Legislature(2003 - 2004)

04/15/2004 01:51 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 15, 2004                                                                                           
                         1:51 P.M.                                                                                              
                                                                                                                                
TAPE HFC 04 - 84, Side A                                                                                                        
TAPE HFC 04 - 84, Side B                                                                                                        
TAPE HFC 04 - 85, Side A                                                                                                        
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 1:51 P.M.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative John Harris, Co-Chair                                                                                            
Representative Bill Williams, Co-Chair                                                                                          
Representative Kevin Meyer, Vice-Chair                                                                                          
Representative Mike Chenault                                                                                                    
Representative Hugh Fate                                                                                                        
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Reggie Joule                                                                                                     
Representative Carl Moses                                                                                                       
Representative Bill Stoltze                                                                                                     
                                                                                                                                
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Eric Croft                                                                                                       
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Lesil McGuire;  Representative Dan  Ogg; Pete                                                                   
Ecklund,   Staff,   Representative   Bill   Williams;   Linda                                                                   
Sylvester, Staff,  Representative Bruce Weyhrauch;  Nico Bus,                                                                   
Acting   Director,  Division   of  Administrative   Services,                                                                   
Department  of  Natural  Resources;   Heath  Hilyard,  Staff,                                                                   
Representative Lesil McGuire                                                                                                    
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Bob Loeffler,  Director, Division  of Mining Land  and Water,                                                                   
Department  of Natural Resources,  Anchorage; Kathy  Hartman,                                                                   
Co-Owner Fantasies  Club, Anchorage;  Don Hudson,  Physician,                                                                   
Alaskan  Regional  Hospital, Anchorage;  Carol  Hartman,  Co-                                                                   
Owner Fantasies  Club, Anchorage;  Kara Nyquist,  Director of                                                                   
the  Covenant  House,  Attorney,  Anchorage;  Terry  Dittman,                                                                   
Parent-Teacher-Student Association  (PTSA), Anchorage; Andree                                                                   
McLeod,  Anchorage;   Diana  L.   Straub,  Assembly   Member,                                                                   
Wasilla;  Officer Pablo  Paiz,  Anchorage Police  Department,                                                                   
Anchorage; Regina Manteufel, Anchorage                                                                                          
                                                                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 333    An  Act   relating  to  an  endowment   for  public                                                                   
          education; and providing for an effective date.                                                                       
                                                                                                                                
          CS HB 33 (FIN) was reported out of Committee with                                                                     
          a  "no recommendation"  and with  three new  fiscal                                                                   
          notes by  the Department of Natural  Resources, one                                                                   
          new  zero note  by the Department  of Revenue,  one                                                                   
          new  fiscal  note  by the  Department  of  Revenue,                                                                   
          fiscal  note #1  by the Department  of Education  &                                                                   
          Early  Development   and  fiscal  note  #4  by  the                                                                   
          University of Alaska.                                                                                                 
                                                                                                                                
HB 367    An Act relating to the  licensing and regulation of                                                                   
          sex-oriented businesses  and sex- oriented business                                                                   
          entertainers; relating  to protection of the safety                                                                   
          and  health of  and to education  of young  persons                                                                   
          who perform in adult  entertainment establishments;                                                                   
          and providing for an effective date.                                                                                  
                                                                                                                                
          CS HB 367 (FIN) was reported out of Committee with                                                                    
          "no recommendation"  and with a new  fiscal note by                                                                   
          the    Department   of    Community   &    Economic                                                                   
          Development,  a  new  zero note  by  Department  of                                                                   
          Public  Safety and zero  note #2 by  the Department                                                                   
          of Labor & Workforce Development.                                                                                     
                                                                                                                                
HB 533    An  Act  relating  to  the  state's  administrative                                                                   
          procedures    and   to   judicial    oversight   of                                                                   
          administrative matters.                                                                                               
                                                                                                                                
          CS HB 533 (JUD) was  reported out of Committee with                                                                   
          a "do  pass" recommendation  and with a  new fiscal                                                                   
          note  by Department of  Law, indeterminate  note #1                                                                   
          by the  Alaska Court System, indeterminate  note #2                                                                   
          by the  Commercial Fisheries Entry  Commission, and                                                                   
          indeterminate  note #3 by the Department  of Health                                                                   
          & Social Services.                                                                                                    
                                                                                                                                
HOUSE BILL NO. 333                                                                                                            
                                                                                                                                
     An Act relating to an endowment for public education;                                                                      
     and providing for an effective date.                                                                                       
                                                                                                                                
Co-Chair  Harris  MOVED  to  ADOPT  work  draft  #23-LS099\G,                                                                   
Bullock, 4/14/04,  as the version  of the legislation  before                                                                   
the Committee.  (Copy on File).                                                                                                 
                                                                                                                                
Representative  Joule OBJECTED, asking  for a description  of                                                                   
the changes made to the draft.                                                                                                  
                                                                                                                                
REPRESENTATIVE  DAN OGG, SPONSOR,  spoke to the  changes made                                                                   
to the work  draft, noting the main difference  was repealing                                                                   
the sectional reference to SB 7, Section 8.                                                                                     
                                                                                                                                
In  the  "G"  version,  Page 3,  Lines  15-17,  contains  new                                                                   
language that  further clarifies that.   Page 6,  Lines 9-12,                                                                   
addresses  a  previous  oversight; the  language  was  needed                                                                   
because  the grant  is  not included  as  net  income in  the                                                                   
existing school trust fund.                                                                                                     
                                                                                                                                
Representative Joule  inquired if the work draft  allowed the                                                                   
University to  generate funds as originally  intended through                                                                   
the endowment  with the 5% split.   In addition to  that, the                                                                   
University  would keep  250 thousand  acres of  land to  help                                                                   
generate  income.     Representative  Ogg  agreed   that  was                                                                   
correct.   Representative Joule pointed  out that he  had not                                                                   
supported SB 7.                                                                                                                 
                                                                                                                                
Representative  Joule  WITHDREW  his OBJECTION  stating  that                                                                   
there should  be further  consideration  on the House  floor.                                                                   
There being  NO further  OBJECTION, the committee  substitute                                                                   
was adopted.                                                                                                                    
                                                                                                                                
Co-Chair  Williams MOVED  to ADOPT  Amendment #1.   (Copy  on                                                                   
File).  Co-Chair Harris OBJECTED.                                                                                               
                                                                                                                                
BOB  LOEFFLER,  (TESTIFIED  VIA   TELECONFERENCE),  DIRECTOR,                                                                   
DIVISION  OF MINING  LAND AND  WATER,  DEPARTMENT OF  NATURAL                                                                   
RESOURCES, ANCHORAGE,  stated that the amendment  was created                                                                   
to rectify a  technical change in how revenues  are accounted                                                                   
for in oil  and gas leases.   Because of the manner  in which                                                                   
royalty settlements  are handled,  a contract should  include                                                                   
all revenue.                                                                                                                    
                                                                                                                                
Mr. Loeffler added that in order  to accomplish the sponsor's                                                                   
intent, language  was changed  so that  it would only  affect                                                                   
new  revenue, and  in this  case,  revenue from  oil and  gas                                                                   
leases following the effect of  the proposed act.  He pointed                                                                   
out this was a technical change.                                                                                                
                                                                                                                                
Co-Chair  Harris asked  if the  Representative Ogg  supported                                                                   
Amendment #1.   Representative Ogg replied he  did.  Co-Chair                                                                   
Harris WITHDREW his OBJECTION.                                                                                                  
                                                                                                                                
Representative  Chenault asked  if it  would include  mineral                                                                   
exploration.  Mr. Loeffler replied it would.                                                                                    
                                                                                                                                
There  being  NO  further OBJECTION,  the  Amendment  #1  was                                                                   
adopted.                                                                                                                        
                                                                                                                                
Representative Joule  reiterated that he did not  know how he                                                                   
felt  about  the proposed  legislation.    Co-Chair  Williams                                                                   
advised that he  had requested additional language  be added,                                                                   
pointing out  that it  has taken  the University 40-years  to                                                                   
get up and going.   He did not know what would  happen in the                                                                   
future years  if the University  needed further funding.   He                                                                   
believed that  the legislation would help the  University for                                                                   
future planning, allowing more  time for property management.                                                                   
                                                                                                                                
Representative  Joule spoke to  support for the  University's                                                                   
growth,  noting that  he was  not a  supporter of  SB 7.   He                                                                   
anticipated that  the proposed legislation would  repeal that                                                                   
act.                                                                                                                            
                                                                                                                                
Co-Chair Williams  commented that it could take  up to twenty                                                                   
years to  develop a land  management plan for  250,000 acres.                                                                   
He did not  know what would  happen in the next  twenty years                                                                   
and that the  proposed legislation would help  the University                                                                   
plan for the future.                                                                                                            
                                                                                                                                
Representative  Joule referenced  the last  version of  SB 7,                                                                   
pointing  out that  there was  an  issue of  borough-selected                                                                   
lands and  entitlements.  He  understood that  the University                                                                   
would not  be able  to choose  lands over  the boroughs.   He                                                                   
asked if  headway was being made  for the boroughs  and their                                                                   
entitlements.  Mr. Loeffler acknowledged  that the Department                                                                   
is  making  headway  and  completing  a  12,000-acre  initial                                                                   
entitlement.   At  the  previous rate,  it  would have  taken                                                                   
fifty years  to get the land  to all the municipalities.   He                                                                   
thought that would be available by the end of the decade.                                                                       
                                                                                                                                
Representative Joule asked if  there was a plan for statewide                                                                   
conveyance  to  those  boroughs.   Mr.  Loeffler  offered  to                                                                   
provide that information to the Committee.                                                                                      
                                                                                                                                
Co-Chair   Harris  referenced   the  Department  of   Natural                                                                   
Resources  fiscal  note,  pointing   out  the  $412  thousand                                                                   
dollars coming from the FY05 University endowment.                                                                              
                                                                                                                                
NICO  BUS,   ACTING  DIRECTOR,  DIVISION   OF  ADMINISTRATIVE                                                                   
SERVICES,  DEPARTMENT OF  NATURAL  RESOURCES, explained  that                                                                   
the legislation  would transfer  $353.9 thousand  dollars out                                                                   
of the general fund and $59 thousand  dollars out of the land                                                                   
disposal income  fund into the University Endowment  Fund and                                                                   
the Public School Trust Fund for  the first year.  That ratio                                                                   
would change over  the years.  He added that it  would be the                                                                   
amount of money  for any new resource development  revenue to                                                                   
be generated after the effective date of the legislation.                                                                       
                                                                                                                                
Co-Chair Harris asked the intent  of the $459 thousand dollar                                                                   
note in the FY05 expense budget.   Mr. Bus explained that the                                                                   
                                          th                                                                                    
most  current  note   was  dated  April  9,    and  the  note                                                                   
referenced by Co-Chair Harris no longer applies.                                                                                
                                                                                                                                
Co-Chair Harris mentioned the  timber sale receipts.  Mr. Bus                                                                   
stated that  the amount  of timber sales  that would  be lost                                                                   
through  the  program  could  amount  up  to  $21.8  thousand                                                                   
dollars.                                                                                                                        
                                                                                                                                
Co-Chair   Harris   noted   an    additional   request   from                                                                   
administrative  services  component  in  the  amount  of  $48                                                                   
thousand dollars.   Mr. Bus advised  that in the  first year,                                                                   
the Department would need to change  the computer programs to                                                                   
be able  to implement capability  for revenues coming  out of                                                                   
the  various leases  and  accounts,  moving into  the  school                                                                   
trust fund and  the University endowment.  After  the initial                                                                   
investment,   it  would   cost  $15   thousand  dollars   for                                                                   
maintenance  level up keep.   He  maintained that this  would                                                                   
double the current accounting structure.                                                                                        
                                                                                                                                
Representative  Chenault inquired  about the fiscal  analysis                                                                   
accompanying  the  note.    Mr. Bus  explained  that  in  the                                                                   
initial conversion, it would be  $10 thousand dollars; by the                                                                   
end of the year,  it would amount to $7 thousand  dollars and                                                                   
would fund a part time position.                                                                                                
                                                                                                                                
Representative   Hawker  reminded   members  of  a   previous                                                                   
discussion  with  Representative  Ogg regarding  the  Supreme                                                                   
Court challenge  that had been made  to SB 7.   He understood                                                                   
that  ruling did  not violate  the Constitution  as being  an                                                                   
appropriation and  they declined to rule whether  making this                                                                   
type  of  grant  to  the University  was  a  violation  of  a                                                                   
dedication of funds.  He inquired  if that had been resolved.                                                                   
Representative  Ogg replied  that it  has not  and was  still                                                                   
before the Supreme Court.                                                                                                       
                                                                                                                                
Representative Hawker  questioned if HB 333,  which transfers                                                                   
interest to the University, would  be affected by the outcome                                                                   
of that  court case.  Representative  Ogg responded  that the                                                                   
bill before  the Committee attempts to  differentiate between                                                                   
that  concern.   However,  they are  similar  issues and  the                                                                   
accounts have been bifurcated.   He added that the University                                                                   
portion could be subject to that  concern but that the school                                                                   
portion should not.                                                                                                             
                                                                                                                                
Representative  Hawker grilled  the  representative that  the                                                                   
sponsor did  not appear comfortable providing  assurance that                                                                   
the bill before the Committee  was sufficiently different and                                                                   
that  it  would   not  be  subject  to  a   court  challenge.                                                                   
Representative  Ogg acknowledged  that  he did  not know  and                                                                   
that a potential challenge could be out there.                                                                                  
                                                                                                                                
PETE ECKLUND, STAFF, REPRESENTATIVE  BILL WILLIAMS, attempted                                                                   
to clear  up some  of the  fiscal concerns.   He pointed  out                                                                   
that there are  two notes, which are a cost to  the State and                                                                   
that they  would change  with the  adoption of the  committee                                                                   
substitute.   The  change  is from  general  funds to  public                                                                   
school trust funds.  The committee  substitute changed one of                                                                   
the purposes that those funds  could be used for.  They could                                                                   
be used  for paying the costs  of education and the  costs of                                                                   
managing the  fund itself.   Fiscal note #3,  from Department                                                                   
of Revenue  has costs, which should  be moved to  the "other"                                                                   
component.    The last  fiscal  note  addressed by  Mr.  Bus,                                                                   
Information Services  component should  also be changed  from                                                                   
general funds to the "other" category.                                                                                          
                                                                                                                                
Co-Chair Harris  MOVED to ADJUST  the fiscal note  to reflect                                                                   
testimony  made by Mr.  Ecklund.   There being NO  OBJECTION,                                                                   
the fiscal change was adopted.                                                                                                  
                                                                                                                                
Representative Foster MOVED to  report CS HB 333 (FIN) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS  HB 33  (FIN) was  reported out  of Committee  with a  "no                                                                   
recommendation"  and  with  three  new fiscal  notes  by  the                                                                   
Department  of Natural Resources,  one new  zero note  by the                                                                   
Department of Revenue, one new  fiscal note by the Department                                                                   
of Revenue, fiscal  note #1 by the Department  of Education &                                                                   
Early Development  and fiscal  note #4  by the University  of                                                                   
Alaska.                                                                                                                         
                                                                                                                                
HOUSE BILL NO. 367                                                                                                            
                                                                                                                                
     An Act relating to the licensing and regulation of sex-                                                                    
     oriented    businesses    and   sex-oriented    business                                                                   
     entertainers; relating  to protection of the  safety and                                                                   
     health of and to education  of young persons who perform                                                                   
     in  adult entertainment  establishments;  and  providing                                                                   
     for an effective date.                                                                                                     
                                                                                                                                
REPRESENTATIVE  LESIL   MCGUIRE,  SPONSOR,  noted   that  the                                                                   
statewide Parent-Teacher-Student  Association (PTSA) passed a                                                                   
resolution asking  the Legislature to  pass a law  to protect                                                                   
under 21-year-old  employees and minors from some  of the ill                                                                   
effects  caused by  strip clubs,  massage  parlors and  other                                                                   
nude entertainment  businesses.  Accordingly, they  worked to                                                                   
help craft HB 367.  Among the  findings in the statewide PTSA                                                                   
resolution, from  a review of studies and court  findings, is                                                                   
a showing that the operation of  sexually oriented businesses                                                                   
(SOB)  leads  to  higher rates  of  crime,  including  sexual                                                                   
assaults, prostitution, drug sales and drug use.                                                                                
                                                                                                                                
Representative  McGuire stated that  the primary goals  of HB
367 are  to permit  the legal  operation of these  businesses                                                                   
while protecting young Alaskans  who work at them, to protect                                                                   
minors, and  to protect the  public from operations  by those                                                                   
adult establishments that do not follow the law.                                                                                
                                                                                                                                
Representative  McGuire  highlighted  the provisions  of  the                                                                   
bill, which would protect the  public and young adults in the                                                                   
following ways:                                                                                                                 
                                                                                                                                
   ·     Prohibits nude entertainment from sharing a common                                                                     
         entrance, restroom  or  hallway  with businesses  or                                                                   
         residences used by minors.                                                                                             
   ·     Prohibits the use of closed private booths where                                                                       
         illegal sexual activities may occur.                                                                                   
   ·     Prohibits the operation of sexually oriented                                                                           
         businesses by those with felony  records, or records                                                                   
         involving   sexually   related,   drug-related,   or                                                                   
         violence-related crimes.                                                                                               
   ·     Prohibits the employment of nude or semi nude                                                                          
         entertainers under the age of 19.                                                                                      
   ·     Requires entertainers to obtain a license, and                                                                         
         prove they  have attended  a  State approved  course                                                                   
         teaching the entertainer how to  protect her/himself                                                                   
         from  sexual   assault;   and   a  course   teaching                                                                   
         entertainers   of   wage   and   working   condition                                                                   
         violations that occur in that area of business.                                                                        
   ·     Requires entertainers under 21 years old to show                                                                       
         they  have  attended  a  State-approved   counseling                                                                   
         session that is  aimed at letting young  adults know                                                                   
         of career  and educational  alternatives,  financial                                                                   
         aid and  vocational  training available  to them  as                                                                   
         viable options to entering or remaining  in a career                                                                   
         in  adult  entertainment.     While  it   is  likely                                                                   
         unconstitutional to ban all 21 year  olds from these                                                                   
         jobs, it  is important  that young  adults at  least                                                                   
         know about other  life options.   Many young  adults                                                                   
         who enter into  these careers come  from backgrounds                                                                   
         where those options are not generally discussed.                                                                       
   ·     Entertainers under age 21 shall also be required to                                                                    
         show they  have  taken  a state-approved  course  on                                                                   
         sexually transmitted diseases.                                                                                         
   ·     Businesses and entertainers are required to obtain                                                                     
         licenses  to  show  these  requirements   have  been                                                                   
         followed.   The State,  as it does  in other  areas,                                                                   
         will set the  license fees at  a level to  cover the                                                                   
         State's costs of administration and enforcement.                                                                       
   ·     Communities shall be apprised of adult business                                                                        
         license  applications   through  reasonable   public                                                                   
         notice rules.                                                                                                          
   ·     Allows suspension of an adult entertainment                                                                            
         business  license  if  provisions  of  the  law  are                                                                   
         knowingly violated.                                                                                                    
                                                                                                                                
Representative McGuire  pointed out the faxed  testimony from                                                                   
Shawn Ruggley,  who spent  many years  dancing in teen  strip                                                                   
clubs.  Ms.  Ruggley mentions that the selling  and buying of                                                                   
drugs is intermingled  within that scene; it is  almost as if                                                                   
the two were one in the same.  (Copy on File).                                                                                  
                                                                                                                                
Representative  Hawker  MOVED  to ADOPT  Amendment  #1,  #23-                                                                   
LS1394\X.2,  Craver,  4/15/04.   (Copy  on File).    Co-Chair                                                                   
Williams OBJECTED for the purpose of discussion.                                                                                
                                                                                                                                
Representative  McGuire explained  that the  amendment was  a                                                                   
collection of all  the changes made to the bill  in an effort                                                                   
to  garner  support.     It  eliminates  references   to  age                                                                   
restrictions.   Some of the changes  come as a  reflection on                                                                   
Supreme Court rulings  that would cause legal  expense and be                                                                   
challenged.   She pointed out  that most of the  changes were                                                                   
to the age requirement.                                                                                                         
                                                                                                                                
Representative Hawker MOVED to  add a "friendly" amendment to                                                                   
Amendment  #1,  Page  11,  Line   6,  deleting  "public"  and                                                                   
inserting "pubic".   There being NO OBJECTION,  the amendment                                                                   
was amended.                                                                                                                    
                                                                                                                                
                                                                                                                                
TAPE HFC 04 - 84, Side B                                                                                                      
                                                                                                                                
                                                                                                                                
OFFICER   PABLO   PAIZ,   (TESTIFIED   VIA   TELECONFERENCE),                                                                   
ANCHORAGE  POLICE DEPARTMENT,  ANCHORAGE, spoke  in favor  of                                                                   
the legislation.   He was  disappointed with the  language of                                                                   
the amendment as  he thought it would "water  down" the bill.                                                                   
He commented that  he has witnessed the plight  of many young                                                                   
dancers who are victims to their  employment.  In addition to                                                                   
the  employing,  many  employers  house  them.    Having  the                                                                   
businesses being  licensed and  regulated would keep  them on                                                                   
the up and up.                                                                                                                  
                                                                                                                                
DON  HUDSON,   (TESTIFIED  VIA  TELECONFERENCE),   PHYSICIAN,                                                                   
ALASKA REGIONAL  HOSPITAL, ANCHORAGE, voiced his  support for                                                                   
the bill, voicing concern that  it had been watered down.  He                                                                   
commented on  the dramatic  increase of sexually  transmitted                                                                   
diseases  that many  of the young  girls are  treated for  at                                                                   
local  hospitals.    These  girls  are  frequently  pregnant,                                                                   
having multiple  complications.  He  assessed that this  is a                                                                   
sad  commentary   on   the  life  of   these  young   people,                                                                   
reiterating his support for the bill.                                                                                           
                                                                                                                                
CAROL  HARTMAN,  (TESTIFIED  VIA  TELECONFERENCE),  CO-OWNER,                                                                   
FANTASIES,    ANCHORAGE,   spoke    strongly   against    the                                                                   
legislation.   She  stated that  she owns a  business in  the                                                                   
industry  and thought  that  the bill  should  not have  been                                                                   
brought  forward.    The  industry   was  excluded  from  the                                                                   
discussions  that formulated  the  bill.   She believed  that                                                                   
these issues  should have  been addressed  at a local  level.                                                                   
There are already  municipal codes which grandfather  in this                                                                   
industry  including  specific  requirements.   She  mentioned                                                                   
that they would not be against  regulating the industry if it                                                                   
was  handled  fairly,  making  a better  business  world  for                                                                   
everyone.  The concern is with over-regulation.                                                                                 
                                                                                                                                
Ms. Hartman added that many of  the alleged referenced abuses                                                                   
took place  years ago  when current laws  were not  in place.                                                                   
She  added  that  the  situation   in  Anchorage  is  totally                                                                   
different than those in the large  cities in the Lower forty-                                                                   
eight states and  that mishandling in the  Alaskan businesses                                                                   
is  unproven.   She emphasized  that there  are no  secondary                                                                   
effects from this business.                                                                                                     
                                                                                                                                
Ms.  Hartman  disliked  being  called  a  "sexually  oriented                                                                   
business".   She  stressed  that  there is  no  "sex" in  the                                                                   
industry.  She  asked for specific information  that could be                                                                   
substantiated.   She referred to the reference  regarding the                                                                   
high  rate of  sexually  transmitted diseases,  pointing  out                                                                   
that  the  North  Slope  area   has  the  highest  amount  of                                                                   
Chlamydia in the  nation.  She asked if all  those girls were                                                                   
dancers.   She  claimed that  the legislation  was harsh  and                                                                   
asked that it be reconsidered.                                                                                                  
                                                                                                                                
KARA  NYQUIST,  (TESTIFIED  VIA   TELECONFERENCE),  ATTORNEY,                                                                   
DIRECTOR  OF  COVENANT  HOUSE,  ANCHORAGE,  spoke  in  strong                                                                   
support  of HB  367.   She  noted that  she  had worked  with                                                                   
Representatives  McGuire and  Gara on  the legislation.   She                                                                   
offered a  brief legal description  of her experience  on the                                                                   
issue.  The Alaska Supreme Court  and the U. S. Supreme Court                                                                   
have recognized  that dancing is constitutionally  protected,                                                                   
however,   both   courts  recognize   that   those   judgment                                                                   
restrictions and  that local governments  have the  right and                                                                   
duty to regulate  sexually oriented businesses.   The Supreme                                                                   
Court uses  the term  SOB when  describing those  businesses.                                                                   
She mentioned  the secondary  effects of  this type  of local                                                                   
business  with   increased  crime  including   drug  traffic,                                                                   
prostitution   and  sexual  assault   and  the  increase   of                                                                   
spreading  sexually transmitted  diseases and  wage and  hour                                                                   
violations.                                                                                                                     
                                                                                                                                
Several  of the  minors  interviewed  have spoken  about  the                                                                   
things  that  occurred  to  them when  working  in  clubs  in                                                                   
Anchorage.  Some of the things reported were:                                                                                   
                                                                                                                                
     ·         Required to pay $50 dollars a night to work                                                                      
               at the clubs and if they did not make that                                                                       
               amount they then owed the house;                                                                                 
     ·         Encouraged to do lap dances with no clothing                                                                     
               on;                                                                                                              
     ·         Encouraged to engage in prostitution;                                                                            
    ·         Forced to work in unclean conditions; and                                                                         
     ·         Concluded that 16-year-old girls are engaging                                                                    
               in sex.                                                                                                          
                                                                                                                                
Ms. Nyquist  pointed out that  these things are  happening in                                                                   
Anchorage.   The club owners in  the State should  not employ                                                                   
anyone  under the  age of  21.  She  urged that  the bill  be                                                                   
passed from Committee.                                                                                                          
                                                                                                                                
TERRY  DITTMAN,   (TESTIFIED  VIA  TELECONFERENCE),   PARENT-                                                                   
TEACHER-STUDENT  ASSOCIATION   (PTSA),  ANCHORAGE,  read  the                                                                   
testimony    from    Nancy    Fair,    Parent-Teacher-Student                                                                   
Association,  Service  High  School,  Anchorage.    (Copy  on                                                                   
File).                                                                                                                          
                                                                                                                                
She noted  that they  had spent over  a year researching  the                                                                   
impacts  of the  SOB's, finding  no  benefits, only  negative                                                                   
impacts from  that type  of business to  the children  of the                                                                   
State.   She claimed that  business licensing as  proposed in                                                                   
HB 367  would be an important  step in protecting  the teens.                                                                   
It would  help insure  that underage  teens are not  involved                                                                   
and it would insure that the club owners are not criminals.                                                                     
                                                                                                                                
The PTA  strongly supports raising  the minimum age  for both                                                                   
customers  and strippers to  21 years.   Raising the  minimum                                                                   
age would  not be  inconsistent with  supporting the  minimum                                                                   
voting and military age requirements.                                                                                           
                                                                                                                                
Ms. Dittman added  that participation in SOB's  is frequently                                                                   
a pathway  to drug  and alcohol  addiction and  prostitution.                                                                   
Use  of   drugs  and   alcohol  contributes   to  an   unsafe                                                                   
environment  for teens.   Many of the  customers at  the non-                                                                   
liquor strip clubs  arrive intoxicated.  Strip  clubs without                                                                   
a liquor licenses  have no designated closing  times, so when                                                                   
the bars  close a "rush"  of intoxicated customers  appear in                                                                   
the clubs and interact with the under-aged clients.                                                                             
                                                                                                                                
Ms.  Dittman  added  other  benefits of  the  bill  would  be                                                                   
statewide   jurisdiction,  so   that   all  communities   are                                                                   
protected.     She   strongly   encouraged   review  of   the                                                                   
legislation,  as the industry  is detrimental to  individuals                                                                   
and to the communities.                                                                                                         
                                                                                                                                
ANDREE  MCLEOD, (TESTIFIED  VIA  TELECONFERENCE),  ANCHORAGE,                                                                   
testified  in opposition  to the legislation  because  of the                                                                   
manner in which  it was drafted.  She stated that  she is not                                                                   
in favor of  allowing high school students to  participate in                                                                   
stripping, but  maintained that  the process did  not include                                                                   
the  industry  members  when   formulating  the  bill.    The                                                                   
industry has offered to address  the issues of employing high                                                                   
school students.  Ms. McLeod emphasized  that this is a local                                                                   
issue and  observed that men and  women over 18 years  of age                                                                   
have the right to make their own decisions.                                                                                     
                                                                                                                                
Ms.  McLeod   recommended  that  the  operations   should  be                                                                   
regulated around the  State but that the young  people in the                                                                   
18-21 year  old range  are able to  make their own  decisions                                                                   
without the interference of State government.                                                                                   
                                                                                                                                
DIANA  L.  STRAUB, (TESTIFIED  VIA  TELECONFERENCE),  PARENT-                                                                   
TEACHER ASSOCIATION, ASSEMBLY  MEMBER, WASILLA, voiced strong                                                                   
support for  the bill.   Through  the licensing process,  the                                                                   
public will have  the ability to comment.   The public should                                                                   
have the right to comment during  the renewal process and the                                                                   
community  would  be able  to  participate in  the  licensing                                                                   
process.   It is valuable  that the  public can revoke  these                                                                   
licenses.                                                                                                                       
                                                                                                                                
Ms. Straub recommended that the  licensing process mirror the                                                                   
liquor  licensing  process  and   be  regularly  checked  for                                                                   
compliance.   Requests for application  could be  approved or                                                                   
rejected  by   the  State  for  incompliance.     Ms.  Straub                                                                   
recommended that  parole be added on  Page 4, Line 7  & 8 and                                                                   
on Page 5, Line 10, also inserting cities and boroughs.                                                                         
                                                                                                                                
REGINA  MANTEUFEL,  (TESTIFIED  VIA  TELECONFERENCE),  FORMER                                                                   
STRIPPER,   ANCHORAGE,   voiced   strong  support   for   the                                                                   
legislation.   She urged  that the patrons  be 21  years old.                                                                   
She noted  that she first  started dancing for  the military.                                                                   
Those clients tend  to be very rude and often  would grab the                                                                   
dancers.  She pointed out that  many dancers have stage names                                                                   
to protect themselves from being followed.                                                                                      
                                                                                                                                
Ms. Manteufel  discussed labor laws  that a person  cannot be                                                                   
paid a  shift rate  to work.   Dancers  cannot be paid  their                                                                   
stage tips  to work.  Any stage  tip is considered  a tip and                                                                   
it  is illegal  that  the  owners of  the  club  use that  to                                                                   
suffice minimum  wage.  She  claimed that is  done everywhere                                                                   
and that it is illegal to have a shift-pay.                                                                                     
                                                                                                                                
Ms.  Manteufel recommended  that  the Department  of Labor  &                                                                   
Workforce  Development visit the  clubs twice  a year  and go                                                                   
over the labor  laws with the dancers,  including information                                                                   
on making a wage claim.                                                                                                         
                                                                                                                                
Ms.  Manteufel  did not  support  young girls  table  dancing                                                                   
naked.   She stressed  that there  should be  no naked  table                                                                   
dancing  at any  age.   The original  bill contains  one-hour                                                                   
assertiveness  training,  which  she thought  would  be  cost                                                                   
effective for all clubs.                                                                                                        
                                                                                                                                
Ms. Manteufel  referenced the  domestic violence  records for                                                                   
the  State  of Alaska,  pointing  out  that the  men  abusing                                                                   
between  the  ages  18-21  years   old  are  usually  in  the                                                                   
military.                                                                                                                       
                                                                                                                                
                                                                                                                                
TAPE HFC 04 - 85, Side A                                                                                                      
                                                                                                                                
                                                                                                                                
Ms.  Manteufel concluded  her  testimony  and reiterated  her                                                                   
support for the bill.                                                                                                           
                                                                                                                                
KATHY  HARTMAN, (TESTIFIED  VIA  TELECONFERENCE),  CO-OWNERS,                                                                   
FANTASIES, ANCHORAGE, spoke against  the passage of the bill.                                                                   
She  referenced  the packet  in  member's  files.   (Copy  on                                                                   
File).  She  noted that her business  is in the Union  and is                                                                   
audited every year for workmen's  compensation.  She stressed                                                                   
that  much  of the  testimony  is  off  base.   Much  of  the                                                                   
information  is being provided  from very  old surveys.   She                                                                   
claimed that the "deep" research  performed by Representative                                                                   
McGuire  was not true.   She  responded to  comments made  in                                                                   
previous testimony.                                                                                                             
                                                                                                                                
Ms. Hartman pointed out that there  are only six of this type                                                                   
business in the  Northern Alaskan area.  The  Municipality of                                                                   
Anchorage and Matsu  have laws on the books  regulating them.                                                                   
Currently,  these  businesses  are  required to  do  all  the                                                                   
reporting  that other  businesses  are required  to  provide.                                                                   
She  strongly  urged   that  the  bill  not   be  moved  from                                                                   
Committee.                                                                                                                      
                                                                                                                                
Representative  Hawker MOVED  a conceptual  to Amendment  #1,                                                                   
Page 2, Line 15, inserting language:                                                                                            
                                                                                                                                
     (4)       Information on the State's wage and labor                                                                        
               laws as it pertains to the entertainer's                                                                         
               employment.                                                                                                      
                                                                                                                                
There  being  NO  OBJECTION,  the  conceptual  amendment  was                                                                   
adopted.                                                                                                                        
                                                                                                                                
Vice Chair  Meyer inquired  how performances  in places  like                                                                   
the Performing  Arts Center and  out-door theatres  that from                                                                   
time to time  offer presentations where clothing  is removed,                                                                   
would be handled.                                                                                                               
                                                                                                                                
Representative  McGuire  responded  that the  sponsor's  were                                                                   
careful  in drafting  the legislation  that those  situations                                                                   
were  not  included.   There  is  a definition  on  Page  10,                                                                   
outlining  an  adult  oriented  business  and  operating  for                                                                   
compensation.   She added that sexually oriented  business is                                                                   
a  legally tested  term  words  used throughout  the  Supreme                                                                   
Court documentation.                                                                                                            
                                                                                                                                
Co-Chair  Harris MOVED  to  report  CS HB  367  (FIN) out  of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS  HB 367  (FIN)  was reported  out  of Committee  with  "no                                                                   
recommendation" and with a new  fiscal note by the Department                                                                   
of Community &  Economic Development, a new zero  note by the                                                                   
Department  of  Public  Safety   and  zero  note  #2  by  the                                                                   
Department of Labor & Workforce Development.                                                                                    
                                                                                                                                
HOUSE BILL NO. 533                                                                                                            
                                                                                                                                
     An Act relating to the state's administrative                                                                              
     procedures and to judicial oversight of administrative                                                                     
     matters.                                                                                                                   
                                                                                                                                
LINDA  SYLVESTER,  STAFF,  REPRESENTATIVE   BRUCE  WEYHRAUCH,                                                                   
noted  that   Representative   Weyhrauch  was  carrying   the                                                                   
proposed legislation  for the House State  Affairs Committee.                                                                   
She commented that  HB 533 was a part of a  package put forth                                                                   
by  the  Regulation  Review  Committee,  Chaired  by  Senator                                                                   
Therriault.  The component is  called Judicial extraction and                                                                   
would  address circumstances  when there  is an  unreasonable                                                                   
delay for an instate agency issue.                                                                                              
                                                                                                                                
She stated  that Representative  Weyhrauch was interested  in                                                                   
carrying  the  bill,  as  it  would  address  the  impact  of                                                                   
unreasonable delays causing irreparable harm.                                                                                   
                                                                                                                                
DAVE    STANCLIFF,   STAFF-REGULATION    REVIEW    COMMITTEE,                                                                   
REPRESENTATIVE PETE  KOTT, stated that  HB 533 was  the final                                                                   
stage   of  a   three-bill   system,  working   through   the                                                                   
Legislature and providing a safety valve.                                                                                       
                                                                                                                                
He referenced the data provided  by Legislative Research.  To                                                                   
date, only half the agencies have  reported in.  It is worthy                                                                   
to  note  for   the  record  that  since  1980,   over  8,000                                                                   
administrative  cases have languished  for more than  a year.                                                                   
That  does not  count  the  contract-hearing  officers.   Mr.                                                                   
Stancliff  commented it  would be difficult  to quantify  how                                                                   
that  would affect  State  government knowing  it  is a  huge                                                                   
expense.  The  courts require that the  administrative remedy                                                                   
must  be exhausted  before  they can  be  brought before  the                                                                   
court.   He commented that the  trick is to provide  a safety                                                                   
valve  without  providing  too  easy  a way  to  opt  out  of                                                                   
regulations.  He  noted that the sponsor had  worked with the                                                                   
Department of  Law.  By  the time it  makes it to  court, the                                                                   
court would have three options:                                                                                                 
                                                                                                                                
     ·         Site the agency to speed the process up;                                                                         
     ·         Some type of alternate dispute resolution;                                                                       
     ·         Claim that it was out there long enough to                                                                       
               come to a resolution and in the matter of                                                                        
               public interest, the court would opt to                                                                          
               consider the case.                                                                                               
                                                                                                                                
Mr. Stancliff pointed  out that the theory is,  once a safety                                                                   
value  is in  place, on-going  cases  would become  resolved.                                                                   
The  reform  is  not sweeping,  but  to  the  businesses  and                                                                   
citizens,  it would  be a  sign  that politicians  understand                                                                   
that there are  cases, which have gone on too  long, and that                                                                   
there is an alternative option.   It is anticipated that once                                                                   
the  Department   of  Environmental   Conservation   and  the                                                                   
Department  of Education  & Early Development  weigh  in with                                                                   
the contract cases,  there could be somewhere  between 12,000                                                                   
and 15,000  cases that  have gone  on for  more than  a year.                                                                   
The cost is extraordinary.                                                                                                      
                                                                                                                                
Mr.  Stancliff  pointed out  the  indeterminate  notes.   The                                                                   
intention is that  once the cases are processed,  the savings                                                                   
would reduce  that level by offsetting  them.  He  offered to                                                                   
answer questions of the Committee.                                                                                              
                                                                                                                                
Representative  Hawker asked about  the fiscal note  from the                                                                   
Alaska Permanent Fund Corporation.   He pointed out that note                                                                   
related to  HB 553 (analysis)  and should not be  included in                                                                   
the file for HB 533.                                                                                                            
                                                                                                                                
Representative  Hawker noted  that he  was disappointed  that                                                                   
Representative Weyhrauch  was not present.   He asked  if the                                                                   
bill  was a  vehicle being  considered  as an  administrative                                                                   
relief  language related  to the  expungement  statute.   Mr.                                                                   
Stancliff replied  that it had  not been considered  for that                                                                   
reason.   He discussed that  they would respectfully  request                                                                   
that it  remain "whole"  as it  is one  part of a  three-part                                                                   
process.    Ms.  Sylvester  interjected  that  Representative                                                                   
Weyhrauch was very interested  in expungement concept and had                                                                   
investigated that.                                                                                                              
                                                                                                                                
Representative Foster MOVED to  report CS HB 533 (JUD) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS HB  533 (JUD)  was reported  out of  Committee with  a "do                                                                   
pass"  recommendation   and  with   a  new  fiscal   note  by                                                                   
Department of Law, indeterminate  note #1 by the Alaska Court                                                                   
System,  indeterminate note  #2 by  the Commercial  Fisheries                                                                   
Entry   Commission,  and   indeterminate  note   #3  by   the                                                                   
Department of Health & Social Services.                                                                                         
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 3:53 P.M.                                                                                          
                                                                                                                                

Document Name Date/Time Subjects