HOUSE FINANCE COMMITTEE April 29, 1999 3:40 P.M. TAPE HFC 99 - 114, Side 1 TAPE HFC 99 - 114, Side 2 CALL TO ORDER Co-Chair Therriault called the House Finance Committee meeting to order at 3:40 p.m. PRESENT Co-Chair Therriault Representative Foster Co-Chair Mulder Representative Grussendorf Vice-Chair Bunde Representative Kohring Representative Austerman Representative Moses Representative J. Davies Representative Williams Representative G. Davis ALSO PRESENT Representative Jerry Sanders, Sponsor; Mike Pauley, Staff, Senator Leman; Robert Buttcane, Youth Corrections, Department of Health and Social Services; James Kenworthy, PhD., Executive Director, Alaska Science and Technology Foundation, Department of Commerce and Economic Development; Harold Holton, Representative, Seafarers International Union, Anchorage; Nanci Jones, Director, Alaska Permanent Dividend Division, Department of Revenue; Deborah Vogt, Deputy Commissioner, Department of Revenue. TESTIFIED VIA THE TELECONFERENCE NETWORK John Glenn, Seaman, Anchorage; Eden Latta, Merchant Marine, Anchorage; Joy Tucker, Anchorage. SUMMARY HB 34 "An Act relating to the crime of misprision of a crime against a child." HB 34 was HELD in Committee for further consideration. HB 40 "An Act combining parts of the Department of Commerce and Economic Development and parts of the Department of Community and Regional Affairs by transferring some of their duties to a new Department of Commerce and Rural Development; transferring some of the duties of the Department of Commerce and Economic Development and the Department of Community and Regional Affairs to other existing agencies; eliminating the Department of Commerce and Economic Development and the Department of Community and Regional Affairs; relating to the Department of Commerce and Rural Development and the commissioner of commerce and rural development; adjusting the membership of certain multi- member bodies to reflect the transfer of duties among departments and the elimination of departments; creating the office of international trade and relating to its duties; and providing for an effective date." HB 40 was HELD in Committee for further consideration. HB 157 "An Act relating to absences from the state while serving on oceangoing vessels of the United States merchant marine for purposes of eligibility for permanent fund dividends; and providing for an effective date." HB 157 was REPORTED out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Revenue dated 4/16/99. HB 209 "An Act amending the size of grants for which the Alaska Science and Technology Foundation must allocate at least 50 percent of endowment income and amending the maximum amount of the grant that the Alaska Science and Technology Foundation may award for development of the Kodiak launch complex and Fairbanks satellite ground station space park; and providing for an effective date." HB 209 was REPORTED out of Committee with "no recommendation" and a zero fiscal note by the Department of Commerce and Economic Development. CSSB 27(FIN) "An Act relating to school records and driver license records of certain children." CSSB 27 (FIN) was REPORTED out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Administration dated 2/25/99; and a fiscal impact note by the Department of Education dated 2/25/99. HOUSE BILL NO. 40 "An Act combining parts of the Department of Commerce and Economic Development and parts of the Department of Community and Regional Affairs by transferring some of their duties to a new Department of Commerce and Rural Development; transferring some of the duties of the Department of Commerce and Economic Development and the Department of Community and Regional Affairs to other existing agencies; eliminating the Department of Commerce and Economic Development and the Department of Community and Regional Affairs; relating to the Department of Commerce and Rural Development and the commissioner of commerce and rural development; adjusting the membership of certain multi- member bodies to reflect the transfer of duties among departments and the elimination of departments; creating the office of international trade and relating to its duties; and providing for an effective date." Co-Chair Therriault provided members with a proposed committee substitute, 1-LS0056\K, Lauterbach, 4/28/99 (copy on file). HB 40 was HELD in Committee for further consideration. HOUSE BILL NO. 34 "An Act relating to the crime of misprision of a crime against a child." Co-Chair Therriault noted that the Committee's previous action in adopting Amendment 1 resulted in unanticipated results. He noted that Representative Dyson would work with legal counsel to iron out any problems. HB 34 was HELD in Committee for further consideration. CS FOR SENATE BILL NO. 27(FIN) "An Act relating to school records and driver license records of certain children." MIKE PAULEY, STAFF, SENATOR LEMAN testified in support of SB 27. SB 27 ensures parents will have access to important records about their minor children, and also requires school districts to share information with other districts about potentially dangerous transfer students. The motivation behind this legislation stems from a call Senator Leman received last year from a constituent in Anchorage. This woman had contacted the Division of Motor Vehicles (DMV) to check on her teen daughter's driving record - because she suspected her child was driving with a suspended license. She was astonished when the DMV told her that her daughter's driving record was private and confidential - and even a parent did not have a right to know this information! Most people are aware of the responsibilities parents take upon their shoulders once their child receives a license. A parent must give consent before the license is issued, and then the law holds the parent responsible for any damage caused by negligence or willful misconduct while the child is operating a vehicle. Yet the same law denies parents any right to check and see if their son or daughter is driving safely! We believe this provision of the law was probably unintentional. There is a provision in our statutes that requires all drivers' records to be kept "confidential and private." This is obviously a needed protection for adults, but it makes no sense in the context of the parent-child relationship. The current law provides an exception that allows law enforcement personnel to have access to the information. But there is no such exception for parents. Senate Bill 27 corrects this problem. It will allow parental access to a driving record that includes accident reports and also any convictions for vehicle, driver or traffic offenses. We understand from DMV that the number of times they have to turn down parents who request this information is relatively rare - apparently it happens fewer than ten times a year. However, on those few occasions we understand it can be highly unpleasant for the DMV employee involved, and obviously frustrating for the parent. Mr. Chairman, in addition to access to driving records, SB 27 includes a provision guaranteeing parental access to school records. When we set out to write this bill, we also considered whether there were any other records to which a parent should have access. Of course, school records immediately came to mind. Therefore, we asked the drafting attorney to review state statutes and determine whether there was any provision that guaranteed parents the right to access their children's school records. We were surprised to learn there is no such law. We did find a statute (AS 25.20.130), that guarantees a non-custodial parent the same access to school records that is allowed for custodial parents. But nowhere does the law define what access rights a custodial parent has, or what rights parents in general have! Therefore, we have added in Section 1 of this bill a provision that also guarantees parental access to school records of a child under 18. We believe this adds clarity to our statutes. It will also help ensure that no school in Alaska becomes ineligible to receive federal funding, because there is a federal law (20 USC 1232g) that denies funding to any educational agency or institution that does not allow parental access to children's school records. In light of this, we believe it is only prudent to state clearly in our statutes that parents have a right to this information. Finally, there is a third provision of this legislation that deals with the transfer of student record information. This provision, which is found in Section 2 of the legislation before you, requires school districts to transfer certain information about a child who moves from one school district to another. If the student has committed an offense that is punishable as a felony, or if the student has committed any offense involving the use of a deadly weapon, this information must be included in the student record information that follows the child from one district to another. We believe this is a very useful amendment that will help school districts protect their students from potentially dangerous young offenders. Vice-Chair Bunde referred to page 2, line 19. "The department may refuse to release the driver's address to the parent or guardian if the department determines that the release of the driver's address poses a threat to the health or safety of the driver." He questioned how the department would know and if the department would be reliable for the release. Mr. Pauley noted that the addition was at the request of the Council on Domestic Violence and the Department of Public Safety. The intent was to address the concern that a non-custodial parent with a history of domestic violence could request the information. He noted that their concerns were satisfied by the absence of the address. He observed that the language is permissive. The department has the discretion to deny the information. Co-Chair Therriault observed that the department would set up a process through regulation that would allow the custodial parent to request that the information be withheld. Representative Grussendorf asked where the burden of proof rests. Mr. Pauley stated that the burden of proof issue was not addressed. He anticipated that the Division of Motor Vehicles and school districts would make individual policy. He stressed that the intent is to create the right in statute. He observed that there is discretion in how the information is provided. Representative J. Davies noted that flagging records seems to be limited to missing children. Mr. Pauley agreed and added that the flag would trigger an alert and the Department of Public Safety would be notified. ROBERT BUTTCANE, YOUTH CORRECTIONS, DEPARTMENT OF HEALTH AND SOCIAL SERVICES testified in support of SB 27. He referred to section 2 on page 2, line 9. He observed that the department attempts to cooperate with schools districts. The department notifies schools of issues of delinquencies that raise concerns for the safety of students and staff. He maintained that the system is working fairly well and that schools are being notified. However, records are not always transferred with students that relocate. He observed that the legislation corrects this by requiring schools to make sure that safety alert information (specifically as it relates to felony or weapons offenses) is transferred from one school to the next. Vice-Chair Bunde asked if there were comments from the Division of Motor Vehicles regarding their ability to release or not release information under section 3. Mr. Pauley stated that the Division has not commented on section 3. He clarified that they have shown support for the ability to disclose information to the parents. The Department of Public Safety supports the language. Representative Foster MOVED to report CSSB 27 (FIN) out of Committee with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CSSB 27 (FIN) was REPORTED out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Administration dated 2/25/99; and a fiscal impact note by the Department of Education dated 2/25/99. HOUSE BILL NO. 209 "An Act amending the size of grants for which the Alaska Science and Technology Foundation must allocate at least 50 percent of endowment income and amending the maximum amount of the grant that the Alaska Science and Technology Foundation may award for development of the Kodiak launch complex and Fairbanks satellite ground station space park; and providing for an effective date." JAMES KENWORTHY, PHD, EXECUTIVE DIRECTOR, ALASKA SCIENCE AND TECHNOLOGY FOUNDATION, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT testified in support of HB 209. He explained that the legislation would make changes to AS 37.17, which governs the Alaska Science and Technology Foundation (ASTF). It raises the amount of funds that ASTF can spend on projects that are more than $100 thousand dollars. Current statutes require that 50 percent of ASTF grants be for projects under $100 thousand dollars. The legislation would increase the number of projects over $100 thousand dollars by changing $100 to $250 thousand dollars. He emphasized that large and small projects do not crowd each other out. Projects are funded based on their ability to meet technical and economic criteria. They are not funded based on size. The second change to the statute would allow ASTF to fund the $5 million dollars in construction costs needed to complete the Kodiak Launch Complex. He noted that ASTF has agreed to complete the capital cost of the Kodiak Launch Complex. Their current statute only allows them to spend up to $5 million dollars. Statutory authorization for $11 million dollars is needed. Representative Austerman noted that the complex must be completed before newly acquired private launches can take place. He spoke in support of the legislation. Representative J. Davies MOVED to report out of Committee with the accompanying fiscal note. Mr. Kenworthy noted that there would be no general fund impact. The funding would come from endowment earnings. He noted that there were extra high earnings this year as a result of the performance of the permanent fund. Vice-Chair Bunde pointed out that the funding is technically general funds. There being NO OBJECTION, HB 209 was reported out of Committee. HB 209 was REPORTED out of Committee with "no recommendation" and a zero fiscal note by the Department of Commerce and Economic Development. HOUSE BILL NO. 157 "An Act relating to absences from the state while serving on oceangoing vessels of the United States merchant marine for purposes of eligibility for permanent fund dividends; and providing for an effective date." REPRESENTATIVE JERRY SANDERS, SPONSOR spoke in support of HB 157. He noted that there are several merchant mariners in Alaska who do not receive the permanent fund dividend even though they live and maintain a residence in Alaska. He gave examples of mariners who live in Alaska. He noted that the number of people that the bill would affect is small. Representative J. Davies questioned why Peace Corps volunteers were not included. Representative Sanders responded that the intent was to keep the legislation narrow to increase its chances of passage. Representative Austerman expressed support for the legislation but questioned the number of permanent fund dividend exceptions. He asked if a merchant marine serves on a vessel that does not dock in Alaska if they would receive the permanent fund dividend. HAROLD HOLTON, REPRESENTATIVE, SEAFARERS INTERNATIONAL UNION, ANCHORAGE stated that if a merchant marine sailed off and did not return for two or three years they would not be considered a resident. He stressed that the Alaskan merchant marine jobs are very unique. The important issue is where mariners reside when they are off the ship. Co-Chair Therriault observed that the exception states: "serving under foreign or coastal articles of employment aboard an oceangoing vessel of the United States merchant marine." He observed that the individual that has a home in Valdez might or may not come home when he is off the ship. Mr. Holton stated that it is the intent to allow Alaskans to accept jobs. He showed members a video overview of their training program in Piney Point, Maryland. Mr. Holton provided members with written testimony: I was born in Ketchikan, raised in Ketchikan, Petersburg, and Juneau, upon my completion of 6 years in the Marine Corps, I came back to Alaska and became a state trooper for a short period of time. I was a Salmon tender captain for 15 years, before becoming a union rep. The Seafarers opened an office in Anchorage, almost 2 years ago to the day. Our objective is to recruit Alaskans to go to our unlicensed apprenticeship program in Piney Point, Maryland, and give them an opportunity to obtain good paying jobs with good benefits when they complete the program. I first became alerted to the fact that Merchant Seamen were being denied their permanent fund, by a Merchant Seaman from a different union. His name is Ross Perrine from Palmer, and he owns a home, has an Alaska driver's license, voter registration card, etc. he has been denied the fund since the inception. I went to one of our ships, and found that a boatswain on the Tote ship Northern Lights has also experienced the same problems. His name is John Glenn and he will be testifying this afternoon. My recruiting effort has taken me around a lot of the state, and in my interviews with young people, I seem to have their interest in the program until the question of the Permanent Fund dividend comes up, then I am told they are no longer interested. I thought to myself and have shared this view, that these people seemed awfully shortsighted, until I really thought about it, this is probably the only steady money. They have ever seen, and are reluctant to let it go under any circumstance. One of our recent graduates (Jessie Sharp) who will testify this afternoon, that already this year he has been denied the Permanent Fund dividend These merchant seaman being denied, does not have a choice when they sail, as to whether they can sail in Alaska or not. Sailing is based on a seniority system, and believe it or not, our Alaska routes, are in high demand. The ones that have the Alaska routes Ross and John are denied because they are not physically in state a minimum of 180 days. All of our Alaskans have been accepted to Piney Point because they are Alaska residents. I would hate to discourage good young people, (short sighted as they may be) from enjoying such a career opportunity. Right now we have 18 Alaskans who have graduated from Piney Point, and we presently have 2 in school. Besides the 18 graduates, we have created a Riding Maintenance gang. These merchant seaman go on oil tankers and do preventative maintenance. We hired 10 Riding gang a year ago, and all have done an outstanding job. When they have a year of sea time, they will be sent back to Piney Point and upgraded to Able-bodied seaman. We will start training and working a new crew. This crew averages $3,200.00 per month, with full benefits. Two of these Merchant Seaman have recently put money down on homes in the Wasilla area. They also will be denied their Permanent Fund dividend. An article in the Anchorage news recently the 12th did an article on our first native Alaskan. This has generated such a positive response it is hard for me to keep up with it. The first day generated about 20 phone calls, and yesterday I received 71 inquires. This has resulted in 6 tests being given Monday, and 6 more done on Friday. Plus 2 in Soldotna, 1 in Anchor Point, 2 in Kodiak, 2 in Ketchikan, and several from Willow. These numbers are candidates that are qualified. In my estimation, we are not talking about any more than 200 Merchant Seaman over a ten-year Period. Representative J. Davies summarized that mariners working in other seas would still have to maintain an Alaskan residency. Co-Chair Therriault asked if consideration was given to restricting the legislation to individuals sailing from Alaskan ports. (Tape Change, HFC 99 - 114, Side 2) Mr. Holton stated that there are individuals that do sail out of Anchorage. He pointed out that they would ship out of Alaska regardless of where they sail. Representative Sanders stressed that they have to fulfill the other resident requirements. Representative Austerman noted that they could be gone for up to two years. He observed that the intent is to cover individuals that are residents and are dispatched out of Alaska to do a job for four months to be eligible for their permanent fund dividend. Mr. Holton clarified that there are not enough Alaskans to ship out of Alaska. He observed that graduates ship out of Piney Point when their training is finished. He anticipates that there will eventually be an Alaskan dispatch hall. Representative Austerman expressed surprise that the legislation did not reference shipping out of Alaska. Mr. Holton stated that he would not be adverse to an amendment to tighten the language. Representative J. Davies questioned if "dispatched" out of Alaska would be an appropriate qualifier. Mr. Holton stated that it would be an appropriate qualifier. JOHN GLENN, SEAMAN, ANCHORAGE testified via teleconference in support of the legislation. He stated that he has been denied the permanent fund dividend. He observed that many ferry workers receive permanent fund dividends. He stated that he feels like a second class citizen, while everything he does is in Alaska. EDEN LATTA, MERCHANT MARINE, ANCHORAGE testified via teleconference in support of the legislation. He noted that he is a graduate from the Piney Point program. He was also denied his permanent fund dividend. He stressed that he lives in Alaska when he is off of the ship and meets other residency requirements. In response to a question by Representative Austerman, Mr. Latta stated that he has been a merchant marine since 1997. He has left Alaska twice as a merchant marine. JOY TUCKER, ANCHORAGE testified via teleconference in support of the legislation. He noted that her husband works as a merchant marine. She stressed that they live in Alaska and he returns home when he is off of the ship. DEBORAH VOGT, DEPUTY COMMISSIONER, DEPARTMENT OF REVENUE provided information on the legislation. She emphasized that the list of allowable absences does not include all Alaskans. She observed that the legislature has identified Alaskans that qualify. She noted that there are inequities. The commissioner has been allowed to include individuals that demonstrated their intent to return. The provision was difficult to administer. The department adopted the 180-day absence provision as an alternative. She noted that the commissioner's discretion was removed during the prior session. She stated that the proposed exemption is clear and would not be difficult to administer. She noted that the intent would be to support individuals that do remain in Alaska and whose families remain in Alaska. Representative J. Davies questioned if the department would support "dispatched out of Alaska". She stated that the department would not object to the addition. Mr. Vogt explained that the two-year return rule requires that Alaskans return to the state within two years for a minimum of 72 hours. She added that if an individual is gone for over five years there would be a presumption that there is not an intention to remain in the state. Individuals can demonstrate to the contrary. Another provision that will go into effect in the current year would prevent a continuous absence for more than 10 years for any reason. Representative Austerman noted that military personal who come to Alaska register as an Alaskan resident and continue to get the permanent fund dividend after they transfer, as long as they return within two years for a minimum of 72 hours. After five years they would be ineligible. Ms. Vogt clarified that they would be presumed ineligible unless they affirmatively prove that they have substantial ties to the state. Military spouses are also eligible. In response to a question by Representative J. Davies, Ms. Vogt noted that the definition of "state resident" in AS 43.23.005 is modified by AS 43.23.095: "state resident" means an individual who is physically present in the state with the intent to remain indefinitely in the state under the requirements of AS 01.10.055 or, if the individual is not physically present in the state, intends to return to the state and remain indefinitely in the state under the requirements of AS 01.10.055: (a) A person establishes residency in the state by being physically present in the state with the intent to remain in the state indefinitely and to make a home in the state. (b) A person demonstrates the intent required under (a) of this section (1) by maintaining a principal place of abode in the state for at least 30 days or for a longer period if a longer period is required by law or regulation; and (2) by providing other proof of intent as may be required by law or regulation, which may include proof that the person is not claiming residency outside the state or obtaining benefits under a claim of residency outside the state. (c) A person who establishes residency in the state remains a resident during an absence from the state unless during the absence the person establishes or claims residency in another state, territory or country, or performs other acts or is absent under circumstances that are inconsistent with the intent required under (a) of this section to remain a resident of this state. Ms. Vogt noted that the department looks at extenuating circumstances to determine if they are retaining ties to the state. She noted that the department looks to see if a person has friends or family present when the five-year presumption arises. She clarified that the qualifying year is the prior calendar year. Representative J. Davies observed that the applicant must be physically present during the qualifying year or if absent was absent only as allowed in the exceptions. NANCI JONES, DIRECTOR, ALASKA PERMANENT DIVIDEND DIVISION, DEPARTMENT OF REVENUE pointed out that the trainees were not denied because they were away at training. Training is an allowable absence. They were denied because the did not return after the training. In response to a question by Representative Moses, Ms. Vogt noted that on the 1998 permanent fund dividend there were 4,419 armed forces absent from the state. There were also 2,100 spouses and 4,600 children accompanying an Alaskan resident who was eligible for a permanent fund dividend. Representative J. Davies MOVED to insert on page 2, line 2 "dispatched out of Alaska and." Representative G. Davis OBJECTED for the purpose of discussion. He questioned if the definition of "dispatched" would be problematic. Representative Sanders stated that he did not oppose the amendment but did not think it was necessary. Ms. Vogt stated that the department would work with the union to define "dispatch" through regulation. She did not think there would be a difficulty. Representative Moses pointed out that a person could be dispatched out of the state without being present in the state. Ms. Vogt emphasized that the department would look at where the applicant spent their time. Representative G. Davis did not think the amendment was necessary. Representative J. Davies stated that the intent is to encourage opportunities for Alaskans. He stressed that it would provide an incentive for an Alaskan office. Representative Sanders pointed out that some merchant mariners do not belong to the union. He questioned if there would be a problem for non-union mariners. Representative J. Davies WITHDREW his amendment. Co-Chair Therriault recalled a situation with one of his constituents. In response to comments by Co-Chair Therriault, Ms. Vogt stated that the merchant marine list is a definite list. She observed that there are other people that are not on the merchant marine list that work outside of Alaska for employment. She noted that other legislation was offered to pay Alaskans that work outside of the state. The department had trouble with that legislation because it is hard to tell if an employee is required by their employer to leave the state. It would be hard to administer because the lines are "fuzzy". Co-Chair Therriault observed that congressional staff receives permanent fund dividends if they work in the congressional legislator's office but not if they work for the committee chaired by the Alaskan member. Representative Moses noted that there are a significant number of people living out of the state and collecting the permanent fund dividend. Representative Austerman stressed that individuals make lifestyle choices. He expressed concern with the number of exceptions. Co-Chair Therriault echoed his concerns. Representative J. Davies stressed that there are equity issues. He pointed out that there has to be a good public interest reason for treating Alaskans differently. He maintained that people should qualify if they meet the resident requirements. Representative G. Davis MOVED to report HB 157 out of Committee with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 157 was REPORTED out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Revenue dated 4/16/99. ADJOURNMENT The meeting adjourned at 4:35 p.m. House Finance Committee 1 4/15/99