Legislature(2001 - 2002)
04/21/2001 11:24 AM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
April 21, 2001
11:24 a.m.
MEMBERS PRESENT
Representative Norman Rokeberg, Chair
Representative Scott Ogan, Vice Chair [by teleconference]
Representative Jeannette James
Representative John Coghill
Representative Kevin Meyer
Representative Ethan Berkowitz
MEMBERS ABSENT
Representative Albert Kookesh
COMMITTEE CALENDAR
HOUSE BILL NO. 181
"An Act relating to the obligations of spouses, to insurance
policies of spouses, to the nonprobate transfer of property on
death to a community property trust, to the division of the
community property of spouses at death, and to the Alaska
Community Property Act; and providing for an effective date."
- MOVED CSHB 181(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 189
"An Act repealing statutory provisions relating to term limits
and term limit pledges."
- MOVED HB 189 OUT OF COMMITTEE
HOUSE BILL NO. 174
"An Act relating to mental health information and records; and
providing for an effective date."
- MOVED CSHB 174(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 228
"An Act relating to the offense of selling or giving tobacco to
a minor, to the accounting of fees from business license
endorsements for tobacco products, to the disclosure of certain
confidential cigarette and tobacco product information, to
notification regarding a cigarette manufacturer's noncompliance
with the tobacco product Master Settlement Agreement, to
business license endorsements for sale of tobacco products, to
citations and penalties for illegal sales of tobacco products;
and providing for an effective date."
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 181
SHORT TITLE:COMMUNITY PROPERTY
SPONSOR(S): REPRESENTATIVE(S)MURKOWSKI
Jrn-Date Jrn-Page Action
03/14/01 0585 (H) READ THE FIRST TIME -
REFERRALS
03/14/01 0585 (H) JUD
03/27/01 0747 (H) COSPONSOR(S): MCGUIRE
04/21/01 (H) JUD AT 11:00 AM CAPITOL 120
BILL: HB 189
SHORT TITLE:REPEAL TERM LIMITS/TERM LIMITS PLEDGES
SPONSOR(S): JUDICIARY
Jrn-Date Jrn-Page Action
03/16/01 0626 (H) READ THE FIRST TIME -
REFERRALS
03/16/01 0626 (H) STA, JUD
04/12/01 (H) STA AT 8:00 AM CAPITOL 102
04/12/01 (H) <Bill Postponed to 4/19>
04/19/01 1062 (H) STA RPT 6DP
04/19/01 1063 (H) DP: STEVENS, CRAWFORD, JAMES,
FATE,
04/19/01 1063 (H) HAYES, COGHILL
04/19/01 1063 (H) FN1: ZERO(GOV)
04/19/01 (H) STA AT 8:00 AM CAPITOL 102
04/19/01 (H) Moved Out of Committee
04/19/01 (H) MINUTE(STA)
04/21/01 (H) JUD AT 11:00 AM CAPITOL 120
BILL: HB 174
SHORT TITLE:MENTAL HEALTH INFORMATION AND RECORDS
SPONSOR(S): RLS BY REQUEST OF LEG BUDGET & AUDIT
Jrn-Date Jrn-Page Action
03/12/01 0543 (H) READ THE FIRST TIME -
REFERRALS
03/12/01 0543 (H) HES, JUD
04/17/01 (H) HES AT 3:00 PM CAPITOL 106
04/17/01 (H) Moved Out of Committee
04/17/01 (H) MINUTE(HES)
04/18/01 1027 (H) HES RPT 5NR 2AM
04/18/01 1027 (H) NR: COGHILL, WILSON, JOULE,
STEVENS,
04/18/01 1027 (H) DYSON; AM: KOHRING, CISSNA
04/18/01 1028 (H) FN1: ZERO(HSS)
04/21/01 (H) JUD AT 11:00 AM CAPITOL 120
BILL: HB 228
SHORT TITLE:SALE OF TOBACCO PRODUCTS
SPONSOR(S): REPRESENTATIVE(S)HARRIS
Jrn-Date Jrn-Page Action
04/02/01 0809 (H) READ THE FIRST TIME -
REFERRALS
04/02/01 0809 (H) L&C, JUD, FIN
04/03/01 0831 (H) COSPONSOR(S): HUDSON,
MURKOWSKI
04/17/01 1021 (H) COSPONSOR(S): KERTTULA
04/18/01 1053 (H) COSPONSOR(S): CRAWFORD
04/18/01 (H) L&C AT 3:15 PM CAPITOL 17
04/18/01 (H) Moved CSHB 228(L&C) Out of
Committee
04/18/01 (H) MINUTE(L&C)
04/20/01 1092 (H) L&C RPT CS(L&C) NT 5DP 1AM
04/20/01 1093 (H) DP: CRAWFORD, HAYES, MEYER,
04/20/01 1093 (H) ROKEBERG, MURKOWSKI; AM: KOTT
04/20/01 1093 (H) FN1: ZERO(REV)
04/20/01 1093 (H) FN2: (LAW)
04/20/01 1093 (H) FN3: (HSS)
04/20/01 1093 (H) FN4: (CED)
04/21/01 (H) JUD AT 11:00 AM CAPITOL 120
WITNESS REGISTER
REPRESENTATIVE LISA MURKOWSKI
Alaska State Legislature
Capitol Building, Room 408
Juneau, Alaska 99801
POSITION STATEMENT: Sponsor of HB 181.
STEPHEN E. GREER, Attorney
PO Box 24-2903
Anchorage, Alaska 99524-2903
POSITION STATEMENT: Assisted with the presentation of Version L
of HB 181, and proposed Amendment 1.
DAVID G. SHAFTEL, Attorney
550 West 7th Avenue, Suite 705
Anchorage, Alaska 99501
POSITION STATEMENT: Assisted with the presentation of Version L
of HB 181.
GAIL FENUMIAI, Election Program Specialist
Division of Elections
Office of the Lieutenant Governor
PO Box 110017
Juneau, Alaska 99811-0017
POSITION STATEMENT: Provided the Division's position on HB 189
and answered questions.
REPRESENTATIVE HUGH "BUD" FATE
Alaska State Legislature
Capitol Building, Room 416
Juneau, Alaska 99801
POSITION STATEMENT: Presented HB 174 on behalf of the Joint
Committee on Legislative Budget and Audit.
ELMER LINDSTROM, Special Assistant
Office of the Commissioner
Department of Health & Social Services (DHSS)
PO Box 110601
Juneau, Alaska 99811-0601
POSITION STATEMENT: During discussion of HB 174, assisted with
the bill's presentation and answered questions regarding
proposed Amendment 1; During discussion of HB 228, provided the
department's position and answered questions.
ANNE HENRY, Special Projects Coordinator
Central Office
Division of Mental Health & Developmental Disabilities
Department of Health and Social Services (DHSS)
PO Box 110620
Juneau, Alaska 99811-0620
POSITION STATEMENT: During discussion of HB 174, answered
questions related to gathering client data.
PAT DAVIDSON, Legislative Auditor
Legislative Audit Division
Legislative Agencies & Offices
PO Box 113300
Juneau, Alaska 99811-3300
POSITION STATEMENT: Assisted with the presentation of HB 174
and answered questions.
JOHN MANLY, Staff
to Representative John Harris
Alaska State Legislature
Capitol Building, Room 513
Juneau, Alaska 99801
POSITION STATEMENT: Presented HB 228 on behalf of
Representative Harris, the sponsor.
EDWIN J. SASSER, Tobacco Enforcement Coordinator
Division of Public Health (DPH)
Department of Health & Social Services (DHSS)
PO Box 110616
Juneau, Alaska 99811-0616
POSITION STATEMENT: During discussion of HB 228, answered
questions relating to enforcement.
DWAYNE D. JONES, Anchorage Police Department (APD)
4801 South Bragaw Street
Anchorage, Alaska 99508
POSITION STATEMENT: During discussion of HB 228, provided
testimony related to enforcement procedures.
DAN BRANCH, Assistant Attorney General
Commercial Section
Civil Division (Juneau)
Department of Law (DOL)
PO Box 110300
Juneau, Alaska 99811-0300
POSITION STATEMENT: During discussion of HB 228, answered
questions relating to the drafting of page 7, lines 6-7.
ACTION NARRATIVE
TAPE 01-70, SIDE A
Number 0001
CHAIR NORMAN ROKEBERG called the House Judiciary Standing
Committee meeting to order at 11:24 a.m. Representatives
Rokeberg, Ogan (via teleconference), Coghill, Meyer, and
Berkowitz were present at the call to order. Representative
James arrived as the meeting was in progress.
HB 181 - COMMUNITY PROPERTY
Number 0088
CHAIR ROKEBERG announced that the first order of business would
be HOUSE BILL NO. 181, "An Act relating to the obligations of
spouses, to insurance policies of spouses, to the nonprobate
transfer of property on death to a community property trust, to
the division of the community property of spouses at death, and
to the Alaska Community Property Act; and providing for an
effective date."
Number 0094
REPRESENTATIVE LISA MURKOWSKI, Alaska State Legislature, sponsor
of HB 181, noted that in 1998, the legislature passed the Alaska
Community Property Act, which allows married couples to
characterize some or all of their assets as community property.
Since implementation of that Act, those who deal with estate
planning and trusts on a day-to-day basis have identified
certain statutes requiring improvement and adjustment. She
proffered HB 181 as a means of amending and strengthening those
community property statutes.
REPRESENTATIVE MURKOWSKI explained that the first area addressed
by HB 181 is the extent to which a creditor can reach a couple's
community property. Section 1 provides that a creditor can only
reach the separate property of the debtor spouse and that
spouse's half of jointly held property. The second area
addressed by HB 181 relates to transfers of property to a
community property trust by beneficiary designation, whereby
certain property such as life insurance policies and Individual
Retirement Accounts (IRAs) can be transferred to a community
property trust by designating the trust as the beneficiary of
the property.
REPRESENTATIVE MURKOWSKI said the third area addressed by HB 181
clarifies the sources of funds used to purchase life insurance,
in that it will be presumed that the spouse who buys the life
insurance has used his/her own property to purchase that life
insurance. In addition, HB 181 will expand the category of
"family member" to include ancestors or descendants of either
spouse. Typically, community property funds may be used by a
couple to purchase their life insurance, and when the primary
beneficiaries are family members, then it is presumed that both
spouses consented to the choice of beneficiaries. The fourth
area addressed by HB 181 is the division of community property
at death. Section 4 clarifies that "different items can be
allocated to the spouse's share as long as each spouse's share
receives half of the total aggregate value of the community
property."
Number 0431
REPRESENTATIVE JAMES made a motion to adopt the proposed
committee substitute (CS) for HB 181, version 22-LS0567\L,
Bannister, 4/19/01, as a work draft. There being no objection,
Version L was before the committee.
REPRESENTATIVE MURKOWSKI added that Version L clarifies "that
these favorable presumptions with the trust are only available
to the portion of the trust that's for the benefit of the family
member."
Number 0501
STEPHEN E. GREER, Attorney, testified via teleconference and
explained that Section 3 of Version L, which is in reference to
life insurance, provides a safety net provision in the event
that an estate plan is audited by the Internal Revenue Service
(IRS). Currently, if a life insurance policy is purchased for
one spouse via a community property account, half the policy is
considered to be owned by the insured spouse and the other half
by the uninsured spouse, which negates any estate-tax benefits
that would be derived if the policy were owned solely by the
insured spouse. He said Version L expands the list of
individuals for whom a policy can be [made] payable to, and is
considered to be done with the consent of the uninsured spouse.
He noted that this presumption could always be overcome by the
testimony of the uninsured spouse.
MR. GREER, in response to questions, reiterated that Version L
provides a safety net and removes the foibles that can create
havoc with an estate planner and his/her clients. He said he
did not see any downside to HB 181, or anything in it that might
be controversial. He noted that Section 1 reflects current law
with regard to what property is held liable for a debtor
spouse's obligation; it simply clarifies how community property
stands in relationship to current law in the event of a spouse's
death.
Number 0877
DAVID G. SHAFTEL, Attorney, testified via teleconference and
explained that existing law essentially makes Alaska a separate
property state. By default, a husband and wife's property is
owned as separate property. Therefore, if the husband incurs an
obligation - because of negligence, for example - during the
course of his occupation, then his separate property is liable
for that obligation, but his wife's property is not. Similarly,
if the couple owned their property jointly - as tenants in
common, for example - if one spouse incurs an occupational
liability, only that spouse's half of the jointly held property
is liable for that obligation. By comparison, in community
property states, there are a number of different rules regarding
the extent to which community property is going to be liable for
one spouse's obligations.
MR. SHAFTEL offered that Version L will simply bring into
conformity Alaska's optional community property system with its
separate property system, so that if one spouse - not both
spouses - incurs a liability, then that spouse's separate
property and one-half of their community property will be liable
for that obligation. Consequently, the other spouse's separate
property and his/her half of their community property would not
be liable for that obligation. He added that there is also a
provision in Version L that says if the liability is incurred by
both spouses, then all the community property is responsible for
that liability. For example, if a couple purchases - together -
some investment property, then all of the community property
would be liable for any obligations.
REPRESENTATIVE BERKOWITZ asked Mr. Shaftel whether he has heard
any criticism of HB 181.
MR. SHAFTEL said that he has not heard any criticism of HB 181
from among the people who work with "this rule". As a matter of
fact, he added, the criticism is directed toward the current
statute because it creates an ambiguity that will result in
extra litigation. He noted that a community property system is
a very attractive and advantageous way for a married couple to
own their property; most of his clients, he said, want to take
advantage of this system but the cloud of ambiguity regarding
community property liability prevents them. He opined that
Version L will provide a fair way of resolving this ambiguity,
and is entirely consistent with rules governing property held
jointly as tenants in common. In response to a question, he
pointed out that Version L would not affect division of property
during a divorce because the "just and equitable rule" would
still be used; thus family law attorneys would not object to
Version L either.
Number 1300
CHAIR ROKEBERG asked whether HB 181 is simply resolving a
creditors' rights issue.
MR. SHAFTEL said, "Yes, it is."
REPRESENTATIVE BERKOWITZ, referring to language in Section 1,
subsection (k), suggested that essentially one spouse could be
bankrupted without significantly impacting the other. He said
that this raises questions about the impact on property
settlements pursuant to a divorce situation. He said he would
like to hear from a family law practitioner regarding what
impact HB 181 might have in a divorce situation.
MR. SHAFTEL asserted that [subsection (k)] is not new; it is
existing law. He said that subsection (j) is new, but
subsection (k) merely restates existing law under AS 34.77.070,
which says that an obligation incurred during marriage by both
spouses will be satisfied from both their separate property and
their community property. He explained that one of the changes
proposed by Version L is to do away with the concept - found in
AS 34.77.070(c) - that an obligation incurred by one spouse in
the interest of the marriage or the family will be satisfied
from the community property as well as the property of the
spouse who incurred that obligation. In its place subsection
(j) will provide that when one spouse incurs an obligation,
either before or during marriage, that obligation may be
satisfied only from that spouse's separate property and from
that spouse's interest in the community property.
MR. SHAFTEL also explained that the existing law pertaining to
the division of community property upon divorce stipulates that
a just and equitable standard will be used for both community
property and separate property; Version L does not change that
law. He reiterated that this is not a family law issue; it is,
at most, a creditors' rights issue. Version L is fair to the
creditor and to the non-negligent spouse, he added. It will
result in the same rule being applied to community property as
with separate property: the negligent spouse's separate
property and his/her half of the community property is all that
should be liable for an obligation incurred only by that spouse.
If, on the other hand, both spouses participated in the
negligence, the legal system already resolves those kinds of
issues; Version L should in no way affect those procedures.
Number 1640
CHAIR ROKEBERG asked whether community property (or separate
property) has to be liquidated in order to satisfy a creditor's
claim.
MR. SHAFTEL said that depends; it could result in a forced sale
if that is the only way to satisfy the obligation. What may
happen is that the creditor could attach the property and become
owner of that half interest, but what most likely - and
practically - occurs, is that the property is sold and half of
the proceeds go to the creditor and half go to the non-liable
spouse. In response to a further question, he affirmed that
when a person enters into an optional community property
agreement, he/she can stipulate what is held as community
property. Through an agreement or a community property trust, a
couple can say what portions of their property are to be
considered separate property and what portions are to be
considered community property. One example he said he is
familiar with is when one spouse has inherited property and
wishes to keep it separate; another example is when one spouse
is in business with other individuals and wishes to keep the
business holdings separate from any community property.
MR. SHAFTEL, with regard to the division of community property
at death, explained that Version L fleshes out current statute
by adding the provision which clarifies that at death, one half
of the property is owned by the deceased spouse and the other by
the surviving spouse. It also establishes what is called an
aggregate form of ownership of property, which allows different
items of the community property to be allocated to the separate
halves so that not every item has to be divided equally as long
as the aggregate value is divided equally. He said that this
often comes into play with pension or IRA accounts because it is
almost always preferable to have the surviving spouse receive
these accounts and simply fund the deceased spouse's "bypassed
trust" with other community property assets. He noted that this
provision of Version L eliminates some federal income tax
arguments that might otherwise exist, and is a strong addition
to the Alaska Community Property Act.
Number 1909
MR. SHAFTEL explained that Section 2 of Version L allows
transfers to a community property trust by beneficiary
designation, which means that if a person has an IRA account,
he/she can name a community property trust as a beneficiary of
that account and then the IRA will be considered community
property. This will facilitate estate planning by Alaskans as
well as facilitate the use of Alaska community property trusts
by nonresidents should they chose to use an Alaskan trustee.
MR. GREER explained that Amendment 1 simply conforms AS
34.77.120(e) to the changes incorporated by Version L regarding
the presumptions pertaining to an insured spouse.
Number 2007
CHAIR ROKEBERG made a motion to adopt Amendment 1, which read
[original punctuation provided]:
AS 34.77.120(e) is amended to read:
This section does not affect the ownership interest or
proceeds of a policy unless a spouse or a trust
described in (b)(7) of this section is designated as
an owner or on the records of the policy issuer and
community property is used to pay a premium on the
policy.
There being no objection, Amendment 1 was adopted.
MR. GREER, in an attempt to allay Representative Berkowitz's
concerns regarding property divisions during a divorce, said
that HB 181 does not affect family law at all; it will not
affect the "rights or obligations of the spouse with respect to
each other with community property."
Number 2129
REPRESENTATIVE MEYER moved to report the committee substitute
(CS) for HB 181, version 22-LS0567\L, Bannister, 4/19/01, as
amended, out of committee with individual recommendations and
the accompanying fiscal note. There being no objection, CSHB
181(JUD) was reported from the House Judiciary Standing
Committee.
HB 189 - REPEAL TERM LIMITS/TERM LIMITS PLEDGES
Number 2148
CHAIR ROKEBERG announced that the next order of business would
be HOUSE BILL NO. 189, "An Act repealing statutory provisions
relating to term limits and term limit pledges."
CHAIR ROKEBERG, speaking on behalf of the House Judiciary
Standing Committee, sponsor of HB 189, said he is very pleased
with the bill. He explained that it repeals those provisions of
Alaska's election law that relate to what he called the "scarlet
letter" or the "gold star" that appears on the ballots
indicating term limit pledges. "Recently, the United States
Supreme Court held that the provisions as they relate to this
issue are unconstitutional under the Elections Process
provisions delegated to the states by the [U.S.] Constitution,"
he said. So those provisions that apply to members of the U.S.
House of Representatives and the U.S. Senate as relate to term
limits are unconstitutional under the Cook v. Gralike decision
[in committee members' packets].
CHAIR ROKEBERG further pointed out that half of the sections
from AS 15.15.500 through AS 15.15.535 were found to be
unconstitutional according to the attorney general's opinion in
1998, so they have not been enforced. They, too, relate to the
congressional members, he said.
Number 2239
CHAIR ROKEBERG said he thinks "the overwhelming testimony and
logic" is that the Cook v. Gralike case also applies to the
state level. He said the Alaska law changed the "scarlet
letter," indicating that a candidate did not support term
limits, into a "gold star," indicating that the candidate had
pledged to support term limits. The Idaho Supreme Court in a
December 6, 2000, ruling, found that "gold star" provisions are
unconstitutional because they infringe on the fundamental right
to vote and that there was no compelling state interest to
continue printing them on the ballot.
CHAIR ROKEBERG said he takes up [term limits and term limit
pledges] "with some trepidation" because the statutes that HB
189 would delete came into state law through the initiative
process and represent the will of the majority of the people of
Alaska that term limits be applied statutorily. "But what this
does is ... broadcast a particular point of view on the election
ballot, which I think is sacrosanct, and I think gives ... an
... advantage ... to a particular candidate. And I think that
it's a complete abridgment of the right of ... suffrage and
free speech." He said he was very disappointed when the
lieutenant governor certified the initiative because he felt at
the time it was not right.
CHAIR ROKEBERG continued:
Particularly galling is the fact that I, for my entire
political career, have indicated that I believe in the
concept of term limits. But I've found that the
longer I stay down here [in the legislature], the more
I recognize that it takes a certain amount of time
even to learn this job, but I do believe that certain
people overstay their limits. So I have ... my own
idea: the concept that somebody should serve no more
than eight years in one house and twelve years
altogether consecutively; but that's at variance with
the term limit pledge {now in statute]. To be
consistent under the state law, you have to agree
precisely with the concept that you can only serve
eight years in sixteen years. So, therefore, I really
take umbrage with this because even though I agree
conceptually in the idea, if I don't agree precisely
with the dictates of that initiative law, then that
makes me the bad guy.
REPRESENTATIVE ROKEBERG said he was very pleased to see the
ruling of the United States Supreme Court and the Idaho court.
He said that in the House State Affairs Standing Committee
(HSTA), there was testimony that the Alaska Civil Liberties
Union (AkCLU) was going to bring a case on this particular item,
and because of this bill, they're going to wait and see if the
bill has success in passage. "So ... we can avoid a lawsuit and
cluttering our courts up with this issue -- and the expense," he
said.
Number 2363
REPRESENTATIVE MEYER asked if the committee would be hearing
testimony from the AkCLU.
CHAIR ROKEBERG said no, and that he seemed to have misplaced the
package given to him the other day by Jennifer Rudinger of the
AkCLU. He said she had testified at the HSTA meeting,
describing the Idaho case in relation to Alaska law.
Number 2397
REPRESENTATIVE BERKOWITZ prefaced his testimony by saying he is
not a supporter of term limits. He said he had couple of points
he would like to make about the inefficacy of the term limit
pledge. He has noticed that a lot of people take the term limit
pledge and then violate it, which seems to him to defeat the
purpose of taking the pledge.
REPRESENTATIVE BERKOWITZ continued:
The second thing I would like to point out, and I want
to congratulate you for making the point, that it's
ridiculous to post someone's political position on the
ballot. You know I offered an amendment the other day
on the floor that would strike "political position"
from the ballot, that is to say, strike someone's
political affiliation from the ballot, which is also a
form of advertisement, and if the title [of HB 189]
was slightly larger here, I would move [to fit that
in]. But I appreciate your sentiment, and I think
that consistency would show that you would support my
position that removal of the term limit pledge would
also support removal of party affiliation from the
ballots.
Number 2445
REPRESENTATIVE OGAN commented that it was an interesting
discussion about removing the indication of party. "I guess if
I was a member of certain parties, I wouldn't want that on the
ballot either," he said.
CHAIR ROKEBERG asked Representative Ogan if he had any problem
with the constitutionality of the repeal proposed by HB 189.
REPRESENTATIVE OGAN said he did not.
TAPE 70, SIDE B
Number 2475
GAIL FENUMIAI, Election Program Specialist, Division of
Elections, Office of the Lieutenant Governor, came forward to
testify. She said:
The division does not have any problem with the repeal
of this law. The first sections of statute that you
mentioned were already not being enforced by the
division because they had been deemed unconstitutional
and our attorney general had advised that before the
Idaho case came out. But the Idaho case said the
unconstitutionality of the first sections ... probably
would have trickled down and applied to the voluntary
term limits sections as well.
Number 2464
REPRESENTATIVE MEYER noted that he has not seen anything in the
news about this being ruled unconstitutional. "It does concern
me a little bit that this was passed by initiative and ... now
we're going to make it unlawful," he said. "But I think if the
public knew that it was unconstitutional and what we're doing is
just correcting that mistake, it would probably be more
acceptable."
CHAIR ROKEBERG explained that the decision in the Idaho case was
a very recent one, handed down February 28, 2001.
REPRESENTATIVE MEYER asked if a person who signed the pledge to
run for no more than eight years is still bound by that pledge.
MS. FENUMIAI said she thinks that if someone had signed a pledge
in the 2000 election, the pledge now would be null and void.
REPRESENTATIVE MEYER sought further clarification: "I guess my
point is, if somebody signed a pledge saying that they would
only run for eight years and then they continue for 12 or 14 or
16, there's nothing to stop that, right?"
CHAIR ROKEBERG volunteered:
As a matter of fact, on that point, Representative
Meyer, I had the occasion when this was on the ballot
to talk to the author of the initiative, Bob Bell, ...
and he told me that I shouldn't be upset because the
way the initiative was drafted, the effectiveness
wasn't until the effective date of the initiative. So
therefore, even though I may have spent a few years
already serving, ... the eight-year bell toll didn't
start until it became law.
CHAIR ROKEBERG said he thinks it is a political issue, "Like I
say I support term limits and I'm going to have to live with
that if I decide to run in the next election."
Number 2369
REPRESENTATIVE OGAN moved to report HB 189 out of committee with
individual recommendations and the accompanying zero fiscal
note. There being no objection, HB 189 was reported out of the
House Judiciary Standing Committee.
HB 174 - MENTAL HEALTH INFORMATION AND RECORDS
[Contains discussion of CSSB 135(HES), the companion bill to HB
174.]
Number 2354
CHAIR ROKEBERG announced that the next order of business would
be HOUSE BILL NO. 174, "An Act relating to mental health
information and records; and providing for an effective date."
[HB 174 is sponsored by the House Rules Standing Committee by
request of the Legislative Budget and Audit Committee]
Number 2330
REPRESENTATIVE HUGH "BUD" FATE, Alaska State Legislature,
speaking on behalf of the Joint Committee on Legislative Budget
and Audit (LB&A), noted that HB 174 is a companion bill to SB
135. He explained that the state auditor and the Department of
Health & Social Services (DHSS) recommend the changes
encompassed by HB 174 in order to allow the state to better
track direct grant moneys that are given to community mental
heath providers. He said HB 174 does two things: It complies
with the auditor's report, which recommends reporting actual
consumer data, and it holds agencies harmless for being sued by
the consumer for breach of confidentiality if such should ever
occur. He added that HB 174 is really about accountability for
state grant funds.
REPRESENTATIVE FATE noted that Amendment 1, [22-LS0684\A.1,
Lauterbach, 4/20/02] will make HB 174 identical to CSSB
135(HES), the current version that is advancing in the Senate.
Amendment 1 reads as follows:
Page 4, following line 26:
Insert a new bill section to read:
"* Sec. 7. The uncodified law of the State of
Alaska is amended by adding a new section to read:
DATA FROM PRIOR YEARS. (a) As a condition of
receiving state money for state fiscal year 2002 under
AS 47.30.520 - 47.30.620, 47.30.660 - 47.30.915, or
AS 47.31, the entity eligible for the state money
shall agree to furnish the Department of Health and
Social Services with confidential and other
information about recipients of services paid for, in
whole or part, with state money during state fiscal
years 2000 and 2001 under AS 47.30.520 - 47.30.620,
47.30.660 - 47.30.915, or AS 47.31. The entities
governed by this subsection shall comply with
regulations of the department regarding the submission
of the information required under this subsection.
(b) The department may review, obtain, and copy
the information submitted under (a) of this section.
The department may also obtain information of the type
described in (a) of this section from the patient who
received the services described in (a) of this section
and review or copy that information.
(c) Records and information obtained by the
department under this section are medical records,
shall be handled confidentially, and are exempt from
public inspection and copying under AS 40.25.110 -
40.25.120. The records and information may be copied
and disclosed under regulations established by the
department only under the same circumstances as
provided for confidential records under AS 47.30.845,
as amended by sec. 4 of this Act.
(d) The department may review the information
obtained under this section to evaluate compliance
with the applicable statutes and grant contracts.
However, the department may not use the information
furnished under this section to impose civil or
administrative penalties for failure to comply with
applicable statutes and contracts. The department may
use the information to establish a database on which
to base future management practices and to impose
restrictions and conditions on use of state money in
fiscal year 2002 and later.
(e) In this section, "department" means the
Department of Health and Social Services."
Renumber the following bill section accordingly.
Number 2252
ELMER LINDSTROM, Special Assistant, Office of the Commissioner,
Department of Health & Social Services (DHSS), explained that
Amendment 1 will allow [the DHSS] to collect data for fiscal
years (FYs) 2000 and 2001 in order to build a "baseline." After
noting that HB 174 will be effective the next fiscal year, he
said that [the DHSS] concurs with the legislative auditor that
without Amendment 1, it would in fact be two or three years
before [the DHSS] would have the kind of baseline and
accountability information that the auditor recommends.
CHAIR ROKEBERG asked Mr. Lindstrom whether he was aware of the
Health Care Financing Administration's (HCFA) "deadline on
confidentiality and the privacy of medical records."
MR. LINDSTROM, after noting that he is not an expert on that
federal law, assured the committee that [the DHSS] is acutely
aware of it, and that anything [the DHSS] does via HB 174 will
be consistent with [the HCFA] requirements. He explained that a
past legislative audit as well as the most recent one have taken
[the DHSS] to task for not being able to collect this data. The
prior audit was requested by the Senate Finance Committee when
it noticed that Medicaid expenditures for community mental
health services had grown exponentially; prior to 1991 or 1992
there was no Medicaid funding going into mental health centers,
but once that was allowed, expenditures grew from nothing to $5
million to $10 million to $20 million, and are now in excess of
$50 million.
MR. LINDSTROM added that [the DHSS] has excellent client data on
the Medicaid program, but the same entities that are beginning
to aggressively bill Medicaid are also grantees of the Division
of Mental Health & Developmental Disabilities. [The DHSS],
however, does not have the management information - the client
data - that would enable it to monitor how those general fund
(GF) grants are being spent. He concurred with Representative
Fate that HB 174 resolves an accountability issue.
CHAIR ROKEBERG mentioned that the provisions of HB 211, what he
calls the "Alaska patients' bill of rights", will take effect
July 1, 2001 for managed care entities; [HB 211] will cover most
health insurers in Alaska, and contains a strict confidentiality
provision, which goes well beyond any "opt in" requirements and
requires the consent of the patient in order to release of any
information.
MR. LINDSTROM, after noting that he has been with the department
for ten years, remarked that he has no recollection of [the
DHSS] ever breaching patient confidentiality; [the DHSS] has
patient records, medical records, and confidential information
in virtually "every bit of book of business that we have in the
department and we ... are acutely sensitive to
[confidentiality]."
Number 2036
CHAIR ROKEBERG said he only brings up the topic because:
We have the HCFA privacy regulations; we've got the
Alaska patients' bill of rights; we have the GLBA (the
Gramm-Leach-Bliley Act), where the private sector is
going to go through ... mandated "opt in" medical
records provisions for all medical information from
insurance companies; to say nothing of our own privacy
provisions of our constitution.
REPRESENTATIVE BERKOWITZ asked for an example of the type of
confidential information that [the DHSS] will be reporting.
Number 1992
ANNE HENRY, Special Projects Coordinator, Central Office,
Division of Mental Health & Developmental Disabilities,
Department of Health and Social Services, explained that the
kind of information that the division is trying to gather is
found on what is called the "Aurora" form - the admission form.
A unique identifier (which consists of the client's initials,
date of birth, and the last four digits of his/her social
security number) is created from that information; the division
does not use the client's full name or full social security
number. Attached to the identifier will be information such as
the client's diagnosis, living situation data, legal situation,
and his/her general function level. The identifier will later
be used to link that client to what is called the "encounter,"
which is when the person comes in for treatment on any given
day; that information will be matched up with that service, the
cost of that service, and the amount of time that service took,
so that the division can build a profile detailing how much each
individual is using certain services. This information will
then be used to make program decisions.
MS. HENRY added that all of the information gathered is
encrypted at the mental health center before it is sent into the
department, where it is then handled by two different
individuals who will be the only people in the state that have
the code to decrypt and access that information. She said that
as far as the division is able to discern at this time, the
deadline established for the privacy portion of the federal
Health Insurance Portability and Accountability Act (HIPAA) will
be about two years. She said that the division believes it has
established the same standards as the federal regulations. In
response to questions, she said that HB 174 will enable the
division to provide the legislature as well as the Alaska Mental
Health Trust with performance measures. In defense of Amendment
1, she explained that it will enable the division to gather two
years' worth information to form a baseline; then, via HB 174,
the division can require mental health providers to continue to
submit data, and thus the division will be able to track
expenditures and patterns of mental health problems in different
locations.
Number 1791
PAT DAVIDSON, Legislative Auditor, Legislative Audit Division,
Legislative Agencies & Offices, mentioned that the impetus for
HB 174 was the result of a couple of audit reports detailing the
escalating cost of community mental health programs. Between
1992 and 1997 the numbers went from zero Medicaid dollars up to
$15 million; the state's share went from $31 million to $39
million. The questions asked as a result of this growth were:
"What's going on?" and, "Is this being well managed?" What the
Legislative Audit Division found is that with regard to
Medicaid, sufficient information was being collected so that the
[DHSS] could analyze its regulatory efficiency, but when it came
to state grants, the Legislative Audit Division ran into a wall
because, while Medicaid is a fee for service, state grants were
going out without any identification of who was being served or
what services were being provided. She said she believes that
HB 174 will allow such information to be collected, and that it
will enhance the [DHSS's] ability to account for those millions
of dollars that go out in state grants.
REPRESENTATIVE FATE mentioned that HB 174 is accompanied by a
zero fiscal note from [the DHSS]. He added that HB 174 will
allow [the DHSS] to comply with the Legislative Audit Report.
CHAIR ROKEBERG asked whether any state [grant] funds go to
private providers of mental health services.
MS. HENRY replied that to her knowledge, all of [the entities
that receive state grant funds] are "community mental health
nonprofits." She pointed out that HB 174 speaks specifically to
community mental health centers.
Number 1572
REPRESENTATIVE BERKOWITZ made a motion to adopt Amendment 1
[text provided previously].
Number 1570
REPRESENTATIVE COGHILL objected for the purpose of reviewing
Amendment 1. After doing so, he withdrew his objection.
Number 1540
CHAIR ROKEBERG noted that there were no further objections to
Amendment 1. Therefore, Amendment 1 was adopted.
Number 1532
REPRESENTATIVE MEYER moved to report HB 174, as amended, out of
committee with individual recommendations and the accompanying
zero fiscal note. There being no objection, CSHB 174(JUD) was
reported from the House Judiciary Standing Committee.
HB 228 - SALE OF TOBACCO PRODUCTS
Number 1501
CHAIR ROKEBERG announced that the next order of business would
be HOUSE BILL NO. 228, "An Act relating to the offense of
selling or giving tobacco to a minor, to the accounting of fees
from business license endorsements for tobacco products, to the
disclosure of certain confidential cigarette and tobacco product
information, to notification regarding a cigarette
manufacturer's noncompliance with the tobacco product Master
Settlement Agreement, to business license endorsements for sale
of tobacco products, to citations and penalties for illegal
sales of tobacco products; and providing for an effective date."
[Before the committee was CSHB 228(L&C).]
Number 1477
JOHN MANLY, Staff to Representative John Harris, Alaska State
Legislature, presented HB 228 on behalf of Representative
Harris, the sponsor. He explained that Representative Harris,
as chairman of the House Finance Subcommittee on the Department
of Health and Social Services (DHSS) budget, became quite
alarmed to learn that Alaska is going to lose $1.5 million of a
substance abuse grant from the federal government as a penalty
because too many Alaskan merchants sell cigarettes to kids. He
said HB 228 attempts to bolster the state's efforts to stop
those sales.
MR. MANLY noted that because of changes that occurred in the
House Labor and Commerce Standing Committee (HL&C), the fines
have been reduced and have been relocated from the criminal
statutes to the civil statutes. He opined that "the hammer" for
a merchant who sells tobacco [products] to minors is the
suspension of his/her ability to sell tobacco products at all.
He noted that current law merely provides for a $300 fine for
the clerk who sells a tobacco product to a minor. The current
version of HB 228 includes an additional $300 fine for the
endorsement holder and a 20-day suspension of the tobacco
endorsement. He confirmed that the fine for the clerk remains
$300 regardless of how many repeat offenses occur, but the fine
for the endorsement holder and the length of time the
endorsement is suspended increases with each repeat offense:
$300 for a first offense, $500 for a second offense, $1,000 for
a third offense, and $2,500 for a fourth [or subsequent]
offense.
MR. MANLY relayed that the sponsor is interested in affecting
any ongoing sales to minors by these businesses; thus the
suspension of the endorsements is really the hammer in HB 174.
CHAIR ROKEBERG mentioned that he is concerned that the fines
proposed by HB 228 are too high.
REPRESENTATIVE MEYER noted that the problem is one of preventing
kids from getting tobacco products. He remarked that Anchorage
has improved but could improve more, in addition to making
improvements in the rural areas. He said putting all the
tobacco products behind the counter is going to help prevent
access by minors, but more should also be done.
Number 1087
REPRESENTATIVE OGAN relayed that some minors whom he knows have
informed him that they are able to simply go into stores and
purchase tobacco products; hence, enforcement is often lacking.
Notwithstanding this and the fact that $1.5 million of federal
funds will be lost because of these violations, he said he still
has concerns regarding the expansion of [the DHSS's] enforcement
authority.
Number 0992
ELMER LINDSTROM, Special Assistant, Office of the Commissioner,
Department of Health & Social Services (DHSS), explained that
Section 10 gives authority to the DHSS to issue citations.
Conceptually, what [the DHSS] is doing currently and wants to
continue to do is contract with local law enforcement agencies
to undertake this activity. Historically, local law enforcement
has not been aggressive in enforcing the tobacco laws; they have
limited resources and have had to set priorities, and this
issue, unfortunately, has not risen to the top of their list.
Part of the funding provisions of HB 228 will go towards
continuing and increasing the contracts with local law
enforcement so that they can do "undercover buys" and other
enforcement activities. He noted, however, that there will be
locations in the state where either there is no local law
enforcement or local law enforcement (for whatever reason) is
unable or unwilling to participate; yet the state is still going
to have an obligation under the federal law to do enforcement
activities in all areas of the state. He explained that Section
10 is a fall back provision that will give [the DHSS], in the
absence of local law enforcement, the authority to initiate its
own enforcement activities. It is the desire of [the DHSS] to
use persons who have a law enforcement background in order to
ensure that these activities are undertaken appropriately.
Number 0862
EDWIN J. SASSER, Tobacco Enforcement Coordinator, Division of
Public Health (DPH), Department of Health & Social Services
(DHSS), noted that he himself is a retired law enforcement
administrator. He said he is currently putting together
contracts, and speaking and negotiating with 15 different police
chiefs across the state. There are agreements and contracts
ready to go for this period; he noted that this was also done
last year, very successfully, with three jurisdictions. He said
he anticipates that [these contracts] will grow, and thus a
majority of activity for the enforcement of tobacco laws
(especially those related to selling to minors) will be through
the contracts that [the DHSS] will have with local police.
MR. SASSER, too, noted that there are a number of areas that
either have no local police or, for one reason or another, the
local police don't want to get involved personally. However,
through the meetings that he is having with the police chiefs,
he has been assured that if he is in their area and lets them
know that he is there and working, they'll provide support and
backup should he need it. He explained that in areas of the
state that do not have borough police protection, since the
Department of Public Safety (DPS) is tasked with other things,
he could be the only person in those areas enforcing the tobacco
laws. He noted that he is an experienced officer and thus feels
comfortable in that role, and that he has participated in this
type of activity with the full knowledge and support of whatever
local agencies are in those areas.
REPRESENTATIVE OGAN said he is wondering what tactics are used
to enforce tobacco laws in rural villages where new faces in
town are closely scrutinized.
MR. SASSER replied that it may very well be the case that new
people stand out, but a survey conducted last year indicated
that in 61 percent of the cases, those new faces were sold to
anyway. He said "we" don't always use new faces; sometimes kids
who live in the communities are used for "control buy"
activities. Whatever the case, whether the people were
recognized as local folks or not, the "buy" rate in the rural
environment is still nearly two out of three successful
attempts. The areas with the most contract activity with local
law enforcement (for example, in the Fairbanks/Northstar areas)
are down to a 21.5 [percent] noncompliance rate, with the goal
being a 20 percent noncompliance rate. Statewide, he noted, the
noncompliance rate is 33-34 percent, which means "we" still have
a ways to go in most areas of the state.
Number 0630
REPRESENTATIVE MEYER asked Mr. Sasser whether he checks with
village government before proceeding with enforcement
activities, and whether there is any animosity regarding these
activities.
MR. SASSER said he has not run into any animosity, although most
of the activity in the villages thus far has merely been survey
activity. He added that he has been working with Volunteer
Public Safety Officers (VPSOs), that he has a memorandum of
[understanding] (MOU) with the courts and the DPS going into
place, and that he always touches base with the local police.
He explained that his goal in this process is to take the time
on the front end to put together a system that works for years
to come. He noted that in the past, [the DHSS] has "done some
hurry-up-collect-data" to satisfy federal reporting
requirements. From a cost accounting standpoint and an
effectiveness standpoint, it makes the most sense to merge the
compliance and data collection process with enforcement whenever
possible; it doesn't make any sense to buy two tickets to New
Stuyahok, for example, when one will suffice. He said a goal is
to combine enforcement with the data collection that the "feds"
require and tie all of that into the vendor [advertisement] and
the other pieces of tobacco control; enforcement is just one
small piece of tobacco control but it's the piece that his
contracting officers and he can do something about.
CHAIR ROKEBERG asked Mr. Sasser to comment on the reluctance of
local law enforcement officers in small communities to enforce
the tobacco laws because of a fear of retribution.
MR. SASSER, after noting that he is no expert on this topic,
said he has spoken with many VPSOs who have indicated that there
are a number of laws that they are reluctant to administer
because of the nature of a small community. There are also, in
all fairness, a number of laws that they are not equipped to
deal with; putting together an operation that involves employing
an underage confidential informant to participate in an
enforcement activity is one of those. As far as the larger
departments go, he added, the argument that he hears is that
felonies take priority over misdemeanors and misdemeanors take
priority over violations; without "emphasis-patrol highway-
dollars," certain types of "minor" violations would not be
pursued. He added that this method of funding is an accepted
practice in law enforcement.
Number 0316
CHAIR ROKEBERG said that he, too, has concerns about giving the
DHSS the legal authority to issue citations for violations,
which are one step below criminal activity. He asked whether
the [DHSS] would have any objections to an amendment clarifying
that [the DHSS] is contracting with local law enforcement and/or
using designated personnel who are properly trained in
determining probable cause and other legal issues.
MR. SASSER opined that neither he nor another appropriate agent
from the DPH would necessarily need to meet the "police
standards equivalency". He pointed out that in most cases, [the
DHSS} will be contracting with local law enforcement, and under
the authority granted by HB 228, will be able to use existing
officers outside of their jurisdictions once some procurement
difficulties are overcome. He noted that this is a narrow band
of authority and involves training personnel - similar to the
Food and Drug Administration (FDA) training - prior to investing
them with the authority to cite. He offered to place any
appropriate requirements within the protocols that he has
established.
CHAIR ROKEBERG noted that currently there are no statutory
"sideboards" included in HB 228. He said he would like to see
an amendment that will narrow the list of who will have the
authority to give out citations.
MR. LINDSTROM said that conceptually [the DHSS] agrees; along
with the Department of Law (DOL), [the DHSS] will try to work up
an appropriate amendment.
Number 0072
DWAYNE D. JONES, Anchorage Police Department (APD), testified
via teleconference and explained that he is taking over the
tobacco enforcement section of the APD. He noted that when they
went into rural areas, the minors used for enforcement purposes
did not, unfortunately, have any problems purchasing tobacco
products from local stores.
TAPE 01-71, SIDE A
Number 0001
MR. JONES noted that the suspension of the tobacco endorsement
is "a pretty big thing for these businesses out here." He
mentioned a desire to bring the frequency of identification (ID)
checks for the sale of tobacco products up to the same level as
for the sale of alcohol.
MR. LINDSTROM, in response to questions regarding page 7,
pointed out that the language stating, "Each day a violation
continues after a citation for a violation has been issued
constitutes a separate violation" refers to the requirements for
signage - the sign that says no one can purchase tobacco
products if they are under the age of 19 - and to the law
relative to "loosies."
MR. SASSER added that this provision could also apply to an
inappropriately placed vending machine. He explained that if a
business receives a citation but does not respond, each
additional day constitutes a separate violation.
CHAIR ROKEBERG pointed out that the language also refers to the
statute pertaining to the sale of tobacco products to minors and
is redundant.
MR. SASSER replied, "I don't know why [AS 11.76.]100 is included
there.
CHAIR ROKEBERG requested that this provision be "cleaned up by
Monday."
Number 0380
DAN BRANCH, Assistant Attorney General, Commercial Section,
Civil Division (Juneau), Department of Law (DOL), explained that
this language on page 7, lines 6-7, does refer to violation of
Title 11 that involves the placement of vending machines.
Current statute says that a vending machine cannot be placed in
a location that is generally accessible to someone under the age
of 19. If law enforcement issues a citation, and the vending
machine is not moved, law enforcement can come back and issue
another citation.
CHAIR ROKEBERG suggested that any cumulative effect of those
penalties should be clarified via an amendment. He said he did
not mind penalizing someone for selling tobacco products to
minors, but opined that if it is simply a case of having a
vending machine inadvertently placed in the wrong location, it
is not fair to impose the same high penalties.
[HB 228 was held over.]
ADJOURNMENT
Number 0536
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 1:05 p.m.
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