Legislature(1999 - 2000)

04/17/2000 01:26 PM House JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               HOUSE JUDICIARY STANDING COMMITTEE                                                                               
                         April 17, 2000                                                                                         
                            1:26 p.m.                                                                                           
MEMBERS PRESENT                                                                                                                 
Representative Pete Kott, Chairman                                                                                              
Representative Joe Green                                                                                                        
Representative Norman Rokeberg                                                                                                  
Representative Jeannette James                                                                                                  
Representative Lisa Murkowski                                                                                                   
Representative Eric Croft                                                                                                       
Representative Beth Kerttula                                                                                                    
MEMBERS ABSENT                                                                                                                  
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                              
HOUSE BILL NO. 300                                                                                                              
"An Act relating to the establishment and enforcement of medical                                                                
support orders for children; and providing for an effective                                                                     
     - MOVED CSHB 300(JUD) OUT OF COMMITTEE                                                                                     
HOUSE BILL NO. 425                                                                                                              
"An Act relating to misrepresentation and false claims made                                                                     
against the state or a municipality; and providing for an                                                                       
effective date."                                                                                                                
     - MOVED CSHB 425(JUD) OUT OF COMMITTEE                                                                                     
CS FOR SENATE BILL NO. 286(JUD)                                                                                                 
"An Act relating to the duties and powers of the attorney                                                                       
     - MOVED HCS CSSB 286(JUD) OUT OF COMMITTEE                                                                                 
PREVIOUS ACTION                                                                                                                 
BILL: HB 300                                                                                                                  
SHORT TITLE: MEDICAL SUPPORT ORDERS FOR CHILDREN                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 1/21/00      1962     (H)  READ THE FIRST TIME - REFERRALS                                                                     
 1/21/00      1962     (H)  HES, JUD, FIN                                                                                       
 1/21/00      1962     (H)  ZERO FISCAL NOTE (REV)                                                                              
 1/21/00      1962     (H)  GOVERNOR'S TRANSMITTAL LETTER                                                                       
 2/24/00               (H)  HES AT   3:00 PM CAPITOL 106                                                                        
 2/24/00               (H)  Heard & Held                                                                                        
 2/24/00               (H)  MINUTE(HES)                                                                                         
 3/23/00               (H)  HES AT   3:00 PM CAPITOL 106                                                                        
 3/23/00               (H)  Heard & Held                                                                                        
 3/23/00               (H)  MINUTE(HES)                                                                                         
 4/11/00               (H)  HES AT   3:00 PM CAPITOL 106                                                                        
 4/11/00               (H)  Moved CSHB 300(HES) Out of Committee                                                                
 4/11/00               (H)  MINUTE(HES)                                                                                         
 4/12/00      3091     (H)  HES RPT CS(HES) NT 5NR 1AM                                                                          
 4/12/00      3092     (H)  NR: GREEN, DYSON, KEMPLEN, BRICE,                                                                   
 4/12/00      3092     (H)  WHITAKER; AM: COGHILL                                                                               
 4/12/00      3092     (H)  ZERO FISCAL NOTE (REV) 1/21/00                                                                      
 4/15/00               (H)  JUD AT   1:00 PM CAPITOL 120                                                                        
 4/15/00               (H)  Scheduled But Not Heard                                                                             
 4/17/00               (H)  JUD AT   1:00 PM CAPITOL 120                                                                        
BILL: HB 425                                                                                                                  
SHORT TITLE: FALSE CLAIMS AGAINST STATE OR MUNI.                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 2/28/00      2334     (H)  READ THE FIRST TIME - REFERRALS                                                                     
 2/28/00      2335     (H)  CRA, JUD, FIN                                                                                       
 2/28/00      2335     (H)  INDETERMINATE FISCAL NOTE (LAW)                                                                     
 2/28/00      2335     (H)  ZERO FISCAL NOTE (ADM/ALL DEPTS)                                                                    
 2/28/00      2335     (H)  GOVERNOR'S TRANSMITTAL LETTER                                                                       
 3/07/00               (H)  CRA AT   8:00 AM CAPITOL 124                                                                        
 3/07/00               (H)  Moved CSHB 425(CRA) Out of Committee                                                                
 3/07/00               (H)  MINUTE(CRA)                                                                                         
 3/15/00      2493     (H)  CRA RPT CS(CRA) 1DP 5NR                                                                             
 3/15/00      2493     (H)  DP: KOOKESH; NR: DYSON, HALCRO,                                                                     
 3/15/00      2493     (H)  MORGAN, JOULE                                                                                       
 3/15/00      2493     (H)  INDETERMINATE FISCAL NOTE (LAW)                                                                     
 3/15/00      2493     (H)  ZERO FISCAL NOTE (ADM/ALL DEPTS)                                                                    
 4/05/00               (H)  JUD AT   1:00 PM CAPITOL 120                                                                        
 4/05/00               (H)  Scheduled But Not Heard                                                                             
 4/13/00               (H)  JUD AT   1:00 PM CAPITOL 120                                                                        
 4/13/00               (H)  Heard & Held                                                                                        
 4/13/00               (H)  MINUTE(JUD)                                                                                         
 4/17/00               (H)  JUD AT   1:00 PM CAPITOL 120                                                                        
BILL: SB 286                                                                                                                  
SHORT TITLE: DUTIES AND POWERS OF ATTORNEY GENERAL                                                                              
Jrn-Date    Jrn-Page           Action                                                                                           
 2/28/00      2449     (S)  READ THE FIRST TIME - REFERRALS                                                                     
 2/28/00      2449     (S)  JUD                                                                                                 
 3/06/00               (S)  JUD AT  1:30 PM BELTZ 211                                                                           
 3/06/00               (S)  Heard & Held                                                                                        
 3/06/00               (S)  MINUTE(JUD)                                                                                         
 3/22/00               (S)  JUD AT  1:30 PM BELTZ 211                                                                           
 3/22/00               (S)  Moved CS(Jud) Out of Committee                                                                      
 3/22/00               (S)  MINUTE(JUD)                                                                                         
 3/23/00      2707     (S)  JUD RPT CS 3DP 1DNP SAME TITLE                                                                      
 3/23/00      2707     (S)  DP: TAYLOR, HALFORD, DONLEY;                                                                        
                            DNP: ELLIS                                                                                          
 3/23/00      2707     (S)  INDETERMINATE FISCAL NOTE (LAW)                                                                     
 4/03/00               (S)  RLS AT 11:30 AM FAHRENKAMP 203                                                                      
 4/03/00               (S)  MINUTE(RLS)                                                                                         
 4/04/00      2856     (S)  RLS TO CALENDAR  4/4/00                                                                             
 4/04/00      2859     (S)  READ THE SECOND TIME                                                                                
 4/04/00      2859     (S)  JUD CS ADOPTED UNAN CONSENT                                                                         
 4/04/00      2859     (S)  ADVANCED TO 3RD RDG FAILED Y13                                                                      
                            N5 E1 A1                                                                                            
 4/04/00      2860     (S)  ADVANCED TO THIRD READING 4/5                                                                       
 4/05/00      2884     (S)  READ THE THIRD TIME CSSB 286(JUD)                                                                   
 4/05/00      2884     (S)  PASSED Y15 N5                                                                                       
 4/05/00      2884     (S)  ELLIS NOTICE OF RECONSIDERATION                                                                     
 4/06/00      2908     (S)  RECONSIDERATION NOT TAKEN UP                                                                        
 4/06/00      2909     (S)  TRANSMITTED TO (H)                                                                                  
 4/07/00      2908     (H)  READ THE FIRST TIME - REFERRALS                                                                     
 4/07/00      2908     (H)  JUD, FIN                                                                                            
 4/15/00               (H)  JUD AT  1:00 PM CAPITOL 120                                                                         
 4/15/00               (H)  Scheduled But Not Heard                                                                             
 4/17/00               (H)  JUD AT  1:00 PM CAPITOL 120                                                                         
WITNESS REGISTER                                                                                                                
BARBARA MIKLOS, Director                                                                                                        
Child Support Enforcement Division                                                                                              
Department of Revenue                                                                                                           
550 West 7th Avenue, Suite 310                                                                                                  
Anchorage, Alaska 99501                                                                                                         
POSITION STATEMENT:  Reviewed the changes encompassed in CSHB
DIANE WENDLANDT, Assistant Attorney General                                                                                     
Collections and Support                                                                                                         
Civil Division (Anchorage)                                                                                                      
Department of Law                                                                                                               
1031 West 4th Avenue, Suite 200                                                                                                 
Anchorage, Alaska 99501-1994                                                                                                    
POSITION STATEMENT:  Reviewed CSED's recommended changes to CSHB
JON SHERWOOD                                                                                                                    
Division of Medical Assistance                                                                                                  
Department of Health & Social Services                                                                                          
PO Box 110660                                                                                                                   
Juneau, Alaska 99811-0660                                                                                                       
POSITION STATEMENT:  Answered questions in regard to Denali                                                                     
LESIL McGUIRE, Staff                                                                                                            
     to Representative Kott                                                                                                     
Alaska State Legislature                                                                                                        
Capitol Building, Room 118                                                                                                      
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT:  Provided clarification on conceptual                                                                       
Amendment 2.                                                                                                                    
JAMES BALDWIN, Assistant Attorney General                                                                                       
Governmental Affairs Section                                                                                                    
Civil Division (Juneau)                                                                                                         
Department of Law                                                                                                               
P.O. Box 110300                                                                                                                 
Juneau, Alaska  99811-0300                                                                                                      
POSITION STATEMENT:  Testified on HB 425; indicated the                                                                         
department is satisfied with Version G.  Testified on CSSB
JIM POUND, Staff                                                                                                                
     to Senator Taylor                                                                                                          
Alaska State Legislature                                                                                                        
Capitol Building, Room 118                                                                                                      
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT:  Presented CSSB 286(JUD).                                                                                   
MARK JOHNSON, Attorney                                                                                                          
13631 Windward Circle                                                                                                           
Anchorage, Alaska 99516                                                                                                         
POSITION STATEMENT:  Testified on CSSB 286(JUD).                                                                                
DEAN GUANELI, Chief Assistant Attorney General                                                                                  
Criminal Division                                                                                                               
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, Alaska 99811-0300                                                                                                       
POSITION STATEMENT:  Discussed concerns with CSSB 286(JUD).                                                                     
ACTION NARRATIVE                                                                                                                
TAPE 00-66, SIDE A                                                                                                              
Number 0001                                                                                                                     
CHAIRMAN PETE KOTT  called the House Judiciary  Standing Committee                                                              
meeting to  order at  1:26 p.m.   Members present  at the  call to                                                              
order  were Representatives  Kott, Green,  Rokeberg, James,  Croft                                                              
and Kerttula.   Representative  Murkowski  arrived as the  meeting                                                              
was in progress.                                                                                                                
HB 300 - MEDICAL SUPPORT ORDERS FOR CHILDREN                                                                                  
CHAIRMAN KOTT announced that the  first order of business would be                                                              
HOUSE BILL  NO. 300,  "An Act  relating to  the establishment  and                                                              
enforcement of medical support orders  for children; and providing                                                              
for an effective date." [Before the committee is CSHB 300(HES).]                                                                
Number 0098                                                                                                                     
BARBARA  MIKLOS,  Director,  Child  Support  Enforcement  Division                                                              
(CSED), Department  of Revenue, testified via  teleconference from                                                              
Anchorage.   She informed  the committee  that CSED requested  the                                                              
introduction of HB 300 due to a problem.   She explained that when                                                              
people go on  medical assistance, CSED is required  to establish a                                                              
medical  support order.   However,  the  current statute  requires                                                              
that  the  division  establish  a financial  order  along  with  a                                                              
medical support  order.  Therefore, this legislation  would change                                                              
the law such that only a medical  support order may be established                                                              
in order  to avoid having to  establish a financial  child support                                                              
order.   This  legislation would  also amend  the medical  support                                                              
statute in  order to  provide that either  parent, not  solely the                                                              
obligor parent, may  be required to provide health  care coverage.                                                              
Furthermore, HB 300 would amend the  law to require that a medical                                                              
support  order  be  issued  regardless   of  whether  health  care                                                              
coverage is currently available to either parent.                                                                               
MS.  MIKLOS pointed  out  that HB  300 was  amended  in the  House                                                              
Health, Education  & Social Services  Committee (HHES).   The HHES                                                              
amendments made it clear that CSED  and the courts follow the same                                                              
procedure.  Furthermore, those amendments  clarified that CSED can                                                              
take  enforcement  action  in  order  to  ensure  medical  support                                                              
compliance with a medical support  order, even in the absence of a                                                              
financial  support  order.   The  remainder  of the  bill  largely                                                              
stayed the same.                                                                                                                
MS. MIKLOS informed the committee  that the division believes that                                                              
this legislation  will help  the obligee, the  person who  has the                                                              
child  or custodial  parent, as  well as  the noncustodial  parent                                                              
because  the division  would not  have to set  up these  financial                                                              
orders  unless  both  parents  desire   such.    Furthermore,  the                                                              
division believes  that the changes  made in HHES  are acceptable.                                                              
However,  [the division]  has one  issue which  is addressed  in a                                                              
letter  entitled, "Recommended  Changes  to CS  for HB  300(HES)".                                                              
She  requested that  Diane Wendlandt  be allowed  to discuss  that                                                              
Number 0310                                                                                                                     
DIANE  WENDLANDT,  Assistant  Attorney  General,  Collections  and                                                              
Support, Civil Division (Anchorage),  Department of Law, testified                                                              
via  teleconference  from  Anchorage.     The  recommended  change                                                              
requests the  removal of the  language "government  assistance" in                                                          
Section 7, page 7, line 12, of CSHB  300(HES).  She explained that                                                              
currently the primary  focus of medical support is  to ensure that                                                              
there is insurance for the child.   However, under Civil Rule 90.3                                                              
parents also have  a responsibility to allocate  the [health care]                                                              
expenses not covered by insurance.   She explained that if a child                                                              
incurs medical expenses not covered  by insurance, those costs are                                                              
split  under the  administrative  or court  order.   As  currently                                                              
drafted,   the   legislation   adds   the   language   "government                                                          
assistance"  so that  it  says, "the  parents  will  - before  the                                                          
agency  will allocate  medical expenses  that are  not covered  by                                                              
insurance  or  by  government  assistance."    She  explained  the                                                              
interpretation  of the existing  law.  If  a child incurs  medical                                                              
expenses, which  are not covered  by insurance, those  are usually                                                              
covered  by  Medicaid.   If  Medicaid  pays those  expenses,  then                                                              
Medicaid has  the right to go  after the parent for  his/her share                                                              
of the  uninsured expenses.   By  adding the language  "government                                                          
assistance",  there  is  the  possibility   that  the  legislation                                                          
eliminates  that  right.   Therefore,  the  recommendation  is  to                                                              
remove  the language  "government  assistance" in  order to  avoid                                                          
affecting that right.                                                                                                           
Number 0448                                                                                                                     
REPRESENTATIVE  ROKEBERG noted  that he  and Ms.  Miklos have  had                                                              
numerous discussions regarding this.   He referred to a case which                                                              
he had discussed  with Ms. Miklos last year and asked  if, in that                                                              
case, "this would  require that person, that obligor,  to pay back                                                              
any Medicaid expenses even though  he'd offered to pay for private                                                              
health insurance."   Representative  Rokeberg said that  he wasn't                                                              
sure that he agreed with the suggested amendment.                                                                               
MS. WENDLANDT clarified  that the suggested amendment  would leave                                                              
the door open, which  is the case in existing law.   She explained                                                              
that medical assistance  is collected when someone  has reasonable                                                              
health  insurance  available at  a  reasonable cost.    Currently,                                                              
existing  law would  allow the  collection  of financial  payments                                                              
which is something that HHES indicated  to be of importance during                                                              
their discussions.   She indicated that HHES felt  that instead of                                                              
the  state paying  for the  public assistance,  if someone  didn't                                                              
have  (indisc.)   health  insurance  perhaps  because   they  were                                                              
wealthy, maybe that person could  be required to pay for the care.                                                              
Although  existing  statute  would  allow  that,  it  is  not  the                                                              
practice.    Therefore,  Ms.  Wendlandt   believes  that  if  this                                                              
amendment is not changed, that door would be closed.                                                                            
Number 0562                                                                                                                     
REPRESENTATIVE ROKEBERG  informed the committee of  a situation in                                                              
which  CSED  went after  a  husband,  within  30 days  of  getting                                                              
divorced  and having a  signed property  agreement, for  increased                                                              
child  support.   He explained  that  the wife  went on  Medicaid,                                                              
which one cannot  get off for six months.  In  this case, the wife                                                              
[began]  a $25  per  hour  job within  a  few weeks  of  obtaining                                                              
Medicaid.   The  husband had  a property  settlement  in which  he                                                              
agreed  to  pay everything.    However,  it turned  into  complete                                                              
chaos.    Representative   Rokeberg  said  that   [this  suggested                                                              
amendment]  would  make  this  husband  responsible  for  all  the                                                              
things, such  as dental work for  the children, that his  wife had                                                              
done while  on Medicaid  and working  for $25-per-hour.   Although                                                              
Representative Rokeberg believes  some of the legislation is good,                                                              
he was not sure that the section under discussion is valid.                                                                     
CHAIRMAN  KOTT asked  if there were  any further  comments  on the                                                              
proposed amendment.   There  being none, he  asked if  anyone else                                                              
wished to  testify in the room  or via teleconference.   He, then,                                                              
inquired as to the wishes of the committee.                                                                                     
Number 0711                                                                                                                     
REPRESENTATIVE  JAMES  requested clarification  in  regard to  Ms.                                                              
Miklos' suggested amendment.                                                                                                    
CHAIRMAN  KOTT  clarified  that   Ms.  Miklos  is  suggesting  the                                                              
deletion of the  language "government assistance" on  page 7, line                                                          
REPRESENTATIVE   ROKEBERG  explained,   in  further  response   to                                                              
Representative  James, that Ms.  Miklos' proposed amendment  would                                                              
allow the state to go after the obligor  for payments made under a                                                              
state Medicaid or other program, such as Denali KidCare.                                                                        
MS.  MIKLOS  stated,  in  response  to  the  case  brought  up  by                                                              
Representative  Rokeberg,   that  this  legislation   was  desired                                                              
because  of a case  such as  the one  mentioned by  Representative                                                              
Rokeberg.    She explained  that  in  the aforementioned  case  an                                                              
agreement had been reached through  a property settlement, but due                                                              
to state law  [the division] had to tie financial  assistance into                                                              
medical assistance.   Therefore,  this bill  was introduced  in an                                                              
attempt  to help  both parents,  especially in  such a  case.   In                                                              
regard to the  amendment, Ms. Miklos believes  that under existing                                                              
statute Medicaid  could ask for someone  to pay for costs  even if                                                              
the person doesn't  have health insurance.  This  was an important                                                              
issue in  HHES as there were  many people who believe  that people                                                              
should be paying for the children's  health care costs and not use                                                              
public   money.  [The   division]  believes   that  the   language                                                              
"government  assistance" would  preclude the  division from  going                                                          
for  things other  than health  insurance.   Ms. Miklos  commented                                                              
that  this is  a policy  call.   She pointed  out that  no one  is                                                              
collecting on this now; [the division]  is only going after health                                                              
care at a  reasonable cost.  That  focus was chosen on  the belief                                                              
that it is the  most cost-effective.  Still, [the  division] would                                                              
prefer to  have language  in the law  that wouldn't preclude  CSED                                                              
from going after other things under any circumstance.                                                                           
Number 0874                                                                                                                     
REPRESENTATIVE CROFT expressed confusion.   He posed the following                                                              
situation in which  the children are covered by  Medicaid and that                                                              
part could  not be allocated, which  would allow Medicaid  to come                                                              
after the noncustodial parent.  He  asked if that would be correct                                                              
under the current language.                                                                                                     
MS. WENDLANDT said Representative Croft's assessment is correct.                                                                
REPRESENTATIVE  ROKEBERG spoke  in opposition  to the adoption  of                                                              
the suggested amendment because he  believes that the programs and                                                              
care available under Medicaid is  greater than almost anyone could                                                              
receive with  a private insurance plan  in Alaska.  By  and large,                                                              
one can receive better care with  Medicaid because it doesn't have                                                              
the exclusions, caps or limits.                                                                                                 
REPRESENTATIVE CROFT related his  understanding that Ms. Miklos is                                                              
saying that  [Representative Rokeberg]  has a compelling  example,                                                              
but he is coming to the wrong conclusion.   He understood that Ms.                                                              
Miklos   is  trying   to   help   the  situation   [described   by                                                              
Representative Rokeberg].                                                                                                       
REPRESENTATIVE ROKEBERG interjected  that he agreed with the bill,                                                              
just  not this  is  particular part  [the  suggested amendment  to                                                              
Section 7].                                                                                                                     
REPRESENTATIVE KERTTULA  related her understanding  that this part                                                              
of the  bill [,  Section 7,]  would allow  [CSED]  to turn to  the                                                              
custodial or  noncustodial parent  in order  to get reimbursed  if                                                              
one is receiving government assistance.                                                                                         
MS.  MIKLOS  indicated   that  would  be  correct   for  uncovered                                                              
expenses.   Therefore,  [the suggested  amendment] presumes  those                                                              
expenses that are not covered by  health insurance and would leave                                                              
the  door open  to  go  after those  expenses.   However,  if  the                                                              
language "government assistance"  is left in Section 7, Ms. Miklos                                                          
was concerned that that door would be closed.                                                                                   
Number 1035                                                                                                                     
REPRESENTATIVE  ROKEBERG posed  the following  situation in  which                                                              
the  obligor had  a major  medical  plan, but  didn't have  dental                                                              
coverage and  the children had dental  work done under  a Medicaid                                                              
program such  as Denali  KidCare.   He asked  if this would  allow                                                              
[the division] the right to turn  to the obligor for reimbursement                                                              
for the dental plan.                                                                                                            
MS. MIKLOS agreed and noted that  [the division] can do that under                                                              
the existing  law.  She  remarked that  some members of  HHES felt                                                              
strongly that [the division] be able to do that.                                                                                
REPRESENTATIVE  ROKEBERG  and  JAMES commented  that  they  didn't                                                              
believe it was fair.                                                                                                            
REPRESENTATIVE  KERTTULA related her  understanding, "Even  if the                                                              
government covered  it, you'd  [CSED] be able  to go  back against                                                              
the custodial/noncustodial parent."                                                                                             
MS. MIKLOS replied yes.                                                                                                         
REPRESENTATIVE  GREEN  interjected   that  it  would  be  for  the                                                              
uncovered expenses.                                                                                                             
REPRESENTATIVE  JAMES pointed  out  that Denali  KidCare has  been                                                              
portrayed as an  insurance policy for folks.  She  asked if people                                                              
who take that insurance policy can be held for the cost of it.                                                                  
MS. MIKLOS informed  the committee that it is  possible for people                                                              
who have  health insurance  to receive  Denali KidCare.   However,                                                              
[the division]  wants to  up the  stakes in  order to receive  the                                                              
reimbursement for  that health insurance.   She acknowledged  that                                                              
it might not  pay for the full  cost of care because  the Medicaid                                                              
insurance  plan   may  have  higher  benefits  than   the  private                                                              
insurance policy, as pointed out  by Representative Rokeberg.  She                                                              
clarified,  "Whether  you  took  that  in  or  left  it  out,  the                                                              
amendment that  we suggested,  it wouldn't  affect the  issue that                                                              
Representative James  is talking about."   She specified  that the                                                              
issue [the division] is discussing  is for the uncovered expenses,                                                              
which  she  interpreted to  mean  those  expenses not  covered  by                                                              
private insurance  that [the division]  can already go after.   By                                                              
leaving [the  language "government  assistance" in Section  7], it                                                          
doesn't  preclude   the  division  from  [going   after  uncovered                                                              
expenses monetarily].   However,  she clarified that  the division                                                              
is not  [being able  to go after  uncovered expenses  monetarily],                                                              
and furthermore  she was not sure  the division would begin  to do                                                              
so  anytime soon.    Still, if  a  wealthy person  without  health                                                              
insurance had a child on Medicaid,  the state may want to consider                                                              
going after that person financially.                                                                                            
REPRESENTATIVE JAMES  asked:  If a person has  an insurance policy                                                              
and Denali KidCare, which would be the primary?                                                                                 
MS. MIKLOS  assumed  that Denali  KidCare would  be the payor  and                                                              
then  seek reimbursement  from the  insurance policy.   She  noted                                                              
that Medicaid does that.                                                                                                        
Number 1222                                                                                                                     
JON  SHERWOOD,  Division  of  Medical  Assistance,  Department  of                                                              
Health  &  Social  Services,  explained  that for  a  person  with                                                              
insurance, the  provider has to  bill the private  insurance first                                                              
for  most types  of services.   Medicaid  only  pays for  expenses                                                              
uncovered by the insurer.  For some  services that aren't commonly                                                              
paid for by insurance,  the provider can bill Medicaid  first.  He                                                              
noted that  "we" do try  to go after  the insurance  company after                                                              
the fact.                                                                                                                       
REPRESENTATIVE   JAMES   commented   that   Denali   KidCare   was                                                              
established  for  those  that  are  either  under-insured  or  not                                                              
insured in order  to cover children's medical  expenses.  However,                                                              
no where in the  Denali KidCare information did she  every see the                                                              
information that  if one receives  this benefit, he/she  will have                                                              
to reimburse it.                                                                                                                
MR. SHERWOOD stated  that in most cases, the client  would not pay                                                              
it back.   He related  his understanding  of the proposed  change.                                                              
He said, "In  situations where there was a child  support order in                                                              
place (indisc.) address medical support  and specifically required                                                              
the noncustodial  parent to pay for  a portion of the  health care                                                              
costs directly, then the noncustodial  parent would be required to                                                              
pay something."                                                                                                                 
Number 1304                                                                                                                     
REPRESENTATIVE JAMES  asked, then, why the custodial  parent would                                                              
need  Denali  KidCare  if  the noncustodial  parent  had  to  pay.                                                              
Furthermore, she inquired  as to why the [custodial  parent] would                                                              
MR. SHERWOOD  related his belief  that the medical  support order,                                                              
in most cases, would  be limited in regard to the  amount of money                                                              
an individual  would have  to pay and  they may still  need Denali                                                              
KidCare to  pay for things outside  the coverage of  the financial                                                              
ability of the two parents.                                                                                                     
REPRESENTATIVE JAMES inquired as  to who makes the application for                                                              
Denali  KidCare, the  obligor or  the  custodial parent.   If  the                                                              
custodial parent is  not paying these and has an  obligation to do                                                              
so from someone  else, that parent shouldn't be able  to apply for                                                              
Denali KidCare.                                                                                                                 
MR.  SHERWOOD pointed  out  that  the custodial  parent  generally                                                              
would make the application first for Denali KidCare.                                                                            
REPRESENTATIVE JAMES remarked, "Sounds like a rip-off to me."                                                                   
REPRESENTATIVE  CROFT mentioned the  following [possibilities]  of                                                              
$10,000 covered by private insurance,  $10,000 covered by Medicaid                                                              
and $10,000  uncovered.   He said, "Under  the bill as  it stands,                                                              
you  'shall  allocate equally  between  the  parents the  cost  of                                                              
reasonable health  care expenses  not covered', that's  $10,000 of                                                              
it.  We split it $5,000 and $5,000  and we say noncustodial parent                                                              
you owe $5,000  for these noncovered medical expenses."   He asked                                                              
if that was a correct characterization.                                                                                         
MR. SHERWOOD deferred to CSED.                                                                                                  
MS. MIKLOS  agreed that  Representative Croft's understanding  was                                                              
REPRESENTATIVE  CROFT  related  his understanding  that  with  Ms.                                                              
Miklos' suggested  amendment it would  result in $10,000  [for the                                                              
private insurance] and $10,000 for  the Medicaid, which is a total                                                              
of $20,000.   Therefore, that $20,000  would be split  equally and                                                              
thus the  noncustodial parent  would receive  a bill for  $10,000.                                                              
When  the custodial  parent receives  [the  $10,000], he/she  uses                                                              
$5,000 for  the noncovered expenses  and the other $5,000  is sent                                                              
back to Medicaid.                                                                                                               
MS. MIKLOS replied, "I believe so."                                                                                             
REPRESENTATIVE CROFT  indicated that it makes sense  to charge the                                                              
noncustodial parent  for government services, but  not for private                                                              
insurance coverage.  He said, "When  it was just the uncovered, it                                                              
sort of made sense  to me.  Why should we distinguish  between the                                                              
two and charge the noncustodial for paying back Medicaid?"                                                                      
Number 1486                                                                                                                     
MS.   WENDLANDT   related  her   understanding   that   government                                                              
assistance is  not supposed  to be a  substitute for  the parental                                                              
responsibility  in  paying  for these  expenses.    If  government                                                              
assistance was not available, these  expenses would have been paid                                                              
and allocated  between the parents.   The policy argument  is that                                                              
government assistance  should not act  as a substitute  and reduce                                                              
the  liability of  the noncustodial  or obligor  parent for  these                                                              
MS. MIKLOS turned  to Representative James' remarks  and explained                                                              
that when someone applies for Medicaid  programs, including Denali                                                              
KidCare, that triggers [the division]  to pursue a medical support                                                              
order.   Then [the division] finds  out whether [the  payment] can                                                              
be reimbursed,  which can  occur from either  parent not  just the                                                              
obligor.    She  echoed Ms.  Wendlandt's  comments  regarding  the                                                              
intent  for the  parents  to be  responsible,  if  possible.   Ms.                                                              
Miklos  pointed out  that [the  division]  is not  doing that  but                                                              
rather using insurance  at a reasonable cost.   However, there may                                                              
be a situation  when the division or the court  would believe that                                                              
the [noncustodial] parent could afford  to help out with something                                                              
other  than insurance.   In  such  a case,  the desire  may be  to                                                              
include that in the order.  [The  division] is concerned that this                                                              
would preclude  that, although  this is not  commonly done  by the                                                              
division nor  the court.   In reference to Representative  Croft's                                                              
situation, the division  does not ask noncustodial  parents to pay                                                              
the $10,000 or $20,000 because it isn't reasonable.                                                                             
REPRESENTATIVE  ROKEBERG returned  to the  situation he  mentioned                                                              
earlier.   This man was divorced,  and in the child  support order                                                              
he agreed to pay half of [his children's]  medical care.  This man                                                              
didn't  have an  insurance policy.   Therefore,  when his  ex-wife                                                              
received  Medicaid  coverage,  it triggered  the  "dead-beat  dad"                                                              
scenario,   which   took  a   year   to   get  out   from   under.                                                              
Representative  Rokeberg  said, in  his opinion,  the  use of  the                                                              
Medicaid assistance  for a protracted period was  discretionary on                                                              
the part  of the  mother.   He emphasized  that there  is no  cost                                                              
containment in Medicaid.                                                                                                        
Number 1646                                                                                                                     
REPRESENTATIVE  JAMES   related  her  belief  that   when  parents                                                              
separate and there is an arrangement  through the courts for child                                                              
support,  [the  support  order] will  say  what  the  noncustodial                                                              
parent  is to  pay.   If  the noncustodial  parent  is to  provide                                                              
insurance and pay  the portion not covered by  the insurance, then                                                              
it seems  there would be a  valid reason, under child  support, to                                                              
go after that  person because that was the agreement  on the child                                                              
support issue.                                                                                                                  
REPRESENTATIVE  JAMES  posed  another   situation  in  which  [the                                                              
noncustodial parent]  is required  to provide insurance  while the                                                              
out-of-pocket  or  noncovered portion  is  to  be covered  by  the                                                              
custodial  parent.    In  such a  case,  she  believed  that  [the                                                              
division] would have  to go after the custodial  parent.  However,                                                              
if the  custodial parent makes  an application to  Denali KidCare,                                                              
she  didn't believe  that custodial  parent  believes that  [those                                                              
services] will have to be paid back.   It seems that there is some                                                              
entrapment in that process.  Furthermore,  certain wage parameters                                                              
must be met in order to apply for  Denali KidCare and thus if [the                                                              
division/court]   is  going   to  go  after   the  custodial   and                                                              
noncustodial  parent, then both  the wages  for the custodial  and                                                              
noncustodial parent  should be included  when applying  for Denali                                                              
KidCare.    Representative  James  said  that  "we"  shouldn't  be                                                              
putting something in law that would  allow them to be entrapped in                                                              
this way.                                                                                                                       
MS.  MIKLOS responded  that  most of  these  orders are  developed                                                              
after people  go into  Denali KidCare.   When people  enter Denali                                                              
KidCare it is made  clear that CSED will be going  after a medical                                                              
support order.   Therefore, she  didn't believe it  is entrapment.                                                              
She reiterated that [the division]  doesn't go after the custodial                                                              
and noncustodial  parent that  can't afford  to pay the  uncovered                                                              
costs as it has  to be "reasonable", which appears  throughout the                                                              
statute.   The only way  CSED would attempt  to collect is  if the                                                              
custodial parent  did have insurance  and didn't disclose  that or                                                              
had  received the  insurance after  getting Denali  KidCare.   Ms.                                                              
Miklos emphasized  that [the division]  doesn't do things  that it                                                              
hasn't  warned  the  parents about.    Although  the  noncustodial                                                              
parent  doesn't  necessarily know  there  will  be an  order,  the                                                              
custodial  parent does  know  that he/she  has  to cooperate  with                                                              
child support.                                                                                                                  
REPRESENTATIVE  JAMES  acknowledged that  Ms.  Miklos' concern  is                                                              
regarding  child  support  and  thus  this  particular  case  only                                                              
addresses those parents  who are separated, which  would result in                                                              
a custodial and  a noncustodial parent.  However,  she wasn't sure                                                              
what  would happen  in  a situation  in which  the  folks are  not                                                              
separated and have  Denali KidCare.  She understood  that "we" are                                                              
treating people  who are split up  differently from those  who are                                                              
not;  she   inquired  as  to  why   the  two  are   being  treated                                                              
MS. MIKLOS pointed out that [those  who are separated versus those                                                              
who are not] are treated differently  due to federal requirements.                                                              
Ms. Miklos said:                                                                                                                
     There's a  reason behind it ...  and that is that  if they're                                                              
     not split up,  then I'm assuming that part ...  of the Denali                                                              
     KidCare would  be to take both  of those parents'  ability to                                                              
     have insurance  or whether they have insurance  would already                                                              
     have been taken  into consideration.  So, it's  only when the                                                              
     parents are  split-up, that people  don't know if  this other                                                              
     parent could possibly get this (indisc.) health insurance.                                                                 
Number 1871                                                                                                                     
REPRESENTATIVE  JAMES asked if  the parent has  to notify  CSED if                                                              
he/she comes into some money, receives  a job or health insurance;                                                              
would he/she lose the ability to receive [Denali KidCare].                                                                      
MS. MIKLOS deferred to Mr. Sherwood.                                                                                            
MR. SHERWOOD answered  that if someone comes into  insurance after                                                              
[admittance to]  Denali KidCare, he/she  is required to  report it                                                              
to  [DHSS].   At that  point,  the providers  will  have to  begin                                                              
billing that insurance first.  He  noted that the parent may still                                                              
remain eligible  for Denali KidCare  and [DHSS] would pay  for the                                                              
uncovered  costs.  Mr.  Sherwood turned  to Representative  James'                                                              
earlier question  regarding a situation  in which there is  not an                                                              
absent parent.   He explained that [DHSS] does  not pursue support                                                              
or recovery in such a situation;  however, both parents' income is                                                              
taken  into consideration  when  reviewing  whether  the child  is                                                              
eligible.   Under federal  law, when  there is  an absent  parent,                                                              
[DHSS] is required  to disregard [the absent parent's]  income and                                                              
financial resources  for an  eligibility determination.   However,                                                              
there is  a requirement  to seek  medical support  for that  child                                                              
from that absent parent, if available at reasonable cost.                                                                       
REPRESENTATIVE ROKEBERG asked if  seeking the medical support is a                                                              
federal mandate.                                                                                                                
MR. SHERWOOD replied yes.                                                                                                       
REPRESENTATIVE  ROKEBERG  posed  a  situation in  which  a  person                                                              
qualifies   for   Medicaid   or  Denali   KidCare   under   normal                                                              
circumstances,  when there is  an outstanding  support order.   He                                                              
inquired  as  to how  long  such a  person  would be  enrolled  in                                                              
Medicaid because  in his  experience, even those  that find  a job                                                              
remain on the rolls for some time.                                                                                              
MR.  SHERWOOD  stated  that  once  a child  is  determined  to  be                                                              
eligible  he/she is eligible  for a  minimum of  six months.   For                                                              
families receiving  coverage from  Family Medicaid who  lose their                                                              
eligibility due to [excess] earnings,  there is up to 12 months of                                                              
transitional  coverage;  that  is   a  federal  requirement.    He                                                              
explained  that  [this  transitional  coverage]  is  considered  a                                                              
support for those attempting to work their way out of poverty.                                                                  
REPRESENTATIVE  ROKEBERG  surmised, then,  that  the situation  he                                                              
mentioned  earlier could  be correct  in that  the mother,  within                                                              
days of obtaining  Medicaid, secured a $25 per  hour job; however,                                                              
the children  remained on Medicaid  for six months.   He remarked,                                                              
"That's a terrible defect in the law."                                                                                          
MR.  SHERWOOD  said   that  he  believes  that   things  [such  as                                                              
transitional coverage]  are utilized in order to  encourage people                                                              
to obtain a  job and work themselves  out of poverty.   Often, the                                                              
loss of health  care benefits can be a large  barrier to returning                                                              
to work.                                                                                                                        
REPRESENTATIVE CROFT posed a situation  in which there is a family                                                              
that  is  in   poverty  or  close  to  poverty  and   there  is  a                                                              
noncustodial parent who can pay,  while the government steps in to                                                              
help.  He  asked, "Should they or  shouldn't they pick  up half of                                                              
that?"   Representative  Croft believes  [the noncustodial  parent                                                              
should pay  for half].   He noted  that Representative  Rokeberg's                                                              
concerns are  addressed by the  language "reasonable" all  the way                                                              
through [Section  7] because it  allows CSED to  determine whether                                                              
services rendered were reasonable.                                                                                              
REPRESENTATIVE  ROKEBERG  stated  that  he  didn't  disagree  with                                                              
Representative Croft.   However, his experience does  not lend any                                                              
credibility  to  the use  of  the  language "reasonable"  in  this                                                              
particular area.   He noted that  the complaints that  he receives                                                              
regarding the  "gestapo" tactics of  this division seem to  be the                                                              
norm.    Therefore,  he  indicated  disbelief  in  regard  to  the                                                              
credibility  of  the  reasonableness   standard.    Representative                                                              
Rokeberg pointed  out the need to differentiate  between [covered]                                                              
and  uncovered  benefits  because  he believes  therein  lies  the                                                              
Number 2160                                                                                                                     
REPRESENTATIVE  CROFT suggested inserting  some language  defining                                                              
"reasonable uncovered expenses."                                                                                                
REPRESENTATIVE  ROKEBERG  said that  the uncovered  expenses  that                                                              
exceed  $5,000  in  a  calendar   year  are  similar  to  a  large                                                              
deductible, and  thus most other  things could be  excluded there.                                                              
Therefore,  he  indicated  that  perhaps  his  concerns  could  be                                                              
reviewed with that  deductible.  He reiterated his  belief that it                                                              
is subject  to abuse and  that he  knew of such  a case.   He also                                                              
expressed  concern  regarding  the  Governor's  aggressiveness  in                                                              
regard to expanding this.                                                                                                       
REPRESENTATIVE  MURKOWSKI  asked  if  anything  in  statute  would                                                              
arrive at what is "reasonable and covered expenses."                                                                            
MS.  MIKLOS informed  the  committee that  CSED  uses the  federal                                                              
government's definition of "reasonable,"  which the feds define as                                                              
insurance provided  by the  employer at a  reasonable [cost].   In                                                              
regard to  Representative  Rokeberg, Ms.  Miklos stated that,  for                                                              
the most part, [CSED] doesn't go after uncovered expenses.                                                                      
REPRESENTATIVE ROKEBERG  remarked that  now CSED would be  able to                                                              
go after uncovered expenses.                                                                                                    
MS.  MIKLOS  clarified  that  under existing  law,  CSED  has  the                                                              
ability to go after uncovered expenses;  however, the division has                                                              
chosen  not   to  do   so  because   it  is  not   cost-effective.                                                              
Furthermore, it  is not required by  federal law.  The  concern is                                                              
that by leaving  "government assistance" in this  legislation, the                                                              
division and the courts would be precluded from doing so.                                                                       
Number 2274                                                                                                                     
REPRESENTATIVE  JAMES said  that the uncovered  expenses  from the                                                              
examples seem  to be beneficial to  the custodial parent  in these                                                              
cases  because who  else will  pay  the uncovered  expenses.   She                                                              
found it  difficult to  envision that they  would be  uncovered if                                                              
they have insurance and Denali KidCare.  She asked:                                                                             
     Am   I  to  understand   that  there   likely  is   uncovered                                                              
     [expenses],  even  after  having  the  insurance  and  Denali                                                              
     KidCare, and  if that is something, then,  that the custodial                                                              
     parent  would have  to  pay, and  that  if ...  you took  any                                                              
     action on that, there would be no benefit to the state,                                                                    
     there would only be benefit to the custodial parent?  That                                                                 
     may be the reason you never do it.                                                                                         
MS. MIKLOS  answered that it is  rare that CSED goes  after either                                                              
parent for uncovered  expenses.  Furthermore, she  didn't know [of                                                              
any case]  when there  has been  health insurance.   She  believes                                                              
that the  uncovered expenses  are viewed  more when neither  party                                                              
has insurance and  the costs of health insurance  were split.  She                                                              
pointed out  that when the court  does this, each  parent's income                                                              
is weighed.  In regard to a situation  in which a custodial parent                                                              
receives  Denali KidCare  and is  very close to  poverty, and  the                                                              
noncustodial parent is wealthy, there  would be the opportunity to                                                              
go after the noncustodial parent.   If the noncustodial parent was                                                              
poor, then no one would go after him/her.                                                                                       
REPRESENTATIVE JAMES asked if it  is possible that the court order                                                              
establishing  the   child  support  would  indicate   whether  the                                                              
noncustodial  parent is supposed  to keep  insurance in  effect as                                                              
well as pay the co-payment.                                                                                                     
MS.  MIKLOS explained  that  the  court order  reads  that if  the                                                              
parent  has  insurance at  a  reasonable  cost,  then it  must  be                                                              
provided  for the  children.   She pointed  out that  most of  the                                                              
program is  geared to those that  could have insurance  but choose                                                              
not to  cover their children.   There is  also a provision  in the                                                              
court order  that if  there are  uncovered costs,  those could  be                                                              
equally   split   between   the  parents,   depending   upon   the                                                              
MS. WENDLANDT  remarked that  she had  only seen that  [provision]                                                              
used  in a few  cases.   As a  general rule,  CSED enforces  those                                                              
uncovered  expenses  only  if  the  parents  have  gone  to  court                                                              
requesting that the  court reduce those expenses to  judgment.  In                                                              
such a case, the courts would determine  whether the expenses were                                                              
reasonable,  whether the  medical treatment  was necessary  and of                                                              
reasonable  cost, as well  as who  should bear  the burden  of the                                                              
costs,  given the  financial  status  of each  parent.   Once  the                                                              
courts  have  made  those  decisions  and  reduced  an  amount  to                                                              
judgment, CSED  will enforce  that judgment.   She clarified  that                                                              
that is  how it  comes up  now in  the context  of not having  any                                                              
"government assistance."                                                                                                        
REPRESENTATIVE  JAMES  noted that  in  her daughter's  divorce  20                                                              
years ago,  her daughter's  husband was  supposed to maintain  the                                                              
insurance as well as maintain the  co-payment.  Perhaps that is no                                                              
longer the case.                                                                                                                
MS. MIKLOS said that is certainly  being done if [that parent has]                                                              
insurance available.                                                                                                            
Number 2450                                                                                                                     
REPRESENTATIVE ROKEBERG  referred to page 7, lines  2-6, and asked                                                              
if  a  property  settlement  approved  by  the  court  would  take                                                              
precedence  over that.   He remarked  that the [language]  doesn't                                                              
seem to give any privity of contract.                                                                                           
MS. WENDLANDT specified that normally  a property settlement would                                                              
be approved by the court and thus becomes...                                                                                    
TAPE 00-66, SIDE B                                                                                                              
MS. WENDLANDT continued,  "...and the court issues  an order based                                                              
on that  property settlement.   That is  what the court  order is,                                                              
and that's what we would enforce."                                                                                              
REPRESENTATIVE ROKEBERG  remarked that [the language  in the bill]                                                              
provides for a formula  that may be at odds with  the agreement in                                                              
the court order/property agreement.                                                                                             
MS. WENDLANDT  said that she  wasn't entirely sure  she understood                                                              
the question.   However, she  referred Representative  Rokeberg to                                                              
the bold  and underlined  sentence beginning on  page 6,  line 31,                                                              
through  page  7, line  2.   She  explained  that  if there  is  a                                                              
property settlement  which resolved the [health  insurance] issues                                                              
in  another way,  due  to a  specific  reason  for that  different                                                              
allocation,  she believes  that there  could  be a  good cause  to                                                              
allocate  the health  insurance costs  in an unequal  manner.   In                                                              
such  a case,  there  would  not be  an  increase or  decrease  as                                                              
provided on page 7, lines 2-9.                                                                                                  
REPRESENTATIVE ROKEBERG  explained that his problem  is that every                                                              
day  CSED   [obligates]  the   (indisc.)  contract   and  property                                                              
settlement  by changing the amounts  of custodial support payments                                                              
based on alleged increases in income.                                                                                           
Number 0071                                                                                                                     
REPRESENTATIVE CROFT moved that the  committee adopt the following                                                              
amendment [Amendment 1]:                                                                                                        
     Page 7, line 12,                                                                                                           
          Delete, "or government assistance"                                                                                
REPRESENTATIVES ROKEBERG AND JAMES objected.                                                                                    
Upon   a  roll   call  vote,   Representatives  Kerttula,   Green,                                                              
Murkowski,  Croft and  Kott  voted  in favor  of  the adoption  of                                                              
[Amendment  1]  and  Representatives   Rokeberg  and  James  voted                                                              
against the  adoption of  [Amendment 1].   Therefore, Amendment  1                                                              
was adopted by a vote of 5-2.                                                                                                   
REPRESENTATIVE CROFT  expressed concern  with the word  "shall" on                                                          
page  7, line  11.   He  said that  two ideas  seem  to be  melded                                                              
together.    First, the  court  may  order that  the  noncustodial                                                              
parent do this.  Second, if there  is a decision to order it, then                                                              
one "shall"  make it equal unless  there is a good reason  not to.                                                          
He asked,  "Does any of  that make any  sense on dividing  the two                                                              
ideas into 'you  may do it' and 'if you do it,  you should presume                                                              
it's equal unless otherwise found.'"                                                                                            
MS. MIKLOS  said that  Representative Croft's  thinking does  make                                                              
sense.  She noted that now she could  see the question, and it was                                                              
not intended that the division should always do that.                                                                           
REPRESENTATIVE  KERTTULA remarked  that there  is another  part to                                                              
this drafting  problem.  She referred  to the bold  and underlined                                                              
sentence  beginning on  page 7, lines  17-20.   She believes  that                                                              
language should  be together with  the other part of  the section;                                                              
otherwise,  there   is  confusion.    She  specified   that  three                                                              
different  ideas  are  going on.    One  is  to split  the  health                                                              
insurance costs,  if reasonable, and  another is to  allocate [the                                                              
health insurance  costs] equally  unless there  is a reason  to do                                                              
otherwise.    Representative  Kerttula surmised,  then,  that  the                                                              
reasonable costs  should be determined and thus  allocated equally                                                              
unless there  is a good reason  not to do  so.  She asked  if that                                                              
would be the appropriate manner in which to put it together.                                                                    
REPRESENTATIVE CROFT  remarked that Representative  Kerttula has a                                                              
point.  He agreed that there are  three ideas.  First, "you can do                                                              
this  if you decide  to, but  you don't  have to."   However,  the                                                              
remaining two ideas  are almost contradictory in the  way they are                                                              
written because one  [part of the provision] says  that the [court                                                              
or  agency]  shall  allocate  [the   costs  of  health  insurance]                                                              
equally,  while the  other [part  of  the provision]  is based  on                                                              
financial circumstances.  He questioned  which should be followed.                                                              
Representative  Croft  said, "I  guess  the combination  that  all                                                              
works is:   You may  allocate this to  the noncustodial  parent if                                                              
you  want.   If you  decide to,  you shall  allocate them  equally                                                              
unless  there's  good  cause,  including  the  relative  financial                                                              
circumstances  of  the  parties  to do  otherwise."    He  further                                                              
clarified that if [the court or agency]  decides to do it, then it                                                              
must be done  equally unless there is  a good reason not  to do it                                                              
REPRESENTATIVE  KERTTULA  inquired  as  to which  way  Ms.  Miklos                                                              
MS. WENDLANDT related her belief  that it would be simpler for the                                                              
agency if it started with the assumption  that [the cost of health                                                              
insurance]  would be  allocated equally,  rather than  immediately                                                              
moving to the financial circumstances.                                                                                          
Number 0303                                                                                                                     
REPRESENTATIVE CROFT  moved that the committee adopt  a conceptual                                                              
amendment [Amendment 2]: on page  7, delete the sentence beginning                                                              
on line 9 and ending on line 13;  delete the sentence beginning on                                                              
line 17  and ending on  line 20.   Replace those with  [sentences]                                                              
that would say:                                                                                                                 
     that the court  may ... order the noncustodial  parent to pay                                                              
     the  uncovered  expenses  exceeding  $5,000,  for  reasonable                                                              
     health care expenses. ...  If  they do make such an award, it                                                              
     should be allocated equally  between the parents unless there                                                              
     is   good    cause,   including   the    relative   financial                                                              
     circumstances of the parties, to allocate them unequally.                                                                  
REPRESENTATIVE  KERTTULA pointed  out that  the language  needs to                                                              
start out with both [parties].                                                                                                  
LESIL  McGUIRE,   Staff  to  Representative  Kott,   Alaska  State                                                              
Legislature, clarified,  then, that  the language should  begin by                                                              
referencing both parents.                                                                                                       
CHAIRMAN  KOTT  asked if  there  was objection  to  Representative                                                              
Croft's  conceptual amendment  [Amendment 2].   There being  none,                                                              
Representative Croft's conceptual amendment was adopted.                                                                        
Number 0436                                                                                                                     
REPRESENTATIVE  ROKEBERG expressed  concern regarding the  privity                                                              
of  contract  and  the  original  property  settlement  agreement.                                                              
Therefore, he suggested the addition  of subsection (d) in Section                                                              
7.   He explained that  conceptually he  is attempting to  get the                                                              
original   property   settlement    agreement   language   to   be                                                              
controlling.   Therefore, the conceptual  amendment would  read as                                                              
follows:    "For  the  purposes  of  this  section,  the  original                                                              
property  settlement  agreement ratified  by  the  court shall  be                                                              
considered  a  good  cause."    He   related  his  belief  in  the                                                              
possibility  and  eventuality  that the  department  and  division                                                              
would change  these things with  their extraordinary  power, which                                                              
would defeat the privity contract.                                                                                              
MS. MIKLOS  said, in response to  Chairman Kott, that she  and Ms.                                                              
Wendlandt think Representative Rokeberg's  conceptual amendment is                                                              
REPRESENTATIVE CROFT remarked that  [Ms. Miklos and Ms. Wendlandt]                                                              
know more about  this area than he,  and thus he would  let it go.                                                              
However,  he  pointed out  that  generally  child support  is  not                                                              
subject to negotiation for good policy  reasons.  Child support is                                                              
established by  rule and based  on certain percentages  of income.                                                              
He  noted, "You  don't want  this negotiated  down because  you're                                                              
worried  in a  lot of  situations about,  'I won't  fight you  for                                                              
custody  if   you  agree  to  take   X  or  Y  ....'"     However,                                                              
Representative Croft  surmised that  such is not  interfering with                                                              
Rule  90.3,  which  is  the  rate-setting,   child-support-setting                                                              
REPRESENTATIVE  ROKEBERG stated  that  [his conceptual  amendment]                                                              
speaks only to the section on cost.                                                                                             
MS.  WENDLANDT  related  her  understanding   that  Representative                                                              
Rokeberg's  conceptual   amendment  would  not  make   a  property                                                              
settlement  agreement  controlling  because  it  is  not  entirely                                                              
subject  to  negotiation  of  the parties.    She  understood  the                                                              
conceptual amendment  as something  that could be  considered when                                                              
making a  good cause  determination on  the allocation  of covered                                                              
expenses, which she  didn't believe would violate Rule  90.3.  She                                                              
noted  that   Rule  90.3  includes   good  cause   exceptions  and                                                              
CHAIRMAN KOTT announced that Representative  Rokeberg's conceptual                                                              
amendment is  Amendment 3.  He  then asked if there  was objection                                                              
to Amendment 3.  There being none, Amendment 3 was adopted.                                                                     
Number 0599                                                                                                                     
REPRESENTATIVE  ROKEBERG  moved that  the  committee report  [CSHB
300(HES)],   as  amended,   out  of   committee  with   individual                                                              
recommendations and  the attached zero  fiscal note.   There being                                                              
no objection, CSHB 300(JUD) was reported  from the House Judiciary                                                              
Standing Committee.                                                                                                             
HB 425 - FALSE CLAIMS AGAINST STATE OR MUNI.                                                                                  
Number 0677                                                                                                                     
CHAIRMAN KOTT turned to the next  item of business, HOUSE BILL NO.                                                              
425, "An Act  relating to misrepresentation and  false claims made                                                              
against  the  state  or  a  municipality;  and  providing  for  an                                                              
effective date."   [James Baldwin had provided brief  remarks at a                                                              
previous hearing.   Before  the committee  was CSHB 425(CRA),  but                                                              
there was a new work draft, Version G.]                                                                                         
Number 0683                                                                                                                     
JAMES BALDWIN,  Assistant Attorney  General, Governmental  Affairs                                                              
Section, Civil Division (Juneau),  Department of Law, came forward                                                              
to  testify. He  said he  had reviewed  this  new draft  committee                                                              
substitute (CS),  and he believes  the amendments that he  and the                                                              
committee had  discussed are reflected  in it.  He stated  for the                                                              
record that he is satisfied with the draft CS [Version G].                                                                      
Number 0780                                                                                                                     
REPRESENTATIVE ROKEBERG moved to  adopt proposed CSHB 425, Version                                                              
G [1-GH2029\G, Bannister, 4/15/00]  as the working document before                                                              
the committee.  There being no objection, it was so ordered.                                                                    
Number 0805                                                                                                                     
REPRESENTATIVE  GREEN asked  Mr. Baldwin  whether the draft  still                                                              
includes treble damages and [a $10,000 fine].                                                                                   
MR. BALDWIN said yes.  He explained  that none of the changes made                                                              
in the  draft are substantive  in nature  from what the  Office of                                                              
the Attorney General originally had  asked the committee to adopt,                                                              
although  the  title  has  been   made  more  descriptive  of  the                                                              
contents.   There had been some  language that would have  led one                                                              
to believe  that the  Department of Law  intended to  change court                                                              
rules, which it  did not, and that language was  corrected.  Also,                                                              
because the previous draft followed  very closely the false claims                                                              
statute of  another state,  there was a  way of describing  things                                                              
that is not typical in Alaska statutes;  that has also been fixed.                                                              
"But yes,  it does contain  treble damages  and the $10,000  fine,                                                              
and that  is one  of the  important aspects  of the  bill that  we                                                              
would like to have as an enforcement tool," he concluded.                                                                       
Number 0890                                                                                                                     
REPRESENTATIVE GREEN related his understanding:                                                                                 
     You are asking [to] prosecute  criminally on preponderance of                                                              
     the  evidence as you  would a  civil crime,  and also  have a                                                              
     rather severe penalty for these  cases against the state.  Is                                                              
     this preferential?   You're  not allowing  this to  happen to                                                              
     someone else, a person who was  wronged; it's just the state.                                                              
     There's probably a rationale behind that.                                                                                  
Number 0928                                                                                                                     
MR. BALDWIN explained  that the motive behind a bill  like this is                                                              
to make it clear  that when one is seeking a benefit  or some kind                                                              
of a financial or proprietary right  from the government, one must                                                              
do so honestly  and in a  straightforward manner.   Therefore, the                                                              
mere act of being dishonest about  it should carry with it a heavy                                                              
burden.  The reason that the Department  of Law would like to have                                                              
this kind of  a statute is that these claims  of misrepresentation                                                              
or defrauding  the government  can be difficult  to prove  in some                                                              
instances.  Mr. Baldwin continued:                                                                                              
     It is often  easier to prove that someone  was dishonest                                                                   
     than  it is  to  prove how  dishonest  they  were.   The                                                                   
     threat of being  able to assess a heavy damage  for that                                                                   
     dishonesty is,  in our view, particularly  [useful] when                                                                   
     cases  that we're  focusing on are  cases against  large                                                                   
     financial  institutions that  either can  bury you  with                                                                   
     documents - to the extent that  it is very difficult and                                                                   
     very expensive to prove how  they may have defrauded you                                                                   
     or misrepresented  things to you - or they  have "cooked                                                                   
     their  books" to  such an  extent that  it's again  very                                                                   
     expensive  and very time-consuming  to prove the  extent                                                                   
     of their misrepresentation.   The fear of  being brought                                                                   
     in under a  statute where you can assess  treble damages                                                                   
     [may make]  a settlement of  the claim more  than likely                                                                   
     than  having to  litigate  it clear  to  the end  point,                                                                   
     which is  extremely expensive and  poses a lot  of risks                                                                   
     for both sides.                                                                                                            
     Number 1032                                                                                                                
     REPRESENTATIVE GREEN said he  certainly could understand                                                                   
     that; it  makes a lot of  sense.  He questioned  whether                                                                   
     this makes it  easier for a state that has  a battery of                                                                   
     attorneys  as  opposed  to  an  individual  or  a  small                                                                   
     company that may  not.  He asked whether  that same fear                                                                   
     would  also reduce  the chances  that  this same  entity                                                                   
     would  try to  defraud a  small  company or  individual.                                                                   
     "I'm just  wondering why we are preferentially  singling                                                                   
     out the state to allow this concept," he added.                                                                            
Number 1070                                                                                                                     
MR. BALDWIN replied:                                                                                                            
     We [in the Office of the Attorney  General] exist and do                                                                   
     our jobs  as trustees  of the public  fisc, and  it's in                                                                   
     that role  that we  are seeking  these kinds of  powers.                                                                   
     When  we  are  acting  in a  fiduciary  capacity,  as  a                                                                   
     protector  of the  public's  property  and assets,  this                                                                   
     kind of  a tool seems to me  to be justified, as  we are                                                                   
     protecting  collectively  the interests  of  all of  the                                                                   
     people in not  having to pay false claims  or not having                                                                   
     to see  the public's property  suffered to loss  through                                                                   
     fraud  or  misrepresentation.  ...  That  would  be  one                                                                   
     distinguishing characteristic.                                                                                             
Number 1130                                                                                                                     
REPRESENTATIVE  CROFT observed  that  there would  be two  options                                                              
when somebody presents a false claim.  He gave an example:                                                                      
     So I say, "Here's the bill for  shipping my car," [when]                                                                   
     I didn't  really ship my car  and I want to  pocket that                                                                   
     $800 or  $1,000.  You  could either, under  the criminal                                                                   
     standards,  hold me  criminally guilty  of fraud ...  or                                                                   
     this  gives you  another  tool that  you  can say,  "All                                                                   
     right, it's  hard to get into  his mental state  and the                                                                   
     burden of  proof is high; we're  just going to  go after                                                                   
     the civil  and get treble damages  from you."   This, in                                                                   
     effect,  gives you another  tool.   And maybe you  could                                                                   
     tell me some  about what some of the  difficulties would                                                                   
     be in just going the criminal route.                                                                                       
Number 1190                                                                                                                     
MR. BALDWIN  replied, "If we go  the criminal route and  you plead                                                              
out to  that, I  can still go  back and go  after you  civilly and                                                              
whatever  you have  admitted to.    If there's  been a  conviction                                                              
entered against  you, that  becomes very  strong evidence  of your                                                              
civil liability as well."  He indicated  the legal options operate                                                              
not only independently but can operate concurrently.                                                                            
REPRESENTATIVE  CROFT  asked  whether  this  could be  used  as  a                                                              
follow-up to criminal prosecution.                                                                                              
MR. BALDWIN  said it would be possible  to do that.   "If you have                                                              
been convicted, it becomes evidence," he explained.                                                                             
REPRESENTATIVE KERTTULA  pointed out that provision  is in Section                                                              
Number 1286                                                                                                                     
MR. BALDWIN read from page 4, line 21:                                                                                          
     A  guilty  verdict  rendered in  a  criminal  proceeding                                                                   
     charging  false  statements  or fraud,  whether  upon  a                                                                   
     verdict  after trial or  upon a plea  of guilty  or nolo                                                                   
     contendere,  estop   the  defendant  from   denying  the                                                                   
     essential  elements of  the  offense in  a civil  action                                                                   
He said that once a person has been  convicted, the state's burden                                                              
of proof on the civil side is much lessened.                                                                                    
REPRESENTATIVE  CROFT responded that  it still  would seem  to him                                                              
that a treble  damage provision would  be most useful, in  that it                                                              
might be an easier way to go than the criminal route.                                                                           
Number 1340                                                                                                                     
MR. BALDWIN explained  that regarding unclaimed property,  it is a                                                              
misdemeanor  when  a financial  institution  fails  to report  its                                                              
unclaimed property to the state.   "I don't know of a circumstance                                                              
where we  have ever gone after  anyone for a misdemeanor  charge,"                                                              
he  said.   "But we  would have  that option.   We  could also  go                                                              
civilly, as  a separate  action, to obtain  treble damages."   Mr.                                                              
Baldwin  noted that in  California, the  prosecution of  unclaimed                                                              
property has  gone more  toward false-claim-type enforcement  than                                                              
it has  toward the regular statutes  that apply for  collection of                                                              
unclaimed  property, simply  because the  ability to claim  treble                                                              
damages is such  a strong enforcement tool that  the companies are                                                              
brought  to a  settlement much  sooner than  if the  state had  to                                                              
proceed  down  the  long  administrative   trail  toward  claiming                                                              
unclaimed property.                                                                                                             
Number 1411                                                                                                                     
REPRESENTATIVE MURKOWSKI  referred to Section  2(a)(8), concerning                                                              
the beneficiary of an inadvertent  submission of a false claim who                                                              
finds  out about  the false  claim, and  then has  to disclose  it                                                              
within  a reasonable  time.  She  wondered what  was considered  a                                                              
reasonable  time.   She then  called attention  to subsection  (c)                                                              
[also under  Section 2],  where it would  appear that a  person is                                                              
going to be held for treble damages  unless that person can reduce                                                              
the amount somehow.   She asked whether [paragraph  (8) is saying]                                                              
that if she  discovers that there  has been a false claim  and she                                                              
has  been the  beneficiary, then  she  has to  report to  somebody                                                              
within 30 days.                                                                                                                 
Number 1876                                                                                                                     
MR. BALDWIN  said he thinks  that is a reasonable  interpretation.                                                              
He stated:                                                                                                                      
     We  are looking  upon that  paragraph (8)  as being  our                                                                   
     best chance  of making  this law  applicable to a  party                                                                   
     like  [a  bank]  whose  activity   occurred  before  the                                                                   
     effective date  of this Act.   I think that it  would be                                                                   
     hard to make  an argument that all the  other provisions                                                                   
     [except paragraph (8)] go back retroactively ....                                                                          
He said the bank has some hard choices;  they still can argue that                                                              
this law  does not apply  because of the retroactivity  arguments,                                                              
but  he believes  that  paragraph (8)  then  brings them  in.   He                                                              
added, "And  then I think  your interpretation is  reasonable that                                                              
the  30 days  which  allows you  to step  down  to double  damages                                                              
rather than treble damages would be the test of reasonableness."                                                                
CHAIRMAN KOTT asked whether anyone  else wished to testify.  There                                                              
being no response, he closed public testimony on HB 425.                                                                        
Number 1560                                                                                                                     
REPRESENTATIVE ROKEBERG  moved to report CSHB 425  [Version G] out                                                              
of committee with individual recommendations  and the accompanying                                                              
fiscal notes.   There being  no objection,  it was so  ordered and                                                              
CSHB  425(JUD)  was reported  from  the House  Judiciary  Standing                                                              
SB 286 - DUTIES AND POWERS OF ATTORNEY GENERAL                                                                                
CHAIRMAN KOTT announced that the  final order of business would be                                                              
COMMITTEE SUBSTITUTE  for SENATE  BILL 286(JUD), "An  Act relating                                                              
to the duties and powers of the attorney general."                                                                              
Number 1690                                                                                                                     
JIM  POUND, Staff  to Senator  Taylor,  Alaska State  Legislature,                                                              
informed the committee that CSSB  286(JUD) primarily addresses the                                                              
duties  of the  attorney general.   Specifically,  the bill  would                                                              
require  the   attorney  general   to  defend  the   Alaska  State                                                              
Constitution,  clarify that  the  duties of  the attorney  general                                                              
would be placed in statute and that  the legislative power to make                                                              
appropriations  and  enact  the   law  restrains  and  limits  the                                                              
attorney  general's  authority when  settling  cases.   Mr.  Pound                                                              
offered to entertain any questions.                                                                                             
Number 1752                                                                                                                     
MARK  JOHNSON,   Attorney,  testified   via  teleconference   from                                                              
Anchorage.  He noted that he formerly  worked for the legislature.                                                              
He informed  the committee  that  this legislation  grew out  of a                                                              
subcommittee of the Commission on  Privatization, which discovered                                                              
some  disturbing   things  regarding  settlement   authority.  The                                                              
subcommittee felt that there was  a need to balance the statute so                                                              
that it  reflected the  extent to  which the  legislature can  and                                                              
should extend, by  statute, the powers of the  attorney general to                                                              
act in certain  areas.  He noted  that he is not an  expert on the                                                              
first element, which  was added by Senator Donley.   He offered to                                                              
speak  to his  letter  to Chairman  Taylor,  Chair  of the  Senate                                                              
Judiciary Committee.   Mr. Johnson informed the  committee that he                                                              
remains supportive  of the legislation and he  urged the committee                                                              
to pass it on.                                                                                                                  
CHAIRMAN KOTT requested that Mr. Johnson speak to the letter.                                                                   
MR. JOHNSON referred the committee  to page 2, lines 8-10, of CSSB
286(JUD).   The portion  that is deleted  grew out of  a disparity                                                              
that  arose out  of  the  [subcommittee's] research  regarding  an                                                              
opinion by the attorney general in  connection with the settlement                                                              
of  the  Exxon  Valdez  litigation.    The  deleted  language  was                                                              
believed   to  be   too  open-ended   and   inappropriate  for   a                                                              
statutorially created attorney general.   He indicated that if the                                                              
attorney general believes that  there  are powers essential to the                                                              
duties of the attorney general, then  he/she could come before the                                                              
legislature and request specific  statutory authority to undertake                                                              
those functions.                                                                                                                
MR. JOHNSON  turned to another  change, which was  further changed                                                              
in  the  Senate   Judiciary  Committee.    He   pointed  out  that                                                              
currently,  there is no  provision in  statute that addresses  the                                                              
attorney general's  authority to  settle cases,  which is  a broad                                                              
authority and tends to be commensurate  with the power to initiate                                                              
litigation.     That  authority  can  include   obligations,  both                                                              
financial  and otherwise,  to  the state.    Therefore, the  final                                                              
section of  CSSB 286(JUD) is an  attempt to place a  limitation in                                                              
statute regarding the authority to settle cases.                                                                                
Number 2086                                                                                                                     
DEAN   GUANELI,  Chief   Assistant   Attorney  General,   Criminal                                                              
Division, Department  of Law, said that  he was happy to  hear Mr.                                                              
Pound say  that the  primary impetus for  this legislation  was to                                                              
include the  change on  page 1, line  5.   However, the  other two                                                              
provisions  in  the  legislation  are  cause  [of  concern].    He                                                              
referred  to page  2,  lines 8-9,  which  seems  to repeal  fairly                                                              
innocuous language.   The attorney general has a  number of powers                                                              
under  statute;   however,  legal   actions  sometimes   get  very                                                              
complicated.    He  pointed  out   that  there  are  a  number  of                                                              
situations  in which  the  attorney general  must  take action  in                                                              
accordance  with   the  public  good,  although  it   may  not  be                                                              
specifically provided  in statute.   Attorneys general  across the                                                              
country find themselves in such a  situation, which is not covered                                                              
in the statute  but rather in the  common law.  He  explained that                                                              
over the years the courts have developed  a set of principles that                                                              
generally  go along  with the office  of the  attorney general  as                                                              
that position  is the  government's primary  legal advocate.   The                                                              
attorney general has  a responsibility to take  certain actions on                                                              
the public's behalf.                                                                                                            
MR. GUANELI provided the committee  with the following four powers                                                              
[of the  attorney general],  which he felt  may disappear  if this                                                              
provision were repealed.   He noted that three of  the four powers                                                              
are from  opinions from  the Alaska Supreme  Court and  the Alaska                                                              
Court  of Appeals.   First,  a number  of  years ago  there was  a                                                              
matter in  which there was a  question as to whether  the attorney                                                              
general  should  prosecute  a  particular   criminal  case.    The                                                              
attorney  general  felt  it was  appropriate  to  investigate  and                                                              
prosecute this case.  However, this  person and their relationship                                                              
with  the administration  led the  attorney general  to feel  that                                                              
there was  a conflict in  the Department  of Law and  thus outside                                                              
counsel was  appointed to prosecute that  case in the name  of the                                                              
state.  However,  the defendant challenged the  attorney general's                                                              
authority  to [appoint  outside counsel  to represent the  state].                                                              
The  Alaska Court  of Appeals  decided that  the attorney  general                                                              
derived the  authority to  appoint [outside/special  counsel] from                                                              
the language which this legislation proposes to repeal.                                                                         
Number 2396                                                                                                                     
MR.  GUANELI  turned to  the  second example  of  a  power of  the                                                              
attorney general that  may disappear.  He explained  that a number                                                              
of  years ago  the  attorney  general's  office began  a  consumer                                                              
protection  action against a  land developer,  who was  engaged in                                                              
some  "less than  reputable" dealings.   The  trial court  decided                                                              
that the  consumer protection  laws didn't  cover that  particular                                                              
conduct and  thus the  attorney general  brought action  under the                                                              
Uniform Land Sales Act.  The court  decided that [the Uniform Land                                                              
Sales Act]  didn't cover the conduct  either.  Finally,  the trial                                                              
court allowed  the attorney  general to bring  a common  law fraud                                                              
action,  under the  attorney general's  common  law authority,  in                                                              
order to sue the [land developer]  on behalf [of the state].  [Mr.                                                              
Guaneli's testimony was interrupted due to a tape change.]                                                                      
TAPE 00-67, SIDE A                                                                                                              
MR. GUANELI continued, "... certainly  in here -- and there was no                                                              
provision in current law as it existed  then that would've covered                                                              
that;  and the  Alaska  Supreme  Court had  to  decide,  in a  ...                                                              
written opinion,  that this particular  provision, which  is going                                                              
to be repealed, allowed the attorney general to do that."                                                                       
Number 0080                                                                                                                     
MR.  GUANELI moved  on to  the third  example  of a  power of  the                                                              
attorney general  that may  disappear, which  he indicated  may be                                                              
surprising.  He  believed that everyone would  probably agree that                                                              
the attorney general  has the authority to decide  to prosecute or                                                              
not prosecute criminal cases.  However,  there is nothing in state                                                              
law that specifies that authority  but rather the current law says                                                              
that "The  attorney general  shall prosecute  all cases  involving                                                              
violation of  state law,  and file  information and prosecute  all                                                              
offenses  against the  revenue  laws and  other  state laws  where                                                              
there  is  no  other provision  for  their  prosecution;".    That                                                              
language specifies  a mandatory duty  and thus the  Alaska Supreme                                                              
Court  had to    hold  that the  attorney  general  does have  the                                                              
discretion not to  prosecute cases or when prosecuted,  to dismiss                                                              
those cases.  Again, that [authority]  was found in the words that                                                              
this legislation  proposes to  repeal.   In this particular  case,                                                              
the attorney  general had been ordered  by a court to  prosecute a                                                              
particular  criminal case.   This  was taken  all the  way to  the                                                              
[Alaska] Supreme Court  in order for the attorney  general to have                                                              
the ability  not to prosecute  a particular  case.  He  noted that                                                              
[the ability to  not prosecute a particular case]  is a common law                                                              
authority of the attorney general.                                                                                              
MR.  GUANELI  turned to  the  fourth example  of  a  power of  the                                                              
attorney general  that may disappear.   He pointed out  that there                                                              
are  a number  of  situations  involving  cases filed  by  private                                                              
litigants   or   in   the   criminal   arena,   cases   filed   by                                                              
municipalities.   In those  cases, the validity  of the  state law                                                              
arises and thus the court notifies  the state and allows the state                                                              
to file  an amicus  brief on  behalf of  the constitutionality  or                                                              
validity of  the state law.  Mr.  Guaneli said that he  didn't see                                                              
anything  in  [the  legislation]  that would  allow  the  attorney                                                              
general to file  at the request of the court in  another action in                                                              
which the state is not a party.   This is used fairly regularly in                                                              
order  to uphold  the  validity of  state  laws,  which he  didn't                                                              
believe is covered in this legislation.                                                                                         
Number 0312                                                                                                                     
MR. GUANELI  indicated  that these examples  illustrate that  this                                                              
legislation   has  unintended  consequences.     Furthermore,   he                                                              
believes  that as time  passes there  will be  other instances  in                                                              
which  the  authority  of  the attorney  general  is  called  into                                                              
question.  Mr. Guaneli felt that  in order to understand what this                                                              
proposed change  does, a more  complete explanation of  what [this                                                              
legislation]  does [is  required].  Mr.  Johnson's testimony  does                                                              
not indicate  that this  was given  much thought.   Therefore,  he                                                              
suggested   that  the   Legislative  Affairs   Agency,  or   other                                                              
appropriate  entity, should  develop research  on the  committee's                                                              
behalf in order  to determine what powers of the  attorney general                                                              
are being given up and being prevented from use.                                                                                
MR. GUANELI turned  to the last part of the bill.   He related his                                                              
belief that  there is no particular  objection to the  notion that                                                              
what the attorney  general does in settling agreements  is subject                                                              
to  the laws  that  the legislature  enacts  or its  appropriation                                                              
power.   However, he  expressed concern  with  the last clause  of                                                              
this  legislation,  which  reads  as  follows:  "...in  which  the                                                              
attorney general represents the state  and in which the state is a                                                              
party."  He explained  that the language means  that [the attorney                                                              
general]  can only  take those  cases and  act in  those cases  in                                                              
which  the  state  is  a  party.   However,  there  is  a  lot  of                                                              
litigation  that  the attorney  general  undertakes  in which  the                                                              
State of Alaska  is not a party.   Mr. Guaneli believes  that this                                                              
legislation  leaves the  attorney  general to  only represent  the                                                              
state.    He  pointed out  that  many  lawsuits  make  allegations                                                              
against state employees, as individuals.   Under the federal civil                                                              
rights statute,  42 U.S.C.  1983, one can  only sue someone  as an                                                              
individual.  Therefore,  most of the actions in  prison litigation                                                              
are federal civil  rights actions under 42 U.S.C.  1983 and all of                                                              
the   defendants   are   individual   correctional   officers   or                                                              
superintendents  who  are  alleged   to  have  violated  someone's                                                              
rights.  Currently, the Office of  the Attorney General represents                                                              
those  people.   If  these  provisions  [in this  legislation]  go                                                              
through  and  the attorneys  general  common  law is  called  into                                                              
question, the attorney general may  not be able to represent those                                                              
individuals.  Furthermore, he suspected  that most union contracts                                                              
for  state  employees have  a  provision  requiring the  state  to                                                              
defend and  indemnify state employees  who get sued in  the course                                                              
of  their employment.    Mr. Guaneli  specified  that the  changes                                                              
[encompassed  in  this  legislation] would  prevent  the  attorney                                                              
general's office from representing  individual state employees and                                                              
thus force  them to hire  private counsel.   Once those  cases are                                                              
settled, the state would be presented  with those bills as well as                                                              
a bill  for attorney's fees.   In such a  case, there is  also the                                                              
danger  to point  fingers at  the employer,  agency or  supervisor                                                              
that forced [the action in question],  which becomes a "field day"                                                              
for   the   plaintiffs   because  of   the   multiple   litigation                                                              
possibilities.    However,  when  the  attorney  general's  office                                                              
handles  the entire  case the parties  are kept  more friendly  in                                                              
order to avoid such a situation.                                                                                                
MR. GUANELI reiterated  his belief that this legislation  has some                                                              
serious  unintended  consequences that  deserve  more  study.   He                                                              
recommended  leaving in  the language  on page  2, lines 8-9,  and                                                              
deleting  the  language   on  page  2,  lines  19-20.     He  also                                                              
recommended that Section 2(d) end  with the word "section" on page                                                              
2,  line 19.   With  those changes,  he didn't  believe that  [the                                                              
Office of  the Attorney General]  would have any objection  to the                                                              
legislation.     Furthermore,  those   changes  would   avoid  the                                                              
aforementioned consequences that could undergo further study.                                                                   
Number 0751                                                                                                                     
REPRESENTATIVE KERTTULA surmised,  from Mr. Johnson's information,                                                              
that  this legislation  could  result  in departments  suing  each                                                              
other, which  occurs in  other states.   She  asked if that  could                                                              
happen with this legislation.                                                                                                   
MR. GUANELI  said that such a  situation is possible;  however, he                                                              
felt that  such a situation is  more likely with  lawsuits against                                                              
employees versus agencies.   He informed the committee  that there                                                              
is case law  in Alaska that says  that employees of the  state are                                                              
not arms  of the state  and thus the  defenses that the  state can                                                              
arise only apply  to the state and not its employees.   Therefore,                                                              
the split  is probably  between the  state and  its employees  and                                                              
less likely between agencies.                                                                                                   
REPRESENTATIVE  KERTTULA remarked  that  although it  is not  that                                                              
clear in the language, it is of concern for her.                                                                                
REPRESENTATIVE  GREEN recalled Mr.  Guaneli's reference  to common                                                              
law.   He  asked  if it  is  the case  that  often  common law  is                                                              
superseded with specific laws.                                                                                                  
MR. GUANELI answered  that in many states where the  common law is                                                              
not  clear, the  trend has  been to  supersede the  common law  by                                                              
statute.  He  explained that often  it is not that easy  to define                                                              
the common law for the country as  different states have different                                                              
common  laws.   Therefore,  many  legislatures pass  statutes  for                                                              
particular  problems in  order to  be  clear and  avoid having  to                                                              
review old court  opinions.  However, in the legal  field when one                                                              
comes  across   something  new  or   something  that   one  hasn't                                                              
anticipated, then it  helps to look to the common  law in order to                                                              
determine how the courts have treated  similar situations.  If the                                                              
common  law  is  completely excluded,  then  [everyone]  would  be                                                              
deprived of  something that is  valuable in those  situations that                                                              
are not covered by statute, which would be unfortunate.                                                                         
Number 1009                                                                                                                     
MR.  JOHNSON  expressed   surprise  that  Mr.  Guaneli   would  be                                                              
mentioning that the issue would need  further study.  In regard to                                                              
the Breeze  case cited  by Mr.  Guaneli, Mr.  Johnson pointed  out                                                            
that the  legislature has  the ability to  legislate in  the fraud                                                              
area as  was done  in the  circumstances presented  by the  Breeze                                                            
case.  The same  is also true of the land fraud  case discussed by                                                              
Mr. Guaneli.   In regard to Mr. Guaneli's third  example involving                                                              
prosecutorial  discretion, Mr.  Johnson  said, "I'm  not sure  how                                                              
actual  that  is."   He  stated  that  the  power to  bring  cases                                                              
included  the power  not to  bring  cases.   Therefore, he  didn't                                                              
believe that a clarification to the  statute would be difficult to                                                              
write in.   Furthermore, the amicus  briefs would also  be equally                                                              
easy  to  frame  within  the statutes.    He  indicated  that  the                                                              
difference is a matter of perspective.   Mr. Johnson said, "If you                                                              
want to  maintain open-ended powers  for the attorney  general and                                                              
the Department of  Law to shelf, you know, a  couple hundred years                                                              
of legal history  and through 51 jurisdictions  through the common                                                              
law  and proceed  in  that manner,  I guess  that's  a matter  for                                                              
legislative judgment."                                                                                                          
MR. JOHNSON informed  the committee that the subcommittee  for the                                                              
Commission  on  Privatization  was  partially  motivated  by  U.S.                                                              
Attorney  General  Cole's  1991  opinion  regarding  the  attorney                                                              
general's settlement  authority.  That opinion suggested  that the                                                              
legislature didn't have the power  to limit the attorney general's                                                              
common  law powers.   The case  that stood  behind that  statement                                                              
inaccurately represented the law  of Maryland.  He referred to the                                                              
Goldberg v. State case [Maryland  Appellate Court, Decision 1987].                                                            
That  case talked  about  the duties  and  powers  of the  state's                                                              
attorney,  which ought  to be  derived from  the constitution  and                                                              
legislative  enactments.  Mr.  Johnson felt  that was central  for                                                              
legislative  consideration  here.    If one  believes  that  there                                                              
should  be limited  and  constitutionally  based government,  then                                                              
this   open-ended   provision   in   statute   is   inappropriate.                                                              
Furthermore, Mr. Johnson didn't believe  that the solutions are as                                                              
difficult as Mr. Guaneli suggests.                                                                                              
CHAIRMAN KOTT asked  if anyone else would like to  testify.  There                                                              
being no one, public testimony was closed.                                                                                      
Number 1214                                                                                                                     
REPRESENTATIVE  MURKOWSKI remarked  that she  wasn't sure  what is                                                              
being given  up.  She  recalled Mr.  Guaneli asking the  question:                                                              
what are  we eliminating and what  common law powers  of attorneys                                                              
general in other  states would no longer be available?   She noted                                                              
that question  had not  been answered.   Representative  Murkowski                                                              
indicated that  she was  not sure about  giving up something  when                                                              
she wasn't sure what she was giving up.                                                                                         
CHAIRMAN  KOTT recalled  that  Mr. Johnson  pointed  out that  the                                                              
attorney  general's powers  should be  [and is]  derived from  the                                                              
constitution and legislative enactments.                                                                                        
REPRESENTATIVE  GREEN referred  to  page 2,  line  9, "  ... IN  A                                                              
STATE]" and  asked if there is  a possibility that there  could be                                                              
conflicting laws  due to 49  other attorneys general  doing things                                                              
in their states.  Does the picking  and choosing create a possible                                                              
MR. GUANELI said:                                                                                                               
     The  way  that  I  would  interpret   this  ...  is  not                                                                   
     necessarily that the attorney  general could or that the                                                                   
     courts,  who  would  ultimately   rule  on  whether  the                                                                   
     attorney general  has this authority would  be saying as                                                                   
     long as we can find one state  that does it, that that's                                                                   
     enough.   ...I  think the clause  here is  the that  all                                                                   
     hangs together as one is "OFFICE  OF ATTORNEY GENERAL IN                                                                   
     A STATE".                                                                                                                  
MR.  GUANELI said  he believes  that what  we are  looking for  is                                                              
regarding the  general American common  law that  usually pertains                                                              
to  the  office of  a  state  attorney general.    Under  American                                                              
jurisprudence,  the office  of a  state  attorney general  usually                                                              
comes    with  certain  authority   that  revolves  around  taking                                                              
necessary and proper  actions to preserve the  public interest and                                                              
protect   the  public.      He  related   his   belief  that   the                                                              
aforementioned  language   really  refers  to  a   state  attorney                                                              
general.   He didn't believe  it is proper  to merely say  that if                                                              
one state does it,  that [Alaska] can do it.   Rather, he believes                                                              
that this  is a  power that  the courts  in the country  generally                                                              
recognize as usually pertaining to  the office of a state attorney                                                              
REPRESENTATIVE  GREEN  commented  that  [such  an  interpretation]                                                              
makes quite a difference.                                                                                                       
MR. GUANELI  acknowledged [that his  interpretation makes  quite a                                                              
difference].  He  didn't believe that [the department]  would have                                                              
any objection to  changing the language to refer  to the office of                                                              
a state attorney general.                                                                                                       
REPRESENTATIVE CROFT said that the  word "generally" would be more                                                              
appropriate than "USUALLY".                                                                                                     
MR. GUANELI  indicated  that [the department]  wouldn't object  to                                                              
CHAIRMAN KOTT  asked if  there has ever  been a case  that reached                                                              
the  highest court  in  the state  and overturned  the  duty of  a                                                              
previous or existing attorney general.                                                                                          
Number 1468                                                                                                                     
JIM  BALDWIN,  Assistant Attorney  General,  Governmental  Affairs                                                              
Section, Civil Division (Juneau),  Department of Law, informed the                                                              
committee that  there was an U.S.  Supreme Court decision  that by                                                              
dissent  decree invalidated  a statute  in  a federal  case.   The                                                              
Alaska Supreme Court  ruled that [the department]  didn't have the                                                              
power to do that.                                                                                                               
CHAIRMAN KOTT  recalled that there  is an association  of attorney                                                              
generals around the  state.  He asked if there is  a document that                                                              
generically  defines  the  powers  and  duties  of  the  attorneys                                                              
general as they see it.                                                                                                         
MR. GUANELI answered that there is  a publication on the office of                                                              
the attorney  general and that  publication includes a  chapter on                                                              
common law powers  of the attorney general.  He  indicated that he                                                              
is reviewing that publication and  it doesn't really set out, with                                                              
any completeness,  what all the common  law powers are.   However,                                                              
he believes that some general principles  can be derived from that                                                              
publication.   Mr. Guaneli informed  the committee that  the tenor                                                              
of that  publication, which  is from  the National Association  of                                                              
Attorneys General,  is that the common  law is necessary  in order                                                              
for attorneys  general to  perform their job.   He noted  that the                                                              
publication  is  not intended  to  be  a  definitive work  on  the                                                              
REPRESENTATIVE  GREEN asked if,  as the  common law has  unfolded,                                                              
different  states  have followed  different  paths  relating to  a                                                              
common law that may not relate to a state statute.                                                                              
MR.  GUANELI responded  that  Representative  Green's question  is                                                              
difficult to answer.   He understood the question  to be regarding                                                              
whether  different  states  have  come  to  different  conclusions                                                              
regarding what the  English common law holds.  In  response to the                                                              
question,  Mr.   Guaneli  said  that  generally   the  states  are                                                              
consistent, but  probably differ  in regard to  a specific  set of                                                              
facts.   Therefore,  some changes  [to the  legislation] might  be                                                              
CHAIRMAN  KOTT  asked if  there  were  further questions  for  Mr.                                                              
Guaneli.    There  being  none, he  asked  if  there  was  further                                                              
REPRESENTATIVE  GREEN moved  that the  committee adopt  conceptual                                                              
Amendment  1, which  would  delete  on page  2,  line 9,  "USUALLY                                                              
PERTAIN TO THE OFFICE OF ATTORNEY  GENERAL IN A STATE]" and insert                                                              
"generally  pertain  to  the  office   of  other  state  attorneys                                                              
general".  He  explained that he is attempting  to incorporate Mr.                                                              
Guaneli's concept of flexibility  for the attorney general without                                                              
necessarily giving  him/her authority to pick and  choose specific                                                              
[duties] that only one state does.                                                                                              
CHAIRMAN KOTT interpreted the conceptual  amendment to mean, then,                                                              
that Alaska would  not allow its attorney general  to do something                                                              
that is tailored to Alaska and not done elsewhere.                                                                              
REPRESENTATIVE  GREEN  replied  yes, at  least  generally  because                                                              
there may  be some instances  where three  states follow  one path                                                              
and the other  46 follow another  path.  He expected our  state to                                                              
go along with the [majority].                                                                                                   
CHAIRMAN  KOTT asked  if  there was  objection  to the  conceptual                                                              
amendment,  Amendment  1.    There being  none,  Amendment  1  was                                                              
Number 1793                                                                                                                     
REPRESENTATIVE  MURKOWSKI referred  to  page 2,  lines 19-20,  and                                                              
recalled that  it would appear that  one wouldn't want  to exclude                                                              
the  attorney  general's  ability  to  take  on  the  individuals.                                                              
Therefore,  Representative  Murkowski  moved  that  the  committee                                                              
adopt Amendment 2 which would delete,  on page 2, all the language                                                              
after the  word "section" on line  19.  There being  no objection,                                                              
Amendment 2 was adopted.                                                                                                        
Number 1871                                                                                                                     
REPRESENTATIVE  GREEN   moved  that  the  committee   report  CSSB
286(JUD),   as  amended,   out   of  committee   with   individual                                                              
recommendations and an indeterminate  fiscal note.  There being no                                                              
objection,  HCS  CSSB  286(JUD),   was  reported  from  the  House                                                              
Judiciary Standing Committee.                                                                                                   
There being no further business before the committee, the House                                                                 
Judiciary Standing Committee adjourned at 3:32 p.m.                                                                             

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