Legislature(1997 - 1998)
05/05/1998 02:00 PM House FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
May 5, 1998
2:00 P.M.
TAPE HFC 98 - 153, Side 1
TAPE HFC 98 - 153, Side 2
TAPE HFC 98 - 154, Side 1
TAPE HFC 98 - 154, Side 2
TAPE HFC 98 - 155, Side 1
CALL TO ORDER
Co-Chair Gene Therriault called the House Finance Committee
meeting to order at 2:00 p.m.
PRESENT
Co-Chair Therriault Representative Kohring
Representative Davies Representative Martin
Representative Davis Representative Moses
Representative Grussendorf Representative Mulder
Representative Kelly
Co-Chair Hanley and Representative Foster were absent from
the meeting.
ALSO PRESENT
Senator Jerry Mackie; Representative Joe Ryan; Jim Hornaday,
Staff, Representative Kott; Jerry Reinwand, Lobbyist, Blue
Cross Blue Shield, Juneau; Marianne Burke, Director,
Division of Insurance, Department of Commerce and Economic
Development; Dean Guaneli, Chief Assistant Attorney General,
Criminal Division, Department of Law; Brett Huber, Staff,
Senator Halford; Barbara Huff Tuckness, Teamsters Union;
Wendy Redman, Vice President, Statewide Programs, University
of Alaska; Dwight Perkins, Special Assistant, Department of
Labor; Robert Pearson, Intern, Senator Leman; Barbara
Miklos, Child Support Enforcement Division, Department of
Health and Social Services; Paul Fuhs, Lobbyist, City of
Yakatat; Ben Brown, Staff, Senator Kelly; Brook Mils, Alaska
Public Officers Commission; Dan Branch, Human Services
Section, Assistant Attorney General, Department of Law; Neil
Slotnick, Assistant Attorney General, Commercial Section,
Department of Law.
The following testified via the teleconference network:
Jennifer Taylor, Fairbanks; Ed Linguist, Anchorage School
District, Anchorage; Dick Mylius, Division of Land,
Anchorage.
SUMMARY
HB 344 "An Act relating to paternity establishment and
child support; relating to the crimes of criminal
nonsupport and aiding the nonpayment of child
support; and amending Rule 37(b)(2)(D), Alaska
Rules of Civil Procedure; and providing for an
effective date."
CSHB 344 (FIN) was REPORTED out of Committee with
"no recommendation" and with five zero fiscal
notes, three by the Department of Administration,
one by the Department of Revenue, one by the
Department of Community and Regional Affairs; and
one fiscal impact note by the Department of
Administration.
HB 490 "An Act relating to insurance premium taxes."
CSHB 490 (FIN) was REPORTED out of Committee with
"no recommendation" and with a fiscal impact note
by the Department of Commerce and Economic
Development.
SB 105 "An Act relating to legislative ethics; relating
to the filing of disclosures by certain
legislative employees and officials; and providing
for an effective date."
SB 105 was HELD in Committee for further
consideration.
SB 218 "An Act relating to the crime of murder and to
murder of children."
HCS CSSB 218 (FIN) was REPORTED out of Committee
with a "do pass" recommendation and with two zero
fiscal notes, one by the Department of
Corrections, dated 2/12/98 and one by the
Department of Labor, dated 2/12/98; and one fiscal
impact note by the Department of Administration,
dated 2/12/98.
SB 281 "An Act relating to general grant land
entitlements for the City and Borough of Yakutat;
and providing for an effective date."
HCS CSSB 281 (CRA) was REPORTED out of Committee
with a "do pass" recommendation and with a fiscal
impact note by the Department of Natural
Resources.
SB 336 "An Act relating to excluding professional hockey
team members from worker's compensation coverage."
CSSB 336 (L&C) was REPORTED out of Committee with
"no recommendation" and with a Department of
Labor.
HOUSE BILL NO. 490
"An Act relating to insurance premium taxes."
JAMES HORNADAY, STAFF, REPRESENTATIVE PETE KOTT testified in
support of HB 490. He explained that Representative Kott
sponsored the legislation by request. The legislation
exempts premiums paid by employers who participate in the
Public Employees' Retirement System (PERS) or in the
Teachers' Retirement System (TRS) and premiums paid under
contracts purchased under AS 39.30 from the tax levied on
insurers in AS 21.09.310. He maintained that the
legislation would encourage participation in these programs
and assist individual employees.
REPRESENTATIVE JOE RYAN addressed section 3. He noted that
the state of Alaska charges a 2.7 percent yearly premium
tax. No premiums are written in Alaska with a value of $100
hundred thousand dollars or more. There are approximately
12,000 premiums written offshore. Insurance polices are
written for $500 million to several billion dollars with
premiums as high as $200 million dollars a year. The
principle is put into a trust for the beneficiary at the
death of the policyholder. This is considered a gift. The
55 percent state tax is not applicable on the trust. He
noted that the legislation would allow Alaska to be
competitive by reducing the premium tax on policies greater
than $100 thousand dollars a year to one-tenth of one
percent. He noted that offshore jurisdictions have no
premium tax.
JERRY REINWAND, LOBBYIST, BLUE CROSS BLUE SHIELD, JUNEAU
explained in response to a question by Representative Kelly,
that the basic question is whether public entities should be
subject to the tax. He noted that the state of Washington
passed legislation in 1994, which raised their tax to 2
percent. The retaliatory tax was implemented in response to
the state of Washington's tax. The state of Alaska exempted
itself from the tax. The statute remained silent in regards
to the University of Alaska. He believes that the
University is a state entity and is covered by the
exemption. He questioned if school districts and
municipalities would fall under the law. He noted that
there would be a loss in revenue from the repeal of the
retaliatory tax. He noted that Blue Cross is the only
company that is subject to the retaliatory tax, since it is
the only company that sells insurance in the state of
Washington and the state of Alaska. He estimated that the
loss in income would be $250 thousand dollars.
Co-Chair Therriault expressed concern that another state's
legislature is impacting the premiums charged in the state
of Alaska.
Mr. Reinwand noted that there is a question in regards to
the state's taxing authority and taxing of political
subdivisions.
Representative Martin asked if the law should be repealed.
Representative Ryan noted that there are no Alaskan based
health insurance companies.
Representative Davies referred to page 2, line 16. He
questioned if other taxation issues would be affected by the
change from section to chapter. Co-Chair Therriault noted
that both the retaliatory and premium taxes would be
affected. He stated that he would offer an amendment to
make reference specifically to the retaliatory section AS
21.09.027.
Representative Ryan noted that New York Life recently sold
NYLCare. New York Life is considering opening a full owned
subsidiary in Alaska to sell life insurance.
Co-Chair Therriault noted that section 3 pertains to the
retaliatory tax. He observed that there are municipalities
and school districts that would benefit from sections 1 and
2.
ED LINGUIST, ANCHORAGE SCHOOL DISTRICT, ANCHORAGE spoke in
support of the legislation. He noted that the District is
paying the retaliatory tax. Each employee pays approximately
$120 dollars a year. He observed that state employees do
not have to pay the tax.
BARBARA HUFF TUCKNESS, TEAMSTERS UNION spoke in support of
HB 490. She noted that teamster members working for the
Anchorage School District would be impacted by the
legislation.
In response to a question by Representative Martin, Ms. Huff
explained that the tax is charged based on the company's
place of domicile.
MARIANNE BURKE, DIRECTOR, DIVISION OF INSURANCE, DEPARTMENT
OF COMMERCE AND ECONOMIC DEVELOPMENT spoke in support of the
legislation. She observed that there is an exemption for
the state of Alaska and insurance purchased under Title 9.
She observed that there are differing attorney general
decisions regarding whom is covered under Title 9. Some
governmental entities and political subdivisions are paying
premium tax. The premium tax is 2.7 percent charged on the
gross. She stressed that it is difficult to enforce. An
attempt has been made to identify who would qualify. Some
political subdivisions cannot afford to belong to PERS. She
noted that the state of Washington changed the tax on
companies headquartered in that state. As a result the
premiums collected under Washington law was higher. The
retaliatory tax was created to protect health insurance
companies headquarter in Alaska. She noted that there are
no health insurance companies domiciled in Alaska. Premiums
collected in the state of Alaska were approximately $1
million dollars in 1995. Blue Cross is the only company
affected since it is the only carrier domiciled in the state
of Washington that is doing business in Alaska. She noted
that Aetna is domiciled in the state of Connecticut. Blue
Cross is at a competitive disadvantage. She urged the
Committee to identify the definition of political
subdivision.
Co-Chair Therriault questioned if the retaliatory tax should
be repealed. Ms. Burke noted that if a company was
domiciled in Alaska that the retaliatory tax may need to be
revisited.
In response to a question by Representative Martin, Ms.
Burke stated that any change would have to be initiated by
the state of Alaska. She emphasized that the "playing
field" is uneven and stated that the appropriate place to
address the problem is in the Alaskan legislature.
Representative Mulder asked the fiscal cost of sections 1
and 3. Ms. Burke noted that the fiscal impact for sections
1 and 3 is unknown. The 2.65 million-dollar fiscal note
only pertains to section 2. She explained that some
governmental entities are being taxed that were not intended
to be taxed. She suggested that the tax be evenly applied.
She pointed out that there is no data to quantify the amount
of retaliatory tax being collected on school districts,
municipalities, REAA's and other political subdivisions.
The fiscal note is based on attached assumptions.
(Tape Change, HFC 98 - 153, Side 2)
Ms. Burke explained that the retaliatory tax was first
collected in 1996. Blue Cross filed for a refund based on
the ambiguity of the law. The refund is still pending.
Representative Davies questioned if political subdivision
needs to be clarified. Ms. Burke observed that political
subdivision is defined in AS 01.10.060. However, it
includes municipalities but not boroughs and school
districts. Case law has held that boroughs and school
districts are political subdivisions. Ms. Burke noted that
it is questionable if the Public Employees Retirement System
(PERS) is a political subdivision.
Representative Davies asked if employers that participate in
PERS and TRS would be exempt under this section. Ms. Burke
expressed concern that their exemption would lead other
entities to request exemptions. She noted that there are
governmental entities that are not included under PERS and
TRS.
In response to a question by Representative Davies, Ms.
Burke noted that AS 39.30 is the statute that exempts the
state of Alaska from collecting premium tax on itself.
Representative Davies questioned if the intent is to exempt
political subdivisions. Ms. Burke suggested that political
subdivisions include a city, municipality, borough, public
school district, Rural Education Attendance Area (REAA),
public school, university or community college.
Representative Davies noted that "municipality" is defined
under AS 29.71.800 as a political subdivision incorporated
under state law.
Co-Chair Therriault suggested that the Committee not try to
distinguish between the municipality of Anchorage and the
Parking Authority in regards to the exemption. He thought
that the retaliatory tax should be repealed. He emphasized
that the decision of charging a premium tax on political
subdivisions and the definition of political subdivision
should be held for further discussion. He noted that
sections 1 and 3, which would reduce tax on life insurance
policies could be positive for the state of Alaska.
Co-Chair Therriault proposed that section 2 be deleted and a
new section be added to repeal AS 21.09.270.
Representative Davies suggested that the retaliatory tax in
section 2 would be beneficial if an Alaskan insurance
business were in operation. Co-Chair Therriault noted that
the retaliatory tax has been in existence since 1966. There
have been no Alaskan insurance companies during this time.
In response to a question by Co-Chair Therriault, Ms. Burke
explained that sections 1 and 3 would attract policies
written in the state of Alaska. The insurance companies do
not have to be domiciled in Alaska.
Representative Davies noted that Blue Cross has already paid
the retaliatory tax. Ms. Burke observed that Blue Cross is
one of the largest insurance writers for municipalities,
boroughs, and school districts. She observed that the state
of Alaska pays and collects the tax for these political
subdivisions. Co-Chair Therriault noted that other private
businesses and individuals are also paying the retaliatory
tax. He questioned the cost to the State of repealing the
tax. Ms. Burke observed that Blue Cross pays approximately
$1 million dollars a year. She observed that Blue Cross
requested the legislation. The Division of Insurance agrees
that the retaliatory tax is unfair.
Co-Chair Therriault MOVED to delete section 2 and add a
section repealing AS 21.09.270. There being NO OBJECTION,
it was so ordered. He noted that there would be a revised
fiscal note.
Representative Mulder MOVED to report CSHB 490 (FIN) out of
Committee with the accompanying fiscal note. Co-Chair
Therriault clarified that the immediate effective date would
remain. There being NO OBJECTION, it was so ordered.
CSHB 490 (FIN) was REPORTED out of Committee with "no
recommendation" and with a fiscal impact note by the
Department of Commerce and Economic Development.
SENATE BILL NO. 218
"An Act relating to the crime of murder and to murder
of children."
BRETT HUBER, STAFF, SENATOR HALFORD, testified in support of
SB 218. He noted that the death of a child is always among
the gravest of situations. He asserted that when a child's
death results from the commission of a crime, the
consequences should be certain and the punishment severe.
Senator Halford introduced this legislation to give law
enforcement, prosecutors and the courts additional tools to
address crime involving the murder of children.
HCS CSSB 218(JUD) makes the following changes to criminal
statutes:
? amends current law by adding a new form of first
degree murder when the death of a child results from
the commission or attempted commission of
kidnapping, or of a sexual offense,
? expands the list of offenses constituting felony
murder to include sexual abuse of a minor in the
first and second degrees,
? elevates criminally negligent homicide from a class
C to a class B felony,
? establishes a twenty year mandatory minimum sentence
for a person convicted of a murder of a child under
the age of sixteen,
? increases the mandatory minimum sentence (from five
to seven years) for manslaughter, when the victim is
a child under the age of sixteen,
? establishes a new sentencing provision, which allows
for a term of unsuspended imprisonment that exceeds
the presumptive term, for certain felony offenses if
the victim is a child under the age of 16,
? establishes the crime of custodial interference in
the first degree if a person violates AS 11.41.330
and causes a child or incompetent person to be
removed or kept outside the state.
Mr. Huber maintained that children, society's most
vulnerable members, deserve a responsible level of care when
entrusted to an adult. The legislation is intended to
establish a level of punishment more commensurate with the
crime and send the clear message of deterrence that if you
kill a child, you're going to jail for a very long time.
Mr. Huber provided members with Amendment 1 (copy on file).
He observed that the amendment would correct a drafting
error. "Natural parent, step parent, adopted parent," would
be added on page 3, line 27. The Department of Law
suggested the language. He observed that the Anchorage
Police Department brought the legislation to Senator
Halford's attention.
Representative Mulder questioned if there have been cases
that would have been affected by the legislation.
DEAN GUANELI, CHIEF ASSISTANT ATTORNEY GENERAL, CRIMINAL
DIVISION, DEPARTMENT OF LAW observed that the Anchorage
Police Department did compile a list of cases involving
manslaughter, criminal negligent homicide, and second degree
murder. He noted that sentences ranged from 18 months to 10
years. An 18-month sentence would be raised to a 3 to 4
year sentence for criminal negligent homicide. Manslaughter
sentences of 5 years would be increased to 7 years. Second-
degree murder sentences of 10 years would be increased to 20
years. He noted that the intent is to provide uniformity
and to eliminate some of the variability of cases around the
state of Alaska. He noted that there would only be a few
cases affected by the legislation.
In response to a question by Representative Grussendorf, Mr.
Guaneli explained that criminal negligent homicide would be
elevated from a class C felony to class B felony. He
estimated that some borderline cases of criminal negligence
and manslaughter might be plea-bargained down.
Representative Mulder MOVED to ADOPT Amendment 1. There
being NO OBJECTION, it was so ordered.
Representative Kohring MOVED to report HCS CSSB 218 (FIN)
out of Committee with the accompanying fiscal note. There
being NO OBJECTION, it was so ordered.
HCS CSSB 218 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with two zero fiscal notes, one by
the Department of Corrections, dated 2/12/98 and one by the
Department of Labor, dated 2/12/98; and one fiscal impact
note by the Department of Administration, dated 2/12/98.
SENATE BILL NO. 336
"An Act relating to excluding professional hockey team
members from worker's compensation coverage."
ROBERT PEARSON, INTERN, SENATOR LEMAN testified in support
of SB 336. He observed that the bill amends Worker's
Compensation provisions by adding professional hockey teams
to the list of persons not covered under AS 23.30.230. In
exchange for this exemption, a team owner would have to
provide a medical and disability program to cover the
players. Coaches and others associated with the team in the
same Worker's Comp risk category would also be covered.
They would not be required to cover office personnel.
Players would be covered 24 hours a day, whether on duty,
travel or their own time. The owner is responsible for the
cost of the premiums. The idea was taken from Florida's
approach to this problem.
The committee was asked to introduce this legislation by the
sole professional hockey team in the state, the Anchorage
Aces.
The Department of Labor, Division of Worker's Compensation
has reviewed the legislation and is neutral on the bill.
Representative Grussendorf asked if the players support the
legislation. Mr. Pearson stated that the players were not
in objection to the legislation.
Co-Chair Therriault observed that players are required to
have other coverage on or off the ice.
Representative Martin expressed concern that the legislation
is exclusive. Representative Davies did not think that the
legislation would fall under special interest legislation.
Co-Chair Therriault observed that the legislation could be
written to include any hockey teams anywhere in the state of
Alaska. Representative Davies questioned if the bill could
be written to allow a second professional hockey team in
Alaska to be covered. Co-Chair Therriault noted that if a
second team did not meet the criteria that they would not
have the exemption granted.
DWIGHT PERKINS, SPECIAL ASSISTANT, DEPARTMENT OF LABOR
responded to questions by Committee members. He explained
that where there is compensation by an employer there must
be workers' compensation. This concern was alleviated by
subsection (9), which provides that they must have workers'
coverage. He noted that another team could be covered by
the exemption. The legislation does not alleviate the
employer's responsibility for injury during the performance
of their duties.
Representative Mulder noted that workers' compensation
provides a shield for the employer from being sued, as well
as protection the employee. The exemption would remove the
employer's shield. He noted that players have testified in
support of the legislation.
(Tape Change, HFC 98 -154, Side 1)
Mr. Perkins noted that sports officials would be included
under the exemption. He explained that the legislation does
not require mandatory participation.
Representative Davies observed that a second hockey team
could opt to participate under workers' compensation. If
they do not have insurance for the worker's protection they
would have to participate in workers' compensation.
Representative Martin reiterated constitutional concerns
regarding the legislation's exclusive nature.
Mr. Perkins estimated that 4 or 5 other states have similar
exemptions. He noted that coverage would be the same as the
coverage offered under workers' compensation. The premiums
may be less than the premium for workers' compensation. He
did not think the Department would support expansion of the
legislation to include any professional team.
In response to a question by Representative Kohring
regarding coverage for semi-professional hockey teams, Mr.
Perkins clarified that if there is wage compensation they
must be covered under the Workers' Compensation Act.
Representative Mulder MOVED to report CSSB 336 (L&C) out of
Committee with the accompanying fiscal note. There being NO
OBJECTION, it was so ordered.
CSSB 336 (L&C) was REPORTED out of Committee with "no
recommendation" and with a Department of Labor.
SENATE BILL NO. 281
"An Act relating to general grant land entitlements for
the City and Borough of Yakutat; and providing for an
effective date."
SENATOR JERRY MACKIE, SPONSOR, testified in support of SB
281. Senator Mackie read the sponsor statement. He noted
that SB 281 was introduced to complete the formation of the
Yakutat Borough and the land entitlements that the state
grants to support local government. Yakutat's petition to
incorporate as a borough in 1992 was considerably reduced in
size by the Local Boundary Commission. The land entitlement
for the new borough by the formula of 10% of "vacant,
unappropriated, and unreserved" (vuu) state lands was a mere
138 acres.
The City and Borough of Yakutat subsequently petitioned the
Local Boundary Commission to reclaim much of the area on its
northern boarder. In a reversal of its earlier decision,
the Local Boundary Commission approved the annexation, which
contains a substantial amount of state "vuu" lands. It is
estimated that if the annexed area had been included for the
original borough formation, the municipal land entitlement
would have amounted to 33,000 acres.
Senator Mackie observed that it has been a long established
policy for the state to assist the formation and operation
of local governments with generous grants of state land. He
maintained that SB 281 corrects the defects in the borough
formation process that resulted in such a small land
entitlement for the City and Borough of Yakutat by
increasing its entitlement to 21,500 acres. The bill also
gives additional authority to the Director of the Division
of Lands in the Department of Natural Resources to condition
and restrict any of the municipality's selections made under
this increased grant.
Senator Mackie reiterated that the City and Borough of
Yakutat only received 138 acres of land as an entitlement.
The original legislation would have granted a 30,000-acre
entitlement. This was reduced to 21,500 in the Senate
Community and Regional Affairs Committee. The Senate
Resource Committee reduced the entitlement to 8,552 acres.
The entitlement was increased back to 21,500 in the House
Community and Regional Affairs Committee. He emphasized
that the University of Alaska, Department of Natural
Resources, Department of Fish and Game and the regional
native corporation supported an entitlement of 21,500 acres.
He reviewed the selection process through the Division of
Land in the Department of Natural Resources.
Co-Chair Therriault questioned if the Borough anticipates
selecting the log transfer site.
PAUL FUHS, LOBBYIST, CITY OF YAKATAT stated that the
community does plan to ask for the log transfer site. He
observed that there is no guarantee that the City's request
would be approved. He explained that no fee would be
charged to the agencies, University or to the Mental Health
Lands Trust during the lifetime of their cut. He stressed
that there would be reasonable fees for the University if
they receive more land.
In response to a question by Representative Martin, Mr. Fuhs
noted that there are approximately 800 individuals in the
Borough. Representative Martin compared entitlements to
other Boroughs. Senator Mackie emphasized that every
community is different and availability of state land must
be considered.
Representative Martin felt that the grant was too large.
Mr. Fuhs spoke in support of the entitlement. He observed
that Yakutat is no longer a single site school district. He
added that fishing and timber receipts are down.
Representative Davies spoke in support of the legislation.
He noted language allowing stipulations. Mr. Fuhs explained
that stipulations would be applied to alleviate concerns by
the Department of Fish and Game regarding habitat.
Representative Davis spoke in support of the legislation.
Co-Chair Therriault asked if the community's memorandum of
understanding with the Mental Health Trust differs from the
current one with the University of Alaska. Mr. Fuhs stated
that the memorandum with the Mental Health Trust is
different than the memorandum with the University of Alaska.
He explained that the Mental Health Trust is a fee simple
title owner. The University would have to renegotiate for
additional property. Mr. Fuhs clarified that the City would
charge a reasonable rate on future operations. The City's
agreement with the Mental Health Trust is for free access
during the current period. A lease fee would be charged on
future cuttings based on an accessed value.
WENDY REDMAN, VICE PRESIDENT, STATEWIDE PROGRAMS, UNIVERSITY
OF ALASKA spoke in support of the legislation. She noted
that the University is working on a memorandum of agreement
with the Borough. She estimated that they would reach
agreement in the next couple of days.
Senator Mackie stressed that the Borough wants to maintain a
good relationship with the University.
In response to a question by Representative Kohring, Mr.
Fuhs stated that the community supports land sale to private
holders.
Representative Mulder MOVED to report HCS CSSB 281 (CRA) out
of Committee with the accompanying fiscal note. There being
NO OBJECTION, it was so ordered.
HCS CSSB 281 (CRA) was REPORTED out of Committee with a "do
pass" recommendation and with a fiscal impact note by the
Department of Natural Resources.
HOUSE BILL NO. 344
"An Act relating to paternity establishment and child
support; relating to the crimes of criminal nonsupport
and aiding the nonpayment of child support; and
amending Rule 37(b)(2)(D), Alaska Rules of Civil
Procedure; and providing for an effective date."
BARBARA MIKLOS, CHILD SUPPORT ENFORCEMENT DIVISION,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES reviewed the
proposed committee substitute, work draft # 0-GH2007\F,
5/4/98. She observed that 4 sections were removed after the
Division learned that the federal government did not require
them. She referred to a memorandum by Terri Lauterbach,
Legislative Council, dated 5/4/98 (copy on file). She
agreed with Ms. Lauterbach's interpretation. Section 5 was
removed. This section made aiding the nonpayment of child
support punishable by the loss of hunting and sport fishing
licenses. Section 11 was removed. Sections pertaining to
court rule changes were also removed. She stressed that the
legislation fulfills federal requirements without doing more
then is required by the federal government.
Co-Chair Therriault observed that section 37 would delete
the sunset. He spoke in support of retaining the sunset.
Ms. Mikolos explained that section 36 accompanies section 2.
Representative Martin questioned if the biological parents
are pursued once a child is placed in a foster home. Ms.
Mikolos clarified that both biological parents are pursued,
either jointly or individually, based on income.
Ms. Mikolos observed that if the sunset provision is
retained the Division would be before the Legislature in
1999. In response to a question by Representative Martin,
Ms. Mikolos noted that the Division has three investigators.
She noted that other employees assist on some
investigations. Investigators only do the most serious
cases. There is one halftime district attorney assisting
the Division.
JENNIFER TAYLOR, FAIRBANKS expressed concern with the use of
social security numbers. Co-Chair Therriault noted that
social security information would be available to the
Department, but not to the general public. She emphasized
the need to provide for the survival of children born to
single poor mothers. She stressed that statutes should be
written for general comprehension. She maintained that
culpability should be the same regardless of income. She
spoke in support of state statutes that are serious enough
to provide absolute enforcement.
(Tape Change, HFC 98 - 154, Side 2)
In response to a question by Co-Chair Therriault, Ms.
Mikolos explained that language contained in the previous
version was found to be over reaching. The Division
consulted with the federal government and they agreed. She
added that section 24 might still be too broad.
DAN BRANCH, HUMAN SERVICES SECTION, ASSISTANT ATTORNEY
GENERAL, DEPARTMENT OF LAW suggested that "has a" and
"obligated" be deleted and replaced with "owes overdue." He
explained that this change would provide that the only
persons that could have their fish and game licenses
affected by failure to comply with a child support subpoena
or warrant are those that owe overdue child support.
Co-Chair Therriault MOVED to delete "has a" and "obligated"
and insert "owes overdue." There being NO OBJECTION, it was
so ordered.
Co-Chair Therriault MOVED to delete section 37. He
explained that this would retain the sunset review.
Representative Davies suggested that the sunset date be
extend to the year 2001. Ms. Mikolos spoke in support of a
2001-year sunset review. Co-Chair Therriault WITHDREW the
MOTION to delete section 37.
Representative Davies MOVED to amend section 37 to provide a
sunset date of 2001. There being NO OBJECTION, it was so
ordered.
Representative Davies questioned what provisions would be
taken to keep social security numbers confidential. Ms.
Mikolos noted that there is a federal felony penalty for
failure to maintain confidentiality. She noted that they
have an agreement with the Department of Fish and Game to
black out social security numbers on licenses.
Representative Davies MOVED to ADOPT work draft # 0-
GH2007\F, 5/4/98. There being NO OBJECTION, it was so
ordered.
Representative Davies MOVED to report CSHB 344 (FIN) out of
Committee with the accompanying fiscal notes.
Representative Kohring OBJECTED. He expressed concern that
too much control is being given to the Child Support
Enforcement Division. He also expressed concern with the
inclusion of social security numbers and federal mandates.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Grussendorf, Moses, Davis, Foster, Kelly,
Martin, Therriault
OPPOSED: Kohring
Co-Chair Hanley and Representative Mulder were absent for
the vote.
The MOTION PASSED (8-1).
CSHB 344 (FIN) was REPORTED out of Committee with "no
recommendation" and with five zero fiscal notes, three by
the Department of Administration, one by the Department of
Revenue, one by the Department of Community and Regional
Affairs; and one fiscal impact note by the Department of
Administration.
SENATE BILL NO. 105
"An Act relating to legislative ethics; relating to the
filing of disclosures by certain legislative employees
and officials; and providing for an effective date."
Representative Kelly MOVED to ADOPT work draft #0-LS0074\J,
dated 5/4/98. There being NO OBJECTION, it was so ordered.
BEN BROWN, STAFF, SENATOR KELLY reviewed the sectional
analysis for HCS CSSB 105 (FIN), #0-LS0074\J.
SECTION 1: AS 15.13.040(i) DONATION OF SPACE NOT CONSIDERED
A CONTRIBUTION This section adds a new subsection which
allows donation of space for the posting of political signs,
for storage, or for an event without consideration of the
donation as a campaign contribution.
SECTION 2: AS 15.13.070(e) LIMITED USE OF CAMPAIGN FUNDS
FOR PARTY-RELATED EXPENSES This section adds a new
subsection which allows a candidate to expend up to $1000
annually from a campaign account to pay for attendance at
political party events, for party membership, or to sponsor
party functions.
SECTION 3: AS 15.13.072(d) PROHIBITED SOLICITATION &
ACCEPTANCE OF CONTRIBUTIONS This section prohibits
legislative candidates from soliciting or accepting
contributions while the Legislature is convened in regular
or special session, unless the candidate's election is
within 90 days and the solicitation or acceptance takes
place somewhere other than the capital city.
SECTION 4: AS 15.13.072(g) PROHIBITED SOLICITATION &
ACCEPTANCE OF CONTRIBUTIONS This section adds a new
subsection which prohibits candidates for governor and
lieutenant-governor from soliciting or accepting
contributions in the capital city while the Legislature is
convened in regular or special session.
SECTION 5: AS 15.13.074(c) PROHIBITED CONTRIBUTIONS This
section prohibits a person or group from contributing to a
candidate for governor or lieutenant- governor before the
1st of January of a general election year or before the date
of a proclamation calling for a special election. It
prohibits a person or group from contributing to a
legislative candidate while the legislature is convened in
regular or special session, unless the candidate's election
is within 90 days and the solicitation or acceptance takes
place somewhere other than the capital city. Section 5
lengthens the period of time after an election in which a
candidate may continue to raise money to the earlier of
either 60 days after the election or the end of the calendar
year.
Sections 6 - 27 were not changed in work draft J.
SECTION 28: AS 24.60.080(c) GIFT RESTRICTION EXEMPTIONS A
new subsection 8 was added on page 20. It clarifies that a
stay in a vacation home located outside Alaska is not an
exempted gift. It allows legislators and legislative
employees to accept discounts while on State business if the
discount benefits the State. It allows legislators and
their personal staff (but not other legislative employees)
to accept discounts and welcoming gifts in the capital city
during session. Section 28 allows receipt of a gift worth
more than $250 of legal services related to a matter of
legislative concern.
SECTION 29: AS 24.60.080(d) GIFT REPORTING This section
increases the reference to the maximum cumulative annual
gift limit from $100 to $250. It mandates reporting of
gifts of travel or legal services within 30 days of receipt.
It changes the reporting deadline for gifts not related to
legislative status to the 15th of March of the following
year, and specifies that the disclosure need include only a
description of the gift and the giver's identity (not the
actual value). Section 29 also calls for the Ethics
Committee to forward gift disclosures by legislators and
legislative directors to the Alaska Public Offices
Commission (APOC).
Sections 30 through 43 were not changed by the committee
substitute.
SECTION 44: AS 24.60.170(a) INITIATION OF COMPLAINTS
Section 44 removes the committee's ability to initiate
complaints on its own aggregate motion, but does not remove
any individual committee member's right to initiate a
complaint.
Sections 45 through 47 remained the same.
SECTION 48: AS 24.60.170(g) CORRECTIVE ACTIONS New language
was added on lines 8 - 13, on page 30. This section allows
the ethics committee to issue an opinion (which must go to
both the complainant and the subject) recommending
corrective action after finding probable cause that a
violation occurred. It lets the subject request a
confidential meeting with the committee within 20 days of
receipt of the opinion, at which the committee must explain
its reasons for recommending corrective action. It then
allows the subject to comply with the opinion or request a
hearing under subsection (j), and lets the committee amend
or affirm the opinion after this hearing. Section 48 sets
out that if a subject agrees to comply with an opinion but
fails to do so in a timely manner, the committee may
formally charge the person under subsection (h) or refer the
matter to a supervisory authority. It empowers the
supervisory authority to enforce corrective actions, or
decline to do so and refer the matter back to the committee,
which retains the power formally to charge the person.
Sections 49 and 50 remain the same.
SECTION 51: AS 24.60.170(l) CONFIDENTIALITY New language
that was added to the end of Section 51 was deleted by the
committee substitute. The Department of Law advised that
the new language was unnecessary. This section provides
that ethics committee proceedings are confidential until the
determination of probable cause, and that complaints and all
documents produced or disclosed in the course of an
investigation are confidential as well. It mandates that
the committee transmit information obtained in the course of
an investigation to appropriate enforcement authorities.
Section 51 clarifies that all meetings of the committee
concerning complaints are closed to the public and non-
members of the committee, though the committee may permit
the subject of a complaint to attend a meeting other than
deliberation on probable cause. It allows the subject to
waive the confidentiality provisions of this section.
Sections 52 through 58 were not changed.
SECTION 59: AS 24.60.210 DEADLINES FOR FILING This section
changes the deadline for filing an LFD from the 15th of
April to the 15th of March.
SECTION 60: AS 24.60.240 CIVIL PENALTY FOR LATE FILING
This section changes the reference to who must file an LFD
to include public members of the ethics committee as well as
legislative directors and legislators.
SECTION 61: AS 24.60.250(a), (b) & (c) EFFECTS OF FAILURE
TO FILE This section sets out what APOC must do if an
incumbent legislator fails to file an LFD by the 15th of
March. It establishes that APOC notifies the candidate that
the report is late, and if the candidate still refuses to
file within 30 days, APOC informs the Lieutenant Governor of
the failure to file. The candidate then forfeits nomination
to office and may not be seated. The lieutenant governor
may not certify the person's nomination, and the results of
the person's election are certified according to
39.50.060(b). Subsection (b) sets out that if a public
member fails to file, APOC must notify the appropriate
presiding officer. Subsection (c) sets out that APOC must
notify Leg Council or LB&A if a legislative director fails
to file.
In response to a question by Representative Mulder, Mr.
Brown explained that if a disclosure is not made by the 15th
of March there is a civil fine of $10 dollars a day. If
disclosure is not made within 30 days of the 15th of March
the penalty would be the inability to run for office or a
lose of office.
In response to a question by Representative Martin, Mr.
Brown noted that a subject might ask that confidentiality be
waived.
Representative Mulder noted that the end of year financial
report is due on February 15th. Close economic
relationships and LFD's are due on March 15th. Mr. Brown
observed that two reports are being consolidated.
Representative Martin emphasized that the public should have
the proper information before a person is elected. He
stated that he supported an amendment to require candidates
to disclose relationships of themselves, spouse or spousal
equivalent with lobbyists. Mr. Brown noted that candidates
file public official disclosure forms under AS 39.50.
Sections 62 through 68 were not changed by the committee
substitute.
SECTION 69: AS 39.50.020 REPORT OF FINANCIAL AND BUSINESS
INTERESTS This section changes the requirements for Public
Official Financial Disclosure reports, setting out that
public officials listed in 39.50.200 must file reports
within 30 days after taking office and in each following
year. It changes the annual filing deadline to the 15th of
March, and specifies that all non-municipal officials file
with APOC, while municipal officials file with appropriate
local authorities.
References to spouse in AS 39.50 have been amended to
include the spousal equivalent. The definition of
"immediate family" has been changed to include the parent,
child, or sibling that resides with the person, is
financially dependent on the person or shares a substantial
financial interest with the person who is filing.
Sections 70 through 72 were not changed.
SECTION 73: AS 39.50.060 THIRTY DAY PERIOD AFTER FILING
DEADLINE This section establishes that APOC must notify a
candidate that the report is late. If the candidate does
not within 30 days, APOC informs the Lieutenant Governor of
the failure to file. The candidate then forfeits nomination
to office and may not be seated. The lieutenant governor
may not certify the person's nomination, and the results of
the person's election are certified according to
39.50.060(b). Subsection (b) sets out that if a public
member fails to file, APOC must notify the appropriate
presiding officer. Subsection (c) sets out that APOC must
notify the Legislative Council or the Legislative Budget and
Audit Committee if a legislative director fails to file.
New language was added to clarify that a person is
considered to have complied if they comply within 30 days
after the due date.
Section 74 remains the same.
SECTION 75: AS 39.50.090(a) PROHIBITION ON USE OF OFFICIAL
POSITION This section disallows the use of official
position to obtain financial gain for a spousal equivalent.
Sections 76 and 77 were not changed in the committee
substitute.
SECTION 78: AS 39.50.200(a)(9) DEFINITIONS This section
expands the definition of 'source of income' to include
spousal equivalents.
SECTION 79: AS 39.50.200(a)(10) DEFINITIONS This section
adds a new definition of 'spousal equivalent' for the
purposes of 39.50.
Statutes relating to the Executive Branch Ethics Act begin
in section 80. Sections 80 through 98 were not changed in
the committee substitute.
SECTION 99: AS 39.52.960(2) DEFINITION OF AGENCY This
section adds the Alaska Railroad Corporation to the
definition of 'agency' for the purposes of the Executive
Branch Ethics Act. Audits by the Legislative Budget and
Audit Committee recommended this change.
SECTION 100: AS 39.52.960(4) DEFINITION OF BOARD OR
COMMISSION This section adds the Alaska Railroad
Corporation Board of Directors to the definition of board or
commission for the purposes of the Executive Branch Ethics
Act.
SECTION 101: AS 39.52.960(11) DEFINITION OF IMMEDIATE
FAMILY This section changes the general definition of
immediate family member for the purposes of the Executive
Branch Ethics Act.
SECTION 102: 42.40.710 ALASKA RAILROAD EMPLOYEES This
section specifies that the Executive Branch Ethics Act
applies to Railroad employees, although the remaining
provisions of Title 39 do not.
(Tape Change, HFC 98 - 155, Side 1)
SECTION 103: AS 42.40.230 ALASKA RAILROAD ETHICS CODE
REPEALER This section repeals 42.40.230, which is no longer
needed as the Railroad is brought under the Executive Branch
Ethics Act by the bill.
The remaining sections were not changed by the committee
substitute.
NEIL SLOTNICK, ASSISTANT ATTORNEY GENERAL, COMMERCIAL
SECTION, DEPARTMENT OF LAW stated that he had not discussed
the addition of the Alaska Railroad with the Attorney
General or the Alaska Railroad Corporation. He anticipated
that a memorandum of agreement would be reached that would
allow the Corporation's general counsel to advise them on
legal issues. He anticipated that complaints would be
handled through the Attorney General's Office. He
emphasized that the Department of Law would charge attorney
time through an RSA from the Alaska Railroad Corporation.
Representatives Mulder and Martin spoke in support of the
addition.
Representative Davies suggested that a contractual
relationship be arranged to allow for statutory designated
receipts instead of program receipts.
In response to a question by Representative Mulder, Mr.
Slotnick stated that the Department is supportive of the
amendments made to the Executive Branch Ethics Act.
SB 105 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 5:35 p.m.
House Finance Committee 20
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