Legislature(2003 - 2004)

2004-06-22 Senate Journal

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2004-06-22                     Senate Journal                      Page 3833
                                                                                                    
                                SENATE JOURNAL                                                   
                                                                                                    
                           ALASKA STATE LEGISLATURE                                              
                                                                                                    
                           TWENTY-THIRD LEGISLATURE                                              
                                                                                                    
                            FIRST SPECIAL SESSION                                                
                                                                                                    
Juneau, Alaska                     Tuesday                     June 22, 2004                      
                                                                                                    
                                  First Day                                                      
                                                                                                    
                                                                                                    
Pursuant to the June 4 Proclamation of the Governor calling for the                                 
convening of the First Special Session of the Twenty-Third Alaska                                   
Legislature (page 3811), the Senate was called to order by President                                
Therriault at 11:45 a.m.                                                                            
                                                                                                    
The roll showed nineteen members present. Senator Cowdery was                                       
absent.                                                                                             
                                                                                                    
The prayer was offered by the Chaplain, Senator Stedman. Senator                                    
Hoffman moved and asked unanimous consent that the prayer be                                        
spread. Without objection, it was so ordered.                                                       
                                                                                                    
       Heavenly Father, we ask for Your assistance as we                                            
       deliberate today. Give us Your guidance as we listen and                                     
       speak on matters important to all the people of Alaska.                                      
       With Your assistance today, we will be productive and                                        
       successful.                                                                                  
                                                                                                    
           Also, we ask that You watch over our friends and family                                 
        while we are busy with the affairs of our state.         Amen.                             
                                                                                                    
                                                                                                    
Senator Ben Stevens led the Senate in the Pledge of Allegiance.                                     
                                                                                                    
                                                                                                    
                                                                                                    
                                                                                                    
                                                                                                    

2004-06-22                     Senate Journal                      Page 3834
                                Certification                                                    
                                                                                                    
Senator Ben Stevens moved and asked unanimous consent that the                                      
journals for the one hundred twentieth and one hundred twenty-first                                 
legislative days of the Second Session of the Twenty-Third Legislature                              
and the First Supplement dated June 18, Senate Journal Supplement                                   
No. 8, and House and Senate Joint Journal Supplement No. 19 be                                      
approved as certified by the Secretary. Without objection, it was so                                
ordered.                                                                                            
                                                                                                    
Senator Ben Stevens moved and asked unanimous consent that                                          
Senator Cowdery be excused from a call of the Senate through Friday,                                
June 25, for medical reasons. Without objection, Senator Cowdery was                                
excused.                                                                                            
                                                                                                    
                                                                                                    
                        Introduction and Reference of                                            
                              Senate Resolutions                                                 
                                                                                                    
SJR 101                                                                                           
SENATE JOINT RESOLUTION NO. 101 BY THE SENATE RULES                                                 
COMMITTEE BY REQUEST OF THE GOVERNOR,                                                               
                                                                                                    
          Proposing amendments to the Constitution of the                                           
          State of Alaska relating to and limiting appropriations                                   
          from the Alaska permanent fund based on an                                                
          averaged percent of the fund market value.                                                
                                                                                                    
was read the first time and referred to the Finance Committee.                                      
                                                                                                    
The following fiscal information was published today:                                               
 Fiscal Note No. 1, Office of the Governor                                                          
 Fiscal Note No. 2, zero, Department of Revenue                                                     
                                                                                                    
Governor's transmittal letter dated June 21:                                                        
                                                                                                    
Dear President Therriault:                                                                          
                                                                                                    
Under the authority of article III, section 18, of the Alaska                                       
Constitution, I am transmitting a joint resolution proposing                                        
amendments to the Alaska Constitution relating to and limiting                                      

2004-06-22                     Senate Journal                      Page 3835
appropriations from the Alaska Permanent Fund based on an averaged                                  
Percent of Market Value (POMV) approach. The question presented to                                  
legislators by the joint resolution is whether to allow Alaskans to                                 
decide if management of the Alaska Permanent Fund should be                                         
modernized to a POMV approach. The POMV approach limits annual                                      
spending to five percent of the Alaska Permanent Fund's market                                      
value.                                                                                              
                                                                                                    
If adopted by the voters, the constitutional amendments in this joint                               
resolution would change the way in which amounts available for                                      
appropriation from the Alaska Permanent Fund are determined. The                                    
joint resolution contains the same provisions as CS House Joint                                     
Resolution 26(FIN), which passed the House of Representatives                                       
during the second session of this Legislature. Under the provisions of                              
this joint resolution, the Legislature could appropriate an amount that                             
would not exceed five percent of the averaged market values of the                                  
Alaska Permanent Fund for the first five of the six fiscal years                                    
immediately preceding the fiscal year in which the money is                                         
appropriated. The provisions do not allocate the amount available for                               
appropriation for a specific purpose.                                                               
                                                                                                    
I remain convinced that Alaskans expect us to resolve the state's long-                             
term fiscal problem this year. This resolution is an important part of                              
what must be a bi-partisian solution to the state's fiscal gap.                                     
                                                                                                    
I urge your prompt and favorable action on this measure.                                            
                                                                                                    
Sincerely yours,                                                                                    
/s/                                                                                                 
Frank H. Murkowski                                                                                  
Governor                                                                                            
                                                                                                    
SJR 102                                                                                           
SENATE JOINT RESOLUTION NO. 102 BY THE SENATE RULES                                                 
COMMITTEE BY REQUEST OF THE GOVERNOR,                                                               
                                                                                                    
          Proposing amendments to the Constitution of the                                           
          State of Alaska relating to and limiting appropriations                                   
          from the Alaska permanent fund based on an                                                
          averaged percent of the fund market value and                                             
          relating to permanent fund dividend payments.                                             

2004-06-22                     Senate Journal                      Page 3836
was read the first time and referred to the Finance Committee.                                      
                                                                                                    
The following fiscal information was published today:                                               
 Fiscal Note No. 1, zero, Department of Revenue                                                     
 Fiscal Note No. 2, Office of the Governor                                                          
                                                                                                    
Governor's transmittal letter dated June 21:                                                        
                                                                                                    
Dear President Therriault:                                                                          
                                                                                                    
Under the authority of article III, section 18, of the Alaska                                       
Constitution, I am transmitting a resolution proposing amendments to                                
the Alaska Constitution relating to and limiting appropriations from                                
the Alaska Permanent Fund based on an averaged percent of the                                       
fund's market value. Passage of this resolution by the Legislature                                  
gives Alaskans a voice on the issue of a long-term fiscal plan. Voters                              
would have the ability to approve the resolution and bring certainty to                             
Alaska's fiscal future for themselves and future generations of                                     
Alaskans.                                                                                           
                                                                                                    
The resolution outlines a long-term fiscal plan that 1) changes the                                 
structure of the Alaska Permanent Fund to an endowment model; 2)                                    
limits the annual payout from the Alaska Permanent Fund to five                                     
percent of the fund's value; 3) allocates the annual payout of 50                                   
percent to dividends, 45 percent to public education, including K-12                                
and the University, and five percent to communities. Individual                                     
dividends would be guaranteed to be at least $1,000 or 50 percent of                                
the annual payout, whichever is higher. I believe that these allocations                            
reflect the priorities of a majority of the public for the use of the                               
Alaska Permanent Fund.                                                                              
                                                                                                    
The resolution is based on provisions of CS House Joint Resolution                                  
26(FIN), which passed the House during the second session of this                                   
Legislature. Under the provisions of this resolution, the Alaska                                    
Permanent Fund is converted to the Percent of Market Value or                                       
"POMV" endowment model. An annual payout of five percent of the                                     
value of the fund is set.                                                                           
                                                                                                    
                                                                                                    
                                                                                                    

2004-06-22                     Senate Journal                      Page 3837
POMV is an accepted method for managing funds. Anchorage,                                           
Fairbanks, the North Slope Borough, and Sitka residents have voted to                               
use the POMV model for their municipal trust accounts. Private                                      
foundations like the Ford Foundation and about 83 percent of colleges                               
use some form of a POMV payout method.                                                              
                                                                                                    
These allocation provisions have a ten-year "sunset" to allow the                                   
Legislature and the voters an opportunity to revisit them to ensure that                            
the allocations continue to meet state needs.                                                       
                                                                                                    
I urge your prompt and favorable action on this legislation.                                        
                                                                                                    
Sincerely yours,                                                                                    
/s/                                                                                                 
Frank H. Murkowski                                                                                  
Governor                                                                                            
                                                                                                    
SJR 103                                                                                           
SENATE JOINT RESOLUTION NO. 103 BY THE SENATE RULES                                                 
COMMITTEE BY REQUEST OF THE GOVERNOR,                                                               
                                                                                                    
               Proposing amendments to the Constitution of the                                     
          State of Alaska relating to an appropriation limit.                                       
                                                                                                    
was read the first time and referred to the Finance Committee.                                      
                                                                                                    
The following fiscal information was published today:                                               
 Fiscal Note No. 1, Office of the Governor                                                          
                                                                                                    
Governor's transmittal letter dated June 21:                                                        
                                                                                                    
Dear President Therriault:                                                                          
                                                                                                    
Under the authority of article III, section 18, of the Alaska                                       
Constitution, I am transmitting a resolution relating to an appropriation                           
or "spending" limit. This resolution gives voters the chance to directly                            
voice their opinion on a spending limit at the ballot box. A spending                               
limit is an integral part of the transition to a long-range fiscal plan for                         
Alaska.                                                                                             
                                                                                                    

2004-06-22                     Senate Journal                      Page 3838
I have used as a model for this resolution the final Senate version of                              
House Joint Resolution 9 (HJR 9), which was rejected by the Senate                                  
during the last regular session of the Legislature (SCS CS HJR
9(FIN)(fld S)). This joint resolution differs from SCS CS HJR
9(FIN)(fld S) in that it contains some technical changes that were                                  
recommended by the Department of Law. In the list of appropriations                                 
excluded from the appropriation limit, references to "state lease debt"                             
have been changed to "capital leases" to more accurately reflect the                                
description of these obligations in governmental accounting. Other                                  
technical language changes were made to more clearly provide that the                               
"excluded" appropriations are to be excluded from the appropriation                                 
limit itself as well as from calculation of the appropriation limit.                                
                                                                                                    
The resolution presents the public with the opportunity to approve a                                
spending limit with "teeth" in it. If approved by the Legislature and                               
passed by the voters, it will control government spending. A leaner                                 
and more efficient state government will be produced. Passage of the                                
resolution sends the signal the Legislature has heard the public's                                  
message and will allow Alaskans to vote on the issue.                                               
                                                                                                    
I urge your prompt and favorable action on this resolution.                                         
                                                                                                    
Sincerely yours,                                                                                    
/s/                                                                                                 
Frank H. Murkowski                                                                                  
Governor                                                                                            
                                                                                                    
                                                                                                    
                  Introduction and Reference of Senate Bills                                     
                                                                                                    
SB 1001                                                                                           
SENATE BILL NO. 1001 BY THE SENATE RULES COMMITTEE                                                  
BY REQUEST OF THE GOVERNOR, entitled:                                                               
                                                                                                    
          "An Act relating to taxes on cigarettes and tobacco                                       
          products, to tax stamps on cigarettes, to forfeiture of                                   
          cigarettes and of property used in the manufacture,                                       
          transportation, possession, or sale of unstamped                                          
          cigarettes, to accounting for and use of part of the                                      
          proceeds of the additional cigarette tax, and to                                          

2004-06-22                     Senate Journal                      Page 3839
             licenses and licensees under the Cigarette Tax Act;                                   
           relating to unfair cigarette sales; and providing for an                                
          effective date."                                                                          
                                                                                                    
was read the first time and referred to the Labor and Commerce                                      
Committee.                                                                                          
                                                                                                    
The following fiscal information was published today:                                               
 Fiscal Note No. 1, Department of Revenue                                                           
 Fiscal Note No. 2, Department of Public Safety                                                     
                                                                                                    
Governor's transmittal letter dated June 21:                                                        
                                                                                                    
Dear President Therriault:                                                                          
                                                                                                    
Under the authority of article III, section 18 of the Alaska                                        
Constitution, I am transmitting a bill that increases the cigarette excise                          
tax by $1.00 a pack and makes other changes in our current statutes.                                
The tax on "other tobacco products" such as smokeless tobacco would                                 
be increased from 75 percent to 100 percent of the wholesale cost.                                  
                                                                                                    
Passage of these tax increases is supported by the health benefits                                  
alone. Tobacco is the number one preventable cause of death,                                        
disability, and chronic illness in Alaska. It is public health enemy                                
number one. I want these tax increases to reduce consumption of                                     
tobacco products in Alaska. Such a decrease will benefit adult smokers                              
who decide to quit, teenagers and pre-teens who decide to quit or not                               
start smoking, and Alaskans that choose not to smoke but suffer the ill                             
effects of second hand smoke.                                                                       
                                                                                                    
Current estimates are that passage of the cigarette tax should result in a                          
15 percent drop in illegal teen smoking. A 15 percent drop in youth                                 
smoking rates from current levels translates into 1,800 lives saved                                 
from premature death due to tobacco addiction. My hope is that even                                 
more Alaska teens decide not to try smoking or break their addiction                                
to cigarettes.                                                                                      
                                                                                                    
                                                                                                    
                                                                                                    
                                                                                                    

2004-06-22                     Senate Journal                      Page 3840
Among current adult smokers, 3,500 will quit smoking because of the                                 
tax, and of those, 800 will be saved from a smoking-caused death.                                   
Smoking among expectant mothers would also be reduced                                               
significantly; resulting in 850 babies being spared from exposure to                                
maternal smoking prior to delivery during the next five years.                                      
                                                                                                    
Alaska Natives should particularly benefit from reduced smoking.                                    
While smoking rates are declining within the U.S. general population,                               
the rate of smoking is unchanged among Alaska Native adults and, at                                 
44 percent, is almost double that of non-Natives. Currently, 44 percent                             
of Alaska Native high school students smoke almost four times the                                   
rate among non-Native students. Lung cancer, the leading cause of                                   
cancer deaths, is increasing at an alarming rate among Alaska Natives                               
of both sexes. Cardiovascular disease, including heart disease and                                  
stroke, is also linked with tobacco use, and kills approximately 120                                
Alaska Natives each year.                                                                           
                                                                                                    
In order to ensure we achieve these health benefits, I have included                                
language that earmarks part of the tax revenues for the smoking                                     
education, tobacco use prevention, and tobacco control program. At                                  
the level I have included, Alaska would become one of five states that                              
fund tobacco cessation programs at or above the level recommended                                   
by the Centers for Disease Control.                                                                 
                                                                                                    
I have also included a significant increase in the tax on smokeless                                 
tobacco. Other forms of tobacco such as chew or cigars also present                                 
serious risks to the health of users. For example, smokeless tobacco                                
users may be up to twice as likely as non-users to die from heart                                   
disease and other cardiovascular conditions due to increased blood                                  
pressure.                                                                                           
                                                                                                    
There is also an important fiscal benefit in this bill. The new revenues                            
generated by the tax increases will help reimburse a portion of the                                 
approximately $270 million in annual costs for direct medical                                       
expenses and lost productivity attributed to tobacco use in Alaska. The                             
financial burden all Alaskans are stuck with because some Alaskans                                  
smoke should be reduced.  This bill targets users and asks them to pay                              
a bit more of the costs they impose on all Alaskans. I believe many                                 
Alaskans would argue they should not be stuck with any costs for                                    
someone else's voluntary choice to use a dangerous product.                                         

2004-06-22                     Senate Journal                      Page 3841
Given the health impact, cost savings, and revenue to be generated                                  
from the proposed tobacco tax, I urge your support for this legislation.                            
                                                                                                    
Sincerely yours,                                                                                    
/s/                                                                                                 
Frank H. Murkowski                                                                                  
Governor                                                                                            
                                                                                                    
SB 1002                                                                                           
SENATE BILL NO. 1002 BY THE SENATE RULES COMMITTEE                                                  
BY REQUEST OF THE GOVERNOR, entitled:                                                               
                                                                                                    
 "An Act providing for a special deposit for workers' compensation                                  
insurers; relating to assigned risk pools and workers' compensation                                 
insurers; relating to the board of governors of the Alaska Insurance                                
Guaranty Association; stating the intent of the legislature, and setting                            
out limitations, concerning the interpretation, construction, and                                   
implementation of workers' compensation laws; relating to                                           
restructuring the Alaska workers' compensation system; eliminating the                              
Alaska Workers' Compensation Board; establishing a division of                                      
workers' compensation within the Department of Labor and Workforce                                  
Development and assigning certain Alaska Workers' Compensation                                      
Board functions to the division and the Department of Labor and                                     
Workforce Development; establishing a Workers' Compensation                                         
Appeals Commission; assigning certain functions of the Alaska                                       
Workers' Compensation Board to the Workers' Compensation Appeals                                    
Commission and the office of administrative hearings; relating to                                   
agreements that discharge workers' compensation liability; providing                                
for administrative law judges in workers' compensation proceedings;                                 
relating to workers' compensation awards; relating to an employer's                                 
failure to insure and keep insured or provide security; providing for                               
appeals from compensation orders; relating to workers' compensation                                 
proceedings; providing for supreme court jurisdiction of appeals from                               
the Workers' Compensation Appeals Commission; providing for a                                       
maximum amount for the cost-of-living adjustment for workers'                                       
compensation benefits; providing for administrative penalties for                                   
employers uninsured or without adequate security for workers'                                       
compensation; relating to fraudulent acts or false or misleading                                    
statements in worker's compensation; and providing for an effective                                 
date."                                                                                              

2004-06-22                     Senate Journal                      Page 3842
was read the first time and referred to the Judiciary Committee.                                    
                                                                                                    
The following fiscal information was published today:                                               
 Fiscal Note No. 1, Alaska Court System                                                             
 Fiscal Note No. 2, Department of Administration                                                    
 Fiscal Note No. 3, Department of Labor and Workforce                                               
          Development                                                                               
 Fiscal Note No. 4, indeterminate, Department of Administration                                     
                                                                                                    
Governor's transmittal letter dated June 21:                                                        
                                                                                                    
Dear President Therriault:                                                                          
                                                                                                    
Under the authority of article III, section 18, of the Alaska                                       
Constitution, I am transmitting a bill relating to the workers'                                     
compensation system. This bill is based on the many discussions and                                 
hearings conducted during the Second Session of the Twenty-Third                                    
Alaska State Legislature on Senate Bill 311. The bill preserves lay                                 
participation in the workers' compensation system, while increasing                                 
consistency in decision making and strengthening enforcement. It                                    
seeks to improve the market for existing workers' compensation                                      
insurers and attract new insurers, without immediate reductions in                                  
benefits to injured Alaskan workers.                                                                
                                                                                                    
Despite the Legislature's best efforts over the years, our current                                  
workers' compensation system has not proven responsive to the                                       
pressures caused by a growing, changing workforce and increasing                                    
costs. In order to respond to complaints about the delay in hearings,                               
the Legislature has steadily increased the number of members of the                                 
current Alaska Workers' Compensation Board (board) to make up                                       
more hearing panels, and removed the requirement that a fully                                       
balanced panel be available for hearings. What was originally a three-                              
member board has grown to include 14 volunteer members residing                                     
around the state. The original three-member board heard all claims;                                 
now panels, whose composition can vary in as many as 300                                            
combinations, hear claims. As a result, the consistency of a single                                 
three-member board has been lost. The increased size of the board                                   
makes it difficult to assemble as a body for holding meetings and                                   
adopting regulations. While I appreciate the dedication, public service,                            
and hard work that the board members and division of workers'                                       
compensation (division) staff provide, many members of the board                                    

2004-06-22                     Senate Journal                      Page 3843
lack legal training or background, and division hearing officers are not                            
required to be lawyers. The division is also hampered by the design of                              
the "unified board" system. The division has no authority to respond                                
aggressively and quickly to non-compliance and fraud -- and the board                               
itself is now too unwieldy to take such action in any but singular cases.                           
                                                                                                    
This bill would replace the current system with one more like the most                              
common form of workers' compensation system in the rest of the                                      
United States. Three new components of the system will bring more                                   
consistency and predictability in decisions, and more agility and power                             
of enforcement: (1) a Workers' Compensation Appeals Commission                                      
(commission); (2) qualified and experienced administrative law                                      
judges; and (3) an accountable division director with additional                                    
administrative authority and duties. The only change to benefits                                    
remains the cap on the cost-of-living adjustment paid to out-of-state                               
claimants. While claimants who reside in areas with a lower cost of                                 
living than Alaska's would continue to receive an adjustment, those                                 
residing in a higher cost-of-living area would be capped at the amount                              
paid to in-state claimants. Otherwise, the bill does not alter benefits                             
available to injured workers or the method of delivering them.                                      
                                                                                                    
Under the bill, an administrative law judge in the office of                                        
administrative hearings in the Department of Administration would                                   
conduct initial hearings on disputes. Last session the Legislature                                  
overwhelmingly approved of the use of independent administrative                                    
law judges centrally located in an office of administrative hearings and                            
supervised by a chief administrative law judge to hear and adjudicate                               
administrative hearings. Among other qualifications, all administrative                             
law judges must be admitted to practice law in Alaska, and have been                                
admitted in Alaska for at least two years. They are subject to a code of                            
hearing officer conduct. The bill requires that the administrative law                              
judges who are appointed to conduct workers' compensation hearings                                  
have specific expertise in the area of workers' compensation.                                       
                                                                                                    
The commission would replace the Superior Court at the appeals level.                               
The commission is composed of five members: one attorney                                            
experienced in the practice of workers' compensation law (who will be                               
an employee of the Department of Labor and Workforce                                                
Development) and four lay, volunteer members. The lay, volunteer                                    
members would be appointed from both labor and industry and for any                                 
given matter, one from each side would sit on the appeal together with                              

2004-06-22                     Senate Journal                      Page 3844
the attorney member of the commission. The commission's decisions                                   
would be binding legal precedent unless and until overturned on                                     
appeal to the Alaska Supreme Court.                                                                 
                                                                                                    
This bill also adds new duties and accountability to the administration                             
of the system. Currently, the director has little authority to act because                          
all power rests in the board. This bill would establish a division of                               
workers' compensation in the department. The director, appointed by                                 
the commissioner, would be personally accountable for the                                           
performance of the division. The director would have expanded                                       
authority to administer the second injury fund (AS 23.30.040), obtain                               
stop work orders, investigate uninsured employers, seek civil penalties                             
for an employer's failure to insure workers, investigate complaints of                              
fraud in workers' compensation, propose regulations to the                                          
commissioner, intervene in cases and file appeals, supervise                                        
rehabilitation of injured workers, and administer the Alaska Workers'                               
Compensation Act. The director's formal decisions may be appealed to                                
the commission.                                                                                     
                                                                                                    
The bill also provides a powerful tool to further the department's                                  
current approach of "zero tolerance" for employers that fail to carry                               
legally required workers' compensation liability insurance. Under this                              
bill, the department gains authority to levy civil penalties against                                
employers whose choice to operate without the required insurance                                    
coverage places their employee's financial and physical well being at                               
risk. Such employers also gain an unfair competitive advantage over                                 
employers who act responsibly by complying with the law and                                         
purchasing insurance.                                                                               
                                                                                                    
The bill also authorizes, for the first time, the director to investigate                           
fraud in workers' compensation. Until now, Alaska has relied on                                     
insurers to investigate fraud in workers' compensation claims, with the                             
result that investigations are not necessarily consistent with the                                  
public's interest is preventing workers' compensation fraud, as                                     
opposed to an insurer's monetary interest in a particular case. The cost                            
of fraud is borne by the public in the increased cost of the system--it                             
has an interest in preventing a range of fraudulent acts, such as                                   
obtaining payments beyond the benefit amount allowed, kickbacks,                                    
and threatening witnesses, that is not limited to obtaining                                         
reimbursement of benefits from a single dishonest claimant.                                         
                                                                                                    

2004-06-22                     Senate Journal                      Page 3845
The bill would also revise AS 21, the insurance code, regarding how                                 
the state regulates the workers' compensation insurance industry.                                   
Under the bill, insurers that transact workers' compensation insurance                              
would be required to maintain in this state special deposits of cash or                             
securities for the protection of persons covered by workers'                                        
compensation insurance. In addition, insurers must provide collateral                               
in this state for their assumed share of the assigned risk pool. This                               
revision provides additional protection in the event of insurer                                     
insolvency.                                                                                         
                                                                                                    
The Alaska Insurance Guaranty Association's Board of Governors                                      
would be modified to include representatives from employers, labor,                                 
and insurance licensees. This change will expand the expertise of the                               
Board of Governors to better address workers' compensation market                                   
issues.                                                                                             
                                                                                                    
Finally, the assigned risk pool is altered to ensure that it is self-                               
funding, instead of relying on periodic assessments against insurers                                
and consumers. The current pool is unable to generate sufficient                                    
premium to pay the claims made against it. The additional burden on                                 
insurance companies is a factor making the Alaska workers'                                          
compensation insurance market unattractive to insurers. Eliminating                                 
the cap on the assigned risk pool surcharge, and mandating a self-                                  
funding pool, should increase deposits available to protect insureds,                               
improve the market for Alaska insurance companies, and ensure that                                  
employers have access to workers' compensation insurance.                                           
                                                                                                    
This bill represents a major step forward in modernization of the                                   
Alaska workers' compensation system and addressing the significant                                  
workers' compensation crisis in Alaska. This bill would                                             
professionalize the hearing process through the use of administrative                               
law judges located in the office of administrative hearings. This will                              
improve the process of making workers' compensation decisions,                                      
increase predictability in the hearings, and strengthen enforcement                                 
powers of the division. These features should make Alaska more                                      
attractive for businesses to remain here or to relocate their operations                            
to this state.                                                                                      
                                                                                                    
                                                                                                    
                                                                                                    
                                                                                                    

2004-06-22                     Senate Journal                      Page 3846
I urge your prompt and favorable action on this measure.                                            
                                                                                                    
Sincerely yours,                                                                                    
/s/                                                                                                 
Frank H. Murkowski                                                                                  
Governor                                                                                            
                                                                                                    
SB 1003                                                                                           
SENATE BILL NO. 1003 BY THE SENATE RULES COMMITTEE                                                  
BY REQUEST OF THE GOVERNOR, entitled:                                                               
                                                                                                    
          "An Act relating to the income of and appropriations                                      
          from the Alaska permanent fund under art. IX, sec.                                        
          15(b), Constitution of the State of Alaska, and                                           
          making conforming amendments; relating to                                                 
          permanent fund dividend payments of at least $1,000;                                      
          relating to the determination of net income of the                                        
          mental health trust fund; and providing for an                                            
          effective date."                                                                          
                                                                                                    
was read the first time and referred to the Finance Committee.                                      
                                                                                                    
The following fiscal information was published today:                                               
 Fiscal Note No. 1, zero, Department of Revenue                                                     
                                                                                                    
Governor's transmittal letter dated June 21:                                                        
                                                                                                    
Dear President Therriault:                                                                          
                                                                                                    
Under the authority of article III, section 18, of the Alaska                                       
Constitution, I am transmitting a bill relating to the income of and                                
appropriations from the Alaska permanent fund under article IX,                                     
section 15(b), Constitution of the State of Alaska, and making                                      
conforming amendments. This bill is substantially the same as CS                                    
House Bill 298(FIN) am, which passed the House during the second                                    
regular session, but with a few new provisions.                                                     
                                                                                                    
I have separately transmitted to you a joint resolution proposing a                                 
"percent of market value" (POMV) amendment to the Alaska                                            
Constitution. This bill would make conforming amendments to the                                     
enabling act of the Alaska Permanent Fund Corporation necessary to                                  

2004-06-22                     Senate Journal                      Page 3847
implement that amendment. This bill also would make allocations of                                  
the amount available for appropriation from the Alaska permanent                                    
fund after the POMV amendment is adopted. These allocations make                                    
provision for aid to municipalities and other communities, public                                   
education, and the permanent fund dividend. The allocation provisions                               
would give moral force to the legislature's intent to pay for these                                 
important public purposes. A new provision has been added that                                      
would adjust the allocation of amounts available for appropriation                                  
from the Alaska permanent fund so that the dividend will be kept at                                 
$1,000 or more each year. The bill also contains provisions that will                               
conform the mental health trust fund revenue availability and                                       
accounting provisions to those proposed for the Alaska permanent                                    
fund. The mental health trust fund is invested by the Alaska Permanent                              
Fund Corporation and it will be more efficient if the computation of                                
revenue available for appropriation is consistent for both funds.                                   
                                                                                                    
I believe that this bill provides a vehicle the legislature can use to                              
resolve how the POMV amendment would be implemented. By                                             
placing the implementing provisions in statute, the legislature retains                             
the power to make necessary adjustments to meet unforeseeable                                       
events.                                                                                             
                                                                                                    
I urge your prompt and favorable consideration of this bill.                                        
                                                                                                    
Sincerely,                                                                                          
/s/                                                                                                 
Frank H. Murkowski                                                                                  
Governor                                                                                            
                                                                                                    
SB 1004                                                                                           
SENATE BILL NO. 1004 BY THE SENATE RULES COMMITTEE                                                  
BY REQUEST OF THE GOVERNOR, entitled:                                                               
                                                                                                    
          "An Act providing for and relating to the issuance of                                     
          general obligation bonds for the purpose of paying                                        
          the cost of design, construction, and major                                               
          maintenance of facilities at the University of Alaska;                                    
          and providing for an effective date."                                                     
                                                                                                    
was read the first time and referred to the Finance Committee.                                      

2004-06-22                     Senate Journal                      Page 3848
The following fiscal information was published today:                                               
 Fiscal Note No. 1, Department of Revenue                                                           
                                                                                                    
Governor's transmittal letter dated June 21:                                                        
                                                                                                    
Dear President Therriault:                                                                          
                                                                                                    
Under the authority of article III, section 18, of the Alaska                                       
Constitution, I am transmitting a bill authorizing the issuance of                                  
general obligation bonds to finance capital improvement projects for                                
the University of Alaska. Great progress has been made with our                                     
university system. Student enrollment is at the highest level ever.                                 
(Increase of 14.5 percent system wide between 2000 and 2004).                                       
Research activities are also at an all-time high, and have increased by                             
more than 75 percent since fiscal year 1999. These successes are based                              
on the state's on-going commitment to the university. This bill builds                              
upon, and reinforces this commitment, while realizing the harsh reality                             
of the limits forced on the state by the present fiscal situation.                                  
                                                                                                    
The projects in this bill address a number of the University of Alaska's                            
critical infrastructure needs. The projects include improvements to the                             
integrated science facility at the University of Alaska, Anchorage to                               
provide crucial science classroom and instructional labs.                                           
                                                                                                    
Also included are projects that address essential life safety, renovation,                          
and equipment priorities. These include Americans with Disabilities                                 
Act and life safety issues, as well as crucial equipment and space                                  
renovation needs. Basic information technology upgrades and                                         
replacement of academic and instructional equipment is included.                                    
Designed and construction, such as for the Biological and                                           
Computational Science Facility on the Fairbanks campus, will support                                
the continued successful expansion of the state and university's                                    
research and development agenda.                                                                    
                                                                                                    
New construction, such as for the Biological and Computational                                      
Facility on the Fairbanks campus, will support the continued                                        
successful expansion of the state and university's research and                                     
development agenda.                                                                                 
                                                                                                    
                                                                                                    

2004-06-22                     Senate Journal                      Page 3849
The bill requires that sections one through seven of the bill only take                             
effect once the Lieutenant Governor has certified a long-range fiscal                               
plan has been adopted as specified in the bill and the bonds have been                              
approved by the voters.                                                                             
                                                                                                    
I urge your prompt and favorable action on this legislation.                                        
                                                                                                    
Sincerely yours,                                                                                    
/s/                                                                                                 
Frank H. Murkowski                                                                                  
Governor                                                                                            
                                                                                                    
SB 1005                                                                                           
SENATE BILL NO. 1005 BY THE SENATE RULES COMMITTEE                                                  
BY REQUEST OF THE GOVERNOR, entitled:                                                               
                                                                                                    
          "An Act providing for and relating to the issuance of                                     
          general obligation bonds for the purpose of paying                                        
          the cost of state surface transportation projects; and                                    
          providing for an effective date."                                                         
                                                                                                    
was read the first time and referred to the Finance Committee.                                      
                                                                                                    
The following fiscal information was published today:                                               
 Fiscal Note No. 1, Department of Revenue                                                           
                                                                                                    
Governor's transmittal letter dated June 21:                                                        
                                                                                                    
Dear President Therriault:                                                                          
                                                                                                    
Under the authority of article III, section 18, of the Alaska                                       
Constitution, I am transmitting a bill authorizing the issuance of                                  
general obligation bonds to finance surface transportation capital                                  
improvement projects.                                                                               
                                                                                                    
The projects included in this bill address a variety of important surface                           
transportation needs across the state, ranging from congestion relief in                            
Anchorage and Fairbanks, to safety improvements, betterment of                                      
driving conditions, and access to critical resource and industrial                                  
projects. Some of these upgrades are being included to facilitate                                   
transfer to local ownership.                                                                        

2004-06-22                     Senate Journal                      Page 3850
Investment in transportation pays both short- and long-term dividends                               
to the state's economy. Immediately, it would put Alaskans to work in                               
the design and construction of these surface transportation projects.                               
Long term, it ensures that workers and commodities can move                                         
efficiently, and enables new economic activity to occur that in turn                                
creates new family-wage jobs.  As such, I consider this bond package                                
a stimulus to the state's economy, and part of the budget solution.                                 
                                                                                                    
One key advantage of this bill is that it provides an additional level of                           
transportation financing during a period of reduced federal funding for                             
highways. Since statehood, the flow of federal dollars has typically                                
grown each year, but since 2002 this trend has changed and we now                                   
face two consecutive years of decline in federal funding levels.                                    
Supplementing the state's capital program with general obligation                                   
bond money would ensure that the state's infrastructure would keep                                  
pace with growth in traffic and other uses.                                                         
                                                                                                    
I view this bond package as an important plank in the state's long-                                 
range financial plan. Ensuring that we have a sufficient and effective                              
surface transportation system is an important duty of the legislative                               
and executive branches. The bill also requires that the money in the                                
bond package only be available once a constitutional amendment                                      
establishing the percent of market value approach to determining                                    
amounts available for appropriation from the Alaska permanent fund,                                 
and the bonds, have been approved by the voters.                                                    
                                                                                                    
I welcome your support of this important measure.                                                   
                                                                                                    
Sincerely,                                                                                          
/s/                                                                                                 
Frank H. Murkowski                                                                                  
Governor                                                                                            
                                                                                                    
                                                                                                    
                             Unfinished Business                                                 
                                                                                                    
Senator Wilken moved and asked unanimous consent to be excused                                      
from the Senate, not subject to a call, from 8:00 p.m. plane time, June                             
25 to morning plane time, July 7. Without objection, Senator Wilken                                 
was excused.                                                                                        

2004-06-22                     Senate Journal                      Page 3851
                                Announcements                                                    
                                                                                                    
SB 1002                                                                                           
Senator Seekins, Chair, moved and asked unanimous consent that                                      
Uniform Rule 23 be waived on SENATE BILL NO. 1002 "An Act                                           
providing for a special deposit for workers' compensation insurers;                                 
relating to assigned risk pools and workers' compensation insurers;                                 
relating to the board of governors of the Alaska Insurance Guaranty                                 
Association; stating the intent of the legislature, and setting out                                 
limitations, concerning the interpretation, construction, and                                       
implementation of workers' compensation laws; relating to                                           
restructuring the Alaska workers' compensation system; eliminating                                  
the Alaska Workers' Compensation Board; establishing a division of                                  
workers' compensation within the Department of Labor and Workforce                                  
Development and assigning certain Alaska Workers' Compensation                                      
Board functions to the division and the Department of Labor and                                     
Workforce Development; establishing a Workers' Compensation                                         
Appeals Commission; assigning certain functions of the Alaska                                       
Workers' Compensation Board to the Workers' Compensation Appeals                                    
Commission and the office of administrative hearings; relating to                                   
agreements that discharge workers' compensation liability; providing                                
for administrative law judges in workers' compensation proceedings;                                 
relating to workers' compensation awards; relating to an employer's                                 
failure to insure and keep insured or provide security; providing for                               
appeals from compensation orders; relating to workers' compensation                                 
proceedings; providing for supreme court jurisdiction of appeals from                               
the Workers' Compensation Appeals Commission; providing for a                                       
maximum amount for the cost-of-living adjustment for workers'                                       
compensation benefits; providing for administrative penalties for                                   
employers uninsured or without adequate security for workers'                                       
compensation; relating to fraudulent acts or false or misleading                                    
statements in worker's compensation; and providing for an effective                                 
date" for the Judiciary Committee meeting at 1:30 p.m., June 22.                                    
Without objection, it was so ordered.                                                               
                                                                                                    
                                                                                                    
                                                                                                    
                                                                                                    
                                                                                                    

2004-06-22                     Senate Journal                      Page 3852
SB 1001                                                                                           
Senator Bunde, Chair, moved and asked unanimous consent that                                        
Uniform Rule 23 be waived on SENATE BILL NO. 1001 "An Act                                           
relating to taxes on cigarettes and tobacco products, to tax stamps on                              
cigarettes, to forfeiture of cigarettes and of property used in the                                 
manufacture, transportation, possession, or sale of unstamped                                       
cigarettes, to accounting for and use of part of the proceeds of the                                
additional cigarette tax, and to licenses and licensees under the                                   
Cigarette Tax Act; relating to unfair cigarette sales; and providing for                            
an effective date" for the Labor and Commerce Committee meeting at                                  
2:30 p.m., June 22. Without objection, it was so ordered.                                           
                                                                                                    
Announcements are at the end of the journal.                                                        
                                                                                                    
                                                                                                    
                                 Adjournment                                                     
                                                                                                    
Senator Ben Stevens moved and asked unanimous consent that the                                      
Senate stand in adjournment until 9:00 a.m., June 23, 2004. Without                                 
objection, the Senate adjourned at 11:59 a.m.                                                       
                                                                                                    
                                                                Kirsten Waid                        
                                                     Secretary of the Senate                        
                                                                                                    
                                                                    June 2004                       

2004-06-22                     Senate Journal                      Page 3853
                                Announcements                                                    
                                                                                                    
Americans with Disabilities Act Notice - Persons with disabilities who require                      
special accommodation or alternative communication formats to access                                
committee meetings may contact the appropriate committee office or the                              
Legislative Information Office in their community. Reasonable advance                               
notice is needed to accommodate the request. For further information, call the                      
ADA Coordinator at 465-3854 Voice/465-4980 TDD.                                                     
                                                                                                    
                                                                                                    
                             STANDING COMMITTEES                                                 
+ indicates teleconference                                                                          
= indicates bill previously heard/scheduled                                                         
                                                                                                    
                                   FINANCE                                                       
                                                                                                    
Jun 22        Tuesday                   Senate Finance 532            3:00 PM                     
              -- Teleconference --                                                                  
+ SB1003 DISTRIBUTIONS OF APPROPS FROM PERM FUND                                                    
+ SB1004 G.O. BONDS FOR UNIVERSITY PROJECTS                                                         
+ SB1005 G.O. BONDS FOR SURFACE TRANS. PROJECTS                                                     
+ SJR101 CONST. AM: PERM FUND P.O.M.V.                                                              
+ SJR102 CONST. AM: PERM FUND P.O.M.V.; DIVIDENDS                                                   
+ SJR103 CONST AM: APPROPRIATION LIMIT                                                              
                                                                                                    
Jun 23        Wednesday                 Senate Finance 532            9:30 AM                     
              -- Time Change --                                                                     
+             SCR:                                                                                  
              Relating to Appropriations from the                                                   
              Constitutional Budget Reserve Fund and                                                
              Earnings Reserve Account to Offset                                                    
              General Revenue Shortfalls                                                            
              <Pending Introduction and Referral>                                                   
+= SB1003 DISTRIBUTIONS OF APPROPS FROM PERM FUND                                                   
+= SB1004 G.O. BONDS FOR UNIVERSITY PROJECTS                                                        
+= SB1005 G.O. BONDS FOR SURFACE TRANS. PROJECTS                                                    
+= SJR101 CONST. AM: PERM FUND P.O.M.V.                                                             
+= SJR102 CONST. AM: PERM FUND P.O.M.V.; DIVIDENDS                                                  
+= SJR103 CONST AM: APPROPRIATION LIMIT                                                             
+ SB1001 TOBACCO TAX; LICENSING; PENALTIES                                                          
              <Pending Referral>                                                                    
+ SB1002 INSURANCE & WORKERS' COMPENSATION SYSTEM                                                   
              <Pending Referral>                                                                    
                   ----------------------------------------                                        

2004-06-22                     Senate Journal                      Page 3854
                                  JUDICIARY                                                      
                                                                                                    
Jun 22        Tuesday                         Butrovich 205           1:30 PM                     
     SB1002 INSURANCE & WORKERS' COMPENSATION SYSTEM                                                
                                                                                                    
Jun 23        Wednesday                       Butrovich 205           8:00 AM                     
= SB1002 INSURANCE & WORKERS' COMPENSATION SYSTEM                                                   
                   ----------------------------------------                                        
                                                                                                    
                               LABOR & COMMERCE                                                  
                                                                                                    
Jun 22        Tuesday                               Beltz 211         2:30 PM                     
     SB1001 TOBACCO TAX; LICENSING; PENALTIES                                                       
                   ----------------------------------------                                        
                                                                                                    
                               JOINT COMMITTEES                                                  
                                                                                                    
                          LEGISLATIVE BUDGET & AUDIT                                             
                                                                                                    
Jun 23        Wednesday                  House Finance 519            1:00 PM                     
              RPL - Alaska Aviation Safety Project                                                  
                   ----------------------------------------                                        
                                                                                                    
                                OTHER MEETINGS                                                   
                                                                                                    
                       JOINT LEGISLATIVE HEALTH CAUCUS                                           
                                                                                                    
Jun 23        Wednesday                       Butrovich 205           1:00 PM                     
              "Getting Injured Alaskan Workers Back                                                 
              on the Job...is it Working?"