Legislature(1995 - 1996)

03/05/1996 08:03 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
             HOUSE STATE AFFAIRS STANDING COMMITTEE                            
                         March 5, 1996                                         
                           8:03 a.m.                                           
 MEMBERS PRESENT                                                               
 Representative Jeannette James, Chair                                         
 Representative Scott Ogan, Vice Chair                                         
 Representative Ivan Ivan                                                      
 Representative Brian Porter                                                   
 Representative Caren Robinson                                                 
 MEMBERS ABSENT                                                                
 Representative Ed Willis                                                      
 Representative Joe Green                                                      
 COMMITTEE CALENDAR                                                            
 * HOUSE BILL NO. 365                                                          
 "An Act relating to the offense of possession of tobacco by a                 
      - PASSED OUT OF COMMITTEE                                                
 HOUSE BILL NO. 354                                                            
 "An Act relating to a retirement incentive program for certain                
 employees of school districts under the teachers' retirement system           
 and the public employees' retirement system; and providing for an             
 effective date."                                                              
      - PASSED CSHB 354(STA) OUT OF COMMITTEE                                  
 HOUSE BILL NO. 368                                                            
 "An Act relating to election campaigns, election campaign                     
 financing, the oversight and regulation of election campaigns by              
 the Alaska Public Offices Commission, the activities of lobbyists             
 that relate to election campaigns, and the definitions of offenses            
 of campaign misconduct; and providing for an effective date."                 
      - HEARD AND HELD                                                         
 HOUSE BILL NO. 317                                                            
 "An Act relating to election campaigns, election campaign                     
 financing, the oversight and regulation of election campaigns by              
 the Alaska Public Offices Commission, the activities of lobbyists             
 that relate to election campaigns, and the definitions of offenses            
 of campaign misconduct; and providing for an effective date."                 
      - HEARD AND HELD                                                         
 (* First public hearing)                                                      
 PREVIOUS ACTION                                                               
 BILL:  HB 365                                                               
 SHORT TITLE: MINOR IN POSSESSION OF TOBACCO                                   
 SPONSOR(S): REPRESENTATIVE(S) BUNDE, James                                    
 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, JUDICIARY                          
 02/19/96      2812    (H)   COSPONSOR(S): JAMES                               
 02/27/96              (H)   STA AT  8:30 AM CAPITOL 102                       
 02/27/96              (H)   MINUTES(STA)                                      
 03/05/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 BILL:  HB 354                                                               
 SHORT TITLE: RIP FOR SCHOOL DISTRICT EMPLOYEES                                
 SPONSOR(S): REPRESENTATIVE(S) MACKIE                                          
 JRN-DATE      JRN-PG            ACTION                                        
 12/29/95      2359    (H)   PREFILE RELEASED                                  
 01/08/96      2359    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/08/96      2359    (H)   HES, STATE AFFAIRS, FINANCE                       
 01/16/96              (H)   HES AT  3:00 PM CAPITOL 106                       
 01/16/96              (H)   MINUTE(HES)                                       
 02/15/96              (H)   HES AT  3:00 PM CAPITOL 106                       
 02/15/96              (H)   MINUTE(HES)                                       
 02/16/96      2789    (H)   HES RPT  3DP 2NR                                  
 02/16/96      2790    (H)   DP: G.DAVIS, ROBINSON, BRICE                      
 02/16/96      2790    (H)   NR: BUNDE, TOOHEY                                 
 02/16/96      2790    (H)   FISCAL NOTE (ADM)                                 
 02/27/96              (H)   STA AT  8:30 AM CAPITOL 102                       
 02/27/96              (H)   MINUTES(STA)                                      
 03/05/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 BILL:  HB 368                                                               
 SHORT TITLE: ELECTION CAMPAIGN FINANCE REFORM                                 
 SPONSOR(S): REPRESENTATIVE(S) JAMES                                           
 JRN-DATE      JRN-PG            ACTION                                        
 12/29/95      2362    (H)   PREFILE RELEASED                                  
 01/08/96      2362    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/08/96      2362    (H)   STA, JUDICIARY, FINANCE                           
 01/25/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 01/25/96              (H)   MINUTE(STA)                                       
 01/30/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 01/30/96              (H)   MINUTE(STA)                                       
 02/01/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 02/01/96              (H)   MINUTE(STA)                                       
 02/29/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 02/29/96              (h)   MINUTE(STA)                                       
 03/05/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 BILL:  HB 317                                                               
 SHORT TITLE: ELECTION CAMPAIGN FINANCE REFORM                                 
 SPONSOR(S): REPRESENTATIVE(S) FINKELSTEIN                                     
 JRN-DATE      JRN-PG            ACTION                                        
 04/21/95      1427    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 04/21/95      1427    (H)   STATE AFFAIRS, JUDICIARY, FINANCE                 
 01/08/96      2358    (H)   SPONSOR SUBSTITUTE INTRODUCED-REFERRALS           
 01/08/96      2358    (H)   STATE AFFAIRS, JUDICIARY, FINANCE                 
 01/25/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 01/25/96              (H)   MINUTE(STA)                                       
 01/30/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 01/30/96              (H)   MINUTE(STA)                                       
 02/01/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 02/01/96              (H)   MINUTE(STA)                                       
 02/29/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 02/29/96              (H)   MINUTE(STA)                                       
 03/05/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 WITNESS REGISTER                                                              
 REPRESENTATIVE CON BUNDE                                                      
 Alaska State Legislature                                                      
 State Capitol, Room 108                                                       
 Juneau, Alaska 99801-1182                                                     
 Telephone:  (907) 465-4843                                                    
  POSITION STATEMENT:   Sponsor of HB 365.                                     
 DELISA CULPEPPER, Member                                                      
 Alaska Public Health Association                                              
 1874 Wickersham Drive                                                         
 Anchorage, Alaska 99507                                                       
 Telephone:  (907) 563-6426                                                    
  POSITION STATEMENT:   Provided testimony in support of HB 365.               
 CHRIS STOCKARD, LT.                                                           
 Planning and Research Section                                                 
 Office of the Commissioner                                                    
 Department of Public Safety                                                   
 P.O. Box 111200                                                               
 Juneau, Alaska 99811-1200                                                     
 Telephone:  (907) 465-4306                                                    
  POSITION STATEMENT:   Provided testimony on HB 365.                          
 GLEN RAY, Health Promotion Program Manager                                    
 Community Health and Emergency Medical Services                               
 Division of Public Health                                                     
 Department of Health and Social Services                                      
 P.O. Box 110616                                                               
 Juneau, Alaska 99811-0616                                                     
 Telephone:  (907) 465-3140                                                    
  POSITION STATEMENT:   Provided testimony on HB 365.                          
 FOREST RAY                                                                    
 9278 Emily Way                                                                
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 789-0729                                                    
  POSITION STATEMENT:   Provided testimony on HB 365.                          
 LYNDA ADAMS, Regional Board Member                                            
 Seven Circles Regional Council                                                
 P.O. Box 7171                                                                 
 Ketchikan, Alaska 99901                                                       
 Telephone:  (907) 225-6227                                                    
  POSITION STATEMENT:   Provided testimony on HB 365.                          
 MICHAEL LIVINGSTON                                                            
 Address not provided.                                                         
 Telephone not provided.                                                       
  POSITION STATEMENT:   Provided testimony in support of HB 365.               
 DIANE CROPPER                                                                 
 2006 Tudor Hills Court                                                        
 Anchorage, Alaska 99507                                                       
 Telephone:  (907) 561-0211                                                    
  POSITION STATEMENT:   Provided testimony on HB 365.                          
 REPRESENTATIVE JERRY MACKIE                                                   
 Alaska State Legislature                                                      
 State Capitol, Room 404                                                       
 Juneau, Alaska 99801-1182                                                     
 Telephone:  (907) 465-4925                                                    
  POSITION STATEMENT:   Sponsor of HB 354.                                     
 STEVE WRIGHT, Part of Executive Board                                         
 Kenai Peninsula Educational Support Association                               
 P.O. Box 4645                                                                 
 Soldotna, Alaska 99669                                                        
 Telephone:  (907) 262-7355                                                    
  POSITION STATEMENT:   Provided testimony on HB 354.                          
 LUCY HOPE, President                                                          
 Mat-Su Education Association                                                  
 P.O. Box 870887                                                               
 Wasilla, Alaska 99687                                                         
 Telephone:  (907) 376-4796                                                    
  POSITION STATEMENT:   Provided testimony on HB 354.                          
 GARY BADER, Administrative Services Director                                  
 Juneau School District                                                        
 10014 Crazy Horse Drive                                                       
 Juneau, Alaksa 99801                                                          
 Telephone:  (907) 463-1700 x239                                               
  POSITION STATEMENT:   Provided testimony on HB 354.                          
 VERNON MARSHALL, Executive Director                                           
 National Education Association-Alaska                                         
 114 2nd Street                                                                
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 586-3090                                                    
  POSITION STATEMENT:   Provided testimony on HB 354.                          
 STEVE MCPHETRES, Executive Director                                           
 Alaska Council of School Administrators                                       
 326 4th Street, Suite 404                                                     
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 586-9702                                                    
  POSITION STATEMENT:   Provided testimony on HB 354.                          
 WALT BROMENSCHENKEL                                                           
 128 North Binkley                                                             
 Soldotna, Alaska 99669                                                        
 Telephone:  (907) 262-5846                                                    
  POSITION STATEMENT:   Provided testimony on HB 354.                          
 REPRESENTATIVE DAVID FINKELSTEIN                                              
 Alaska State Legislature                                                      
 State Capitol, Room 424                                                       
 Juneau, Alaska 99801-1182                                                     
 Telephone:  (907) 465-2435                                                    
  POSITION STATEMENT:   Provided testimony on HB 368 and HB 317.               
 JACK CHENOWETH, Attorney                                                      
 Legislative Legal Counsel                                                     
 Legislative Legal and Research Services                                       
 Legislative Affairs Agency                                                    
 130 Seward Street, Suite 409                                                  
 Juneau, Alaska 99801-2105                                                     
 Telephone:  (907) 465-2450                                                    
  POSITION STATEMENT:   Provided testimony on HB 368 and HB 317.               
 ACTION NARRATIVE                                                              
 TAPE 96-27, SIDE A                                                            
 Number 0015                                                                   
 The House State Affairs Committee was called to order by Chair                
 Jeannette James at 8:03 a.m.  Members present at the call to order            
 were Representatives Ogan, Porter, Robinson and James.  Members               
 absent were Representatives Green, Ivan and Willis.                           
 HB 365 - MINOR IN POSSESSION OF TOBACCO                                     
 The first order of business to come before the House State Affairs            
 Committee was HB 365.                                                         
 CHAIR JEANNETTE JAMES called on the sponsor of HB 365,                        
 Representative Con Bunde.                                                     
 Number 0042                                                                   
 REPRESENTATIVE CON BUNDE explained there were laws against minors             
 consuming alcohol and tobacco.  Unfortunately, unlike minors                  
 consuming alcohol, a glitch existed in the laws that prevented the            
 enforcement of the prohibition against minors consuming tobacco.              
 He explained "sting operations" were not allowed in tobacco                   
 compliance checks, and HB 365 would take care of that.  The problem           
 was addressed at the federal level with the passage of the Synar              
 Amendment that required states to conduct local random checks for             
 illegal sells.  Alaska had been out of compliance because as the              
 laws were written it could be conceived that the minor was breaking           
 the law and the law enforcement official was contributing to the              
 delinquency of a minor.  Therefore, HB 365 would allow undercover             
 minors working with law enforcement to buy tobacco under a random             
 unannounced inspection.  He said, if there were no compliance                 
 checks, there was no way to know which stores were selling tobacco            
 to children preventing the enforcement of the law.  In addition,              
 many substance abuse prevention and treatment efforts would suffer,           
 if federal substance abuse block grants were reduced as a result.             
 He called HB 365 a simple bill and encouraged the support of the              
 committee members.                                                            
 Number 0287                                                                   
 CHAIR JAMES said HB 365 was a good bill of which she signed on as             
 a cosponsor.                                                                  
 CHAIR JAMES called on the first witness via teleconference in                 
 Anchorage, Delisa Culpepper.                                                  
 Number 0335                                                                   
 DELISA CULPEPPER Member, Alaska Public Health Association, said the           
 Association supported HB 365.  She explained tobacco was related to           
 a number of health problems in the United States and the world.               
 She commented many people believed it was a common rite of passage            
 for the youth when in actuality many of the adults that smoked                
 started before the age of 18 and never stopped.  She cited a survey           
 in Anchorage where 31 percent of young males smoked and 34 percent            
 of young women smoked in the age group of 18 to 24.  Moreover,                
 another survey indicated children were beginning to smoke on a                
 regular basis at a younger age.  She suggested educating children             
 at an earlier age, increasing tobacco rates, and making sure                  
 cigarettes were not readily available as a few solutions to the               
 problem.  Laws existed that said it was illegal to smoke under the            
 age of 19, yet cigarettes were readily available.  She concluded by           
 stating "lets stop the habit."                                                
 Number 0495                                                                   
 CHAIR JAMES asked Representative Bunde what the penalty was in the            
 law for a minor in possession of a tobacco product?                           
 Number 0550                                                                   
 REPRESENTATIVE BUNDE replied, in Anchorage according to news                  
 reports, a citation was being issued rather than making an arrest.            
 Number 0591                                                                   
 REPRESENTATIVE CAREN ROBINSON replied a fine was issued in Juneau             
 of about $300.                                                                
 Number 0605                                                                   
 REPRESENTATIVE BRIAN PORTER asked Representative Robinson if the              
 fine amount was in a municipal ordinance or in a state statute?               
 REPRESENTATIVE ROBINSON replied I think it is in a state statute.             
 CHAIR JAMES called on the next witness in Juneau, Chris Stockard,             
 Lt., Department of Public Safety, to answer her question.                     
 CHRIS STOCKARD, Lt., Research and Planning Division, Office of the            
 Commissioner, Department of Public Safety, replied he was here to             
 answer questions.  He did not have a prepared statement.  The                 
 penalty of a minor in possession of a tobacco product was a class             
 B misdemeanor.                                                                
 CHAIR JAMES called on the next witness in Juneau, Glen Ray,                   
 Department of Health and Social Services.                                     
 Number 0671                                                                   
 GLEN RAY, Health Promotion Program Manager, Community Health and              
 Emergency Medical Services, Division of Public Health, Department             
 of Health and Social Services, said the division was in favor of HB
 365.  He explained every state in the United Stated discouraged               
 tobacco use through banning sells to minors.  He cited an estimated           
 3,000 minors started smoking every day which translated to about 1            
 million addicted minors every year.  He explained tobacco use                 
 usually started in early adolescence, and cited a 1992 behavioral             
 risk survey of which 84.5 percent of the current smokers reported             
 the use of tobacco before the age of 20.  He further cited in 1995            
 a behavioral risk survey indicated 36.5 percent surveyed identified           
 themselves as current smokers, defined as at least one cigarette in           
 the last 30 days; and 21 percent identified themselves as frequent            
 smokers, defined as at least 20 cigarettes in the last 30 day.                
 There was a high rate of tobacco use in Alaska compared to the rest           
 of the United States.  A report by the Center for Disease Control             
 (CDC) indicated the overall percentage of smokers was higher in               
 1993 than in 1989, while the trend was increasing among the youth,            
 this was directly associated with the sell of tobacco from small              
 vending stores.  He further explained nicotine was the most                   
 difficult addiction to overcome.  Therefore, if the supply was                
 restricted, the amount of addicted smokers would decrease in the              
 long run.  A recent study indicated only 28 percent of the vendors            
 obeyed the laws.  The easy access, he asserted, sent a wrong                  
 message to minors.  In conclusion, he said HB 365 would reduce the            
 number of tobacco products acquired by minors thereby reducing the            
 number of people becoming addicted to tobacco, and improving the              
 health of the state.                                                          
 CHAIR JAMES called on the next witness in Juneau, Forest Ray.                 
 Number 1160                                                                   
 FOREST RAY said he was a sophomore at Juneau Douglas High School.             
 He was part of a sting operation this summer of which 10 places               
 were hit.  He explained around six of the places sold to him easily           
 of which only about one-half asked him for identification.  He                
 expressed his support for HB 365.  He did not like to be around               
 smokers, and to breath the smoke and chemicals.                               
 Number 1211                                                                   
 REPRESENTATIVE ROBINSON asked Mr. Ray if he was instructed not to             
 lie about his age?  She wondered if that was an important part of             
 a sting operation.                                                            
 Number 1233                                                                   
 MR. RAY replied he did not hear that part.                                    
 CHAIR JAMES called on the next witness via teleconference in                  
 Ketchikan, Frances Young.                                                     
 Number 1248                                                                   
 FRANCES YOUNG said she agreed with the previous testifiers, Ms.               
 Culpepper and Mr. Ray.  She said the mortality and the cost related           
 to tobacco use added to the problem.  She explained in Ketchikan a            
 judge required a 10 page report for a first offense on the effects            
 of tobacco.  She further explained, if the minor was caught on                
 school property with a tobacco product, a one day in-house                    
 suspension was enforced.  Moreover, a second offense required a 20            
 page report, and a two day in-house suspension.  Consequently, the            
 smoking rate in Ketchikan appeared to be down.  According to a                
 compliance check in Ketchikan, three out of five vendors sold                 
 cigarettes to minors.  The vendors did not sell the second time               
 around, however.  She called HB 365 a helpful bill.                           
 CHAIR JAMES called on the next witness via teleconference in                  
 Ketchikan, Lynda Adams.                                                       
 Number 1424                                                                   
 LYNDA ADAMS, Regional Board Member, Seven Circles Council, said the           
 Council represented communities in Ketchikan, Juneau, and Sitka.              
 The Council supported HB 365, and further felt the House State                
 Affairs Committee should also hear HB 431.  The Council supported             
 HB 365 because it would make sting operations easier for                      
 communities.  She reiterated the Council supported HB 365, and                
 hoped the committee would hear HB 431 as well.                                
 CHAIR JAMES called on the next witness via teleconference in                  
 Anchorage, Michael Livingston.                                                
 Number 1488                                                                   
 MICHAEL LIVINGSTON congratulated Representative Con Bunde on                  
 proposing HB 365.  He urged the committee members to pass the bill            
 forward to the next committee of referral.  He also urged the                 
 committee members to consider the penalties for businesses cited              
 selling tobacco products to minors.  He recommended considering an            
 optional court appearance with a $300 fine.  The reason, he said,             
 was because magistrates often dismissed businesses cited creating             
 a waste of time for a police officer to issue a citation.                     
 Number 1550                                                                   
 CHAIR JAMES asked Representative Bunde to address the suggestion              
 Mr. Livingston made regarding the optional court appearance and the           
 $300 fine.                                                                    
 Number 1568                                                                   
 REPRESENTATIVE BUNDE deferred to the experts in the Department of             
 Public Safety to answer the question.                                         
 Number 1594                                                                   
 LT. STOCKARD replied the Department did not handle a lot of these             
 cases.  He cited in 1995 there were 3 cases of sales and 19 cases             
 of possession.  The Department knew about the sting operations in             
 some communities, and that Judge Peter B. Froehlich pursued the               
 issue seriously and to the maximum in Juneau.  The issue, however,            
 laid with the court system and not with law enforcement.                      
 Number 1649                                                                   
 REPRESENTATIVE PORTER responded, unlike district court judges or              
 superior court judges, magistrates did not run for confirmation.              
 He said magistrates were employees of the court system, and                   
 suggested sending a letter to the superior court judge when the               
 magistrate did not want to enforce the law.                                   
 CHAIR JAMES called on the next witness via teleconference in                  
 Anchorage, Diane Cropper.                                                     
 Number 1676                                                                   
 DIANE CROPPER explained she was the mother of five children in                
 Anchorage.  She explained a Tesoro Northstore Company (7-Eleven)              
 store in Anchorage sold a tobacco product to her 16 year old son.             
 The receptionist of the Anchorage Police Department advised her to            
 call the Borough or Alcohol and Tobacco and Firearms for                      
 information who in turn referred her to the Anchorage Police                  
 Department.  She said it was amazing that there was a law that no             
 one was enforcing.  Furthermore, after several more phone calls she           
 was passed around until she talked to a Sergeant Nelson.  She                 
 explained to Sergeant Nelson she had a receipt showing the date and           
 time of the purchase and she wanted to file a complaint.  She could           
 not identify the clerk and was told without positive identification           
 there was nothing that could be done.  However, the police could              
 give her son a $300 ticket, and talk to the employees of the 7-               
 Eleven.  The fact that she had a receipt did not matter.  In                  
 response, she said she would organize her own sting operation.  The           
 police officer explained she would go to jail for aiding and                  
 abetting a minor, receive a $300 fine, her son would receive a $300           
 fine, and lastly the store would get off because the evidence was             
 gathered while she was committing a crime.  She was told tobacco              
 sells to minors were not a big enough crime to warrant anyone to              
 enforce the law.  She explained her son looked like the average 16            
 year old, and he shared with her that the small stores were the               
 easiest to purchase tobacco products from.                                    
 Number 1885                                                                   
 REPRESENTATIVE PORTER replied sometimes the police department was             
 the messenger rather than the creator of the rules.  The fact that            
 a case could not be made using her receipt was not an arbitrary               
 decision by the police department, but a decision made in law by              
 the courts.  House Bill 365 was trying to correct her frustrations.           
 MS. CROPPER replied, "that's what I'd like to see happen."                    
 Number 1928                                                                   
 REPRESENTATIVE ROBINSON wondered if the police officer could notify           
 the business owner a complaint had been reported.                             
 Number 1935                                                                   
 REPRESENTATIVE PORTER replied, according to the testimony of Ms.              
 Cropper, that was what the officer suggested.                                 
 Number 1946                                                                   
 REPRESENTATIVE ROBINSON reiterated her concern about minors lying             
 about their age in a sting operation.  She wondered if it needed to           
 be clarified in the bill.                                                     
 Number 1976                                                                   
 REPRESENTATIVE BUNDE replied the individuals were lying in a sting            
 operation, but not about their age.  He cited the response, "I lost           
 my drivers license," was a lie.  He did not view this as                      
 entrapment, however.  He said it was the obligation of the store              
 clerk to investigate the age further.                                         
 Number 2008                                                                   
 REPRESENTATIVE ROBINSON reiterated it was important to create a               
 program that did not encourage minors participating in a sting                
 operation to lie about their age.                                             
 Number 2046                                                                   
 REPRESENTATIVE BUNDE replied, nonetheless, when entrapment was                
 involved it was not a good case.                                              
 Number 2066                                                                   
 CHAIR JAMES said it was more proper to ask for identification than            
 to ask how old was the person.                                                
 Number 2078                                                                   
 REPRESENTATIVE ROBINSON said, according to the experts in Juneau,             
 the program worked because the clerks and business owners were                
 educated to the extent of the law.  Her goal was to educate the               
 clerks to prevent the sale of tobacco products to minors.                     
 Number 2137                                                                   
 REPRESENTATIVE PORTER replied it was preferable to educate as                 
 Representative Robinson suggested.  However, there were times when            
 a vendor intentionally violated the law, and that was when it was             
 important to allow law enforcement to make a case.                            
 Number 2165                                                                   
 REPRESENTATIVE BUNDE stated the age requirement for tobacco                   
 products should match the age requirement for alcohol.                        
 Identification was required when alcohol was purchased.                       
 Number 2189                                                                   
 REPRESENTATIVE ROBINSON reiterated she had a problem with creating            
 a situation that supported a minor to lie about his or her age.               
 Number 2199                                                                   
 REPRESENTATIVE BUNDE replied the fact that a minor tried to buy was           
 a lie.  He said he did not want to encourage children to be                   
 dishonest either.                                                             
 REPRESENTATIVE ROBINSON asked Representative Bunde to think about             
 the issue further and to talk to the experts here in Juneau.                  
 Number 2222                                                                   
 REPRESENTATIVE BUNDE moving forward, responded to the $300 fine               
 discussed earlier.  He said he would consider increasing the fine             
 to $1,000, for example.                                                       
 CHAIR JAMES said she would support an increase in the fine.                   
 Number 2242                                                                   
 REPRESENTATIVE PORTER moved that HB 365 move from committee with              
 individual recommendations, and attached fiscal notes.  Hearing no            
 objection, it was so moved from the House State Affairs Committee.            
 HB 354 - RIP FOR SCHOOL DISTRICT EMPLOYEES                                  
 The next order of business to come before the House State Affairs             
 Committee was HB 354.                                                         
 CHAIR JAMES called on the sponsor of HB 354, Representative Jerry             
 Number 2358                                                                   
 REPRESENTATIVE JERRY MACKIE read the following sponsor statement              
 into the record.                                                              
 "I introduced HB 354 in response to the desire to many Alaskan                
 school districts to achieve operational cost savings through a                
 retirement incentive program.  The program allows school districts            
 to offer early retirement to teachers at the higher end of the                
 district's salary scale.  The savings would result from the hiring            
 of replacement teachers that are younger and lower on the pay                 
 "The proposed early retirement program is similar to programs                 
 established for all public employees beginning in 1986 and ending             
 in 1990.  A November 1991 legislative audit estimated that the                
 1989-90 retirement incentive program saved approximately $23                  
 million on the early retirement of 1,764 employees taking advantage           
 of the program.  In the 1986-87 program 2,327 employees                       
 participated achieving a savings of over $73 million.  It should be           
 noted that retirement incentive programs are commonly used by                 
 business corporations to attain a more efficient and economic                 
 "The program established in HB 354 offers three years of service              
 credited to eligible public school employees facing retirement.               
 The offer is an inducement to employees near or at retirement                 
 eligibility to terminate their services.  The resulting vacancies             
 allow employers to achieve savings by filing positions with persons           
 of lower step and pay range, down classing positions, or keeping              
 positions vacant.  A key provision requires agencies to show on a             
 case by case basis that a three year credited service award would             
 result in a net personnel services cost savings.  It should be                
 stressed that participation in the program is completely optional             
 for either the employer or any employee.                                      
 "The three year credit must be applied in the following order:                
 1.  To meet the age or service required for eligibility for normal            
 2.  to meet the age required for early retirement;                            
 3.  to reduce the actuarial adjustment required for early                     
 retirement; and                                                               
 4.  as years of credited service for calculating retirement                   
 "An employee awarded the benefit is required to contribute to the             
 retirement system the amount they would have paid had they                    
 continued working the additional three years.  The employer's cost            
 is the difference between the employee's contribution and the full            
 actuarial cost of the three year incentive.  Thus, the TRS or PERS            
 retirement system is fully compensated for the effects of an                  
 individual's early termination of service.                                    
 "The employer's additional contribution to the retirement system as           
 well as sharing in other program administration costs are primary             
 factors in calculating whether a potential early retirement will              
 result in a net savings and hence qualify.  The calculation is                
 based on a five year time period.                                             
 "House Bill 354 has a sunset clause that terminates the incentive             
 program on July 1, 1998.                                                      
 "I believe this legislature has to make a serious effort to address           
 the state's continuing revenue shortfall and the need for long term           
 financial stability.  If education is faced with reduced or frozen            
 budget funding levels, then we have to give the school districts              
 the tools to make the necessary adjustments.  Otherwise, the                  
 education of Alaska's youth will directly suffer.  HB 354 is one of           
 the tools that can be used to mitigate budget shortfalls and                  
 preserve the excellence in our public school system."                         
 TAPE 96-27, SIDE B                                                            
 Number 0023                                                                   
 REPRESENTATIVE MACKIE referred the committee members to the survey            
 by the Alaska Association of School Administrators in their packet            
 of information.  He explained all school districts were surveyed of           
 which 67 percent of the school districts responded and an                     
 overwhelmingly number responded that they would participate in a              
 RIP program.  He also referred the committee members to an audit              
 conducted by the Alaska State Legislature, Division of Legislative            
 Audit, estimating the savings or (costs) by the employer the last             
 time a RIP program was instituted in 1991.  Furthermore, he                   
 referred the committee members to a letter from Lawrence A. Wiget,            
 Director, Government Relations/Legislative Liaison, Anchorage                 
 School District, that estimated there were at least 600 eligible              
 teachers to participate in a RIP program calling for a potential of           
 $12 million in savings.  The Anchorage School District had their              
 own retirement incentive program and it was unclear if the District           
 would participate at this point, however.  He referred the                    
 committee members to a letter from Mary Rubadeau, Superintendent,             
 Juneau School District, that estimated a saving of $3 million.  He            
 also cited the Hoonah School District estimated a substantial                 
 savings as well.  In conclusion, he explained the amendment before            
 the committee members included the commissioner of education as               
 part of the reviewing and certification process of a RIP plan                 
 proposed by a school district.                                                
 Number 0156                                                                   
 CHAIR JAMES asked, if a school district got its money, up front,              
 for the three year credit, from the regular formula funding?  She             
 was concerned the state would need to pick-up the remaining money             
 Number 0187                                                                   
 REPRESENTATIVE MACKIE replied, once a decision was made to retire             
 a teacher under a RIP plan, the cost savings depended on who was              
 hired to replace the retired teacher.  There was an obvious savings           
 if the new teacher was hired at a lower pay scale.  Therefore, the            
 district would have the money saved from that hire to put up front            
 into the retirement account.  He stated a fiscal note was never               
 considered because of the savings.  Furthermore, the teacher would            
 have to contribute the money up front into the account as well.               
 Number 0257                                                                   
 CHAIR JAMES asked Representative Mackie if he felt the amendment              
 before them was needed?                                                       
 Number 0263                                                                   
 REPRESENTATIVE MACKIE replied, it was not a bad idea.  He called it           
 an extra safeguard.  He said, a school district should have a plan            
 and demonstrate a savings, and if by including the commissioner of            
 education was necessary to ensure that, then he agreed with the               
 CHAIR JAMES wondered if the state should be the entity telling the            
 school districts they needed a RIP plan.                                      
 Number 0288                                                                   
 REPRESENTATIVE MACKIE replied, HB 354 gave the school districts the           
 ability to act on a local level.  However, it was responsible of              
 the state to require a demonstration of savings before implementing           
 a RIP plan.                                                                   
 CHAIR JAMES replied she had more faith in the school district.  It            
 was hard to believe a school district would implement a plan                  
 without demonstrating a savings.  She resisted the idea of                    
 including the commissioner of education.                                      
 Number 0326                                                                   
 REPRESENTATIVE MACKIE replied some might feel it was one more level           
 of bureaucracy.  He said it really did not matter to him if the               
 amendment was adopted or not.                                                 
 Number 0348                                                                   
 REPRESENTATIVE SCOTT OGAN wondered about a conceptual amendment to            
 address the cost savings issue to include a provision that did not            
 allow the re-hire of a teacher with more than three years of                  
 experience, for example.  He agreed with the concept of local                 
 control and hoped the local voters would hold their school                    
 districts accountable.  However, he wondered about the school                 
 districts that were not closely watched by the local voters and               
 felt a conceptual amendment would protect those districts.                    
 Number 0411                                                                   
 REPRESENTATIVE PORTER announced he supported the amendment.                   
 Moreover, he commented about specialty positions that required a              
 high level of qualification, such as a special education teacher.             
 He wondered how there would be a savings for a district in that               
 Number 0437                                                                   
 REPRESENTATIVE MACKIE replied he understood Representative Ogan's             
 concept to require a district to maximize its savings.  However, he           
 would resist going to that extreme.  He explained HB 354 was only             
 a tool for local school districts.  A district would know if it was           
 in its best interest to re-hire a teacher at the low-end of a pay             
 scale.  He did not want to suggest to a school district what was in           
 its best interest in terms of experience to replace the retired               
 teacher.  That, he said, should be addressed at the local level.              
 Number 0496                                                                   
 CHAIR JAMES expressed her support for HB 354.  However, she was               
 terrified to hear from teachers in her district that supported a              
 RIP program because they were "burnt-out."  A RIP program should              
 not be necessary to get rid of teacher who were burnt-out.  Local             
 control was needed to give district the flexibility to manage their           
 Number 0590                                                                   
 REPRESENTATIVE MACKIE replied each district and each employee was             
 different.  He said there were various reasons a teacher could take           
 advantage of a RIP program.  He further said it would be hard for             
 a district to get rid of a good teacher, and agreed the more local            
 control the better.                                                           
 Number 0639                                                                   
 REPRESENTATIVE ROBINSON reminded the committee members it was the             
 teacher that would make the decision to approach the school                   
 district to retire.                                                           
 CHAIR JAMES called on the first witness via teleconference in                 
 Kenai, Steve Wright.                                                          
 Number 0663                                                                   
 STEVE WRIGHT member of the Kenai Peninsula Educational Support                
 Association, read the statement from the National Education                   
 Association-Alaska (NEA-Alaska) into the record.                              
 "NEA-Alaska supports utilization of a retirement incentive program            
 (RIP) as a cost effective means to reduce the overall cost of                 
 school district operation.  This cost saving measure is needed                
 especially at a time when student population is increasing and                
 inflation continues to chop away at the opportunities schools offer           
 children.  Additional funding is needed to correct the problem but,           
 in the short term, the RIP provides an option for school districts            
 to trim already tight budgets.                                                
 "In January over 400 NEA-Alaska member delegates attending our                
 annual Delegate Assembly approved the following legislative                   
 priority:  Retirement Incentive Program:  NEA-Alaska shall seek               
 legislation to support the enactment of a retirement incentive                
 program that is actuarialy sound.  Delegates also discussed the               
 need to make the program available to all school employees in each            
 school district.                                                              
 "If it is the intent of the Legislature and the Administration to             
 reduce the cost of state and local governments, a retirement                  
 incentive program is an excellent opportunity to achieve that goal            
 without harming employees at the upper or lower ends of the salary            
 schedule.  Absent a RIP, a school district attempting to cut                  
 operating costs through reduction in staff (RIP) would be forced to           
 lay off less experienced employees.  This option creates a hardship           
 on younger employees and their families and disrupts initial career           
 goals of these employees.                                                     
 "Previous RIPs provided certified and non-certified school                    
 employees the benefit of the retirement incentive.  Lawmakers have            
 a history that demonstrates the benefits of RIP to both the                   
 employee and employer.                                                        
 "NEA-Alaska represents nearly 10,000 members; 2,500 of which are              
 non-certified Educational Support Personnel.  Earlier bills                   
 extended the benefits of RIP to all school employees.  We support             
 the universal application of the RIP to all school employees.                 
 "A retirement incentive program offers school district                        
 administrators an opportunity to retire staff at the top-end of the           
 salary schedule.  Those who retire can be replaced by employees at            
 a lower position on the salary schedule.  If school administration            
 carefully employs equally qualified but less experienced teachers             
 and support employees, a school district will net a reduction in              
 operating costs.                                                              
 "Previous RIPs offered experienced employees an early retirement              
 option by providing them a credit of three additional years of                
 service provided the employer and employee pay the actuarial cost             
 of that service.  Maintaining that option will not encourage large            
 numbers of experienced school employees to retire since many would            
 likely retire within three to five years anyway.  Furthermore, it             
 would maintain the strength of the retirement system for present              
 and future generations of retirees.                                           
 "We support a retirement incentive plan that is universal in                  
 nature.  State and local governments, including school districts,             
 can utilize a RIP to achieve cost savings in fair way to both the             
 employer and employee.  A RIP is a way to address the economic                
 uncertainty many school districts face.  The legislation presents             
 an equitable and fair plan for the employees of Alaska's schools              
 and state government to retire during periods of economic                     
 CHAIR JAMES called on the next witness via teleconference in Mat-             
 Su, Lucy Hope.                                                                
 Number 0885                                                                   
 LUCY HOPE, President, Mat-Su Education Association, said the                  
 Association represented 852 school teachers in the Mat-Su School              
 District.  She said the District was currently facing budget                  
 difficulties.  She recently received formal notification to lay-off           
 every non-tenure school teacher, approximately 170 teachers.  The             
 RIP program was a good way to alleviate those concerns, she said.             
 The salary schedule was built so that beginning teachers made about           
 one-half of what most experiences teachers made.  The last time the           
 District participated in a RIP program 26 teachers retired, double            
 the number of teachers hired in a given school year, and the                  
 District saved over one-half million dollars over three years.  She           
 called the RIP program a humane way to deal with the budget                   
 difficulties a district was faced with.  She supported HB 354 as a            
 tool for school districts to use to maintain the integrity of the             
 Number 0983                                                                   
 REPRESENTATIVE OGAN asked Ms. Hope if the teachers were hired at a            
 lower salary because of seniority or because of a different pay               
 Number 1006                                                                   
 MS. HOPE replied a teacher was hired at a lower salary because of             
 the number of years of experience and education the teacher brought           
 to the District.  The only way a teacher could be hired at the same           
 salary as the retired teacher was if he or she had taught in Alaska           
 for the same number of years.  She explained the local negotiated             
 agreement recognized only four years of out-of-state experience,              
 and the actual number of years of Alaska experience.                          
 REPRESENTATIVE OGAN thanked Ms. Hope for the clarification.                   
 Number 1051                                                                   
 REPRESENTATIVE MACKIE asked Ms. Hope how many teachers received a             
 lay-off notice?                                                               
 MS. HOPE replied 170 teachers.  She stated she only received a                
 formal notification and the teachers had yet to receive their                 
 individual letters of notification.                                           
 Number 1070                                                                   
 REPRESENTATIVE MACKIE wondered if the notices were sent to clear              
 the books so the school district was not saddled with additional              
 tenured teachers.                                                             
 Number 1080                                                                   
 MS. HOPE said the budget would probably not be finalized by the               
 last day of school and by statute that was the last opportunity the           
 District had to lay-off employees.  The formal notification was               
 necessary because of the negotiated agreement that required a                 
 notification by March 1.  She said the District planned to recall             
 a number of the teachers based on qualifications.                             
 CHAIR JAMES called on the next witness in Juneau, Gary Bader.                 
 Number 1116                                                                   
 GARY BADER, Administrative Services Director, Juneau School                   
 District, said the District supported HB 354.  He said in terms of            
 the repayment, the District calculated the savings made on each               
 teacher.  The current contract for the Juneau School District                 
 limited a new teacher to bring four years of service to the                   
 District.  He said, according to HB 354, a district did not have to           
 start repaying until the second year after retirement, reserving a            
 portion of the first year of savings while the rest would be                  
 available for the general expenditures of the school district.  He            
 reiterated the District favored HB 354 and hoped it would be passed           
 out of committee today.                                                       
 Number 1176                                                                   
 REPRESENTATIVE MACKIE said the Juneau School District had a higher            
 number of teachers at the top-end of the salary range compared to             
 the other districts.  He asked Mr. Bader if he knew the exact                 
 number of teachers at the higher-end of the salary range?                     
 MR. BADER replied the District estimated about 60 teachers would              
 participate in a RIP program.  However, not all were vested in the            
 system.  He reiterated the District had 60 eligible participants.             
 Number 1205                                                                   
 REPRESENTATIVE ROBINSON asked Mr. Bader his opinion regarding the             
 proposed amendment.                                                           
 Number 1214                                                                   
 MR. BADER replied the District did not have a difficulty with the             
 proposed amendment.  He said the bill already contained provisions            
 to ensure there was a savings, however.  He felt certain the Juneau           
 School District RIP Plan would pass any scrutiny.                             
 CHAIR JAMES called on the next witness in Juneau, Vernon Marshall.            
 Number 1238                                                                   
 VERNON MARSHALL, Executive Director, National Education                       
 Association-Alaska (NEA-Alaska), said the reality was echoed by               
 Representative Mackie that many districts were experiencing frozen            
 funding levels.  He explained, due to inflation and demands for new           
 programs from the state and federal governments, an immense amount            
 of pressure was put on the employees.  He called a RIP program a              
 safety valve to relieve the pressure, and HB 354 was a step in the            
 right direction.                                                              
 Number 1376                                                                   
 CHAIR JAMES said it was costly to incorporate new programs demanded           
 from the state and federal governments.  It was the biggest                   
 contributor to the raising cost of education, and she did not see             
 evidence of any improvement in the system.  She asked Mr. Marshall            
 to respond to her statements.                                                 
 Number 1423                                                                   
 MR. MARSHALL said the question of who would pay for a new program             
 needed to be answered first.  He called it the mission for public             
 education.  He said 1996 presented various problems relative to               
 children and the issues brought to the classrooms, and cited                  
 students having babies as an example.  He said there were a lot of            
 frustrated teachers who wanted to do more, but because of the                 
 demands and limited resources they were not able to.                          
 Number 1578                                                                   
 CHAIR JAMES said the reasons why a RIP program was needed was also            
 necessary to discuss.  She commented the schools were expected to             
 address social issues and suggested funding them with social money            
 as opposed to education money.  She said the schools were getting             
 a "bad rap" because they were expected to be parents, social                  
 workers, and police officers, for example.                                    
 Number 1671                                                                   
 MR. MARSHALL agreed with the comments of Chair James.  He further             
 said HB 354 addressed the economic issues and was a mechanism to              
 save districts money.                                                         
 Number 1742                                                                   
 CHAIR JAMES said it was important to keep the title of HB 354 tight           
 for support.                                                                  
 Number 1762                                                                   
 REPRESENTATIVE OGAN asked Mr. Marshall what he contributed the                
 inflation issue to discussed earlier?                                         
 Number 1812                                                                   
 MR. MARSHALL replied the inflation was the same that everyone                 
 experienced and was a factor that the school district absorbed.  He           
 cited school districts operated on a funding unit of $61,000.  He             
 said, if it was adjusted, it was worth much less.  Therefore, the             
 districts had to pay to react to the new demands.  He called the              
 bill a safety valve to allow districts to let-off steam.                      
 Number 2017                                                                   
 CHAIR JAMES agreed with Mr. Marshall about inflation.  She said it            
 did not relate to real income and was a serious problem.                      
 Number 2049                                                                   
 REPRESENTATIVE OGAN said he was concerned about the causes of                 
 inflation.  He said one of the biggest problem with inflation were            
 the negotiated salaries.  He said he supported full funding for               
 education last year, but felt it was time the districts started               
 talking about why a RIP program was necessary.  He stated the                 
 private sector absorbed inflation.  He said he would support HB 354           
 because it would help his district, and asked Mr. Marshall to be              
 realistic about the future salary demands.                                    
 Number 2160                                                                   
 MR. MARSHALL said he would be glad to provide a break down of the             
 salaries negotiated.  He said the salary increases were about 2               
 percent.  A report indicated from the University of Alaska that               
 Alaska ranked 14th in America for inflation adjusted salaries.  He            
 said he did not see that the school districts were causing the                
 academic inflation.                                                           
 CHAIR JAMES called on the next witness in Juneau, Steve McPhetres.            
 Number 2280                                                                   
 STEVE MCPHETRES, Executive Director, Alaska Council of School                 
 Administrators, said the Council represented 600 school                       
 administrators and business officials across Alaska.  He said the             
 Council supported HB 354 as another tool to balance the budgets.              
 He explained there would be a substantial savings per teacher, if             
 the district hired an employee at the low end of the pay scale.  He           
 said it was also an opportunity to hire more faculty as the                   
 classrooms continued to grow in size because of the money saved.              
 Number 2456                                                                   
 REPRESENTATIVE MACKIE thanked Mr. Mcphetres for his work done in              
 support of HB 354.                                                            
 Number 2480                                                                   
 REPRESENTATIVE PORTER moved to adopt Amendment 1.  Hearing no                 
 objection, it was so adopted.                                                 
 TAPE 96-28, SIDE A                                                            
 Number 0000                                                                   
 REPRESENTATIVE PORTER said some school districts needed help with             
 their numbers, therefore, he supported the amendment.  He said he             
 did not see it as an infringement.                                            
 Number 0095                                                                   
 CHAIR JAMES said a school district should not have to be overseen             
 because it was suppose to house the smartest people in the state.             
 Number 0132                                                                   
 REPRESENTATIVE OGAN said he agreed with Chair James.  He said he              
 would support Amendment 1 because of accountability for districts             
 that were not as responsible or careful.                                      
 Number 0216                                                                   
 CHAIR JAMES disagreed with Representative Ogan for the record.                
 Number 0238                                                                   
 REPRESENTATIVE PORTER moved that CSHB 354(STA) move from the                  
 committee with individual recommendations and attached fiscal                 
 notes.  Representative Ogan objected.                                         
 CHAIR JAMES called on the next witness via teleconference in Kenai,           
 Walt Bromenschenkel.                                                          
 WALT BROMENSCHENKEL said in 1986 and 1987, 39 employees chose to              
 participate in the RIP program in Kenai; and in 1989 and 1990,                
 about 43 employees chose to participate in the RIP program which              
 generated over $800,000 in savings.  Furthermore, HB 354 would                
 allow money to be redirected to the education of the students.  He            
 was pleased with the motion to pass the bill out of the committee.            
 Number 0436                                                                   
 REPRESENTATIVE OGAN explained he objected to the motion for the               
 sake of further discussion.  He said he supported HB 354 because he           
 recognized the problems in his district.  He hoped districts would            
 look at local management further to hire personnel in a cost                  
 effective manner, however.  He said he trusted his district to                
 address the problems and hoped the bill would alleviate the major             
 crisis back home.                                                             
 REPRESENTATIVE OGAN removed his objection.                                    
 CHAIR JAMES responded hearing no further objection, CSHB 354(STA)             
 moved from the House State Affairs Committee.                                 
 Number 0512                                                                   
 CHAIR JAMES temporarily adjourned the House State Affairs Committee           
 at 9:45 a.m.                                                                  
 TAPE 96-29, SIDE A                                                            
 Number 0000                                                                   
 CHAIR JAMES opened the House State Affairs Committee meeting again            
 at 9:50 a.m. to discuss the next items on the agenda.                         
 HB 368 - ELECTION CAMPAIGN FINANCE REFORM                                    
 HB 317 - ELECTION CAMPAIGN FINANCE REFORM                                     
 The next order of business to come before the House State Affairs             
 Committee was HB 368 and HB 317.                                              
 Number 0150                                                                   
 REPRESENTATIVE FINKELSTEIN referred the committee members to the              
 committee substitute 9-LS1260/F.  He said the committee substitute            
 attempted to incorporate the recommendations of the House State               
 Affairs Committee, the Alaska Public Offices Commission (APOC),               
 Senators, and public comments.  He said there were 30 amendments to           
 the initiative and HB 368.  The initiative remained substantially             
 the same, however.  He stated the amendments strengthened,                    
 broadened or liberalized the provisions and were in the best                  
 interest of public policy.                                                    
 Number 0257                                                                   
 REPRESENTATIVE PORTER wondered if Representative Finkelstein                  
 conferred with Mike Frank, Chair, Campaign Finance Reform Now, and            
 asked if he shared the same conclusion?                                       
 Number 0276                                                                   
 REPRESENTATIVE FINKELSTEIN said Mr. Frank had been involved.  He              
 would not say if it was or was not substantially the same because             
 it was beyond his ability.  He said Mr. Frank was concerned about             
 the final product.  The subject areas addressed were appropriate              
 for the legislature to consider and were reasonable public policy             
 debates.  He said Mr. Frank was aware of the amendments and                   
 suggested including him at the next hearing.                                  
 Number 0365                                                                   
 REPRESENTATIVE PORTER said he was not asking for a legal opinion,             
 if it was substantially the same.  He wondered if Mr. Frank would             
 advertise against the committee substitute as written.                        
 Number 0390                                                                   
 REPRESENTATIVE FINKELSTEIN suggested asking Mr. Frank directly.  He           
 further said Mr. Frank was comfortable with the approach                      
 represented in the committee substitute.  He reiterated the                   
 amendments were reasonable areas for debate.                                  
 Number 0432                                                                   
 CHAIR JAMES said she was concerned about "clamping-down" so far               
 that only those with their own money could participate.  She said             
 the best way to deal directly with this issue was to make sure the            
 public knew about the APOC reporting requirements.                            
 CHAIR JAMES asked Representative Finkelstein to explain the                   
 Number 0561                                                                   
 REPRESENTATIVE FINKELSTEIN explained Amendment 1 deleted the                  
 indexing only of contribution limits.  He called it a technical               
 REPRESENTATIVE FINKELSTEIN explained Amendment 2 was a technical              
 correction to clarify the registration of a contribution.  He said            
 it was not the intent of the initiative to require an individual              
 toregister before making a contribution.  He called it an odd                 
 section and said it should have been drafted better.  He further              
 explained it was a change to current law.                                     
 REPRESENTATIVE FINKELSTEIN explained Amendment 3 returned the                 
 contribution limit back to $100 as written in the existing law.               
 REPRESENTATIVE FINKELSTEIN explained Amendment 4 adopted the                  
 approach of the legislature for honorariums rather than the                   
 approach in the initiative.                                                   
 REPRESENTATIVE FINKELSTEIN explained Amendment 5 shortened the fund           
 raising period in the beginning and increased it towards the end.             
 The beginning period for a legislative race was June 1.  The                  
 beginning period for a statewide race was January 1, and for all              
 other races, five months before the date of the election.  He said            
 this area was controversial.  The amendment strengthened the                  
 initiative.  It was bound by constitutional limitations, however.             
 A longer period as in the initiative was more likely to survive a             
 constitutional challenge.  He explained the amendment did not limit           
 the funds raised, just the period of fund raising.  He reiterated             
 the issue was problematic due to past court cases.                            
 REPRESENTATIVE FINKELSTEIN explained Amendment 6 allowed                      
 contributions from out-of-state family members of up to $2,000 for            
 a House race, $3,000 for a Senate race, and $20,000 for a statewide           
 REPRESENTATIVE FINKELSTEIN explained Amendment 7 was a request by             
 APOC to reduce paperwork.                                                     
 REPRESENTATIVE FINKELSTEIN explained Amendment 8 was a conforming             
 REPRESENTATIVE FINKELSTEIN explained Amendment 9 allowed for the              
 repayment of surplus contributions in approximate proportions.                
 This was not allowed in the initiative.  He said a carry forward              
 was limited to $5,000 for a House race, $7,500 for a Senate race,             
 and $50,000 for a statewide race.  He further explained the                   
 amendment allowed some money to be put into an office fund.                   
 Disclosure would be necessary to meet certain standards to ensure             
 it was not used for personal use, however.                                    
 REPRESENTATIVE FINKELSTEIN explained Amendment 10 simplified the              
 initiative.  The initiative applied aggravating and mitigating                
 criminal factors, and state of mind, for APOC to apply certain                
 penalties.  The amendment included the higher maximums when acted             
 knowingly.  Furthermore, he said APOC knew how to determine the               
 difference between an intentional and an accidental late filing               
 REPRESENTATIVE FINKELSTEIN explained Amendment 11 inserted the                
 definition of a political party.  He said it was a clarification              
 based on complaints from the Libertarian Party.  The Party was                
 concerned it would be considered a group rather than a party.  The            
 definition was expanded to include 3 percent of the votes in the              
 past five governor elections.  The definition, if adopted, would              
 increase the official parties to five.  They were:  the Green,                
 Libertarian, Democratic, Republican and AIP Parties.                          
 REPRESENTATIVE FINKELSTEIN explained Amendment 12 was based on                
 discussions to reduce the penalties.  The initiative included a               
 felony penalty for intentional violations.  The amendment changed             
 it to a misdemeanor.                                                          
 Number 1102                                                                   
 REPRESENTATIVE PORTER asked if the expansion of the political party           
 definition in Amendment 11 brought in any more political parties              
 besides the Libertarian Party?                                                
 Number 1140                                                                   
 REPRESENTATIVE FINKELSTEIN replied he did not remember any more.              
 He reiterated the amendment was based on a complaint from the                 
 Libertarian Party.                                                            
 Number 1152                                                                   
 CHAIR JAMES commented if there were any more parties out there,               
 they probably were not a threat to campaign finance reform.                   
 Number 1160                                                                   
 REPRESENTATIVE FINKELSTEIN replied Amendment 11 was a reasonable              
 compromise.  He did believe, however, that at some time a party did           
 become a group.                                                               
 REPRESENTATIVE FINKELSTEIN moving forward explained Amendment 13              
 removed the 24 hour reporting requirement for expenditures from               
 law.  Currently, the Commission did not require it, and the bill,             
 he said, did not want to interfere with the reporting concepts.               
 This was based on a recommendation from APOC.                                 
 REPRESENTATIVE FINKELSTEIN explained Amendment 14 removed the                 
 requirement for a group to report a contribution worth over $250.             
 This was based on a recommendation from APOC.                                 
 REPRESENTATIVE FINKELSTEIN explained Amendment 15 was a conforming            
 amendment to a Supreme Court decision.  The amendment set the limit           
 at $250 for an individual to use expenditures to advertise in a               
 newspaper, for example.                                                       
 REPRESENTATIVE FINKELSTEIN explained Amendment 16 attempted to                
 define a public funded entity to mean, a state, a political                   
 subdivision, and a state-funded agency.  This was based on a                  
 recommendation from Jack Chenoweth, Attorney, Legislative Legal and           
 Research Services.                                                            
 REPRESENTATIVE FINKELSTEIN explained Amendment 17 deleted "one-               
 half" and inserted "one-third" of expenditures in support or in               
 opposition to a candidate, was needed to include the name of the              
 candidate as part of the name of the group.  This was based on a              
 recommendation from APOC.                                                     
 REPRESENTATIVE FINKELSTEIN explained Amendment 18 allowed political           
 parties and their subdivisions to pass money among themselves.                
 This was not allowed in the initiative because they organized as              
 separate groups, whereas, the amendment viewed them as                        
 Number 1446                                                                   
 REPRESENTATIVE PORTER asked, if Amendment 18 were adopted, could              
 anyone who described himself as a subgroup, be treated as part of             
 the party?                                                                    
 Number 1469                                                                   
 REPRESENTATIVE FINKELSTEIN replied, "no."  He explained the                   
 definition or status of a subgroup derived from the party.                    
 REPRESENTATIVE PORTER asked where was that explained in the bill?             
 Number 1532                                                                   
 JACK CHENOWETH, Attorney, Legislative Legal Counsel, Legislative              
 Legal and Research Services, Legislative Affairs Agency, referred             
 the committee members to page 24, lines 12 - 13, which read "to               
 include a subordinate unit of the organized group of voters                   
 qualifying a political party."  He said the initiative did not                
 address the relationship between the main party and subordinates.             
 The amendment, therefore, clarified the relationship between the              
 Number 1605                                                                   
 REPRESENTATIVE PORTER asked what the individual subordinate units             
 could do to raise their own funds, and to distribute their own                
 funds to candidates.  He wondered if the contribution limit of                
 $10,000 was treated individually or cumulatively.                             
 Number 1667                                                                   
 MR. CHENOWETH asked Representative Porter if the groups were                  
 treated as a subordinate unit?                                                
 REPRESENTATIVE PORTER replied some were and some were not.                    
 Number 1658                                                                   
 REPRESENTATIVE FINKELSTEIN replied, if the party claimed them as a            
 subordinate unit, it would fit under the party limits.                        
 REPRESENTATIVE PORTER wondered where that was addressed in the                
 Number 1667                                                                   
 MR. CHENOWETH replied, it was not addressed in the bill.  Language            
 would be needed to clarify that issue.                                        
 REPRESENTATIVE FINKELSTEIN suggested it could be clarified on page            
 24, line 12, to read, "to include a subordinate unit as determined            
 by the qualifying party."                                                     
 Number 1689                                                                   
 REPRESENTATIVE PORTER commented the bill should say what we mean.             
 Number 1697                                                                   
 REPRESENTATIVE FINKELSTEIN replied, in defense of the language, the           
 party itself would answer the question, if a subordinate unit was             
 part of the party.                                                            
 Number 1729                                                                   
 CHAIR JAMES said the bottom line was the contribution.  The                   
 contributions would need to be tallied from all the subdivisions to           
 determine they did not go over the maximum.  Furthermore, she was             
 concerned it would leave groups out of the decision making process.           
 Number 1835                                                                   
 REPRESENTATIVE PORTER asked how a party determined if a subgroup              
 was officially part of the party?  He also asked if a subgroup that           
 was part of the party could give an additional $10,000?  He lastly            
 asked if the subgroup was a group could it give an additional $250?           
 Number 1870                                                                   
 REPRESENTATIVE FINKELSTEIN replied he would suggest an amendment to           
 resolve this issue so that the parent party would decide who became           
 part of the party.                                                            
 Number 1887                                                                   
 CHAIR JAMES said the District 34 Republicans were considered a                
 subdivision because the chair was elected and a member of the                 
 statewide central committee.  The Lincoln Society, on the other               
 hand, was an affiliate.  The Lincoln Society was a fund raising               
 group only.  She called the Lincoln Society a group and said it was           
 limited to the provisions under a group in the initiative and the             
 Number 1968                                                                   
 REPRESENTATIVE PORTER asked if the committee substitute raised the            
 limits on groups also?                                                        
 Number 1975                                                                   
 REPRESENTATIVE FINKELSTEIN replied, it returned the limits to the             
 existing law, $1,000.  He further said the committee substitute               
 addressed the issue of subordinates fitting under the overall                 
 limits.  Furthermore, a group could decide to organize as a group             
 or a party under the current law, the initiative and the bills.               
 Therefore, the Lincoln Society had a choice to be a group or a                
 party.  Right now it was treated as a subgroup of the party                   
 according to APOC.  He said most groups would chose to remain part            
 of the party due to the $10,000 limit for a House race, $15,000 for           
 a Senate race, and $200,000 for a statewide race.  He said there              
 were very few races where the limits had been reached in the past.            
 He reiterated the choice could not be controlled, however.                    
 Number 2059                                                                   
 REPRESENTATIVE PORTER asked where it was addressed in the bill?               
 REPRESENTATIVE FINKELSTEIN replied page 24, lines 12 - 13.  The               
 language addressed the total limit under the party.                           
 Number 2084                                                                   
 CHAIR JAMES replied the Lincoln Society was not part of the party             
 in her opinion because it was a select group of people who chose to           
 be a society, whereas the party itself was elected by the people.             
 Number 2097                                                                   
 REPRESENTATIVE FINKELSTEIN replied, "right," because the Republican           
 Party accepted them and allowed them to operate as a party                    
 subdivision now.  The choice would be the same under the                      
 Number 2111                                                                   
 CHAIR JAMES suggested further discussion with the Democratic and              
 Republican Parties was needed.                                                
 REPRESENTATIVE FINKELSTEIN said the parties did not like a limit on           
 any contribution amount.                                                      
 Number 2134                                                                   
 CHAIR JAMES said all contributions should come directly from the              
 parties for grass root politics and support.  She said a limit                
 should be left to special interests and individuals and not to the            
 Number 2211                                                                   
 REPRESENTATIVE FINKELSTEIN said the committee substitute tried to             
 raise the limits.                                                             
 CHAIR JAMES replied the limits were fine.  She said she was opposed           
 to the idea of limiting.                                                      
 Number 2258                                                                   
 REPRESENTATIVE FINKELSTEIN responded limits were included because             
 of the fear of laundering money through the party.  He said the               
 parties would do great under the proposed system because the bulk             
 of the $500 to $1,000 contributions would probably go to the party            
 due to the restrictions on individual contributions.  Therefore,              
 the total amount of money would probably decrease, but the amount             
 of money going to the parties would probably increase.                        
 Number 2300                                                                   
 REPRESENTATIVE PORTER asked Representative Finkelstein what the               
 bill did again to the contribution limits?                                    
 REPRESENTATIVE FINKELSTEIN said he would answer that question as he           
 explained the amendments further.                                             
 Number 2318                                                                   
 REPRESENTATIVE FINKELSTEIN moving forward explained Amendment 19              
 fixed a technical mistake.                                                    
 REPRESENTATIVE FINKELSTEIN explained Amendment 20 conformed to a              
 previous provision related to a Supreme Court decision.                       
 REPRESENTATIVE FINKELSTEIN explained Amendment 21 changed the                 
 effective date to January 1, 1997.                                            
 REPRESENTATIVE FINKELSTEIN explained Amendment 22 incorporated                
 provisions from the charitable gaming bill recently passed in the             
 House of Representatives, excluding the raffle provision.                     
 REPRESENTATIVE FINKELSTEIN explained Amendment 23 allowed out-of-             
 state contributions of up to $2,000 for a House race, $3,000 for a            
 Senate race, and $20,000 for a statewide race.                                
 REPRESENTATIVE FINKELSTEIN explained Amendment 24 increased the               
 maximum contribution limit from a party to a candidate to $10,000             
 for a House race, and $15,000 for a Senate race.                              
 Number 2390                                                                   
 REPRESENTATIVE PORTER asked if Amendment 23 included individual               
 REPRESENTATIVE FINKELSTEIN replied Amendment 23 allowed                       
 contributions from individuals from out-of-state.                             
 CHAIR JAMES explained it was the cumulative amount.                           
 REPRESENTATIVE FINKELSTEIN moving forward explained Amendment 25              
 increased the contribution amount from a group to a candidate from            
 "$500" to "$1,000."  A return to current law.                                 
 REPRESENTATIVE FINKELSTEIN explained Amendment 26 set the maximum             
 contribution limit at $1,000 from a group to another group.  This             
 was not allowed under the initiative.                                         
 REPRESENTATIVE FINKELSTEIN explained Amendment 27 allowed the                 
 governor and lieutenant governor to raise money during the                    
 legislative session immediately prior to an election.                         
 REPRESENTATIVE FINKELSTEIN explained Amendment 28 included a delay            
 of 60 days before going to court for a citizen suit after a                   
 complaint was filed with APOC.  This was to eliminate last minute             
 TAPE 96-29, SIDE B                                                            
 Number 0000                                                                   
 REPRESENTATIVE FINKELSTEIN explained Amendment 29 expanded the                
 exemption for small campaigns to apply to municipal races.  The               
 approach was expanded to $2,500 for both contributions and                    
 expenditures in an attempt to reduce paperwork.                               
 REPRESENTATIVE FINKELSTEIN explained Amendment 30 attempted to                
 reduce the conflicts if the bill and the initiative were both                 
 passed.  This, was only an issue, however, if they were                       
 substantially different.                                                      
 Number 0093                                                                   
 CHAIR JAMES said HB 368 and HB 317 were scheduled again for                   
 Saturday, March 9, 1996.  She asked what was the will of the                  
 committee members.  She commented the next committee of referral              
 was the House Judiciary Committee.                                            
 Number 0116                                                                   
 REPRESENTATIVE PORTER asked what was the progress of SB 191?  He              
 stated he was concerned about the time remaining, and suggested a             
 push for Saturday.                                                            
 CHAIR JAMES asked the committee members to study the committee                
 substitute carefully before the next hearing.                                 
 Number 0143                                                                   
 REPRESENTATIVE PORTER asked what the limits were for individuals              
 and groups?  He said a group was defined as a political action                
 committee (PAC).  He commented only individuals could give to PACs            
 and only individuals and PACs could give to parties.  He asked                
 again what were the limitations on giving to a party?                         
 REPRESENTATIVE FINKELSTEIN replied, the contribution limits were              
 $5,000 from an individual and $1,000 from a group.  Under the                 
 initiative, however, it was $5,000 from an individual and $0 from             
 anybody else.                                                                 
 REPRESENTATIVE PORTER said an individual could give $5,000 to a               
 party.  He further asked how much an individual could give to a               
 REPRESENTATIVE FINKELSTEIN replied $250.                                      
 REPRESENTATIVE PORTER said a PAC could give $1,000 to a party.                
 REPRESENTATIVE FINKELSTEIN replied a PAC could give $1,000 to a               
 candidate.  He said he did not like the word "PAC" because it had             
 a federal definition that was not being followed.  For this reason            
 he preferred the word "group" instead.                                        
 REPRESENTATIVE PORTER said the public understood the word "PAC"               
 better than the word "group."  A group could be viewed as the local           
 Parent Teacher Association (PTA).                                             
 Number 0235                                                                   
 REPRESENTATIVE FINKELSTEIN said it was a loaded word and was viewed           
 Number 0255                                                                   
 CHAIR JAMES replied she did not like them as PACs or as groups, but           
 understood the Supreme Court decision that allowed them.                      
 REPRESENTATIVE FINKELSTEIN said it was a technicality.                        
 Number 0258                                                                   
 REPRESENTATIVE ROBINSON suggested a comparison of the provisions              
 for the next hearing of the current law, the initiative, and the              
 committee substitute.                                                         
 REPRESENTATIVE FINKELSTEIN said he could provide that for the next            
 hearing on Saturday, March 9, 1996.                                           
 Number 0285                                                                   
 REPRESENTATIVE OGAN asked if the committee substitute had been                
 adopted for consideration.                                                    
 CHAIR JAMES replied, "no."  She said it would be adopted on                   
 Saturday when there was a full committee present.                             
 Number 0292                                                                   
 CHAIR JAMES adjourned the House State Affairs Committee meeting at            
 10:45 a.m.                                                                    

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