTZ  said he is  not going to come  up with the  cost, but                                                               
the departments are  looking at it. Some departments  will say it                                                               
is  not a  big deal.  He said  he thinks  it will  take at  least                                                               
another  full-time  position.  "You're  making  decisions  for  a                                                               
pipeline  into  several  years  in the  future  at  billions  and                                                               
billions of  dollars; I think  you need good information  to make                                                               
that decision."                                                                                                                 
                                                                                                                                
10:10:08 AM                                                                                                                   
SENATOR BUNDE concurs  with Senator French that this  might be an                                                               
exercise  in   smoke  and  mirrors.   There  is  some   value  in                                                               
legislators receiving  the information  but better value  for the                                                               
public  to  receive  it.  He  said Alaskans  have  a  variety  of                                                               
opinions  but the  one thing  he has  heard consistently  is that                                                               
there is  too much state spending.  The public has to  be part of                                                               
the solution;  the public demands  the spending and the  pork, he                                                               
stated. People  are pandering to  self interest and they  have to                                                               
understand there are long-term consequences.  He said it has been                                                               
an Alaska tradition  since the gold rush days, to  "come here and                                                               
make your stake and get out."                                                                                                   
                                                                                                                                
10:12:20 AM                                                                                                                   
JACK KREINHEDER, Chief Analyst,  Office of Management and Budget,                                                               
said   the  Palin   administration   supports  long-term   fiscal                                                               
planning,  which  ties in  with  her  2008 budget  proposal.  Key                                                               
elements  of the  budget are  to spend  less, control  government                                                               
growth,  save surpluses,  and live  within the  state's means  by                                                               
keeping the FY08 budget in  line with projected revenues. He said                                                               
a document created from  SB 25 needs to be worth  the paper it is                                                               
printed on and not an exercise  that sits on the shelf collecting                                                               
dust. He  noted that  OMB has been  involved in  long-term fiscal                                                               
planning exercises  over the years  since the mid 1980s  when oil                                                               
prices took a  sharp downturn. The work needs to  be done, but is                                                               
it the best use of staff time and expense? he asked.                                                                            
                                                                                                                                
10:15:33 AM                                                                                                                   
MR. KREINHEDER  said the gully  chart of long-range  spending and                                                               
revenue  through 2020  highlights  the fact  that Alaska's  long-                                                               
range finances  can be  captured in one  chart. He  suggested the                                                               
state  doesn't  need  a  several hundred  page  report  that  the                                                               
legislature may not have time  to read. More targeted information                                                               
may be a  better use of everyone's time. A  25-year time frame is                                                               
better than 100 years, because  looking into the future is risky;                                                               
the one  guarantee is that  it will be  wrong. He said  the gully                                                               
chart looked  forward 13 years,  which is a more  reasonable, and                                                               
the added value of projecting 25 years may be minimal.                                                                          
                                                                                                                                
CHAIR MCGUIRE asked what time frame he would suggest.                                                                           
                                                                                                                                
10:18:16 AM                                                                                                                   
MR.  KREINHEDER said  perhaps 15  years. Once  a projection  gets                                                               
beyond 10 or  15 years its value declines, and  the line tends to                                                               
straighten out  at that  point. The  fiscal note  recognizes that                                                               
this  is not  a trivial  amount of  work and  would require  some                                                               
additional  staff. The  work involved  is tough  to project,  and                                                               
that is  why Mr.  Kreinheder provided  an indeterminate  note. He                                                               
said  OMB  would need  at  least  one  new  position, but  it  is                                                               
difficult to know what other  departments will need. The big jobs                                                               
would be  the Medicaid projections  for the Department  of Health                                                               
and  Social  Services,   enrollment  and  educational  foundation                                                               
formula  projections  for  the   Department  of  Educations,  and                                                               
projections for  public facilities,  which will affect  six other                                                               
departments.  He  said he  has  heard  some concerns  from  other                                                               
departments  regarding  the  work  that  will  be  required.  His                                                               
concern  is figuring  out the  most effective  use of  everyone's                                                               
time and recognizing that large reports don't get read.                                                                         
                                                                                                                                
10:21:24 AM                                                                                                                   
MR. KREINHEDER said  the gully chart showed the  challenge of the                                                               
next 10 to 15  years until a gas line can  be built. The governor                                                               
is  committed to  getting  it  built. The  gully  chart is  still                                                               
accurate  and the  gap of  declining oil  production needs  to be                                                               
bridged until the gas line  is operating. He told the legislature                                                               
that it was important to keep  the lid on spending, not spend the                                                               
state's  surplus,  and  extend the  life  of  the  constitutional                                                               
budget reserve  "so that  as oil production  does drop  off those                                                               
funds would be available to help balance the budget.                                                                            
                                                                                                                                
10:22:51 AM                                                                                                                   
SENATOR BUNDE spoke  of an unsustainable amount  of state funding                                                               
that will put the state in  "deficit mode" in two to three years.                                                               
The state  will have to  start living off  of the savings  in the                                                               
constitutional budget  reserve. He said Senator  Dyson called the                                                               
governor's budget  transitional, and no  one believes it  will be                                                               
as small as  the governor has projected. "Most  people think that                                                               
the $150  million in savings  will be very difficult  to achieve,                                                               
even if  we achieve  that, this year's  projected budget  goes up                                                               
$600 million over  last year." The tail begins to  wag the dog if                                                               
that is the  case, he said. If the gully  happens, the state will                                                               
have to  live off savings,  and "the  wisdom of putting  money in                                                               
the corpus  of the permanent  fund, where it will  be unavailable                                                               
to help bridge this gap, has to come into question."                                                                            
                                                                                                                                
10:24:37 AM                                                                                                                   
CHAIR MCGUIRE said  this bill is more appropriate  in the finance                                                               
committee,  and  she would  like  to  move  it. She  asked  about                                                               
reducing the projection to 15 years.                                                                                            
                                                                                                                                
SENATOR DYSON said  the value and credibility  does decrease over                                                               
time,  but it  is  still valuable.  Each year  the  work will  be                                                               
diminished. He  said he is not  wedded to 25 years,  but 15 years                                                               
would be  the absolute minimum.  Senator Green always  asks, "Why                                                               
would you  do that?" This kind  of information will make  "all of                                                               
us  ask the  question: why  would  we do  that? Why  would we  be                                                               
building  expectations that  are  not sustainable?"  he said.  He                                                               
stated that there  is good expertise in  legislative finance that                                                               
will challenge all of the legislature's actions.                                                                                
                                                                                                                                
10:26:50 AM                                                                                                                   
CHAIR  MCGUIRE moved  Amendment 1.  "Wherever the  number 25  is,                                                               
that it  be stricken and replaced  with the number 15."  She said                                                               
it is a  starting point, and she respects OMB's  opinion that the                                                               
value wavers beyond that time frame.                                                                                            
                                                                                                                                
SENATOR GREEN  said page  4 speaks of  a six-year  increment, and                                                               
she  asked if  that needs  to be  changed to  fifteen. She  noted                                                               
there is an additional six years on page 4, line 4.                                                                             
                                                                                                                                
MR.  SHULTZ said  no,  that is  the original  six  years that  is                                                               
already in statute for where the sources are.                                                                                   
                                                                                                                                
10:28:49 AM                                                                                                                   
Hearing no objections, Amendment 1 carried.                                                                                     
                                                                                                                                
SENATOR BUNDE SENATOR moved SB 25, as amended, from committee                                                                   
with individual recommendations and attached fiscal note(s).                                                                    
There being no objection, CSSB 25(STA) passed out of committee.                                                                 
                                                                                                                                
10:29:14 AM                                                                                                                   
CHAIR MCGUIRE adjourned the Senate State Affairs meeting at                                                                     
10:29 a.m.                                                                                                                      
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