Legislature(2005 - 2006)SENATE FINANCE 532

01/19/2006 09:00 AM Senate FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
Moved CSSB 55(FIN) Out of Committee
Bills Previously Heard/Scheduled
                     SENATE FINANCE COMMITTEE                                                                                 
                         January 19, 2006                                                                                     
                             9:06 a.m.                                                                                        
CALL TO ORDER                                                                                                               
Co-Chair Lyda  Green convened the  meeting at approximately  9:06:08                                                          
Senator Lyda Green, Co-Chair                                                                                                    
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Con Bunde, Vice Chair                                                                                                   
Senator Fred Dyson                                                                                                              
Senator Bert Stedman                                                                                                            
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Also Attending:  SENATOR  TOM WAGONER; DICK MYLIUS, Acting Director,                                                          
Division  of   Mining,  Land  and   Water,  Department  of   Natural                                                            
Resources;  JASON HOOLEY,  Staff to Senator  Dyson; ANNE  CARPENETI,                                                            
Assistant Attorney General,  Legal Services Section-Juneau, Criminal                                                            
Division, Department  of Law; BRYAN BUTCHER, Director,  Governmental                                                            
Affairs and Public Relations, Alaska Housing Finance Corporation                                                                
Attending  via  Teleconference:    From  an  offnet  location:  DAVE                                                          
PARKER, Detective  Sergeant, Crimes Against Children  Unit, formerly                                                            
in charge of the  Sexual Assault Unit, Anchorage Police  Department;                                                            
DAN  FAUSKE,  Chief Executive  Officer/Executive   Director,  Alaska                                                            
Housing Finance Corporation                                                                                                     
SUMMARY INFORMATION                                                                                                         
SB  55-AGRICULTURAL LAND                                                                                                        
The Committee  heard from the sponsor and the Department  of Natural                                                            
Resources. The bill was reported from Committee.                                                                                
SB  54-PROTECTIVE ORDERS FOR SEXUAL ASSAULT                                                                                     
The Committee  heard from  the sponsor, the  Department of  Law, and                                                            
the Anchorage Police Department.  A committee substitute was adopted                                                            
and amended. The bill was held in Committee.                                                                                    
HB 283-AK HOUSING FINANCE CORP BOARD COMP.                                                                                      
The Committee  heard from  the Alaska Housing  Finance Corporation.                                                             
The bill was held in Committee.                                                                                                 
[Note:  Computer  malfunction  occurred  and  subsequently  no  time                                                            
stamps exist for  the first portion of the meeting.  Audio recording                                                            
is available  by clicking on the timestamp  located under  the "Call                                                            
to Order" heading.]                                                                                                             
     SENATE BILL NO. 55                                                                                                         
     "An Act instructing the commissioner of natural resources to                                                               
     issue a patent for the remaining interest in certain state                                                                 
     land to the owner of the agricultural rights to that land."                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
SENATOR  TOM  WAGONER,  sponsor  of the  bill,  testified  that  the                                                            
Department  of  Natural  Resources  was  available  to  address  the                                                            
question raised at the  previous hearing regarding mineral rights on                                                            
the property intended for transfer.                                                                                             
DICK MYLIUS,  Acting Director, Division  of Mining, Land  and Water,                                                            
Department  of Natural  Resources,  noted  that the  Division  would                                                            
administer  the land transfer if this  bill passes. He assured  that                                                            
the State  would retain  subsurface rights.  The bill specifies  the                                                            
sale  would  be  a  "land  estate",  which  is differentiated   from                                                            
"mineral estate". Land  estate specifies the rights "from the ground                                                            
up" and mineral estate  involves the rights of oil and gas and other                                                            
resources  located  below the  surface.  In addition,  AS  38.05.125                                                            
provides  that in "each  contract for  the sale,  lease or grant  to                                                            
State land" the State would retain mineral rights.                                                                              
Mr. Mylius explained this  statute is derived from the Statehood Act                                                            
provision  in  which  the  federal  government  required  that  land                                                            
transferred  from federal  to State  ownership  must remain  mineral                                                            
estate. This is enshrined  in the Alaska Constitution. Therefore, in                                                            
any public sale, the State retains mineral rights.                                                                              
Senator Stedman  understood that mineral rights are  retained by the                                                            
State on  all lands acquired  since the Statehood  Act. He  asked if                                                            
patented  lands from  the time Alaska  was purchased  by the  United                                                            
States   from  Russia   through   territorial   days  were   treated                                                            
Mr. Mylius replied  that the Alaska Constitution imposes  provisions                                                            
applying  to  pre-statehood   land  grants.  The  practices  of  the                                                            
University of  Alaska land trust and the Alaska Mental  Health Trust                                                            
Authority  land  trust  have  never  included  disposal  of  mineral                                                            
estate.  He was  unsure if  the "absolute  prohibition"  applies  to                                                            
these entities.                                                                                                                 
Senator Stedman asked about  property that was patented between 1867                                                            
and statehood.                                                                                                                  
Mr.  Mylius answered  that  in  many cases  the  federal  government                                                            
granted mineral estate  on these properties. Whether the homesteader                                                            
acquired the mineral  rights was a site-specific determination.  The                                                            
federal government  is not restricted from granting  mineral rights.                                                            
Mr. Mylius also  told of federal mining laws providing  that patents                                                            
could be secured for mining claims on federal lands.                                                                            
Co-Chair  Wilken  offered a  motion to  adopt  CS SB  55 (FIN),  24-                                                            
LS0287\F, as a working document.                                                                                                
Without objection the committee  substitute, Version "F" was ADOPTED                                                            
as a working document.                                                                                                          
Co-Chair  Green   recalled  discussion   at  the  previous   hearing                                                            
regarding  the  fiscal  note  and  whether   the  amount  should  be                                                            
indeterminate  rather than  zero. A revised  fiscal note  reflecting                                                            
this change was submitted.                                                                                                      
Co-Chair  Wilken offered  a motion  to report  CS SB  55 (FIN),  24-                                                            
LS0287\F  from Committee  with  individual recommendations  and  new                                                            
fiscal note.                                                                                                                    
There was no objection  and CS SB 55 (FIN) was MOVED  from Committee                                                            
with a new fiscal note  dated 1/17/06 from the Department of Natural                                                            
Resources in an indeterminate amount.                                                                                           
     CS FOR SENATE BILL NO. 54(JUD)                                                                                             
     "An  Act relating  to protective  orders  for crimes  involving                                                            
     sexual  assault or  stalking,  to notifications  to victims  of                                                            
     sexual  assault, and to mandatory  arrest for crimes  involving                                                            
     violation  of protective orders and violation  of conditions of                                                            
     release;   and  amending  Rule   65,  Alaska  Rules   of  Civil                                                            
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
[Note: A motion  to adopt CS SB 54 (FIN), 24-LS0132\U,  as a working                                                            
document, was made by Senator  Dyson at the previous hearing on this                                                            
bill. No action was taken and the motion was still active.]                                                                     
Senator  Dyson, sponsor  of the bill,  removed his  motion to  adopt                                                            
Version "U"  as a working document.  No further action was  required                                                            
to remove the motion.                                                                                                           
Senator Dyson moved for  adoption of CS SB 54 (FIN), 24-LS1032\N, as                                                            
a working document.                                                                                                             
Without  objection,  the  committee   substitute  Version  "N",  was                                                            
ADOPTED as a working document.                                                                                                  
Senator Dyson  testified to the bill. He had been  approached by the                                                            
Anchorage  Police Department  to participate  on  a team to  address                                                            
sexual  assault  issues.  He  learned  that  some  judges  were  not                                                            
allowing  victims of sexual  assault to obtain  a restraining  order                                                            
against the suspected  perpetrator during the criminal  proceedings.                                                            
These judges  have ruled  in this manner  because sexual assault  is                                                            
not listed  among the crimes in which  a restraining order  could be                                                            
authorized; only stalking and domestic violence are specified.                                                                  
Senator  Dyson remarked  that this  legislation  would clarify  that                                                            
judges do have  authority to issue a restraining order  in instances                                                            
involving sexual assault.                                                                                                       
Senator  Dyson  reported  that this  bill  has  undergone  extensive                                                            
review and rewrites since its introduction.                                                                                     
DAVE  PARKER,  Detective Sergeant,  Crimes  Against  Children  Unit,                                                            
formerly  in charge  of the Sexual  Assault  Unit, Anchorage  Police                                                            
Department,  testified via teleconference  from an offnet  location,                                                            
about  the difficulty  in  obtaining  restraining orders  in  sexual                                                            
assault  cases.  Currently,  statute   provides  no  positive  legal                                                            
guidance  to judges  and magistrates  to grant these  orders  in the                                                            
absence of stalking or domestic violence.                                                                                       
Mr. Parker  stated  that this  legislation would  "afford  immediate                                                            
protection"  to  the victim  of  a  sexual assault  to  prevent  the                                                            
necessitation  that  they  become  a victim  of  stalking  before  a                                                            
restraining  order  could be  attained. It  would  provide the  same                                                            
degree  of protection  to victims  of sexual assault  as victims  of                                                            
domestic violence or stalking.                                                                                                  
Mr. Parker remarked  this legislation is particularly  important for                                                            
law enforcement  throughout  the investigative  phase  and prior  to                                                            
charges being filed. During  this time, the victim has no true legal                                                            
protection.  With the passage of this  bill, victims could  obtain a                                                            
restraining order and receive police protection.                                                                                
Senator  Dyson  asked if  during  the investigation  phase,  in  the                                                            
witness'  experience,  the  alleged perpetrator  could  contact  the                                                            
victim  in an  attempt  to intimidate  or  otherwise  influence  the                                                            
victim to change testimony.                                                                                                     
Mr.  Parker affirmed  this  is a common  occurrence.  Sometimes  the                                                            
alleged perpetrator  is aware that  an investigation is proceeding.                                                             
In  any event,  the  police  must  guard against  the  victim  being                                                            
intimidated  into changing  his  or her  story. Authorization  of  a                                                            
restraining  order  would  assist   in preventing   this.  In  other                                                            
instances,  the  alleged  sexual  assault   offender  has  seriously                                                            
threatened or inflicted violence upon the victim.                                                                               
Senator Dyson asked if  similar attempts are made in cases involving                                                            
a child victim  and who would request a restraining  order on behalf                                                            
of the child in these situations.                                                                                               
Mr. Parker  responded  that if  a child  is the victim  of a  sexual                                                            
assault,  law   enforcement  could   assist  the  parent   or  Child                                                            
Protective  Services in obtaining  the restraining  order.  In these                                                            
cases, the  Anchorage Police Department  (APD) works in conjunction                                                             
with the Office of Children's  Services to take custody of the child                                                            
if deemed  necessary  for the protection  of  the child.  Sufficient                                                            
protections are  therefore available for child victims  that are not                                                            
provided for adult victims of sexual assault.                                                                                   
Senator Stedman asked if  charges of sexual assault are misdemeanors                                                            
or felonies.  He also asked the current  discretion given  to judges                                                            
to bar an alleged felony perpetrator from contacting the victim.                                                                
Mr. Parker replied that  most sexual assault offenses are classified                                                            
as felonies.                                                                                                                    
Mr. Parker continued  that the judge could establish  as a condition                                                            
of bail, an order  that the defendant could not contact  the victim.                                                            
This order  could be enforced. However,  this would occur  after the                                                            
alleged  perpetrator  is  charged   with  the  crime.  In  addition,                                                            
"officers  on the street"  do not  have access  to bail conditions,                                                             
whereas  restraining  orders  and  domestic  violence  and  stalking                                                            
orders  are  readily  available.   The concern   addressed  in  this                                                            
legislation  is the period between  the sexual assault incident  and                                                            
when the suspect is charged. This could be weeks or months.                                                                     
Senator  Stedman  recalled  that  the  legislature   "tightened  up"                                                            
provisions  relating to restraining  orders several years  prior, an                                                            
action he supported. However,  he has since been contacted regarding                                                            
abuse  of that  system. He  exampled divorce  and  custody cases  in                                                            
which an ensuing "race  to the judge" occurs to obtain a restraining                                                            
order  in an attempt  to  gain leverage  in the  proceedings.  These                                                            
unintended  consequences should  be addressed.  He wanted  assurance                                                            
that this legislation could  not further allow for these activities.                                                            
Senator  Dyson  shared  this concern.  However,  sexual  assault  is                                                            
primarily "stranger  assault" and  not committed by family  members.                                                            
The  Division  of  Legal and  Research  Services  pointed  out  that                                                            
restraining  orders  are  included  in civil  code,  whereas  sexual                                                            
assault crimes  are addressed under criminal code  and are therefore                                                            
not  related.  The   intent  of  this  legislation   is  to  provide                                                            
protection  for victims from  the time in  which the crime  occurred                                                            
until charges are filed against the alleged perpetrator.                                                                        
Senator Dyson  relayed that most of the instances  involving alleged                                                            
misuse of restraining  orders are attempts to "tilt"  the custody or                                                            
property dissolution in  a marriage or business relationship. In the                                                            
case of  sexual assault,  custody and property  settlements  are not                                                            
involved and thus no benefit  would be achieved from the issuance of                                                            
a  restraining  order.  As  a  further  prevention  of  abuse,  this                                                            
legislation stipulates  that a victim must declare  to the judge any                                                            
pending  legal actions.  The judge  would then be  able to  consider                                                            
whether a restraining order  could be an attempt to gain leverage in                                                            
those proceedings.                                                                                                              
Mr. Parker agreed  Senator Stedman's point is valid,  informing that                                                            
he has  witnessed  such attempts.  Stalking and  sexual assault  are                                                            
usually  crimes against  unrelated people  and no  benefit would  be                                                            
gotten  from filing  a "false  order".  Magistrates  have been  more                                                            
willing  to  modify   domestic  violence  restraining   orders  when                                                            
approached  by the  other party.  The APD therefore  encourages  the                                                            
party to  whom the order  was issued to present  his or her  case to                                                            
the  court.  Modifications   have  been  made  immediately  in  some                                                            
Senator  Stedman  noted that  in  child custody  cases,  charges  of                                                            
sexual assault  against the  child are sometimes  made as a  "gaming                                                            
mechanism".  He was therefore  cautious with  regard to restraining                                                             
Mr. Parker  reiterated that  this bill  includes safeguards  against                                                            
abuse of restraining  orders in cases of sexual assault.  The Office                                                            
of Children's  Services is involved  in addressing crimes  committed                                                            
against children.  He stated that  several cases occur annually,  in                                                            
which a  party levies false  accusations of  sexual abuse against  a                                                            
child in  anticipation that  the party  would automatically  receive                                                            
custody of  the child in  question. Investigations  of child  sexual                                                            
abuse are handled carefully  with this possibility in mind. However,                                                            
these  instances   are   usually  included   in  domestic   violence                                                            
situations rather than sexual assault.                                                                                          
Senator Dyson added that  during the drafting process for this bill,                                                            
the provision  allowing for issuance of restraining  orders in cases                                                            
of  sexual  assault  was  originally  included   in  the  provisions                                                            
relating to domestic  violence. The language was amended  to include                                                            
the  sexual   assault  provision   with   the  stalking   provisions                                                            
specifically  to avoid  abuse of  the restraining  order process  to                                                            
accomplish other goals.                                                                                                         
Senator  Olson  asked  what  changes  were  made  in  the  committee                                                            
substitute Version "N" from earlier versions.                                                                                   
JASON HOOLEY,  Staff to Senator Dyson,  testified that Section  5 of                                                            
Version  "N" deleted  a remedy  that  "requires the  respondents  to                                                            
reimburse the petitioner for counseling and medical expenses".                                                                  
Senator Olson  asked the reason for  the removal of this  provision.                                                            
Senator  Dyson  replied   that  the  requirement  for   the  alleged                                                            
perpetrator  to  provide these  services  to  the victim  should  be                                                            
determined after the case  is adjudicated and the defendant has been                                                            
found guilty.                                                                                                                   
Senator Olson noted that the remedy was provided as an option.                                                                  
Senator Dyson  answered that  the language  provides the judge  with                                                            
the discretion  to award  reimbursement for  counseling and  medical                                                            
ANNE CARPENETI, Assistant  Attorney General, Legal Services Section-                                                            
Juneau,  Criminal  Division,  Department  of  Law,  testified  to  a                                                            
question posed at the last  hearing held on this bill on May 7, 2005                                                            
asking  whether  the  Central  Registry  of  Protective  Orders  was                                                            
available  for  any use  beyond  that  of peace  officers  making  a                                                            
determination  for arrest. She had since verified  that the registry                                                            
is private and access is restricted to the aforementioned use.                                                                  
Ms. Carpeneti stated that  the Department supports this legislation.                                                            
Ms. Carpeneti  proposed  an amendment  to the title  of the  bill to                                                            
include reference  to sexual  abuse in addition  to sexual  assault.                                                            
The provisions of this  legislation cover sexual abuse victims where                                                            
a protective order is appropriate,  although the bill title does not                                                            
reflect  this.  Such  clarification  would  strengthen  the  State's                                                            
position in the event the law was later challenged in court.                                                                    
Co-Chair Green asked if the bill title is this important.                                                                       
Ms. Carpeneti  affirmed  and told of  a brief  she was preparing  in                                                            
which the Department was  attempting to determine legislative intent                                                            
for legislation  adopted  in the  1980s. She  stressed, "Everything                                                             
Co-Chair  Green  asked what  language  of  the bill  specifies  that                                                            
sexual abuse is included in the provisions.                                                                                     
Ms. Carpeneti  cited  Section 10  on page  5, lines  3 and 4,  which                                                            
inserts a new paragraph to AS 18.65.870 to read as follows.                                                                     
                (4) "sexual assault" has the meaning given in AS                                                                
Ms.  Carpeneti explained  this  provides a  cross  reference to  the                                                            
statute that defines sexual assault as including sexual abuse.                                                                  
Ms. Carpeneti  assured Senator Stedman  that this legislation  would                                                            
not apply to cases  in which individuals were fighting  over custody                                                            
of children. This legislation  would apply to individuals not of the                                                            
same household,  with no children  in common and are not  married to                                                            
each other.                                                                                                                     
Senator  Olson referenced  notations  he  made during  the  previous                                                            
hearing  on  this  bill in  which  he  reported  that  the  language                                                            
pertaining to reimbursement  for counseling and medical expenses was                                                            
included to allow this remedy.                                                                                                  
Ms. Carpeneti  responded that the current language  of Section 5 (4)                                                            
is a "catch all section"  that would allow courts to order relief in                                                            
a particular situation  if deemed appropriate. She expressed general                                                            
concern that  a suspect could  be required  to pay compensation  for                                                            
actions in which no charges were filed.                                                                                         
Senator Dyson  appreciated the assistance  of Ms. Carpeneti  in this                                                            
and other matters  relating to addressing crimes of  sexual assault.                                                            
Co-Chair  Green called  on  Anna Fairclough  to give  testimony  via                                                            
teleconference   from  Anchorage.   It  was   determined  that   Ms.                                                            
Fairclough was unavailable.                                                                                                     
Co-Chair Green asked if the sponsor had updated the sectional                                                                   
analysis for this bill to reflect the changes made in the committee                                                             
substitute Version "N".                                                                                                         
Mr. Hooley reported he was in the process of doing so.                                                                          
[Note: Timestamps available and operable for the remainder of the                                                               
AT EASE until 9:47:54 AM                                                                                                      
9:48:35 AM                                                                                                                    
Co-Chair Green requested the sponsor provide an updated sectional                                                               
analysis directed to the committee substitute.                                                                                  
9:48:58 AM                                                                                                                    
Amendment #1: This amendment inserts "sexual abuse" in the title of                                                             
the committee substitute on page 1, line 2 following "sexual                                                                    
assault". The amended language reads as follows.                                                                                
     An Act amending protective  order statutes for crimes involving                                                            
     stalking to include  crimes involving sexual assault and sexual                                                            
     abuse,  to provide for  other relief order  by a court,  to add                                                            
     the protective  orders to a centralized agency,  and to require                                                            
     notification  of the court of  known civil or criminal  actions                                                            
     involving   the   petitioner   or   respondent;   relating   to                                                            
     notifications  to victims  of sexual  assault and to  mandatory                                                            
     arrest for crimes  involving violation of protective orders and                                                            
     violation  of  conditions  of  release;  and amended  Rule  65,                                                            
     Alaska Rules of Civil Procedure.                                                                                           
Senator Dyson moved for adoption.                                                                                               
The amendment was ADOPTED without objection.                                                                                    
9:49:50 AM                                                                                                                    
Co-Chair Green ordered the bill HELD in Committee.                                                                              
9:49:52 AM                                                                                                                    
     CS FOR HOUSE BILL NO. 283(STA)                                                                                             
     "An Act relating  to the compensation for board  members of the                                                            
     Alaska  Housing  Finance  Corporation;  and  providing  for  an                                                            
     effective date."                                                                                                           
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
BRYAN BUTCHER, Director,  Governmental Affairs and Public Relations,                                                            
Alaska Housing  Finance Corporation, read testimony  into the record                                                            
as follows.                                                                                                                     
     House Bill 283 simply  would increase board member compensation                                                            
     for board  meetings from $100 to $400 for the  board members of                                                            
     the Alaska Housing  Finance Corporation. Our board of directors                                                            
     is required  to review  and consider topics  having to  do with                                                            
     bonding,  the mortgage industry, public housing  and many other                                                            
     technical issues.                                                                                                          
     In any given  year, the board is asked to consider  and approve                                                            
     anywhere  from $600 million to $1 billion in  bond programs and                                                            
     millions  of dollars in tax credit and other  federal programs.                                                            
     The workload is such  that the board members must spend a great                                                            
     deal of their  personal time studying and educating  themselves                                                            
     about corporate activities.                                                                                                
     HB 283 increasing  the compensation to $400 would be increasing                                                            
     it  to the  same level  of  other boards,  such  as the  Alaska                                                            
     Railroad    [Corporation],   the   [Alaska]   Permanent    Fund                                                            
     [Corporation], and the Retirement Management Board.                                                                        
     The compensation  would only  apply to the four public  members                                                            
     of the  board who are Frank Roppel  of Wrangell, Bert  Sharp of                                                            
     Fairbanks,  Clay Porter  of Anchorage  and Marty Shuravloff  of                                                            
     We estimate  it would cost approximately  $20,000 in  Corporate                                                            
     receipts a year to make this change.                                                                                       
9:51:45 AM                                                                                                                    
DAN  FAUSKE,  Chief Executive  Officer/Executive   Director,  Alaska                                                            
Housing Finance  Corporation, testified  via teleconference  from an                                                            
offnet location  that the board activities  have expanded  since the                                                            
honoraria was  last increased in 1971.  The proposed increase  would                                                            
serve as a positive  compensation for board members'  time away from                                                            
other activities.                                                                                                               
9:52:26 AM                                                                                                                    
Co-Chair  Wilken characterized  this  legislation  as a "subjective                                                             
call". He referenced  an interoffice  memorandum from the  Office of                                                            
the Governor dated February  9, 2005 [copy on file], which lists the                                                            
honoraria  paid to members  of other boards  overseen by the  State.                                                            
Before he could  support an increase for the Alaska  Housing Finance                                                            
Corporation  (AHFC)  board  members,  he  needed  information  about                                                            
qualification  and duties  of members,  as well  as how the  members                                                            
were selected.  He was unsure if the  amount should be increased  to                                                            
$400 regardless.  If this  legislation passed,  he anticipated  that                                                            
all of the other  boards would request increases for  their members.                                                            
9:53:39 AM                                                                                                                    
Mr. Butcher  responded that  the governor  appoints the four  public                                                            
board members. Frank Roppel  had chaired the AHFC board of directors                                                            
during  the 1970s  and 1980s. Bert  Sharp had  "extensive  dealings"                                                            
with the  Corporation during  his tenure in  the Senate and  seat on                                                            
the Senate  Finance Committee. Marty  Shuravloff is the head  of the                                                            
Kodiak Regional  Housing Authority. Clay Porter is  an architect who                                                            
has  been involved  in  the housing  industry  for "many  years"  in                                                            
Southcentral  Alaska and  serves on  the board of  the Cold  Climate                                                            
Research Center in Fairbanks.                                                                                                   
9:54:33 AM                                                                                                                    
Mr. Fauske  furthered that the areas  of expertise of board  members                                                            
are  specified in  statute.  The expertise  of  one  member must  be                                                            
"rural", one seat  is designated for an expert in  health and social                                                            
services,  one seat  is  designated  for a  finance  expert and  one                                                            
member must have energy  expertise. Names of potential board members                                                            
are  submitted   to  the   governor  for   appointment  along   with                                                            
recommendations  based   on the  candidates'   qualification  for  a                                                            
particular seat.                                                                                                                
9:55:14 AM                                                                                                                    
Senator Stedman agreed  with Co-Chair Wilken that this matter should                                                            
be  further  reviewed to  determine  if  the  impact could  be  more                                                            
9:55:38 AM                                                                                                                    
Senator  Olson also  agreed.  He qualified  that  the  issue is  not                                                            
whether these  board members are deserving  of higher compensation.                                                             
Rather the  concern is that this could  "snowball" and other  boards                                                            
could  deem   increased  compensation   for  their  members   as  an                                                            
achievable goal.                                                                                                                
9:56:12 AM                                                                                                                    
Mr.  Fauske told  of  former AHFC  board  member, Mike  Cook,  whose                                                            
activities with the board  "cost him a great deal personally because                                                            
it  kept  him away  from  his  business."  Mr. Cook  held  the  seat                                                            
designated  for a finance expert and  spent numerous hours  ensuring                                                            
that federal regulations were complied with.                                                                                    
Mr. Fauske pointed out  that this Corporation has "delivered back to                                                            
the State" almost  $1.4 billion in returns over the  past ten years.                                                            
The  efforts  required   of  board  members  and  subsequent   funds                                                            
generated  for the  State should  be compensated  in  an ability  to                                                            
attract competent members.                                                                                                      
9:57:14 AM                                                                                                                    
Senator Olson  asked how difficult  it is to recruit board  members.                                                            
9:57:23 AM                                                                                                                    
Mr.  Fauske spoke  of conflicts  potential  board  members, such  as                                                            
bankers,  homebuilders   and  others,   have  in  wanting   business                                                            
relations  with AHFC.  Service  on the  board takes  time away  from                                                            
members' other  activities. Members  are also prohibited  from doing                                                            
business with the Corporation.                                                                                                  
9:58:37 AM                                                                                                                    
Senator Olson  asked if the proposed  $400 honoraria would  increase                                                            
the number  of qualified applicants  willing to serve on  the board.                                                            
9:58:54 AM                                                                                                                    
Mr. Fauske replied  that this would not necessarily  occur. It could                                                            
influence a potential member's  decision when considering the amount                                                            
of  time   involved   in  holding   the  position.   The   increased                                                            
compensation would be "very helpful" to the Corporation.                                                                        
9:59:17 AM                                                                                                                    
Co-Chair   Wilken  reiterated   that   the  proposed   increase   is                                                            
subjective.  He requested a written  description of the four  public                                                            
seats,  the required  qualifications,  and  the backgrounds  of  the                                                            
current  members,  their  other  employment  or  whether  they  were                                                            
10:00:03 AM                                                                                                                   
Co-Chair Wilken  reminded that the  legislature increased  honoraria                                                            
for the  Alaska Retirement  Management Board  the previous  hear, an                                                            
action he supported. However,  he cautioned that if this legislation                                                            
passed,  the   legislature  must   be  prepared  for  requests   for                                                            
additional compensation increases.                                                                                              
Co-Chair  Wilken  stressed  his  concerns  did not  pertain  to  the                                                            
expertise and public service of board member Bert Sharp.                                                                        
10:00:56 AM                                                                                                                   
Co-Chair Green  stated that information  regarding the functions  of                                                            
other  boards and  the amount of  investment  capital handled  would                                                            
assist  in this  decision.  Some  boards  operate more  as  decision                                                            
makers than investors.                                                                                                          
10:01:20 AM                                                                                                                   
Mr. Butcher would provide the requested information.                                                                            
10:01:32 AM                                                                                                                   
Co-Chair Wilken suggested  that the honoraria rate of all the boards                                                            
could be reviewed  simultaneously. A determination  could be made to                                                            
increase the compensation  for all members to an amount  of $250. He                                                            
admitted that those requesting  an increase to $400 would likely not                                                            
be satisfied.                                                                                                                   
10:02:03 AM                                                                                                                   
Co-Chair Green ordered the bill HELD in Committee.                                                                              
Co-Chair Lyda Green adjourned the meeting at 10:02:31 AM                                                                      

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