Legislature(2009 - 2010)
04/02/2009 03:06 PM House FIN
| Audio | Topic |
|---|---|
| Start | |
| HB199 | |
| HB161 | |
| HB3 | |
| HB98 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 2, 2009
3:06 p.m.
3:06:20 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 3:06 p.m.
MEMBERS PRESENT
Representative Mike Hawker, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Vice-Chair
Representative Harry Crawford
Representative Anna Fairclough
Representative Richard Foster
Representative Les Gara
Representative Reggie Joule
Representative Mike Kelly
Representative Woodie Salmon
MEMBERS ABSENT
Representative Allan Austerman
ALSO PRESENT
Representative Cathy Munoz, Sponsor; Representative Beth
Kertulla, Sponsor; John Bitney, Staff, Representative John
Harris, Sponsor; Dan Fauske, CEO/Executive Director, Alaska
Housing Finance Corporation, Department of Revenue; Joe
Doogler, Chief Financial Officer, Alaska Housing Finance
Corporation, Department of Revenue; Dirk Moffet, Staff,
Representative Bob Lynn, Sponsor; Jerry Luckhaupt,
Legislative Council, Division of Legal Services;
Representative Bob Lynn, Sponsor; Jane Pierson, Staff,
Representative Jay Ramas, Sponsor; Doug Wooliver,
Administrative Attorney, Alaska Court System; Anne
Carpeneti, Assistant Attorney General, Legal Services
Section-Juneau, Criminal Division, Department of Law.
PRESENT VIA TELECONFERENCE
Whitney Brewster, Director, Division of Motor Vehicles,
Department of Administration.
SUMMARY
HB 199 APPROPS: NON-TRANSPORTATION STIMULUS
HB 199 was HEARD and HELD in Committee for further
consideration.
HB 161 JUNEAU SUBPORT BLDG/AHFC BLDG
HB 161 was HEARD and HELD in Committee for further
consideration.
HB 3 REQUIREMENTS FOR DRIVER'S LICENSE/I.D.
CSHS 3 (FIN) was REPORTED out of Committee with a
"do pass" recommendation and with a previously
published fiscal note: FN1 (ADM).
HB 98 ALCOHOL: MINOR CONSUMING/LOCAL OPTION
CSHB 98 (FIN) was REPORTED out of Committee with
"no recommendation" and with a new zero fiscal
note from the Department of Public Safety and two
previously published fiscal notes: FN1 (CRT), FN2
(LAW).
HOUSE BILL NO. 199
"An Act making supplemental appropriations and capital
appropriations; amending appropriations; and providing
for an effective date."
3:06:26 PM
Co-Chair Hawker MOVED to ADOPT CSHB 199 (FIN), version 26-
GH1260\E, Kane, 4/1/09 as a working draft.
Co-Chair Stoltze OBJECTED for discussion.
Co-Chair Hawker informed the committee that the intent of
the draft was to forward open and transparent discussion
regarding American Recover and Reinvestment Act (ARRA)
funds. He detailed that the proposed committee substitute
(CS) keeps all the state's options open by accepting and
appropriating all monies available under ARRA for Alaskan
non-transportation projects.
Co-Chair Hawker stressed that the CS is open for amendment
and further evaluation. He noted that one particular item,
Part B of the $20.7 million education program, had caused
concern, but was still a work in progress. In the draft CS,
the money is appropriated to the Capital Income Fund as a
placeholder. He emphasized that the discussion was still
ahead; the issue would be dealt with in the capital budget
before the end of the legislative session.
Co-Chair Hawker acknowledged questions that had been raised
regarding the potential $15.6 million direct deposit into
the unemployment insurance (UI) trust fund. He pointed out
that the amount does not need to be appropriated in the CS
as the money will automatically be deposited into the trust
if separate legislation passes revising the base periods for
participating in unemployment insurance.
3:10:12 PM
Representative Fairclough requested an explanation of
legislative intent.
Co-Chair Hawker detailed that Section 10 of the work draft
is an initial suggestion for legislative intent. The section
states in language as strong as legally allowed that the use
of stimulus funds will not create obligations to the state
to replace the funds, and that existing programs will not be
expanded. The intent is to use the funds to continue
existing activities or deal with issues such as deferred
maintenance. He added that another important part refuses
federal stimulus money that would violate the strong
constitutional rights to privacy enjoyed by Alaskans.
3:11:36 PM
Co-Chair Stoltze WITHDREW his OBJECTION.
Representative Kelly wanted an opportunity to look over the
proposed CS and the intent language. Co-Chair Hawker assured
him that the CS is a working document subject to committee
scrutiny.
Vice-Chair Thomas noticed that the Office of the Governor
had $1 million in discretionary funds and asked whether the
legislature could spend the money if the governor refused
the funds. Co-Chair Hawker did not believe so.
3:13:41 PM
Co-Chair Stoltze WITHDREW his OBJECTION. There being no
further objection, the work draft was adopted.
HB 199 was HEARD and HELD in Committee for further
consideration.
HOUSE BILL NO. 161
"An Act relating to the Alaska Mental Health Trust
Authority Subport Office Building; authorizing the
issuance of certificates of participation for
construction of the building and authorizing the use of
up to $25,000,000 from the mental health trust fund for
construction of the building; approving leases of all
or part of the building by the Department of
Administration; and providing for an effective date."
3:14:22 PM
Representative Foster spoke in support of the bill.
REPRESENTATIVE CATHY MUNOZ, SPONSOR, addressed specific
questions that had been asked previously by committee
members. She referred to additional materials covering cost
comparison data, due diligence information, and a
construction analysis.
Representative Munoz addressed concerns that the proposed
building was considered Class A space. She detailed that the
proposed construction cost was $315 per square foot, which
is considered Class B space when compared to office space
around the state. New office space ranges from $200 to $500
dollars per square foot.
Representative Munoz turned to the question of square
footage price and reported that a ceiling had been
established at $3.50 per square foot; the intent was to
negotiate down from the ceiling. She pointed to extensive
data regarding cost comparisons for Anchorage and Juneau.
She reminded the committee that the square footage costs do
not include investments that the state makes on lease space
to make the space meet information technology (IT),
lighting, and other requirements. For example, the Frontier
Building in Anchorage is leased at $3.00 per square foot,
but recently required over $1 million in upgrades to make
the space adequate.
Representative Munoz discussed concerns raised about the
owner of the Department of Labor and Workforce Development
(DLWD) building. She noted that the state is not interested
in renegotiating a lease contract at the site because of
environmental and repair issues.
Representative Munoz emphasized that the proposed project
provided great opportunity for the state of Alaska and for
the Mental Health Trust; the state would save $13 million
and the trust would be able to develop a key asset.
Representative Munoz mentioned a proposed amendment that
would allow the Alaska Housing Finance Corporation (AHFC) to
purchase an administrative building in Anchorage using AHFC
funds.
3:19:54 PM
Vice-Chair Thomas puzzled over the location of the building
and questioned the price that would be paid. He thought for
the price the building should be where the subport building
used to be. Representative Munoz responded that the project
architects could speak specifically to site issues; she was
presenting the mental health trust's proposal.
Co-Chair Stoltze noted that the bill would be heard again
the next day.
Representative Kelly commented that his previous questions
had been answered completely.
3:23:15 PM
Co-Chair Hawker stated some of his concerns for the record.
He had questions regarding cost, value, quality issues,
financing alternatives, and the structure of the bill.
Representative Crawford requested a short explanation as to
why it would be to the state's advantage to have someone
else build, own, and operate the building instead of owning
the building itself. He understood that the deal would be
increasingly good for the mental health trust over time and
wondered how the state would benefit.
Representative Munoz emphasized that the mental health trust
and the state should be regarded as partners. The state
works very closely with the trust and encourages it to
develop its assets. She thought the project provided the
trust with an opportunity to develop their portfolio and
provide a revenue stream to beneficiaries over the course of
the project. The state would benefit as a funding partner
with the trust.
REPRESENTATIVE BETH KERTTULA, SPONSOR, added that another
advantage to the state would be saving $13.5 million.
3:25:59 PM
Representative Crawford did not understand how the state
would save $13.5 million. He thought the trust could gain by
selling the land and investing the earnings. He had been
told that the state had paid over $50 million in rent for
the DLWD building. He asked why the state should rent rather
than buy and why the state should not appropriate money
directly to the trust instead of give it money through rent.
Representative Munoz responded that the proposal involves
three different sites. The Department of Public Safety (DPS)
building on Whittier Street, was built in 1970 to last ten
years, but has been occupied by the state for nearly 40
years. Renovation of the DPS building and the second
building, the Department of Fish and Game (DFG) building in
Douglas, would cost much more than $8.5 million. She added
that the $13 million savings does not include replacement
costs that the state foresees for both the DPS and DFG
buildings.
3:28:25 PM
Vice-Chair Thomas queried whether the buildings would have
60-foot atriums and whether they would meet the new state
energy efficiency codes being proposed because of the
stimulus funds.
Co-Chair Stoltze thought the architect could address the
question.
Co-Chair Stoltze MOVED Amendment 1, 26-LS0605\W.1, Cook,
4/2/09 (copy on file):
Page 1, lines 2-3:
Delete "the Alaska Mental Health Trust Authority"
Insert "a separate trust land development account"
Page 1, line 6, following "Administration;":
Insert "authorizing the Alaska Housing Finance
Corporation to acquire the building that it
occurpies for an amound that does not exceed
$14,500,000;"
Page 5, following line 20:
Insert a new bill section to read:
"*Sec.8. The uncodified law of the State of Alaska is
amended by adding a new section to read:
AUTHORIZING THE ALASKA HOUSING FINANCE CORPORATION
TP ACQUIRE A BUILDING. The Alaska Housing Finance
Corporation is authorized to acquire the building in
Anchorage it occupies on the effective date of this Act
for an amount that does not exceed $14,500,000. This
section constitutes the approval required by AS
18.55.100(d) and AS 18.56.090(d) for that acquisition."
Renumber the following bill sections accordingly.
Co-Chair Hawker OBJECTED for DISCUSSION.
JOHN BITNEY, STAFF, REPRESENTATIVE JOHN HARRIS, SPONSOR and
CHAIRMAN, LEGISLATIVE COUNCIL, reported that the intent of
the amendment was to bring forth a proposal. He explained
that the Anchorage Legislative Information Office (LIO) is
on a year-to-year lease and needs office space.
Conversations with AHFC about space and financing options
led to a cost-savings idea. The corporation has needed space
as well and had calculated costs for a mortgage that could
result in savings of several million dollars.
3:34:04 PM
DAN FAUSKE, CEO/EXECUTIVE DIRECTOR, ALASKA HOUSING FINANCE
CORPORATION, DEPARTMENT OF REVENUE, provided a memo
regarding the proposal (copy on file). He provided history,
explaining that AHFC has owned 4.3 acres in midtown
Anchorage since 1995; the corporation had planned to build
office space but the contract was cancelled. In 1997, AHFC
entered into an agreement to lease office space. In 1999,
AHFC unsuccessfully sought legislative approval to acquire
the property. Tatitlek Corporation bought the building for
$6 million and has been open to sell the property to AHFC.
The native corporation wants the 4.3 acres that AHFC owns
and AHFC wants the building they are currently leasing from
Tatitlek.
Mr. Fauske continued that there have been negotiations to
trade assets. Appraisals on the building show that it is
worth about $14.5 million. No cash will be required from the
legislature, lease payments will be reduced, and AHFC will
acquire an asset. In addition, the increased net income will
increase the dividend available to the state.
Mr. Fauske added that the governor's office had not objected
to the idea of AHFC purchasing the building. He referred to
a spread sheet with detailed descriptions and figures
related to the properties (copy on file).
3:39:59 PM
JOE DOOGLER, CHIEF FINANCIAL OFFICER, ALASKA HOUSING FINANCE
CORPORATION, DEPARTMENT OF REVENUE, summarized that the
net present value savings [of the trade] would be
approximately $7.5 million, and possibly $12 million. He
continued that the purchase price includes $2 million for
needed upgrades.
Representative Foster cited experience with city taxes, and
reported that most of a city can be tax-exempt. He asked how
the proposal would affect tax income for Anchorage. Mr.
Fauske responded that the building would be tax exempt as
AHFC would own it as a state entity. He referred to similar
discussion regarding other property.
Co-Chair Stoltze asked if the taxable and tax-exempt aspects
would cancel each other out. Mr. Fauske replied that it was
possible.
3:43:54 PM
Representative Gara asked whether the building was currently
not taxed because it was owned by Tatitlek Corporation. Mr.
Fauske thought it was being taxed.
Representative Gara wondered how much property tax revenue
the municipality would lose. Mr. Fauske responded that he
did not know but would find out.
Representative Gara asked if Anchorage would end up
collecting less money. Mr. Fauske replied that the city
would collect less money. He defended AHFC regarding taxes
because the corporation brings a lot of assets to Anchorage.
He thought the issue was more a state issue. He referred to
past debates with the legislature regarding taxes.
3:45:31 PM
Representative Gara wanted to know the position of the
municipality. Mr. Fauske did not know.
Co-Chair Stoltze noted that the municipality is not asked in
other similar situations.
Representative Fairclough spoke on the taxing issue. In her
experience, taxes do not go up but are spread across the
entire body. There are many components: property values
might go up or down, the mill rate goes up or down,
depending on Anchorage's budget; but government spending is
not cut back when less tax income is available.
Representative Gara asked for clarification. Representative
Fairclough responded that state government has a bill for
various items; if revenue declines, people who have the
ability pay in. She pointed to other variables, such as a
mini-permanent fund that draws interest.
Representative Gara asked whether AHFC's fund and ability to
further its mission would be impacted if AHFC purchased the
building.
3:48:17 PM
Mr. Fauske responded that there would only be a cash
displacement and other programs would not in any way be
affected.
Representative Fairclough asked whether there would be a
small increase in income to the state. Mr. Fauske replied
that there would be a positive increment because AHFC would
be spending less in operating expenses and 75 percent of the
corporation's net income is available for appropriation by
the state.
Vice-Chair Thomas asked for clarification about the trade.
Mr. Fauske responded that the amount of the land value,
estimated at between $4.5 million and $5 million, would be
deducted from the $14.5 million and AHFC would owe the
difference. The additional revenue from the second piece of
land would also be deducted.
Vice-Chair Thomas asked whether the amendment would give
legislative authority to release the assets. Mr. Fauske
explained that AHFC needs authority to purchase a building.
He stressed that in the present proposal AHFC would be
exchanging and not disposing an asset.
Mr. Doogler interjected that AHFC would be disposing an
asset as well. He added that AHFC also has the statutory
authority to dispose of assets. Mr. Fauske clarified that
AHFC cannot sell assets as a private entity would; there is
a public process.
Mr. Doogler pointed out that Anchorage would get more taxes
from the land when it is developed, which would replace
taxes lost by AHFC acquiring the building.
3:51:54 PM
Co-Chair Hawker asked about the quality and desirability of
the exchanged land in the Anchorage market. Mr. Fauske
th
responded that land on 34 street was appraised in 2008 at
$4,168,000; current market value would put it closer to
between $4.7 million and $5.1 million. As of February 2008
the 1.4 acres at Boniface and DeBarr was appraised at
$511,000; current market value could be slightly higher.
Co-Chair Hawker queried the probability of the property
being developed. Mr. Fauske responded that there was a very
high probability that Tatitlek Corporation would develop the
site. Co-Chair Hawker confirmed that the property would be
developed for taxable commercial purposes.
Co-Chair Hawker asked whether AHFC would be the only
occupant of the building acquired. Mr. Fauske replied that
one tenant, the Alaska Public Safety Employees Union,
occupies a small space. Co-Chair Hawker confirmed that there
was no commercial plaza involved.
Mr. Fauske stated that AHFC needs to own a building. He did
not want higher leases and thought the opportunity was good
as the location is centrally located and the property will
only increase in value. He did not feel the amendment would
harm HB 161.
3:55:59 PM
Co-Chair Hawker noted that questions he had had regarding
deferred maintenance and other issues had been answered. He
hoped negotiations would continue in such a way that the
state would receive the best value possible. Mr. Fauske
agreed.
Co-Chair Stoltze spoke to personal experience with an AHFC
purchase and appreciated the open process.
Representative Gara stated his support but wanted to hear
from the municipality. Mr. Fauske replied that he would get
the information.
3:59:04 PM
Representative Salmon asked which native corporation owned
the building. Mr. Fauske responded Tatitlek Corporation, a
subsidiary of Chugach Alaska Corporation.
Representative Kelly asked if there would be further issues.
Mr. Bitney stated that "this is it." Mr. Fauske explained
that the purchase of the building was originally going to be
a stand-alone bill.
Co-Chair Hawker WITHDREW his OBJECTION. There being no
further objection, Amendment 1 was ADOPTED.
HB 161 was HEARD and HELD in Committee for further
consideration.
4:02:30 PM AT EASE
4:06:22 PM RECONVENED
HOUSE BILL NO. 3
"An Act relating to issuance of identification cards
and to issuance of driver's licenses; and providing for
an effective date."
4:06:22 PM
Representative Hawker MOVED to ADOPT CSHB 3 (FIN), version
26-LS0008\P, Luckhaupt, 3/30/09 (copy on file), as a working
document.
Co-Chair Stoltze OBJECTED for DISCUSSION.
DIRK MOFFET, STAFF, REPRESENTATIVE BOB LYNN, SPONSOR,
introduced the title change of the proposed CS because of
added language.
JERRY LUCKHAUPT, LEGISLATIVE COUNCIL, DIVISION OF LEGAL
SERVICES, explained that the change was made because of
language dealing with regulation authority in response to
questions that had been raised.
4:07:57 PM
Mr. Moffet turned to the next change, regarding a
typographical error on page 1, line 9 and page 2, line 1.
Mr. Luckhaupt added that the change was made in response to
previous legislation by Representative Crawford.
Mr. Moffet explained the third change extending the
expiration date of cards issued to persons 60 years and
older on page 2, line 1. Language in version A was changed
since the identification cards are free to senior citizens
and their physical appearance does not change as fast as
that appearance of younger citizens. The sponsor believed
that extending the expiration date on the cards would be
good business; senior citizens would visit the Division of
Motor Vehicles (DMV) less often. He stressed that fewer DMV
customers would mean less staff resource. Amendment 3 was
offered to make the cards never expire for those over 60
years of age. However, federal regulation (the Real ID Act
of 2005) stipulated that eight years was the longest
expiration date allowed. He pointed out that the change
doubled the expiration date from five years to ten years and
had the added benefit of being non-compliant with the Real
ID Act.
Mr. Moffet moved to the fourth change regarding anti-Real ID
language related to identification cards to conform with AS
44.99.040, Limitations on Certain State Expenditures. He
read the language added in version P to page 2, lines 27-29,
stating that the Commissioner of Administration may not
adopt regulations related to identification cards solely to
bring the state into compliance with the requirements of the
federal Real ID Act of 2005.
Mr. Moffet detailed that the fifth change also added anti-
Real ID language related to driver licenses. Language was
added on pages 2 and 3, lines 30-31 stating that for section
four, AS 28.05.011 is omitted by adding a new section to
read that the Commissioner of Administration may not adopt
regulations related to driver licenses solely to bring the
state into compliance with the Real ID Act.
4:12:04 PM
Mr. Luckhaupt explained that the language changes were
requested to make sure the Department of Administration
(DOA) does not try to bring the state into compliance with
the Real ID Act through regulation. He noted that the added
language had necessitated the title change.
Mr. Moffet concluded with the sixth change, anti-Real ID
disclaimer language on page 5, lines 15-17. Language was
added to emphasize non-cooperation with the Real ID Act. He
spoke of two amendments adding the anti-Real ID language to
HB 3; neither accomplished the desired goal and language was
drafted adding language congruent with Real ID statute yet
tailored to deal with the subject of identification cards
and driver licenses. The anti-Real ID disclaimer language
was also added to clarify that although the state has
adopted legal presence law, the bill was deliberately
drafted to be non-compliant with the Real ID Act. The
sponsors believed that Alaska should determine for itself
the perimeters of good business practice.
4:14:48 PM
Representative Foster did not think the issue was a problem
for his constituents and wondered why the issue was being
brought up. Mr. Moffet replied that currently in regulation
the primary document must be brought to DMV when getting a
license for the first time. The requirement will be put into
statute by the legislation.
Representative Foster questioned the need for putting the
requirement in statute. Mr. Moffet replied that the sponsors
believe the policy is good. He emphasized that the bill also
allows the DMV to be flexible about the expiration date. He
acknowledged that the provision would not affect rural
communities.
Representative Foster reiterated his questions. Mr. Moffet
explained the desire to keep people who are in Alaska for a
limited time period from allowing their legal presence to
expire and still be able to keep an Alaska driver's license.
4:17:12 PM
Co-Chair Stoltze pointed out that the changes wanted by
committee members had been covered. He WITHDREW his
OBJECTION. There being no further OJBECTION, the CS was
adopted.
Representative Kelly commented that his questions had been
answered. He agreed that people who were in Alaska illegally
should not be allowed to drive. He spoke in support of the
legislation.
Representative Joule asked whether the passage of the bill
would give law enforcement an excuse to stop people to check
their identifications. Mr. Luckhaupt replied that the
measure would not allow law enforcement to pull anyone over
without justification. In Alaska, there must be probable
cause of a violation of law in order to pull someone over.
4:19:59 PM
Mr. Luckhaupt added that the issue had come up in other
states as well when states have wanted to set up check-
points. He stated that the only way a state can set up a
check point is to check U.S. citizenship where the state had
entered into an agreement with the Immigration and
Naturalization Service (INS) or Customs and Border Patrol.
Florida has entered into the agreement with some law
enforcement, but most states have not.
Co-Chair Stoltze assumed the present administration would
not embrace the issue.
4:21:30 PM
Representative Crawford asked a question regarding the
statement that the Commissioner of DOA being unable to adopt
regulation related to identification cards in order to bring
the state into compliance with the Real ID Act. Mr.
Luckhaupt replied that the word "solely" was added so that
regulation could be added for other valid reasons.
Mr. Luckhaupt added regarding a previous question that
people can be stopped in Alaska for probable cause or
reasonable suspicion of imminent physical danger to the
public. He provided an example.
Co-Chair Stoltze described experience with local police
setting up DUI (drinking under the influence) road blocks
and questioned the legality of the practice. Mr. Luckhaupt
replied that in Alaska, the question is open as to whether
sobriety checkpoints are legal. He added that the U.S.
Supreme Court has said that the checkpoints are legal for
purposes of the U.S. Constitution; that has not been decided
in Alaska.
4:24:44 PM AT EASE
4:24:52 PM RECONVENED
Representative Crawford pointed out that the provision's
wording actually could allow regulation adopting the Real ID
Act and questioned the use of the word "solely." Mr.
Luckhaupt explained that the only purpose of the provision
was regulation authority. He added that another previously
passed provision prevents any state agency from adopting
regulations to implement the Real ID Act; this will be the
fourth place in statute stating that Alaska would not comply
with the Real ID Act.
Representative Crawford believed that the offending word was
"solely." He read the passage without the word: "If the
Commissioner of Administration may not adopt a regulation
related to identification cards to bring the state into
compliance." He thought the passage would make it clear that
regulation could not comply with the act. Mr. Luckhaupt
responded that the word "solely" would mean that regulation
can be adopted for another valid reason.
Representative Crawford proposed saying "with the intent to
bring the state into compliance" instead of "solely." He
thought the intent would be clear. He asked whether the
presence of the word "solely" would say that it is fine to
adopt the Real ID Act as long as there is another purpose.
4:27:26 PM
Mr. Luckhaupt replied that the word "solely" allows other
reasons.
Representative Crawford asked if the word "solely" could
allow the Real ID Act to be adopted. Mr. Luckhaupt answered
that the word "solely" allows the Commissioner of
Administration to adopt any regulation relating to
identification cards providing it is not solely adopted in
order to implement the Real ID Act. He interpreted this to
mean that if there is any other valid reason for adopting
the regulation, the fact that it brings the state into
compliance with the Real ID Act does not matter. He stated
that he had drafted the language as he was instructed, but
added that the way it is drafted leads to the
interpretation. As long as there is any other valid reason,
bringing the state into compliance is okay with the word
"solely" present, even if the commissioner wants to bring
the state into compliance with the Real ID Act.
4:28:48 PM
Co-Chair Stoltze noted that the same issue had been
contentious in a previous meeting.
Representative Gara pointed out that the word "solely" was
proposed because no one has come up with acceptable language
for the provision; what is clear is that the state does not
want DMV to implement the Real ID Act. He thought the
response to Representative Crawford's question was yes. He
presented a hypothetical: A commissioner has the secret
intent to implement the Real ID Act, but says the purpose is
to save money. He asked whether the hypothetical would be
possible even though it violates the intention of the
legislation.
Mr. Moffet clarified that he word "solely" was used because
the Real ID Act would not allow DMV staff to be trained
regarding fraudulent document detection, for example. He
stated that many current good business practices would be
discarded if the committee wanted a strict prohibition on
anything in the Real ID Act. He described the Real ID Act as
a "laundry list" of all the good ideas that the states came
up with; he opined that some of the ideas are good and some
bad. For example, the sponsor thought that putting the legal
presence expiration date directly on someone's card was not
a good business practice, even though the Real ID Act would
allow it. All Alaskan cards would look the same except for
the expiration date; only looking very closely at the
expiration date would indicate the legal status of the
holder.
Mr. Moffet stated that the sponsor wanted the word "solely"
left in the provision in order to conform to what is already
in statute and not re-write the anti-Real ID Act legislation
already passed.
Representative Gara wanted his question answered. Mr.
Luckhaupt replied that the answer would be yes.
Representative Gara described the conundrum: the legislature
does not want DMV to implement the Real ID Act, but the
language makes it possible for a DMV person to implement it.
He asked whether the legislative intent in the CS was good
enough to protect the state from a commissioner who wanted
to implement the Real ID Act. Mr. Moffet replied that the
legislature oversees the DMV and can change anything they do
not want through statute; the division cannot implement the
Real ID Act.
4:34:15 PM
Mr. Luckhaupt noted that the provision passed last year said
the division should not be implementing the act. He
acknowledged that the hypothetical of the director wanting
to implement the act was possible.
Representative Gara stated for the record that the intention
is to prevent DMV from implementing the Real ID Act and that
no language has been found to make that clearer. He thought
Representative Crawford's question was still a concern but
he could not find better language.
Representative Foster queried possible penalties for not
complying with the federal requirements.
WHITNEY BREWSTER, DIRECTOR, DIVISION OF MOTOR VEHICLES,
DEPARTMENT OF ADMINISTRATION (via teleconference), testified
that there are some penalties for not complying with the
Real ID Act by the end of 2009. She detailed that residents
of states that do not issue Real ID Act compliant
identification cards or driver licenses will not be able to
access federal facilities and will not be able to board
airplanes without secondary screening.
4:36:48 PM
Co-Chair Hawker spoke to difficulties in Alaska and the
necessity of identification. He pointed to state statute and
regulations connected with obtaining identification cards.
He queried the additional difficulties that might be
incurred for renewing identification cards if the
legislation passed.
REPRESENTATIVE BOB LYNN, SPONSOR, explained that the
provision would not change things for Alaskans but for
people coming from out-of-state and for people who are
temporarily on a visa or work permit.
Co-Chair Hawker agreed that the additional burden is not on
state residents but on other classes of individuals.
4:40:31 PM
Representative Foster described difficulties experienced by
people in the Bush who have to travel long distances to get
identification cards.
Co-Chair Hawker asked Mr. Moffet to respond to his question.
Mr. Moffet described changes the bill would put in place.
Alaskans who renew driver licenses will not have to show
primary documents. Alaskans who have allowed their driver's
license to expire will be allowed 90 extra days to renew
without showing primary documents; this provision was put in
for people in rural areas. The 90-day window was chosen
because statute stipulates that people new to Alaska have 90
days to change their license to an Alaska state drivers
license.
4:43:09 PM
Co-Chair Hawker queried additional difficulties that would
be caused by the legislation. Ms. Brewster did not think the
provision would increase the burden on people who currently
hold an Alaska driver's license. She addressed concerns
about people from rural areas. She recognized the bigger
challenges to those who do not have direct access to a DMV
office, but pointed out that people can renew through the
mail.
Ms. Brewster referred to future legislation that would allow
for renewing online. She explained that the issue is the new
digital license. The last of the old Polaroid licenses will
expire this year, requiring people to come to an office in
person to capture a digital likeness.
4:45:18 PM
Representative Foster commented on the federal government
directing state decisions.
Co-Chair Hawker MOVED to report CSHS 3 (FIN) as amended from
Committee with individual recommendations and the
accompanying fiscal note.
Representative Gara OBJECTED for discussion. He commented
that the rules in place already keep illegal immigrants from
getting a driver's license and the proposed law would not
change the rules aside from extending renewal time for
senior citizens. He noted that legislation on divisive
issues increases problems and does not change anything.
Representative Gara WITHDREW his OBJECTION.
Representative Foster commented on the situation in rural
Alaska where everyone knows each other.
There being NO further OBJECTION, it was so ordered.
CSHS 3 (FIN) was REPORTED out of Committee with a "do pass"
recommendation and with a previously published fiscal note:
FN1 (ADM).
HOUSE BILL NO. 98
"An Act relating to minor consuming and repeat minor
consuming; and providing for an effective date."
4:49:02 PM
Co-Chair Hawker noted that there would be two amendments to
the bill.
JANE PIERSON, STAFF, REPRESENTATIVE JAY RAMAS, SPONSOR,
provided history regarding HB 98, explaining that HB 359,
legislation amending minors consuming statutes, had been
passed the previous year, but had created a new problem
related to convictions.
Co-Chair Hawker clarified that new language would provide a
technical correction.
Representative Gara MOVED Amendment 1, 26-LS005\A.4,
Luckhaupt, 4/1/09 (copy on file):
Page 1, line 1, following both occurrences of
"consuming":
Insert "or in possession or control"
Page 1, following line 3:
Insert a new bill section to read:
"*Section 1. AS 04.16.050(b) is amended to read:
(b) A person who violates (a) of this section
and who has not been previously convicted or
received a suspended imposition of sentence under
(1) of this subsection is guilty of minor
consuming or in possession or control. Minor
consuming or in possession or control is a
violation. Upon conviction in the district court,
the court
(1) may grant a suspended imposition of
sentence under AS 12.55.085 and place the person
on probation for up to one year if the person has
not been convicted of a violation of this section
previously; among the conditions of probation, the
court shall, with the consent of a community
diversion panel, refer the person to the panel,
and require the person to comply with conditions
set by the panel, including counseling, education,
treatment, community work, and payment of fees; in
this paragraph, "community diversion panel" means
a youth court or other group selected by the court
to serve as a sentencing option for a person
convicted under this section; or
(s) shall impose a fine of at least $200
but not more than $600, shall require the person
to attend alcohol information school if the school
is available, and shall place the person on
probation for up to one year under (e) of this
section; the court may suspend a portion of the
fine imposed under this paragraph that exceeds
$200 if the person is required to pay for
education or treatment required under (e) of this
section."
Page 1, line 4:
Delete "Section 1"
Insert "Sec. 2"
Renumber the following bill sections accordingly.
Page 1, line 9, following "section.":
Insert "Repeat minor consuming or in possession or
control is a violation."
Page 2, following line 15:
Insert new bill sections to read:
"*Sec. 4. AS 04.16.050(l) is amended by adding a new
paragraph to read:
(4) "violation" has the meaning given in AS
11.81.900 and the penalties that are provided in this
section.
*Sec. 5. The uncodified law of the State of Alaska is
amended by adding a new section to read:
LEGISLATIVE RECOGNITION OF EFFECT OF DEFINITION.
The legislature recognizes that
(1) the definition of "violation" in AS
11.81.900(b)(63) provides that persons charged with a
violation are not entitled to counsel or a trial by
jury; and
(2) notwithstanding the definition of
"violation" in AS 11.81.900(b)(63), persons charged
with a first offense minor consuming or in possession
or control or with repeat minor consuming or in
possession or control under AS 04.16.050 are entitled
to counsel and a trial by jury under the decision of
the Alaska Court of Appeals in State v. Auliye, 57 P.3d
711 (Alaska App. 2002)."
Renumber the following bill sections accordingly.
Co-Chair Hawker OBJECTED for DISCUSSION.
Representative Gara explained that the amendment would clear
up whether the first two convictions would be considered a
crime. He did not want a young person to be charged with a
crime for the first two violations. He expressed
frustration.
4:52:23 PM
Co-Chair Hawker queried the position of the sponsor on the
amendment. Ms. Pierson stated that Representative Ramras did
not support the amendment. She spoke to the sponsor's desire
to keep the bill clean regarding the minor consuming statute
and his feeling that the amendment could cloud the issue.
4:53:17 PM
DOUG WOOLIVER, ADMINISTRATIVE ATTORNEY, ALASKA COURT SYSTEM,
understood the desire to have the statute clear so that the
courts would understand that the first two offenses are not
criminal offenses. He stated that the law itself is not
unclear and that the court will not count the first two
offenses as crimes. He acknowledged that the defendants do
not always know that.
Mr. Wooliver declared that the concern about adding the word
"violation" is its definition in statute; this offense is
contrary to that definition in almost all respects. He
pointed out that adding the word "violation" would not be a
simple fix and judges agree that an additional layer of
confusion would be added. The definition of "violation" is a
crime that is punishable only by a fine, which does not
apply to the statute. The definition also includes an
offense for which the defendant does not get counsel, which
also does not apply. Another definition is an offense for
which the defendant is not entitled to a jury trial, which
also does not apply.
Mr. Wooliver stated that the courts were concerned about
adding a definition that in all respects is contrary to what
the bill actually does. He agreed with the drafter that
technically the offense would be a violation, but calling it
a violation creates a lot of confusion because of the
definition. He pointed out that the courts have been dealing
with minor consuming issues in the legislation for some time
and thought the statute was close to working.
Co-Chair Hawker asked for clarification regarding what was
meant by the "host of judges" who had been consulted. Mr.
Wooliver replied that he routinely asked for comments from
judges regarding the possible impact of legislation.
Comments regarding HB 98 had indicated concerns about adding
confusion.
Co-Chair Hawker asked whether he meant that seated members
of the Alaska bench have confided that they have examined
the language and expressed concerns regarding their ability
to implement the language. Mr. Wooliver responded in the
affirmative.
4:56:54 PM
Representative Gara admitted frustration in not having the
judges present to be questioned. Mr. Wooliver replied that
the judges disagreed with him from time to time.
Representative Gara wondered how the language of the bill
was developed. He felt that the statute language should be
clearer. He opined that the issue was simple.
Representative Joule wondered whether using language about
intent would clarify the issue.
Co-Chair Hawker MAINTAINED his OBJECTION to Amendment 1. He
felt that the court system should speak to Representative
Gara's office about his concerns.
Representative Kelly asked for clarification. He felt that
the language needed revisiting. He suggested that minors
might misinterpret the law upon reading it, but summarized
that he did not have a problem with the existing language.
5:00:35 PM
Representative Gara emphasized that the law is not clear. He
reiterated concerns that a minor would think they had
committed a crime. He asked whether the following language
would work: "Minor consuming or in possession or in control
is not a crime." Ms. Pierson pointed out that the language
should make it clear that only first and second minor
consuming was meant.
Representative Gara referred to the language regarding the
first and second convictions; he queried his suggested
language: "Minor consumer or in possession or in control is
not a crime." Mr. Wooliver stated his willingness to work on
the language with counsel. Representative Gara requested
viable language that could be used on the floor. Ms. Pierson
stated that the sponsor would not have a problem with
language that would work for everyone.
Mr. Wooliver noted that he would continue to work with
counsel on the language.
5:03:26 PM
Co-Chair Hawker MAINTAINED his OBJECTION to Amendment 1.
Representative Gara WITHDREW Amendment 1.
Co-Chair Hawker MOVED to ADOPT Amendment 2, 6-LS0051\A.5,
Luckhaupt, 4/2/092 (copy on file):
Page 1, line 1, following "consuming;":
Insert "relating to penalties for violations of limitations
on possessing, sending, shipping, transporting, or bringing
alcoholic beverages to, soliciting or receiving orders for
delivery of alcoholic beverages to, and the manufacture,
sale, offer for sale, barter, traffic, or possession of
alcoholic beverages in, a local option area;"
Page 2, following line 15:
Insert new bill sections to read:
"* Sec. 3. AS 04.16.200(h) is amended to read:
(h) Upon conviction of a class C felony under (b)
or (e)(2) or (3) of this section, the court
(1) shall impose a fine of not less than
$10,000 and a minimum sentence of imprisonment of
(A) 120 days if the person has not been previously
convicted [ONCE];
(B) 240 days if the person has been previously
convicted once [TWO TIMES];
(C) 360 days if the person has been previously
convicted two [THREE] or more times;
(2) may not
(A) suspend execution of sentence or grant
probation except on the condition that the person
(i) serve the minimum imprisonment under (1) of
this subsection; and
(ii) pay the minimum fine required under (1) of
this subsection; or
(B) suspend imposition of sentence.
* Sec. 4. The uncodified law of the State of Alaska is
amended by adding a new section to read:
APPLICABILITY. AS 04.16.200(h), as amended by sec.
3 of this Act, applies to an offense occurring on or
after the effective date of this Act. References to
previous convictions in sec. 3 of this Act apply to
convictions occurring before, on, or after the
effective date of this Act."
Renumber the following bill section accordingly.
Vice-Chair Thomas OBJECTED.
Co-Chair Hawker shared that the language in the amendment is
linked to another bill in committee related to limitations
on alcohol importation. He reported that he had spoken with
the co-chair of the committee, who indicated that he had no
problem with the amendment as long as legal counsel could
provide assurances.
ANNE CARPENETI, ASSISTANT ATTORNEY GENERAL, LEGAL SERVICES
SECTION-JUNEAU, CRIMINAL DIVISION, DEPARTMENT OF LAW,
testified that the amendment attempts to address previous
mistakes in SB 265. The intent of the legislation was to
adopt mandatory minimum penalties for bootlegging that were
the same as mandatory minimums for drunk driving.
Unfortunately, the definition of "previously convicted for
bootlegging" is different than for the term "previously
convicted for drunk driving." In terms of felony bootlegging
at least, the legislation passed did not do what it was
intended to do.
Ms. Carpeneti stated that Amendment 2 would make the repair.
She reported that she had spoken with Representative Herron
and assured him regarding the language.
5:07:19 PM
Representative Gara wondered about a concern with the
underlying bill related to rural Alaska. He asked whether
Representative Herron objected to a portion of the bill. Co-
Chair Hawker answered yes. He reiterated that Representative
Herron was not concerned about the provisions in the
amendment.
Representative Gara asked for clarification regarding how
the amendment corrects the bill. Ms. Carpeneti replied that
the amendment adopts the same mandatory minimum penalty for
first-time felony bootlegging and first-time felony drunk
driving.
Representative Gara felt that the crimes were not equal in
weight. He felt that the first-time $10,000 penalty plus 120
days in jail might not be appropriate for a bootlegging
offense. Ms. Carpeneti replied that bootlegging has had
negative consequences in rural communities that have voted
to be dry or damp. She stressed that both issues have large
effects on communities.
5:11:55 PM
Representative Joule agreed with the language with
reservations. He expressed concern regarding the
disproportionate amount of rural Alaskan males in the prison
system. He shared that his community (Kotzebue) is a damp
community, but bootlegging is not legal. Alcohol can be
imported and consumed, but not sold. He described a
community less than 200 miles away that can import, consume,
and sell alcohol legally. He stated concerns about pushing
communities into going wet. He understood the complexity of
the problems, but worried that at some point people could
figure out that voting to go wet would release the males in
prison.
5:14:44 PM
Representative Gara deferred to rural legislators regarding
the scope of the problem and the penalties and questioned
the felony level for first-time bootlegging. Ms. Carpeneti
explained how the current law works. The state has to prove
that the alcohol was brought in for the purposes of sale.
There is also a presumption that can be rebutted that
bringing in more than 10.5 liters of distilled spirits, 24
liters of wine, or 12 gallons of malt liquor amounts to
transporting with the intent to sell.
5:16:39 PM
Ms. Carpeneti continued that SB 265 included that a third
conviction of bootlegging would be a Class C felony and
smaller amounts would be a Class A misdemeanor. She
indicated that past support for the measure by rural
representation had prompted submission of the bill by the
department.
Representative Foster thought there was not disincentive to
bootleg because of high profits.
Vice-Chair Thomas spoke to past support from rural members
for the provision.
Co-Chair Hawker queried the sponsor's position regarding
Amendment 2. Ms. Pierson replied that the sponsor did not
have a problem with the amendment.
Vice-Chair Thomas WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered. Amendment 2 was
ADOPTED.
5:20:17 PM
Representative Gara asked if his proposed language "minor
consuming or in possession or control is not a crime" would
successfully say that the first and second violations are
not a crime.
JERRY LUCKHAUPT, LEGISLATIVE COUNCIL, DIVISION OF LEGAL
SERVICES, testified that he agreed with the concept that the
offense should be denominated. He pointed out that the
legislature identifies every type of criminal statute.
However, the offenses are violations; the word is used in
Title IV for any non-criminal offense dealt with in the
criminal justice system. He did not understand why the
magistrates had a problem. He stated concerns about saying
the offense is not a crime, including that they would be
considered a civil offense, necessitating litigation of all
the issues again.
Representative Gara noted that there are only two offenses
in the state, civil and criminal. He asked if there was
statute language that the offense was a violation. Mr.
Luckhaupt responded that it does not say the offense is a
violation.
Representative Gara asked whether the offenses were being
interpreted as a violation even though the statute does not
say it that way. Mr. Luckhaupt responded in the affirmative.
5:23:59 PM
Representative Gara stated that he only wanted to say that
minor consuming is not a crime, which does not add or take
away the word. He queried objections to saying "not a
crime."
Co-Chair Hawker questioned the productiveness of the
conversation.
5:26:02 PM
Representative Kelly stated that he was comfortable with the
amendment.
Co-Chair Hawker agreed that he would support an amendment
with both Representative Gara and the sponsor's name on it.
Co-Chair Hawker noted the zero fiscal notes.
Vice-Chair Thomas MOVED to report CSHB 98 (FIN) out of
Committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 98 (FIN) was REPORTED out of Committee with a "no
recommendation" and with a new zero fiscal note from the
Department of Public Safety and two previously published
fiscal notes: FN1 (CRT), FN2 (LAW).
ADJOURNMENT
The meeting was adjourned at 5:27 PM.
| Document Name | Date/Time | Subjects |
|---|