Legislature(1995 - 1996)
02/20/1996 08:02 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE February 20, 1996 8:02 a.m. MEMBERS PRESENT Representative Jeannette James, Chair Representative Scott Ogan, Vice Chair Representative Joe Green Representative Ivan Ivan Representative Brian Porter Representative Caren Robinson Representative Ed Willis MEMBERS ABSENT All members present. COMMITTEE CALENDAR HOUSE BILL NO. 63 "An Act relating to special request licenses depicting the sport of dog mushing." - PASSED CSSSHB 63(STA) OUT OF COMMITTEE * HOUSE JOINT RESOLUTION NO. 60 Relating to Revised Statute 2477 rights-of-way. - PASSED OUT OF COMMITTEE HOUSE JOINT RESOLUTION NO. 51 Proposing an amendment to the Constitution of the State of Alaska relating to limited entry for sport fish guides and allied professions. - PASSED OUT OF COMMITTEE * HOUSE BILL NO. 495 "An Act amending the Election Code to provide that voters be permitted to register opposition to all candidates in certain election contests." - HEARD AND HELD HOUSE BILL NO. 363 "An Act requiring banks to pay interest on money in reserve accounts held in connection with mortgage loans." - PASSED CSHB 363(STA) OUT OF COMMITTEE HOUSE BILL NO. 338 "An Act relating to permits to carry concealed handguns." - SCHEDULED BUT NOT HEARD HOUSE BILL NO. 472 "An Act relating to release before trial for cases involving controlled substances." - BILL CANCELLED FOR THIS DATE (* First public hearing) PREVIOUS ACTION BILL: HB 63 SHORT TITLE: DOG MUSHING VANITY PLATES SPONSOR(S): REPRESENTATIVE(S) DAVIES, Bunde, Barnes, Willis, Elton, Toohey, James, Nicholia JRN-DATE JRN-PG ACTION 01/06/95 37 (H) PREFILE RELEASED 01/16/95 37 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 37 (H) TRANSPORTATION, STATE AFFAIRS, FINANCE 01/19/95 91 (H) COSPONSOR(S): BUNDE 03/15/95 740 (H) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS 03/15/95 740 (H) READ THE FIRST TIME - REFERRAL(S) 03/15/95 741 (H) TRANSPORTATION,STATE AFFAIRS,FINANCE 01/08/96 2382 (H) COSPONSOR(S): BARNES, WILLIS, ELTON 01/08/96 2382 (H) COSPONSOR(S): TOOHEY 01/17/96 2474 (H) COSPONSOR(S): JAMES 01/24/96 2527 (H) COSPONSOR(S): NICHOLIA 01/24/96 (H) TRA AT 1:00 PM CAPITOL 17 01/24/96 (H) MINUTE(TRA) 01/30/96 2564 (H) TRA RPT CSSS(TRA) 3DP 3NR 01/30/96 2564 (H) DP: JAMES, LONG, BRICE 01/30/96 2564 (H) NR: MASEK, SANDERS, G.DAVIS 01/30/96 2564 (H) FISCAL NOTE (DPS) 02/15/96 (H) STA AT 8:00 AM CAPITOL 102 02/20/96 (H) STA AT 8:00 AM CAPITOL 102 BILL: HJR 60 SHORT TITLE: RS 2477 HIGHWAY RIGHTS OF WAY SPONSOR(S): STATE AFFAIRS JRN-DATE JRN-PG ACTION 02/16/96 2790 (H) READ THE FIRST TIME - REFERRAL(S) 02/16/96 2790 (H) STATE AFFAIRS, RESOURCES 02/20/96 (H) STA AT 8:00 AM CAPITOL 102 BILL: HJR 51 SHORT TITLE: SPORT FISHING GUIDE LIMITED ENTRY SPONSOR(S): REPRESENTATIVE(S) GREEN JRN-DATE JRN-PG ACTION 12/29/95 2358 (H) PREFILE RELEASED 01/08/96 2358 (H) READ THE FIRST TIME - REFERRAL(S) 01/08/96 2358 (H) STATE AFFAIRS, FSH, JUDICIARY 02/13/96 (H) STA AT 8:00 AM CAPITOL 102 02/17/96 (H) STA AT 10:00 AM CAPITOL 102 02/20/96 (H) STA AT 8:00 AM CAPITOL 102 BILL: HB 495 SHORT TITLE: NONE OF THE ABOVE OPTION IN ELECTIONS SPONSOR(S): REPRESENTATIVE(S) GREEN JRN-DATE JRN-PG ACTION 02/09/96 2698 (H) READ THE FIRST TIME - REFERRAL(S) 02/09/96 2699 (H) STATE AFFAIRS, JUDICIARY 02/20/96 (H) STA AT 8:00 AM CAPITOL 102 BILL: HB 363 SHORT TITLE: INTEREST ON MORTGAGE ESCROW ACCTS SPONSOR(S): REPRESENTATIVE(S) BUNDE JRN-DATE JRN-PG ACTION 12/29/95 2361 (H) PREFILE RELEASED 01/08/96 2361 (H) READ THE FIRST TIME - REFERRAL(S) 01/08/96 2361 (H) STATE AFFAIRS, L&C, FINANCE 01/18/96 (H) STA AT 8:00 AM CAPITOL 102 01/18/96 (H) MINUTE(STA) 01/23/96 (H) STA AT 8:00 AM CAPITOL 102 01/23/96 (H) MINUTE(STA) 02/01/96 (H) STA AT 8:00 AM CAPITOL 102 02/01/96 (H) MINUTE(STA) 02/20/96 (H) STA AT 8:00 AM CAPITOL 102 WITNESS REGISTER REPRESENTATIVE JOHN DAVIES Alaska State Legislature State Capitol, Room 422 Juneau, Alaska 99801-1182 Telephone: (907) 465-4457 POSITION STATEMENT: Sponsor of CSHB 63(TRA). WALTER WILCOX, Legislative Assistant House State Affairs Committee State Capitol, Room 102 Juneau, Alaska 99801-1182 Telephone: (907) 465-3743 POSITION STATEMENT: Provided testimony on HJR 60. JEFF LOGAN, Legislative Assistant to Representative Joe Green State Capitol, 24 Juneau, Alaska 99801-1182 Telephone: (907) 465-4931 POSITION STATEMENT: Provided testimony on HJR 51. ERIC STIRRUP, Owner Kodiak Western Charters P.O. Box 4123 Kodiak, Alaska 99615 Telephone: (907) 486-2200 POSITION STATEMENT: Provided testimony in support of HJR 51. KEITH GREBA 504 Monastery Sitka, Alaska 99835 Telephone: (907) 747-8309 POSITION STATEMENT: Provided testimony on HJR 51. BARBARA BINGHAM P.O. Box 6112 Sitka, Alaska 99835 Telephone: (907) 747-5777 POSITION STATEMENT: Provided testimony on HJR 51. KENT HALL 500 Lincoln Street, Number 641 Sitka, Alaska 99835 Telephone: (907) 747-5089 POSITION STATEMENT: Provided testimony on HJR 51. ALAN LEMASTER P.O. Box 222 Gakona, Alaska 99586 Telephone: (907) 822-3664 POSITION STATEMENT: Provided testimony on HJR 51. MARK BUCHNER P.O. Box 1103 Valdez, Alaska 99686 Telephone: (907) 835-4435 POSITION STATEMENT: Provided testimony on HJR 51. KRISTY TIBBLES, Legislative Secretary to Representative Joe Green State Capitol, Room 24 Juneau, Alaska 99801-1182 Telephone: (907) 465-4931 POSITION STATEMENT: Provided sponsor statement for HB 495. REPRESENTATIVE CON BUNDE Alaska State Legislature State Capitol, Room 108 Juneau, Alaska 99801-1182 Telephone: (907) 465-4834 POSITION STATEMENT: Sponsor of HB 363. CRAIG INGHAM, President and Chief Executive Officer Mt McKinley Bank P.O. Box 73880 Fairbanks, Alaska 99707 Telephone: (907) 452-1751 POSITION STATEMENT: Provided testimony in opposition to HB 363. ACTION NARRATIVE TAPE 96-20, SIDE A Number 0000 The House State Affairs Committee was called to order by Chair Jeannette James at 8:02 a.m. Members present at the call to order were Representatives Robinson, Willis, Porter and James. Members absent were Representatives Ivan, Green, and Ogan. HB 63 - DOG MUSHING VANITY PLATES The first order of business to come before the House State Affairs Committee was CSSSHB 63(TRA). CHAIR JEANNETTE JAMES announced HB 338 would not be heard today. CHAIR JAMES called on Representative John Davies, sponsor of CSSSHB 63(TRA). Number 0103 REPRESENTATIVE JOHN DAVIES read the following sponsor statement into the record. "With recent attacks on our state sport, it is more important than ever for Alaskans to show their enthusiastic support for dog mushing. While not a musher myself, dog mushing is a sport I enjoy following very much. There is nothing quiet like watching a good team moving quietly along the trails in Goldstream Valley near sunset. I am worried that the loss of financial backing for the long distance races like the Quest and the Iditarod will erode support for the whole sport. "For that reason, I introduced House Bill 63, which would allow the Department of Public Safety to issue dog mushing license plates. Clearly this bill is not going to solve all of the problems of the long-distance races, nor is it the most crucial issue facing the state. But it will encourage Alaskans to show their zest for mushing. "House Bill 63 would allow automobile owners to purchase specially designed license plates depicting some aspect of mushing. The extra $50 fee will more than pay for the plates and any excess revenue could be appropriated to support dog mushing programs. Admittedly, the pool of money would be modest, but the real objective would be met by making dog mushing more visible on every street and parking lot in Alaska. Moreover, is it gives nonmushers an opportunity to bolster the mushing community with a proud symbol of their support!" Number 0247 REPRESENTATIVE ED WILLIS commented the bill sounded good. Number 0255 CHAIR JAMES said she was a member of Mush With Pride and encouraged everyone to join. The organization tried to put more credibility into the sport of dog mushing and thwart adverse publicity. She referred the committee members to page 1, line 10, and read "The department shall use the colors blue and gold in designing the registration plates under this subsection." She said the color restrictions were a product of the difficulty of identifying license plates. She announced she did not want to restrict the colors to blue and gold because she envisioned ugly license plates. She explained the Chair of the House Transportation Committee, Representative Gary Davies, stated the plates did not have to be entirely blue and gold, but rather had to include those colors. Chair James suggested deleting that provision altogether. Number 0427 REPRESENTATIVE BRIAN PORTER moved to adopted CSSSHB 63(TRA) for consideration. Hearing no objection, it was so adopted. Number 0452 REPRESENTATIVE PORTER moved to delete on page 1, line 10, starting with "The department," and ending on line 11, with "this subsection." (Amendment 1) Hearing no objection, it was so deleted. Number 0494 REPRESENTATIVE WILLIS wondered if Representative John Davies objected to the amendment. Number 0500 REPRESENTATIVE DAVIES replied, "no." He further stated there were a variety of opinions regarding the colors. The Department of Law felt it would be difficult to identify. He also said some plates were very distinctive such as the University of Alaska Fairbanks' (UAF) which enhanced the ability to identify it. The amendment, he stated, would return the bill to its original form as introduced. Number 0567 REPRESENTATIVE PORTER said the bill called for the Department of Public Safety to approve the design and color, and the department would not approve one that would cause a law enforcement problem. Number 0581 REPRESENTATIVE CAREN ROBINSON commented the bill clearly gave the power to the Commissioners. Number 0601 CHAIR JAMES agreed, however, she also thought it was not a good idea to restrict the ability of the artist to make an attractive license plate. The record reflected the arrival of Representative Joe Green. CHAIR JAMES explained the amendment on the table to Representative Green. Number 0645 REPRESENTATIVE JOE GREEN asked, if the colors were not in the design, was it a problem for the department? Number 0660 CHAIR JAMES replied that was the issue, but she did not hear any testimony from the department in the House Transportation Committee regarding that concern directly. CHAIR JAMES announced, hearing no objection to Amendment 1, it was so adopted. Number 0740 REPRESENTATIVE WILLIS moved that CSSSHB 63(STA), move from the committee with individual recommendations and attached zero fiscal note. Hearing no objection, it was so moved from the House State Affairs Committee. HJR 60 - RS 2477 HIGHWAY RIGHTS OF WAY The next order of business to come before the House State Affairs Committee was HJR 60. CHAIR JAMES announced HJR 60 was put forward by the House State Affairs Committee, and called on Walter Wilcox, Legislative Assistant, House State Affairs Committee, to present the sponsor statement. Number 0841 WALT WILCOX, Legislative Assistant, House State Affairs Committee, said HJR 60 dealt with Federal Revised Statute 2477 (RS 2477) that allowed roads and trails used prior to a certain date to be turned into transportation corridors for future highways, rails, and trails. He further stated the bill expired in 1976 and Congress was trying to undo the RS 2477 access trails across Alaska. Therefore, HJR 60 supported the Congressional level resolutions that promoted the extension of the assertion time and the ability of the state to maintain its current roads and trails. He said it was an important issue for Alaska, especially for the east to west transportation corridors, and encouraged the committee members to support the resolution. Number 0914 REPRESENTATIVE PORTER moved that HJR 60 move from the committee with individual recommendations and attached zero fiscal note. Number 0931 REPRESENTATIVE WILLIS wondered about the hearing this summer in Anchorage regarding RS 2477 and questioned the role of the Attorney General. Number 0954 MR. WILCOX replied the resolution had nothing to do with the Attorney General. He further said HJR 60 supported Senators Murkowski and Stevens, and the ability of Alaska to retain its RS 2477 assertions. Number 0976 CHAIR JAMES said there were 11 cases prepared to go to court to challenge the validity of the RS 2477 trails. As a result of reductions in spending, however, the Department of Law had taken no action against challenging those 11 cases. The state had been expecting action from Washington D.C. to give Alaska an extended length of time to recognize the cases. "The clock was ticking," she said, to assert these rights. Therefore, money was spent for nothing, and if there was not enough money to take the cases to court, the next step was to expect the federal government to do something. That was the issue HJR 60 addressed. It also put Alaska on record with Congress that the state supported it to preserve its RS 2477 right-of-ways. Number 1064 REPRESENTATIVE PORTER said there was concern that the state had not moved forward sufficiently to register the claims that were ready. Number 1084 CHAIR JAMES agreed that was a concern. She said, many of the RS 2477 right-of-ways had been identified, but getting information to use in court to assert the right was becoming difficult. There was testimony from the Attorney General that there was action in the federal government to extend the state's time. There was also a question of the notice time and whether it expired in July of 1996. She reiterated there were 11 cases fully documented and ready to go to court. She further said there were two ways to address the issue - through the state or through the federal government. REPRESENTATIVE PORTER commented the two ways to address the issue were not mutually exclusive. CHAIR JAMES replied, "no," they were not mutually exclusive. The best was probably to address it both ways. At this point in time, however, the approach was through the federal government. Number 1180 MR. WILCOX stated the legislature appropriated $1.2 million to help fund this project, and more than 560 routes qualified as an RS 2477 right-of-way. Number 1204 REPRESENTATIVE PORTER wondered why the 11 cases had not been filed. Number 1210 CHAIR JAMES said, according to the Attorney General, the Department of Law was focusing on other civil cases and this was not a priority. The department was also expecting an extension from Congress. Number 1233 MR. WILCOX announced HJR 60 did not address private lands, only public lands. Mr. Wilcox further explained the zero fiscal note was from the House State Affairs Committee, and the only cost incurred would be that which was needed to inform the Alaskan Congressional contingent the results. CHAIR JAMES asked again if there were any objections to the motion. Hearing none, HJR 60 moved from the House State Affairs Committee. The record reflected the arrival of Representative Scott Ogan at 8:23 a.m. HJR 51 - SPORT FISHING GUIDE LIMITED ENTRY The next order of business to come before the House State Affairs Committee was HJR 51. CHAIR JAMES called on Jeff Logan, Legislative Assistant to Representative Joe Green, to present HJR 51. Number 1315 JEFF LOGAN, Legislative Assistant to Representataive Joe Green, explained, when he presented HJR 51 to the committee members last week, the questions primarily related to the specificity of the language. He said, after further research, the simple answer to the questions, was politics. The sponsor was concerned if the language was too broad, the resolution would encounter the same problems as Representative Scott Ogan encountered with his efforts to save the Big Game Commercial Services Board. He called this a "catch-22" situation whereby the resource managers could not take the necessary action without a constitutional amendment. He said the concern expressed earlier regarding restricting other types of resources, such as brown bear guides, through the constitution was valid. However, based on the current information, it was unlikely that would be necessary for quit some time. He said in 1968 the legislature took action to address fishery management issues and passed a bill that instituted limited entry. Litigation followed, of which the state lost, and ultimately a ballot was put before the voters. This, he explained, was how limited entry came about for commercial fisheries. Therefore, a resolution was specific, but it was not unprecedented. Number 1446 REPRESENTATIVE ROBINSON wondered about sufficient data collected before a decision was reached. Number 1463 MR. LOGAN replied there was a lot of anecdotal evidence. He explained there were fisheries that were full of boats, and resource managers and users had asked for a limit. He cited in 1991 the Division of Parks and Outdoor Recreation had a set of regulations that were ruled patently unconstitutional. He further stated, everyone knew the real solution to the problem lied with something that would come after HJR 51. Number 1520 REPRESENTATIVE ROBINSON wondered about the progress of HB 175, Sport Fish Guide Licensing. REPRESENTATIVE GREEN replied HB 175 was moving forward. CHAIR JAMES called on the first witness via teleconference in Kodiak, Eric Stirrup. Number 1550 ERIC STIRRUP, Owner, Kodiak Western Charters, said he strongly supported HJR 51. He said the state and the sport fish guide industry were at an important crossroads. He said there were three choices - HJR 51, allocations quoted to each business, or over capitalization. He stated the business was growing by leaps and bounds pushing the allocation window. He asserted it was time the state considered HJR 51 as a management option. CHAIR JAMES called on the next witness via teleconference in Sitka, Keith Greba. Number 1630 KEITH GREBA said there was ample data to suggest a moratorium due to the limited amount of resources. He was also concerned about the qualifications to become a guide and suggested it needed to be looked at further, otherwise HJR 51 would not solve the problem. Number 1702 CHAIR JAMES asked Mr. Greba if he was in favor of HJR 51? Number 1703 MR. GREBA said he favored a moratorium, and addressing the area of qualifications, before mandating a limited entry. CHAIR JAMES called on the next witness via teleconference in Sitka, Barbara Bingham. Number 1763 BARBARA BINGHAM said conservation was the issue and a resource should be managed for the end user. She said a constitutional amendment would not solve the problem, and restricting a particular group did not seem appropriate. She also favored a moratorium. CHAIR JAMES called on the next witness via teleconference in Sitka, Kent Hall. Number 1798 KENT HALL said a constitutional amendment was too drastic. He also favored a moratorium for control. CHAIR JAMES called on the next witness via teleconference in Gakona, Alan Lemaster. Number 1830 ALAN LEMASTER said he was listening at this point and trying to formulate some ideas. He cited, however, the Gakona River was receiving more pressure every year as a result of problems on other rivers. He said, if the trend was to continue, a regulation would be needed. Number 1887 MR. LOGAN said HJR 51 did not say "when" the limits would be imposed. He asserted the limits would be the end result of a public process based on scientific data. The resolution said the state would have the power to impose a limitation, if needed. He asked the committee members, if saving important fisheries dear to many Alaskans and tourists, was good statewide policy? Number 1942 CHAIR JAMES said she was struggling with this issues. She was not sure a constitutional amendment was the correct way to fix the problem. She agreed there was a problem, but she did not have any suggestions. She stated the Alaska State Constitution mandated the state manage fish and wildlife for sustainability, but no one had tried to manage the state's resources in that manner due to politics. She said some were unwilling to take the political heat that had to be taken to address the problem. She announced she was not pleased with the limited entry program for commercial fisheries, and she did not want to create a limited entry permit that suddenly had a dollar value. Number 2030 REPRESENTATIVE GREEN said, if it was that clear to everyone, it would not be necessary to put the issue on a ballot. House Joint Resolution 51 removed any stigma, and cleared the way for a solution. Number 2090 REPRESENTATIVE OGAN said he supported the concept of HJR 51. It was imperative for the state to retain the ownership of the permits, he asserted. He said it was also important to avoid what happened to commercial fisheries. He said he was concerned about Alaska loosing its resources and cited the vulnerability of rock fish. Number 2179 REPRESENTATIVE PORTER said he agreed with Chair James regarding the value of the permit. He said there was the opportunity to correct that, and suggested adding language to prevent it from happening again. He said he would be willing to take that up in the House Judiciary Committee as Chair of the committee. Number 2223 REPRESENTATIVE GREEN reiterated HJR 51 was not the answer, it just opened the avenue for the answers. There was the suggestion of limiting guides to half-a-day - a morning guide and an afternoon guide, for example. He further said the resolution did not want to cause a rash of unqualified sport guides based on speculation. However, he said limiting the value of the permit was a legal question. Number 2282 CHAIR JAMES stated she found it distressing that the state had not found a way to follow the constitution. She further said it was not proper to use the constitution for special interests. She also alluded there was a timing issue involved, because it was a presidential election year, and suggested the ballots were being stacked. CHAIR JAMES called on the next witness via teleconference in Valdez, Mark Buchner. Number 2350 MARK BUCHNER said he was the owner of a gill net permit. He said he saved for 10 years to be able to buy the permit. He said it was not fair and suggested a place system for future limited entries. CHAIR JAMES explained the next committees of referral for HJR 51 were the House Special Committee on Fisheries, and the House Judiciary Committee, and announced she felt comfortable moving HJR 51 forward to those committees. Number 2408 REPRESENTATIVE ROBINSON wondered if HB 175 was also referred to the House State Affairs Committee. Number 2418 REPRESENTATIVE PORTER replied, "no." CHAIR JAMES explained the only reason the House State Affairs Committee was hearing HJR 51 was because it was a constitutional amendment. Number 2426 REPRESENTATIVE ROBINSON said she also struggled with HJR 51. She agreed there was a problem facing the state. She was also concerned about taking an extreme action before all the data was collected to determine the true problems. She announced she did not have a problem moving HJR 51 forward to the next committee of referral - the House Special Committee on Fisheries. Number 2455 CHAIR JAMES commented she was concerned about forwarding HJR 51 to the ballot without more information for the public. Number 2472 REPRESENTATIVE OGAN said HB 175 should be in place as a modality to identify sport guides. He cited there was an attempt for a point system on the Guide-Outfitter Use Areas Board for hunting in a particular area. He said there were many problems because of the Owsichek v. State case which ruled the exclusive use of an area was unconstitutional. TAPE 96-20, SIDE B Number 0059 REPRESENTATIVE GREEN reiterated HJR 51 said the state "may" limit sport guide fishing and required further legislation. He reiterated the resolution assured there would not be an impediment and removed any stigma. Number 0107 MR. LOGAN addressed the data issue and referred the committee members to a proposal titled "The Kenai River Guide Limit Proposal." He said it was backed-up by more data than the committee members would like to consider. He further said any proposal under the auspices of a constitutional amendment would be backed-up by ample data. Number 0131 CHAIR JAMES said she understood the "sales technique" regarding the constitutional amendment because the resolution was prompted by a lot of support for a limited entry. The record reflected the arrival of Representative Ivan Ivan at 8:55 a.m. Number 0154 REPRESENTATIVE GREEN replied, "I would like the record to reflect that you have no idea what my intent is." He said he did not enjoy having it on the record this was a sales technique, and was very offended. He asserted, the resolution was intended to open the avenue for others to solve the problem. Number 0169 CHAIR JAMES apologized to Representative Green. Number 0175 REPRESENTATIVE ROBINSON stated she was concerned a constitutional amendment was too extreme when it could be discovered that it was not the right direction needed. Number 0202 REPRESENTATIVE GREEN replied HJR 51 authorized a cure, it did not mandate an answer. CHAIR JAMES announced the presence of Representative Ivan Ivan for the record. Number 0240 REPRESENTATIVE ROBINSON responded the cure needed to be concluded, before convincing the public a constitutional amendment was necessary. CHAIR JAMES replied, "the cart before the horse." Number 0253 REPRESENTATIVE GREEN said, "that would put the cart before the horse, exactly." He cited a scenario where time and energy was spent to determine a solution and the people said, "no." He said there was a good chance of a legal challenge, but at least it would be a possibility and the time would be spent for something. Number 0289 REPRESENTATIVE WILLIS wondered if a moratorium was a practical way to address the permit issue. Number 0300 REPRESENTATIVE GREEN responded, without a constitutional amendment, there would be a legal challenge. Number 0318 CHAIR JAMES asked Representative Green to respond to the fact that the Alaska State Constitution required the state to manage its fish and game on a sustainable yield basis, and wondered what the options were. Number 0329 REPRESENTATIVE OGAN replied the state managed it resources through seasons and bag limits. He said a moratorium was not possible because it would restrict commerce. Number 0357 REPRESENTATIVE GREEN cited the water shortage in Orange County California whereby at one time the people believed the aquifer was more than sustainable. He said, as an analogy, when the constitution was passed, there was probably more fish than man could ever catch. However, the population and number of people fishing had increased creating a problem with allocation because the resources could no longer sustain the appetites of the users. He agreed meddling with the constitution was risky. He said HJR 51 did not meddle with it, it just made it clearer. Number 0436 REPRESENTATIVE OGAN reiterated he supported HJR 51. He called it an enabling amendment that gave latitude to resource managers. Number 0471 REPRESENTATIVE OGAN moved that HJR 51 move from committee with individual recommendations and attached fiscal notes. Hearing no objection, it was so moved from the House State Affairs Committee. HB 495 - NONE OF THE ABOVE OPTION IN ELECTIONS The next order of business to come before the House State Affairs Committee was HB 495. CHAIR JAMES called on Kristy Tibbles, Legislative Secretary to Representative Joe Green, to present the sponsor statement. Number 0525 KRISTY TIBBLES, Legislative Secretary to Representative Joe Green, read the following sponsor statement into the record. "In the 1994 Alaska gubernatorial election, 119,558 registered voters did not vote. This number represents 35.6% of registered voters. This high rate of voter apathy is often reflected nationwide. While there may be several reasons for this nonvoter group to be so large, one reason often mentioned is that people just did not like any of the candidates for particular offices. As Americans and Alaskans, to all those who have died to establish and preserve this precious heritage, we have an obligation to exercise this invaluable right to vote. "House Bill 495, if enacted, would provide citizens with an incentive to vote even though they may be dissatisfied with all the candidates and would otherwise not take the time to vote. Nonvoting is a poor method of registering protest and therefore HB 495 will give voters a better alternative. It will also encourage them to develop the good habit of voting. "Only votes cast for candidates shall be counted in determining election to any office. The candidate receiving the majority of yes votes (unless a minimum number is required) shall prevail. There will not be a re-election, even if the results for "none of these candidate" receives the highest number of votes cast in any particular contested position. Presidential elections, elections for delegates to a constitutional convention, municipal/borough, and school board election are excluded. "While NOTA has no legal effect, it does allow the voting public to express themselves. By providing citizens with this option, there is a potential that Alaska's voters turnout for the coming 1996 election may increase. NOTA may also have an impact on negative campaigning, leading to cleaner, more issue-oriented campaign races." Number 0611 REPRESENTATIVE OGAN commented that not voting was a show of no support. He said, when he was not sure about a particular candidate, he did not vote for anybody. Number 0633 MS. TIBBLES responded there were many people that did not show to vote at all, and HB 495 would encourage those who gave-up to come forward and vote. Number 0645 REPRESENTATIVE GREEN said HB 495 was a proactive means to get the people to vote. It was not a reaction or a non-action. Number 0690 REPRESENTATIVE PORTER wondered if there were instructions to check a spot, if the voter did not know enough about the issue or candidate to vote for none of the above. He further said he did not support HB 495. Number 0707 REPRESENTATIVE GREEN said NOTA was growing in popularity across the United States. He cited Nevada used NOTA in its general and primary elections. He also cited one-half of the states used it in the primary. He said NOTA did not imply time was not taken to understand the candidates, and furthermore, if a voter did not take the time to understand the candidates, he probably would not read the instructions anyway. The concept of NOTA was to keep the voters proactive, even if they did not like the candidates, he stated. He further said NOTA would eliminate any doubt why the people were not voting. He lastly said it was a floating concept to energize the large number of non-voters. Number 0815 REPRESENTATIVE ROBINSON said a low voter turnout was an indication the voters did not support any of the candidates. She stated she was concerned about the cost when the state was trying to cut the budget. Number 0896 REPRESENTATIVE GREEN replied 70 percent of the fiscal note was based on a "potential" cost. He said as the ballots were printed another line would be needed for NOTA, and if there were many of these, an additional ballot would be necessary requiring another $53.4 thousand otherwise only $30 thousand. He explained it was not an automatic $84.9 thousand. Number 0933 CHAIR JAMES said 2,834 people in her district did not vote last year out of approximately 8,000 people. She sent those 2,834 people that did not vote a letter and response card indicating her interest as to why they did not vote. She cited out of the 2,834 cards mailed, 1,422 were returned not received by the addressee, and only 114 people mailed the card back. The following were the responses: 45 were absent from town, 19 had a problem with the absentee ballot, 13 did not register to vote in time, 11 had transportation problems, 6 said they did vote, 5 were fed-up with the candidates, 4 said there was not enough information, 3 said they did not have time, 2 were ill, 2, were not interested, 1 had a death in the family, 1 was experiencing marital problems, 1 had a baby, and 1 slept during the day. Chair James said, based on the results, the people did not vote because they were fed-up contrary to her initial belief. She said when she first saw the presentation on NOTA in 1994 she was excited about it because she thought many people were fed-up, and thought NOTA created the potential for better candidates. However, after the survey, she decided it was not the case that voters were fed-up. She said a big problem was that voter registrations were not purged. She also stated a better absentee ballot process was needed to guarantee a greater turnout. Number 1085 REPRESENTATIVE GREEN replied the statistics Chair James shared with the committee members did not reflect the national statistics, but was probably reflective of Alaska. CHAIR JAMES said it was an expensive process, but treasured the information like it was the bible. Number 1134 REPRESENTATIVE WILLIS said there was a write-in option, if a voter was not satisfied with the names on the ballot. He cited Mr. Hickel came very close to winning a gubernatorial race on a write-in. Number 1174 CHAIR JAMES said, if NOTA could change an election, there would be a reason for a write-in candidate, and not to just make a statement. Number 1208 REPRESENTATIVE GREEN moved that HB 495 move from committee with individual recommendations and attached fiscal note. Representative Porter objected, so a roll call vote was taken. Representatives James, Ogan, Ivan, and Porter voted against moving the bill. Representatives Green, Robinson and Willis voted in favor of moving the bill. So HB 495 did not move from the House State Affairs Committee. HB 363 - INTEREST ON MORTGAGE ESCROW ACCTS The next order of business to come before the House State Affairs Committee was the proposed CSHB 363(STA). CHAIR JAMES called on the sponsor of the proposed CSHB 363(STA), Representative Con Bunde. Number 1320 REPRESENTATIVE CON BUNDE said the proposed CSHB 363(STA) shed more sunshine on the escrow business without disrupting the financial mortgage services in Alaska. He stated the proposed CSHB 363(STA) incorporated three changes. He referred the committee members to page 1, line 6, and explained the word "assessments," was added because mortgage money was often used for repairs. He also referred the committee members to page 1, line 9, which stated the "The rate of interest paid on that money shall equal three percent..." He further referred the committee members to page 1, line 14, section (c), which required lending institutions to produce a year-end report that included: the cost to administer the account, the amount in the account on the last day of each month, the amount of interest earned on that account, and a schedule of payments made by the bank from the account. He stated this information gave the consumer choices. He said lending institutions advertized their interest rates as part of the service provided and the information would allow for more competition. Number 1546 REPRESENTATIVE ROBINSON wondered about the increase in the interest rate from 2 percent to 3 percent. Number 1560 REPRESENTATIVE BUNDE said it was actually a decrease. The original bill stated 2 percent below prime and 3 percent was passbook savings. He said the prime was too much of a burden to calculate. Number 1575 REPRESENTATIVE PORTER said Section 1 created a state sanction for a violation of a federal law, and wondered what the federal sanction was for violating the federal law. Number 1602 REPRESENTATIVE BUNDE replied that was a good question. He was not sure what the sanction was for a violation of a federal law. Number 1633 REPRESENTATIVE PORTER said a federal law was usually enforced by the feds and it was ironic that a state should enforce it. Number 1662 REPRESENTATIVE BUNDE said Representative Porter had a valid point, however, the Real Estate Settlement Procedures Act (RESPA) was not high on the category of crimes according to the federal government. Number 1674 REPRESENTATIVE PORTER wondered if the reporting requirements in Section 1, subsection (c) were obtainable because the banks co- mingled funds. Number 1717 REPRESENTATIVE BUNDE said the banking institutions co-mingled funds, and the escrows ended-up in an account, and interest was paid per dollar. Number 1722 REPRESENTATIVE PORTER commented the interest the account earned was a moving target. REPRESENTATIVE BUNDE said it was the average interest at the end of the month that was being looked at. He said the amount of interest earned varied daily, and the bill required the amount earned for the month. Number 1770 CHAIR JAMES said an interest daily calculation was required because the balance in the account would vary. REPRESENTATIVE BUNDE said this was done electronically and any institution making a profit was well aware of what was happening daily to shift funds. He said this would not be an onerous burden. Number 1835 REPRESENTATIVE ROBINSON said, in response to Representative Porter's question, the sanctions would probably fall under a regulation that was not being followed. Number 1868 CHAIR JAMES said she assumed the bank examiners would determine if a bank was not following the law and act accordingly. She further stated there was no evidence within Alaska that the banks were not following the RESPA law. Number 1938 REPRESENTATIVE BUNDE said testimony indicated banks were having problems meeting RESPA limitations and were moving rapidly into compliance. He said there was a bank regulating portion of the state government that would be aware of when an institution broke the RESPA rules whereby the 3 percent interest would kick-in. Number 2000 CHAIR JAMES said the cost of the information required at the end of each year would be born by the consumer. Number 2038 REPRESENTATIVE BUNDE said banks calculated interest rates daily now so it would probably amount to printing three more lines, for example, on their annual report. CHAIR JAMES called on the next witness via teleconference in Fairbanks, Craig Ingham. CRAIG INGHAM, President and Chief Executive Officer, Mt McKinley Bank, said the cost of the added disclosure according the Representative Bunde was untrue. The amount of revenue and expense for each loan was constant. The cost to service a $50 thousand mortgage was the same as servicing a $250 thousand mortgage, but the revenue received was greater on the $250 thousand mortgage. He stated, if there was a problem disclosing proper information to the consumer, the federal government was better equipped to properly inform the borrowers under the disclosure rules that were in effect right now. He said he really did not see the purpose of the bill. It was changed to a penalty driven piece of legislation. He said, if the banks failed to follow the federal regulations that went into effect the first of this year, it faced a civil penalty. The banks, he asserted, would not be foolish enough to violate those penalties. He questioned if an additional law was needed. He said he saw no purpose in the piece of legislation except to create an added burden on banks. He said the consumer would not benefit. He said the balance and account activity was already provided under federal regulations, and a penalty would be more than paying 3 percent interest on the amount over RESPA regulations required in this bill. Number 2392 REPRESENTATIVE BUNDE asked Mr. Ingham if the federal regulations required all the calculations the bill required. Number 2411 MR. INGHAM replied, "no." He said the cost to the bank would require an analysis at a great cost to the bank with no benefit to the consumer at all. He said he was not sure if it could be done accurately. He said it was possible on an aggregate basis, but did not see how it could be done on an individual basis, accurately, even with the technology. He further said the account balance on the last day of each month would be zero, and questioned the need for a data base field for a zero balance. He also stated a schedule of payments made by the bank was required under federal law. He said Section 1, subsection (c) was a duplication of federal regulations. He said this legislation did not protect the consumer, but created a burden on the banks. TAPE 96-21, SIDE A Number 174 REPRESENTATIVE BUNDE respectfully disagreed with Mr. Ingham regarding the sharing of the information. Mr. Ingham said it would be burdensome to share that with the consumer. Number 205 CHAIR JAMES said Mr. Ingham indicated the cost to the bank of administering the account was the same for each mortgage. Therefore, the information would be easy to obtain by dividing the number of accounts by the cost. The amount that was in the account on the last day of each month was already provided, therefore, that was not a problem. The amount of interest earned on the account each month was a problem, however. A schedule of payments made by the bank from the account was already provided, therefore, that was a problem as well. Number 348 MR. INGHAM replied, the cost to the bank of administering the account was not as simple as Chair James indicated, because each loan was different. He said a loan might have a private mortgage insurance on it, for example. He said it would be very cumbersome to calculate on an individual account basis. He further reiterated items 2-4 were properly addressed under federal regulations. Number 428 CHAIR JAMES asked Mr. Ingham if this bill was a duplicate of federal regulation enforcement? Number 453 MR. INGHAM replied, "absolutely." He said the regulations were relatively new, but by the end of the year the institutions would be complying or pay the heavy civil penalty. He further said right now there was a program that did not allow a bank to have more than a $50 overage in the account. Therefore, automatically the system did not allow a bank to hold an excess amount because of the risk of penalties. He said the banks were doing what needed to be done, and following the federal regulations. He said he wished the state would not make it any tougher to the detriment of the consumer. Number 558 REPRESENTATIVE GREEN commented there was interest paid on his checking and saving accounts daily, and wondered why it would be burdensome to a bank to calculate an escrow account. Number 612 MR. INGHAM said if the law mandated a 3 percent interest paid on the escrow account it would not be a problem, but the bill required reporting disclosure and a penalty based on an excess. He wondered again if a state law was necessary when a federal law existed. Number 693 REPRESENTATIVE GREEN said testimony indicated banks were not following the federal law, and yet Mr. Ingham indicated there was heavy civil penalty for a bank that did not follow the federal law, and wondered which scenario was true. Number 710 CHAIR JAMES reiterated there was no information available that Alaskan banks were violating the federal laws. Number 728 REPRESENTATIVE PORTER said the regulations were more recent. Number 756 REPRESENTATIVE BUNDE said the original RESPA put into place in the 1980's was not obeyed. It was tighten-up this year, and asserted it was disingenuous to state institutions had been following the law. He further said, if they followed the federal law, this law should not be of great concern. Number 789 CHAIR JAMES replied the 3 percent interested was not a problem. She said she was concerned the cost to the bank of administering the account was a nightmare based on personal experience as an accountant. The amount of interest earned on the account each month could be done, she said, but saw no real need and it was difficult to obtain. Number 886 REPRESENTATIVE BUNDE asked, if the amount of interest earned on the account each month could be calculated daily, or at the end of each month? CHAIR JAMES said it depended where the money was invested. Number 900 REPRESENTATIVE BUNDE wondered if it would be less burdensome to say the amount of interest earned that year. Number 920 CHAIR JAMES replied she was certain the banks had the number earned on the accumulated balance of the escrow accounts, but unless it was calculated daily, it would not be accurate. Number 959 REPRESENTATIVE BUNDE stated a bank would have to know the cost and how much it made or it was not a good business entity, and wondered why there was such a resistance to provide that information to the consumer. Number 1005 REPRESENTATIVE OGAN said this should be more of a policy call for a bank. He cited, if it was advantageous or there was a consumer demand, then a bank should do it. He said he agreed with Representative Porter that the bill was enforcing a federal mandate. He also said the issue had been belabored enough. Number 1066 REPRESENTATIVE GREEN moved to accept the proposed CSHB 363(STA) for consideration. Hearing no objection, it was so accepted. REPRESENTATIVE ROBINSON said she appreciated the sponsor and the bill, but was concerned about implementing a state law when there was a federal law in place. She also believed this was an issue for the House Labor and Commerce Committee and would support moving the bill forward to that committee. CHAIR JAMES said she supported moving the bill to the next committee of referral because she did not want to see it anymore. Number 1108 REPRESENTATIVE GREEN moved that CSHB 363(STA) move from committee with individual recommendations and attached fiscal note. Representative Ogan objected, so a roll call vote was taken. Representatives James, Green, Ivan, Robinson, and Willis voted in favor of moving the bill. Representatives Ogan and Porter voted against moving the bill. So CSHB 363(STA) moved from the House State Affairs Committee. ADJOURNMENT Number 1261 CHAIR JAMES adjourned the House State Affairs Committee at 9:57 a.m.