Legislature(2005 - 2006)SENATE FINANCE 532

04/28/2006 09:00 AM Senate FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 3:00 pm --
Moved CSSJR 20(FIN) Out of Committee
Moved CSSB 272(L&C) Out of Committee
Moved SB 309 Out of Committee
Moved SB 317 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    SENATE FINANCE COMMITTEE                                                                                  
                         April 28, 2006                                                                                       
                           9:13 a.m.                                                                                          
CALL TO ORDER                                                                                                               
Co-Chair  Lyda  Green  convened   the  meeting  at  approximately                                                               
9:13:55 AM.                                                                                                                   
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 RALPH  SEEKINS;  AMY  STEITZ, Staff  to                                                             
Senator Tom  Wagoner; SCOTT NORDSTRAND,  Commissioner, Department                                                               
of  Administration; GREG  O'CLARAY,  Commissioner, Department  of                                                               
Labor  and Workforce  Development;  TOM MAHER,  Staff to  Senator                                                               
Therriault;  MIKE  ANDREWS,  Director, Alaska  Works  Partnership                                                               
Inc.;   JOHN   BITNEY,   Lobbyist,  Alaska   State   Homebuilders                                                               
[NOTE:  Public testimony  on SJR  20 was  presented in  the order                                                               
depicted  in   the  minutes.  In  addition,   all  testimony  was                                                               
presented in Juneau unless otherwise noted.]                                                                                    
Attending  via   Teleconference:  From  Anchorage:   MARK  DAVIS,                                                             
Director,  Division  of  Banking   &  Securities,  Department  of                                                               
Commerce,  Community  and  Economic  Development;  ROGER  PRINCE,                                                               
Department of  Commerce, Community and Economic  Development; JOE                                                               
BRAMMER,  Alaska Association  of Mortgage  Brokers; JOHN  MARTIN;                                                               
KEN  GAIN, Secretary/Treasurer,  Independent  Lenders of  Alaska;                                                               
JOHN   CARMAN,   Past    President,   Alaska   Mortgage   Bankers                                                               
Association;  MIKE  SAMSON,   President,  Samson  Electric;  BILL                                                               
WATTERSON,  President, Watterson  Construction; JULIE  AUNE, Vice                                                               
President,  AAA  Fence;   REBECCA  LOGAN,  President,  Associated                                                               
Building and  Contractors (ABC) of  Alaska; from  Fairbanks: DOUG                                                               
ISAACSON,   Past  President,   Alaska  Association   of  Mortgage                                                               
Brokers,   President,  Gold   Coast  Mortgage;   JAY  QUAKENBUSH,                                                               
President, Building and Construction  Trades; JIM LAITI, Business                                                               
Manager,  Pipefitters  Local  375;  CLICK  BISHOP;  MIKE  SEXTON,                                                               
Executive  Director, Mechanical  Contractors of  Fairbanks; WENDY                                                               
REDMAN,  University  of Alaska;  from  an  offnet location:  GREG                                                               
WILLIAMS,   Regional  Director   of  State   Government  Affairs,                                                               
American  Financial  Services  Association (AFSA);  LAURIE  HOLT,                                                               
Officer  of  Residential  Lending,  Mortgage  Operations,  Alaska                                                               
Housing  Finance  Corporation   (AHFC),  Department  of  Revenue;                                                               
RICHARD   CATTANACH,  Executive   Director,  Associated   General                                                               
Contractors;   DAN   FAUSKE,    CEO,   Alaska   Housing   Finance                                                               
SUMMARY INFORMATION                                                                                                         
SJR 20-CONST. AM: BENEFITS & MARRIAGE                                                                                           
The Committee heard from the  bill's sponsor, adopted a committee                                                               
substitute,  and took  public testimony.  The bill  reported from                                                               
SB 272-MORTGAGE LENDING                                                                                                         
The Committee  heard from the  bill's sponsor, the  Department of                                                               
Commerce, Community and Economic  Development, the Alaska Housing                                                               
Finance  Corporation, and  industry representatives.  A committee                                                               
substitute  and two  amendments  were adopted  and  the bill  was                                                               
reported from Committee.                                                                                                        
SB 309-CONSTR. TRAINING GRANT; UNEMPLOYMENT COMP.                                                                               
The Committee  heard from the  bill's sponsor, the  Department of                                                               
Labor  and Workforce  Development, and  industry representatives.                                                               
The bill was reported from Committee.                                                                                           
SB 317-ANCHORAGE PARKING GARAGE                                                                                                 
The  Committee heard  from the  Department of  Administration and                                                               
the bill was reported from Committee.                                                                                           
     SENATE JOINT RESOLUTION NO. 20                                                                                             
     Proposing an amendment to the section of the Constitution                                                                  
     of the State of Alaska relating to marriage.                                                                               
This was the  second hearing for this bill in  the Senate Finance                                                               
Co-Chair Green moved to adopt  CS SJR, 20 24-LS1676\G as amended,                                                               
as  the  working  document, and  then  objected  for  explanation                                                               
SENATOR RALPH  SEEKINS, Chair,  Senate Judiciary  Committee which                                                               
sponsored  the bill,  noted that  the committee  substitute would                                                               
add the following  language to the "Marriage  Amendment", Art. 1,                                                               
Section  25,   of  the  State's  Constitution,   which  specifies                                                               
marriage as a union solely between one man and one woman.                                                                       
     …No  other union  is similarly  situated to  a marriage.  No                                                               
     provision  of  this  constitution   shall  be  construed  to                                                               
     require that marriage or the  legal incidents of marriage be                                                               
     conferred  on a  union other  than the  union of  a man  and                                                               
Senator Seekins  disclosed that the  proposed language  was based                                                               
on language  in Senate Joint  Resolution 1 (SJR 1)  as introduced                                                               
in the United States Senate.                                                                                                    
9:16:10 AM                                                                                                                    
Senator Seekins continued that the  adoption of Version "G" would                                                               
align  the   State  with   the  policy   included  in   the  U.S.                                                               
Constitution,   which   would   allow   "reciprocal   beneficiary                                                               
contracts to  exist". Such a  policy currently exists  within the                                                               
University of Alaska system, where  policy specifies that couples                                                               
in  a  "mutual  beneficiary   relationship"  who  meet  specified                                                               
criteria could qualify for  insurance benefits. Approximately 113                                                               
couples are qualified under the University's program.                                                                           
Senator  Seekins   further  noted   the  bill  would   allow  the                                                               
University to  expand its definition  of "mutual  beneficiary" to                                                               
include "a  mother and her  son or  two brothers". It  would also                                                               
allow an  employer to  provide benefits  to individuals  based on                                                               
existing contract  law "such as  legal arrangements to  co-own or                                                               
inherit    property,    medical    visitation    decision-making,                                                               
guardianship  of  children,  medical benefits."  While  the  bill                                                               
would "expand  the universe  of those  people" who  would qualify                                                               
for  a mutual  beneficiary  relationship, the  employer would  be                                                               
allowed to establish their own guidelines.                                                                                      
9:18:33 AM                                                                                                                    
Senator Seekins  considered the  proposed changes  to be  a "good                                                               
policy" which  "could be  defended" from  differing perspectives.                                                               
It would  also "preserve the  institution of marriage".  He asked                                                               
for the Committee's support.                                                                                                    
9:19:00 AM                                                                                                                    
Senator  Dyson  ascertained  therefore  that  Version  "G"  would                                                               
return the  State to the  policy position which existed  prior to                                                               
the October 2005 Alaska Supreme Court  ruling on the case ACLU v.                                                               
State   &   Municipality   of  Anchorage.   That   position   was                                                               
"permissive" in "that State organizations  are free to enter into                                                               
these kinds of relationships as they choose".                                                                                   
Senator Seekins affirmed.                                                                                                       
Senator  Dyson recognized  the policy  as  permissive because  it                                                               
would  allow State  organizations  to choose  whether  or not  to                                                               
provide   benefits   to   individuals    in   "these   kinds   of                                                               
Senator  Seekins responded  that while  Version "G"  would permit                                                               
it, "it would no longer require"  as the Court's ruling did, that                                                               
"someone who  cannot be legally  married under law would  have to                                                               
be treated  as if they were  married. And the extension  of that,                                                               
and the  expansion of that,  is much greater than  the particular                                                               
case" upon which  the State Supreme Court ruled.  This bill would                                                               
allow  beneficiary relationships,  "but it  does not  require any                                                               
longer that you treat … someone  who cannot be married as if they                                                               
were married".                                                                                                                  
9:20:12 AM                                                                                                                    
Senator Dyson  understood that  a man  and a  woman who  were not                                                               
married  are  recognized  as  a  couple  under  the  University's                                                               
policy. That  particular union was  not addressed in  the Supreme                                                               
Court  ruling. Thus,  the language  proposed  in this  resolution                                                               
would make that situation permissible  whereas before it could be                                                               
argued "it was not, in terms of heterosexual couples".                                                                          
Senator  Seekins  concurred. An  unmarried  man  and woman  could                                                               
qualify under the language being proposed.                                                                                      
Senator Dyson  reemphasized that the benefit  determination would                                                               
be a choice of the institution or political subdivision.                                                                        
Senator Seekins affirmed.                                                                                                       
9:21:14 AM                                                                                                                    
Senator  Bunde asked  for confirmation  that this  language would                                                               
permit domestic partnerships  "including a mother and  son or any                                                               
other combination of people" to qualify.                                                                                        
Senator Seekins affirmed.                                                                                                       
9:21:41 AM                                                                                                                    
Senator Bunde discerned  that Version "G" would  allow "an entity                                                               
of the State  then to recognize" such  domestic partnerships "for                                                               
purposes of benefits".                                                                                                          
Senator  Seekins replied  "yes"; the  recognition would  be based                                                               
"on a mutually  dependent situation" rather than  being based "on                                                               
the  premise  of  rights  or privileges  of  marriage  or  sexual                                                               
Senator Bunde  asked whether the  policy could be  interpreted as                                                               
lowering "the choice to discriminate to a municipal level".                                                                     
Senator   Seekins   expressed    that   rather   than   expanding                                                               
discrimination,  this  resolution   would  expand  an  employer's                                                               
choice. It would not require  an employer "to provide benefits to                                                               
someone  that  isn't legally  married",  but  it would  allow  an                                                               
employer  to provide  benefits if  they  chose, to  someone in  a                                                               
mutually beneficial relationship.                                                                                               
Senator  Bunde  had  heard  that  qualifying  criteria  had  been                                                               
incorporated  into the  previous  version of  this resolution  to                                                               
address   the    concern   that   "these    mutually   beneficial                                                               
relationships would  cost the  State a lot  of money".  Thus, his                                                               
understanding now was that Version  "G" would not save the State,                                                               
University, or municipality any money.                                                                                          
Senator Seekins  expressed that passage of  this resolution might                                                               
incur costs  to the State. To  that point, he stated  that of the                                                               
University's 7,000  employees, less  than 120  mutual beneficiary                                                               
relationships have  been formalized.  Less than  20 of  those 120                                                               
were same  sex couples.  While this  is not  a huge  number, some                                                               
financial  impact  could  be  incurred  to  the  State  were  the                                                               
University's  policy  incorporated  into the  State's  collective                                                               
bargaining systems and offered to all State employees.                                                                          
9:24:02 AM                                                                                                                    
Senator  Bunde remarked  therefore that  the adoption  of Version                                                               
"G"   would   negate   the  argument   "that   preventing   these                                                               
relationships would save money".                                                                                                
Senator  Seekins affirmed.  He  noted he  had  never argued  that                                                               
Co-Chair Green  announced that public testimony  would be limited                                                               
to  two minutes.  Also in  consideration of  the time,  she asked                                                               
that those who  had previously testified on the  bill not present                                                               
repetitious testimony.                                                                                                          
9:25:06 AM                                                                                                                    
Senator Seekins  noted that Kevin  Clarkson, a consultant  to the                                                               
Legislature on this issue, would  be available via teleconference                                                               
to respond to Member's questions.                                                                                               
Co-Chair  Green,  observing that  20  people  had at  this  point                                                               
signed up to testify, again directed that testimony be concise.                                                                 
9:25:50 AM                                                                                                                    
Senator Olson asked  Senator Seekins to further  clarify how this                                                               
resolution would affect a heterosexual  unmarried couple, with or                                                               
without children.                                                                                                               
Senator Seekins  stated the adoption  of Version "G"  would allow                                                               
those  individuals  to  be  recognized   as  being  in  a  mutual                                                               
beneficiary relationship;  coverage could be extended  to them if                                                               
the employer opted to.                                                                                                          
Senator Olson understood therefore  that a private employer would                                                               
be required to recognize these  relationships under a legislative                                                               
Senator Seekins responded  no, a private employer  would have the                                                               
option  to   offer  such  benefits.  While   a  private  employer                                                               
currently has a  number of beneficiary options, he or  she is not                                                               
required  to provide  beneficiary  coverage  to employees.  While                                                               
many employers  currently do  so, the employer  has the  right to                                                               
negotiate options.                                                                                                              
Senator Seekins  was uncertain as  to whether  the aforementioned                                                               
State Supreme Court ruling might  have required private employers                                                               
to provide benefits they provided  to married couples "to someone                                                               
that legally  was not  allowed to  be married".  Nonetheless, the                                                               
adoption  of Version  "G" would  allow any  employer, private  or                                                               
public, to provide mutual beneficiary coverage if it chose to.                                                                  
9:28:20 AM                                                                                                                    
DIXIE HOOD,  Licensed Marriage and Family  Therapist, appreciated                                                               
the   opportunity  to   speak  "on   this   important  piece   of                                                               
legislation".   She   was   "alarmed  and   offended   that   our                                                               
representative democracy at  the State and at  the national level                                                               
was being undermined  in so many ways  by political opportunism".                                                               
Adopting  an amendment  to the  State's Constitution  that "would                                                               
further deprive  many Alaskans  of their  civil rights  and equal                                                               
protection is unjust and contrary"  to the "ideals of democracy".                                                               
Women, Blacks, Jews,  and other groups in the  United States were                                                               
"denied equality by laws determined  by the majority". During her                                                               
lifetime she witnessed condemnations of many minorities.                                                                        
Ms. Hood has  advocated for civil rights on behalf  of women, the                                                               
elderly,  gay people,  and  persons  with disabilities.  "Putting                                                               
civil rights up  for a popular vote is  shameful … discrimination                                                               
based on  self interest ignorance is  all too common in  this day                                                               
and age and  has no place in Alaska." She  urged the Committee to                                                               
hold  Alaska to  the  highest democratic  standards and  prohibit                                                               
legislation such  as this which  would "deny rights  and benefits                                                               
based on marital status".                                                                                                       
9:30:40 AM                                                                                                                    
CLOVER  SIMON   testified  via  teleconference  from   an  offnet                                                               
location  in  opposition  to  the   resolution.  All  persons  in                                                               
Alaska's diverse society should  be respected and benefits should                                                               
be available to individuals' partners  regardless of their sexual                                                               
orientation or marriage status.                                                                                                 
9:31:39 AM                                                                                                                    
JAMES  GRAY  testified  via   teleconference  from  Anchorage  in                                                               
opposition to  the resolution. He  and his partner's  "loving and                                                               
caring" family are  insulted by discriminatory views  such as the                                                               
one being furthered in this resolution.                                                                                         
9:32:19 AM                                                                                                                    
FRED   TRABER,  Public   Employee   Retirement  System   Retiree,                                                               
testified via teleconference from  Anchorage in opposition to the                                                               
resolution. He applauded the actions  taken by Ross Anderson, the                                                               
mayor of Salt Lake City,  Utah, who, shortly after taking office,                                                               
had  "issued  a  non-discrimination executive  order"  which  was                                                               
followed  by  another executive  order.  These  orders served  to                                                               
extend  "benefits   to  the  both  unmarried   and  married  city                                                               
Mr. Traber  summarized that "on  one hand we have  an enlightened                                                               
mayor of  a notoriously  religious city  who recognized  the need                                                               
for same  sex benefits and  created those benefits with  a simple                                                               
stroke of  a pen. Here  we are  in a notoriously  independent and                                                               
free  thinking  state debating  whether  or  not you  legislators                                                               
should legislate  additional discrimination toward a  small group                                                               
of" people.  He urged  the Committee not  to pass  the resolution                                                               
from Committee.                                                                                                                 
9:34:59 AM                                                                                                                    
Senator  Bunde  understood  that  Version "G"  changed  the  bill                                                               
"significantly and would  allow mutually beneficiary partnerships                                                               
or  same   sex  partnerships  to  receive   benefits  from  their                                                               
employers".  To  that point,  he  asked  whether Mr.  Traber  had                                                               
reviewed  Version  "G", and  if  so,  whether he  maintained  his                                                               
Mr. Traber responded "yes".                                                                                                     
9:35:43 AM                                                                                                                    
MARY  KEHRHAHN-STAR testified  via teleconference  from Fairbanks                                                               
against the  resolution. Legislators  should keep  their personal                                                               
beliefs  separate  from  "the  big  picture".  While  the  people                                                               
targeted by this  resolution might be same sex  couples, they are                                                               
also  law abiding  hard working  Alaskans who  pay taxes  and are                                                               
neighbors and co-workers. Adopting  this resolution "would be out                                                               
and out  discrimination". This  action would  be contrary  to the                                                               
essence of  Alaska. Serious consideration  must be given  to this                                                               
9:36:51 AM                                                                                                                    
VICTORIA  SCHLERGER testified  via teleconference  from Fairbanks                                                               
in  opposition  to the  resolution.  She  identified one  of  the                                                               
prominent questions asked by "the  wide spectrum of religious and                                                               
political group" family members  at a recent multi-state Parents,                                                               
Families,  and Friends  of Lesbians  and Gays  (PFLAG) conference                                                               
she  attended  as  being  "why are  our  children  being  treated                                                               
differently?"  A vote  in support  of this  legislation would  be                                                               
akin to saying  "I want to discriminate against"  gay and lesbian                                                               
people. She urged the Committee to vote no on the resolution.                                                                   
9:37:57 AM                                                                                                                    
MARJORIE  COLE,  Chair,  Call to  Action  Alaska,  testified  via                                                               
teleconference  from   Fairbanks.  The  organization,   which  is                                                               
primarily  comprised  of  Christians,  sent a  letter  [copy  not                                                               
provided]  on February  19, 2006  to legislators  which expressed                                                               
concern about  the discriminatory nature of  this resolution. The                                                               
State's  Constitution "was  not meant  to limit  human rights  or                                                               
divide  the people".  The discrimination  in  the resolution  was                                                               
based  on  outdated  fears; "most  Americans  have  moved  toward                                                               
tolerance  and  acceptance  of the  approximate  ten  percent  of                                                               
population born to homosexual orientation".  During the debate of                                                               
a  similar proposal  in  the state  of  Washington, a  legislator                                                               
decried  "that the  heart does  not choose  who to  love". Alaska                                                               
should be at  the forefront of human rights. The  language in SJR
20 is "extremely  vague and if applied literally  would make life                                                               
intolerable   for   many   people.   What   are   these   benefit                                                               
obligations?" She asked  whether they would include  the right to                                                               
visit  a loved  one in  the hospital,  to execute  a loved  one's                                                               
will, or  to raise their  children. Homosexual people  are family                                                               
people with morals. She requested  the Committee not support this                                                               
discriminatory legislation.                                                                                                     
9:39:54 AM                                                                                                                    
KEVIN  DIAMOND, Student,  Juneau  Douglas High  School, spoke  in                                                               
opposition to the  resolution as it would  be an unconstitutional                                                               
violation  of people's  "basic human  rights to  equal protection                                                               
under the  law". The  financial impact to  the State  incurred in                                                               
providing benefits to  gay and lesbian couples  would be minimal.                                                               
He  was  concerned about  how  furthering  this resolution  would                                                               
affect himself and his partner in the future.                                                                                   
9:41:42 AM                                                                                                                    
LIN  DAVIS stated  that the  language  in Version  "G" was  still                                                               
"vague  and  problematic"  and   thus,  had  not  diminished  her                                                               
opposition to  the resolution. It  would not provide her  and her                                                               
partner  of 18  years  "the equal  protection  that we  deserve".                                                               
Unfortunately,   in  her   job   assisting   people  in   finding                                                               
employment,  she  has  become aware  of  numerous  discriminatory                                                               
actions  people  have  experienced.   She  disclosed  she  was  a                                                               
plaintiff in the  2005 ACLU v. State &  Municipality of Anchorage                                                               
Marriage  Amendment  case because  she  was  concerned about  her                                                               
partner who is  nine years her junior. She wanted  her to receive                                                               
"all the  benefits that the people  who work in the  offices next                                                               
to me automatically get when  they get married". Her community is                                                               
strengthened when  people like  her and  her partner  have access                                                               
"to the  strongest financial base possible";  conversely, neither                                                               
a community  nor a family  would benefit by denying  people "that                                                               
safety net" of health, death,  or dental benefits. She has worked                                                               
hard at  her job and is  simply seeking "to receive  the same pay                                                               
and benefits" as co-workers.                                                                                                    
9:44:13 AM                                                                                                                    
STEPHEN  GINGRICH of  Eagle  River  testified via  teleconference                                                               
from  Anchorage and  stressed this  resolution would  harm rather                                                               
than  benefit people.  The State's  Supreme Court  ruling on  the                                                               
2005  lawsuit  was  conducted   with  "professionalism"  and  the                                                               
justices "rose  above personal prejudices  to do what  was right.                                                               
Their decision harmed  no one. This bill panders  to bigotry" and                                                               
would violate many good  government principles particularly that,                                                               
in a democracy,  "a prejudice majority should not  have the right                                                               
to  deny equal  rights to  a minority".  Providing equal  pay for                                                               
equal work  and providing medical coverage  and survivor benefits                                                               
to  children as  well as  spouses is  the responsibility  of good                                                               
government.  Discriminatory  actions  such as  the  State's  1998                                                               
Constitutional amendment  which specified marriage to  be a union                                                               
between  one   man  and  one   woman  would  one  day   be  ruled                                                               
unconstitutional.  The University  of  Alaska's  policy of  equal                                                               
treatment to  all employees has been  in effect for a  decade. It                                                               
is  a harmless  policy. "Popular  prejudice is  diminishing." The                                                               
supporters  of this  bill  would be  placing  "themselves on  the                                                               
wrong side  of history in  the same  place as the  legislators of                                                               
the former slave  states who after the Civil War  enacted the Jim                                                               
Crowe laws. This is a Jim Crowe law."                                                                                           
9:45:46 AM                                                                                                                    
Senator Bunde asked whether the  Marriage Amendment had ever been                                                               
challenged as being unconstitutional.                                                                                           
9:46:16 AM                                                                                                                    
Senator  Seekins  clarified  that  the "amendment  has  not  been                                                               
challenged"  as unconstitutional.  While he  was uncertain  as to                                                               
whether  similar  language  adopted  by  other  states  had  been                                                               
challenged, he was certain any such challenge had not prevailed.                                                                
9:47:17 AM                                                                                                                    
Co-Chair Green invited  Senator Seekins to join  the Committee at                                                               
the table in  order to respond to concerns  raised by testifiers.                                                               
Continuing,  she asked  whether Version  "G" could  be viewed  as                                                               
discriminatory, as argued by testifiers.                                                                                        
9:47:38 AM                                                                                                                    
Senator  Seekins did  not view  the  language in  Version "G"  as                                                               
discriminatory against  individuals. It  is correct  that "people                                                               
can't  get married"  to their  mother, brother  or sister,  first                                                               
cousin, or  "someone of  the same sex".  Therefore, "if  our laws                                                               
are discriminatory",  they are  uniformly "discriminatory  to all                                                               
of  those  particular combinations".  Thus,  it  is difficult  to                                                               
understand how  including the language  specified in  Version "G"                                                               
in the  State's Constitution could  be viewed  as discriminatory;                                                               
specifically  as the  provision  specifying marriage  as a  union                                                               
between  one man  and one  woman  already exists  in the  State's                                                               
Constitution and has not been challenged in Court.                                                                              
9:49:00 AM                                                                                                                    
KEVIN  CLARKSON,   Attorney,  Brena,   Bell  &   Clarkson,  P.C.,                                                               
testified  via   teleconference  from  an  offnet   location  and                                                               
communicated that  his firm  was retained  by the  Legislature to                                                               
provide legal  advice on this  legislation. He observed  that the                                                               
majority of the  testimony presented was to  the previous version                                                               
of this resolution rather than to Version "G".                                                                                  
Mr. Clarkson presented that Version  "G" would "return this issue                                                               
to the  democratic process".  Version "G"  "would allow  either a                                                               
legislative branch  of government or an  administrative branch of                                                               
government to  extent benefits to  its employees, similar  to the                                                               
benefits provided to  a married employee for  their spouse. While                                                               
the  University of  Alaska's policy  which "extended  benefits to                                                               
domestic partnership  type relationships" for the  last ten years                                                               
could  have  been  impacted  by   the  previous  version  of  the                                                               
resolution, it  would not be  impacted by Version "G".  "The only                                                               
entity"  that Version  "G" "would  prohibit from  extending these                                                               
benefits  would be  the Court  because  it simply  says that  the                                                               
Constitution doesn't  require it".  The proposed  language "would                                                               
allow the  democratic process  to operate", as  it would  make it                                                               
permissible  for benefits  to be  extended to  mutual beneficiary                                                               
Mr.  Clarkson responded  to  Senator  Bunde's question  regarding                                                               
litigation on marriage amendments in  the country: 19 states have                                                               
adopted   "marriage  defining   or   marriage  benefit   defining                                                               
amendments" and 12 more are  considering such action. Of the ones                                                               
adopted, the  only constitutional challenge was  filed in federal                                                               
court  in regards  to a  Nebraska  amendment. In  that case,  the                                                               
"federal  judge  issued an  opinion  that  he thought  that  that                                                               
particular  amendment somehow  deprived  gay  and lesbian  people                                                               
access to the democratic process.  That opinion has been appealed                                                               
by the  State of Nebraska…"  Legal scholars specializing  in this                                                               
type  of  issue  expect  that   federal  ruling  "to  be  soundly                                                               
Mr. Clarkson verified that Alaska's  Marriage Amendment has never                                                               
been challenged as being unconstitutional.                                                                                      
9:52:22 AM                                                                                                                    
Senator Bunde  remarked therefore that the  "current unchallenged                                                               
Alaska  Constitution  says  that  marriage is  one  man  and  one                                                               
Mr. Clarkson affirmed.                                                                                                          
9:52:52 AM                                                                                                                    
Senator Bunde acknowledged those  who philosophically prefer "the                                                               
original version of  SJR 20, which would  have prevented domestic                                                               
partnerships    or    mutually    beneficial    relationships..."                                                               
Continuing,  he asked  how  the adoption  of  Version "G",  which                                                               
would  allow extending  benefits  to those  in mutual  beneficial                                                               
relationships,  would affect  current  law  considering that  the                                                               
Constitution   currently   specifies   that  "gay   marriage   is                                                               
Mr. Clarkson  limited his  response to  the legal  impacts rather                                                               
than to any political impacts  which might result by the adoption                                                               
of Version "G". Version "G"  would "undo the Alaska Supreme Court                                                               
decision because that  was the judicial extension  of benefits by                                                               
the  Court  under  the  logic that  the  Constitution  of  Alaska                                                               
required those benefits to be  extended." Adoption of Version "G"                                                               
would say "no, the judiciary  on this particular issue should not                                                               
be getting out ahead of the people  of Alaska …. It would put the                                                               
issue  back  into  the  democratic  process  because  across  the                                                               
country  when  marriage  and   marriage  related  amendments  get                                                               
presented to the people" those  amendments pass by overwhelmingly                                                               
margins. The  people of  the country  do not  want the  courts to                                                               
make decisions on these types of issues.                                                                                        
9:55:46 AM                                                                                                                    
Senator  Bunde discerned  therefore  that  this resolution  would                                                               
further the  "separation of  powers". The  message to  the courts                                                               
would be that  this is a legislative and public  decision to make                                                               
rather  than a  judicial issue.  The basic  law would  not change                                                               
regardless of whether the resolution was adopted.                                                                               
Mr.  Clarkson clarified  that SJR  20  would change  the ACLU  v.                                                               
State & Municipality of Anchorage  court decision which specified                                                               
that  "the Alaska  Constitution mandates  that these  benefits be                                                               
extended by all public employers".                                                                                              
Senator  Bunde  acknowledged.  The adoption  of  this  resolution                                                               
would make the  extension of benefits by various  entities of the                                                               
State permissive rather than required.                                                                                          
Mr. Clarkson affirmed.                                                                                                          
9:56:49 AM                                                                                                                    
Senator  Olson  inquired to  the  number  of states  banning  gay                                                               
marriage, and the related benefit language of those laws.                                                                       
Mr.  Clarkson  communicated  that 19  states,  including  Alaska,                                                               
currently  have marriage  amendments.  Of  those, "seven  include                                                               
language   that  addresses   marriage  related   benefits".  Some                                                               
prohibit extending  benefits to people  not in a "man  and woman"                                                               
marriage  relationship,  and  some  contain  permissive  language                                                               
similar to  that contained in  this resolution.  Marriage related                                                               
amendments would  be on  12 other  states' election  ballots this                                                               
November. Were it  adopted, this resolution would also  be on the                                                               
November general  election ballot.  Some of the  benefit language                                                               
of  the  12  other  ballot  measures would  be  similar  to  that                                                               
proposed in Version "G".                                                                                                        
9:58:29 AM                                                                                                                    
Senator Olson  asked the reason  this benefit was  not considered                                                               
one of employment rather than one of marriage.                                                                                  
Mr. Clarkson  replied that historically,  the matter has  been "a                                                               
benefit of  employment that is  extended because of  the marriage                                                               
AT EASE 9:59:37 AM / 10:01:00 AM                                                                                            
10:01:40 AM                                                                                                                   
MARGOT  KNUTH,  former  State   employee,  observed  that  people                                                               
participating in  this hearing were "disadvantaged"  as copies of                                                               
Version "G" were unavailable.                                                                                                   
Co-Chair Green  apologized and ordered  copies of Version  "G" to                                                               
be distributed.                                                                                                                 
Ms. Knuth voiced concern regarding  the possible legal effects of                                                               
Version "G". She  deemed the impacts to be not  "nearly as clear"                                                               
as professed by Mr. Clarkson. Her testimony was as follows.                                                                     
     It  says that  no provision  in this  Constitution shall  be                                                               
     construed to  require that marriage  or the  legal incidence                                                               
     of marriage be construed on a  union other than the union of                                                               
     a man and  woman and as pointed out by  Senator Olson, there                                                               
     is a  distinction between  what are  the legal  incidence of                                                               
     marriage  and what  are the  legal incidence  of employment.                                                               
     And that is what the  Alaska Supreme Court was addressing in                                                               
     the ACLU case.  I don't know that this  new language impacts                                                               
     the  Alaska Supreme  Court decision  at all.  To the  extent                                                               
     that  this language  is meant  to accomplish  something, I'm                                                               
     not sure what that is. It  is ambiguous, it is unclear and I                                                               
     think an  extremely good argument  can be made that  it does                                                               
     not impact  the decision and  I've heard a number  of people                                                               
     that  have  said  that  the problem  that  we're  trying  to                                                               
     address is  judicial activism. If  you are going  to address                                                               
     judicial  activism, you  need to  be  as clear  as you  can.                                                               
     Otherwise, all you're doing  is inviting further litigation.                                                               
     I also  think that April  28th is late in  the [legislative]                                                               
     session to  try to  develop a clear,  helpful Constitutional                                                               
     amendment.  Constitutional  amendments  are  something  that                                                               
     should  happen  very,  very rarely,  and  for  a  compelling                                                               
     reason. And  if we're hearing  that this is not  supposed to                                                               
     have a  significant impact on  the State of  Alaska, legally                                                               
     speaking, why  are we doing  it? If  it is supposed  to have                                                               
     significant  legal impact  what is  that impact?  Members of                                                               
     the Committee,  I would like  to suggest that  what's really                                                               
     wrong with  this resolution and  with the amendment  is that                                                               
     it's  divisive and  it will  divide this  State once  again.                                                               
     It's a topic  that is painful to people and  it's within the                                                               
     control of  this Committee to not  let it go forward.  And I                                                               
     just believe that what we want  is a unified Alaska. We have                                                               
     enough issues  like oil  and gas  taxes that  we need  to be                                                               
     rallying around and that splintering  us and making us focus                                                               
     on what  we don't  like about  each other  is not  the right                                                               
     direction to  go. I thank  you for your consideration  and I                                                               
     thank you especially for your compassion.                                                                                  
10:05:03 AM                                                                                                                   
Senator Bunde  voiced his appreciation  for the legal  advice Ms.                                                               
Knuth had provided to legislators  when she worked for the State.                                                               
As indicated  by his  questions to Mr.  Clarkson, he  is confused                                                               
about what  this resolution would  accomplish. To  garner further                                                               
insight as to the affect of  Version "G" he had hoped a supporter                                                               
of  the  original  version  of   the  resolution  would  testify.                                                               
Continuing,  he  asked Ms.  Knuth  whether  she agreed  with  Mr.                                                               
Clarkson's view  that the two  major things that  this initiative                                                               
would accomplish  would be  placing this  issue back  within "the                                                               
legislative arena rather than the judicial" arena, making these                                                                 
mutually beneficial relationships "permissive for local entities                                                                
rather than mandatory".                                                                                                         
10:06:25 AM                                                                                                                   
Ms. Knuth disagreed with both points. Responding to the second                                                                  
question, she made the following statement.                                                                                     
     "There is  nothing in this language  that addresses domestic                                                               
     partnerships  or mutually  beneficial relationships  at all.                                                               
     This  is  completely silent  about  that,  and so  it  can't                                                               
     support those or allow those  in its silence. At most you're                                                               
     saying that those are allowed  under the Alaska Constitution                                                               
     already  and that  they would  continue to  be allowed.  But                                                               
     there's nothing in the language  that says no other union is                                                               
     similarly  situated  to a  marriage;  no  provision in  this                                                               
     Constitution  shall  be   construed  to  require  something.                                                               
     There's nothing  in that language  at all that's  helpful to                                                               
     domestic relationships or partnerships.                                                                                    
Ms. Knuth continued as follows.                                                                                                 
     On the first  question, counsel had said that  the affect of                                                               
     this  amendment  would  be  to  change  the  Alaska  Supreme                                                               
     Court's ruling  in the ACLU  case. I'm not sure  that that's                                                               
     true  either  because  the  Alaska  Supreme  Court  was  not                                                               
     interpreting marriage  and the benefits of  marriage; it was                                                               
     interpreting  employment  and  the benefits  of  employment.                                                               
     And, as an  example, I'm a Tier I State  of Alaska employee.                                                               
     I paid  as much  of a contribution  for benefits  the entire                                                               
     time that I worked  for the State of Alaska and  if I have a                                                               
     same sex  partner, why should  I not  have the right  to buy                                                               
     the same insurance  for that person, or as a  Tier I to have                                                               
     it  provided  by the  State  of  Alaska, as  somebody  who's                                                               
     dependent or partner is a legally recognized marriage.                                                                     
     Senator  Seekins  was  trying  to lump  marriages  that  are                                                               
     illegal;  to wed  cousins within  a degree  of consanguinity                                                               
     with gay  and lesbian  marriages. The United  States Supreme                                                               
     Court  has  said  that  you  cannot  do  that.  There  is  a                                                               
     distinction. The  U.S. Supreme  Court recognizes  the rights                                                               
     of  states to  prohibit  certain marriages…and  to say  that                                                               
     this is illegal conduct. They  have ruled that states cannot                                                               
     criminalize  gay and  lesbian  relationships.  It cannot  be                                                               
     criminalized. And  the fact that  it cannot  be criminalized                                                               
     is what  put the  Alaska Supreme  Court in  the bind  in the                                                               
     ACLU case.  You have said  that I'm  not going to  grant you                                                               
     the same  civil recognition  for same  sex marriage,  but by                                                               
     federal Constitution, you cannot  criminalize it. And so the                                                               
     Alaska Supreme  Court was saying  in that case, what  I have                                                               
     to  do  is  say  for  this  class  of  people  who  you  are                                                               
     prohibiting from the civil rights  of marriage, but which is                                                               
     conduct that  is constitutionally permissible, now  that has                                                               
     to  be treated  equally.  And that's  going  to remain  true                                                               
     after this amendment to SJR 20. It's a complicated issue."                                                                 
10:09:33 AM                                                                                                                   
Senator Bunde appreciated the information Ms. Knuth provided.                                                                   
10:10:28 AM                                                                                                                   
MARSHA  BUCK, Representative,  Parents  Families  and Friends  of                                                               
Lesbians  and Gays  (PFLAG) -  Juneau, voiced  being "equally  as                                                               
confused"  as  Committee  members.  She  also  appreciated  Margo                                                               
Knuth's  testimony.   As  a  public   citizen,  she   would  have                                                               
appreciated  having advance  notice that  a committee  substitute                                                               
would  be offered  today as  many  people's testimony,  including                                                               
hers, was based  on the previous version of the  resolution. As a                                                               
consequence,  that  testimony  might   be  inappropriate  to  the                                                               
discussion.  Therefore, she  would  speak to  the  issue at  hand                                                               
Ms. Buck spoke  to her initial opposition of  the resolution: gay                                                               
and lesbian sons  and daughters and bisexual  citizens were being                                                               
marginalized today in the same way  that groups of people even in                                                               
Biblical  times  "have  been  marginalized  throughout  history".                                                               
Provisions in  the original resolution  "definitely marginalized"                                                               
her lesbian  daughter as  well as her  daughter's children  as it                                                               
would have  denied them access  to the same rights  and benefits.                                                               
This was an affront to her Christian beliefs.                                                                                   
Ms.  Buck stated  that, like  the original  version, Version  "G"                                                               
might, upon review, also "feel  discriminatory". There is concern                                                               
that  making the  provision of  benefits  permissive rather  than                                                               
mandatory  for   the  State  would  also   marginalize  gays  and                                                               
lesbians; it  would "protect the  rights of the  minority". "What                                                               
if there  were a legislature  that didn't look at  protecting the                                                               
rights of  the minority but looked  only at taking a  vote out to                                                               
the majority, since  we know the majority  doesn't always protect                                                               
the  rights of  a minority."  The rights  of people  such as  her                                                               
daughter might not  be protected were the issue put  to a vote of                                                               
the people. The  benefits of State employees  should be available                                                               
to  her daughter  and  her grandchildren.  This  is an  important                                                               
issue.  Committee  members  should   take  note  of  events  that                                                               
occurred in the past.                                                                                                           
10:14:20 AM                                                                                                                   
REVERAND  MICHAEL BURKE,  Rector,  St.  Mary's Episcopal  Church,                                                               
testified via teleconference from  Anchorage in opposition to the                                                               
Resolution.  He is  a husband  and  father and  his family  would                                                               
represent "one  of those traditional  families people  talk about                                                               
upholding  and  strengthening".  "The  whole  issue  of  gay  and                                                               
lesbian people and their partnerships  is far from settled in our                                                               
faith communities."  In his Christian denomination,  for example,                                                               
these lifelong  monogamous partnerships  are called  blessings of                                                               
holy union  and the discussion  of what the Hebrew  and Christian                                                               
scriptures say about  human sexuality is a  lively discussion and                                                               
it's far from settled.                                                                                                          
Rev.  Burke reminded  Members that  a generation  or so  ago, the                                                               
place of people who were divorced  or remarried were of a similar                                                               
uncertain status  in our faith  communities and in  society. "The                                                               
argument  back then  is the  same  that I'm  hearing among  folks                                                               
today. That  we need to  uphold traditional  marriage, strengthen                                                               
families,  prevent   the  erosion  of  what   was  called  public                                                               
morality, but  in both  churches and civil  law, we  recognize, I                                                               
think,  the  complexity  of   human  relationships.  That's  been                                                               
reflected in  changes in the  law and  in the moral  judgments we                                                               
make  about  people  who  are  divorced  or  remarried.  Make  no                                                               
mistake, I  believe there  are threats to  the family  unit today                                                               
that are  real, that  are substantial, but  those threats  do not                                                               
come   from   long-term   stable   monogamous   lifelong   loving                                                               
relationships whether  they're straight  or whether they  are gay                                                               
or lesbian. Those are the  kinds of relationships that strengthen                                                               
our family and our civil societies.                                                                                             
Rev. Burke continued, "So, to close,  as an Alaskan, as a father,                                                               
as a husband,  as a Christian minister, as one  who has two young                                                               
kids that are  going to grow up  in this great State,  I ask that                                                               
you reject" this  resolution and "unequivocally take  a stand for                                                               
the  full  human rights  and  respect  in  human dignity  of  all                                                               
Alaskans", regardless of what actions  are taken in other states.                                                               
"Join  me in  being  proud to  be an  Alaskan  where basic  civil                                                               
rights are never called special rights".                                                                                        
10:16:54 AM                                                                                                                   
FRANCIS  MANYOKY,   Student,  University  of   Alaska  Anchorage,                                                               
testified via teleconference from  Anchorage in opposition to SJR
20 as it  would deprive the State and its  citizens of social and                                                               
economic benefits. Those supporting the  bill tout it "to protect                                                               
the traditional  marriage" by providing benefits  only to married                                                               
couples. However,  federal law  has recognized  "homosexuality as                                                               
an  acceptable  lifestyle,  which   means  it's  not  immoral  or                                                               
unethical".  Thus, denying  homosexuals  the right  to marry  has                                                               
resulted in "an acceptable, ethical,  and moral minority" who are                                                               
denied the right to joint health benefits.                                                                                      
Mr.  Manyoky  stated that  the  question  would be  whether  this                                                               
resolution might  encourage homosexual people "to  conform to the                                                               
viewpoint  of those  who propose  this bill  and have  fraudulent                                                               
heterosexual marriages in  order to receive these  benefits or do                                                               
those  who propose  this bill  expect  to discourage  homosexuals                                                               
from seeking  employment" with  the State;  "either way  the bill                                                               
would have a  negative social and economic impact"  on the State.                                                               
Were  this   bill  to  encourage  heterosexual   marriages  among                                                               
homosexual  Alaska  State  employees  "it  would  mock  the  very                                                               
sacredness of  marriage those who  propose this bill claim  to be                                                               
protecting". On  the other  hand, "were  this bill  to discourage                                                               
homosexuals from working  for the State, it  would be unethically                                                               
discriminative towards  an acceptable minority but  it would also                                                               
economically disadvantage  the State as it  would discourage many                                                               
exceptionally  qualified  applicants   from  applying  for  State                                                               
employment."  Those people  would  instead  seek employment  with                                                               
more accepting entities  such as Wells Fargo  Bank and Providence                                                               
Hospital.  The Alaska  Native Hospital  would loose  "desperately                                                               
needed"  skilled  nurses  and doctors.  "Since  the  professional                                                               
skills of a person are relevant  to his or her income," and being                                                               
that the national average income  of homosexuals is approximately                                                               
$20,000  higher than  the income  of  heterosexuals according  to                                                               
information on  the Family Research  Council website,  this would                                                               
indicate  that  "there  would be  highly  valuable  professional"                                                               
homosexuals who would be discouraged  from working for the State.                                                               
He shared that Anchorage, with an  index rating of 100, is on par                                                               
with  the  national  average   number  of  homosexual  relations;                                                               
Juneau's  index  is  140.  These  numbers  would  underscore  the                                                               
negative social  and economic impacts  that passage of  this bill                                                               
would incur to the State.                                                                                                       
Co-Chair Green  stated that in  order to provide  sufficient time                                                               
for  public testimony  on this  bill, the  two minute  time limit                                                               
would be strictly enforced.                                                                                                     
10:22:02 AM                                                                                                                   
Senator Bunde  noted that  the bill's  sponsor had  distributed a                                                               
three-page  letter  [copy  on file]  from  pastors  and  churches                                                               
belonging to  the Alaska  Family Council, in  support of  SJR 20.                                                               
His  question however,  was  to  which version  of  the bill  the                                                               
letter was written.  If it was to the original  bill, he wondered                                                               
whether that support  would continue to apply to  Version "G". He                                                               
also noted that his pastor was not one of the letter signers.                                                                   
10:23:00 AM                                                                                                                   
KAY  ROLLISON  testified  via teleconference  from  Anchorage  in                                                               
opposition to  the resolution. She  could not understand  how the                                                               
Committee  could make  a decision  on this  "extremely important"                                                               
issue in a short period of time  when it took the founders of the                                                               
State's  Constitution several  months to  develop that  document.                                                               
Their educated  and well-researched  effort produced  such things                                                               
as excellent  resource development and equal  protection clauses.                                                               
They  endeavored to  establish  a government  that would  protect                                                               
citizens'  equality rather  than  "second guessing  it by  social                                                               
norms  of  the day".  In  days  gone  by, racial  marriages  were                                                               
unacceptable. However that has changed  as the result of a change                                                               
in  social norms  rather  than a  change in  any  type of  "legal                                                               
contractual  provision". A  lively  debate is  occurring in  this                                                               
country.  She  is  proud  to   be  an  Alaskan  as  this  State's                                                               
Constitution  was well  founded. The  Committee had  insufficient                                                               
time in which to address such an important issue.                                                                               
Co-Chair  Green  announced  that individuals  who  had  testified                                                               
previously to  the earlier version  of this resolution  would not                                                               
be permitted to testify again due to time constraints.                                                                          
10:25:00 AM                                                                                                                   
CRYSTAL   SCHRIER,  Mother,   Student   at   the  University   of                                                               
Alaska/Fairbanks,  and  Inactive  Reserve Member  of  the  United                                                               
States  Army National  Guard  testified  via teleconference  from                                                               
Fairbanks. "As a  soldier", she took the  Constitutions of Alaska                                                               
and the country  "very seriously". She took  exception to putting                                                               
forth "an  amendment that discriminates  and that  really doesn't                                                               
appear  to have  a  purpose based  on  the testimony"  presented.                                                               
Contrary to  the bill sponsor's statement,  this resolution would                                                               
not allow  mutual beneficiary contracts  such as  those currently                                                               
offered by  the University of  Alaska, as the experiences  of the                                                               
states  of  Oregon,  Kansas  and  Nebraska,  which  have  adopted                                                               
similar language, would indicate that  the language could be used                                                               
"to  deny  benefits  for  same   sex  partners"  and  common  law                                                               
Ms. Schrier  stressed that "the  United States Supreme  Court has                                                               
decided  that gay/lesbian  employees and  citizens should  not be                                                               
discriminated against, and this  resolution, in its current form,                                                               
says that it is recognizing marriage as  the union of a man and a                                                               
woman. I don't believe that this  is an issue of marriage … Civil                                                               
partnerships  are  a  matter  of   giving  civil  rights  to  all                                                               
citizens,  all  taxpayers,  all workers".  Soldiers  are  risking                                                               
their lives  to protect  the Constitution  that the  Committee is                                                               
thinking about  changing. This "very very  serious matter" should                                                               
not  be acted  upon without  sufficient public  input. The  civil                                                               
rights  of  all  Americans  must  be  protected.  She  urged  the                                                               
Committee to oppose the legislation.                                                                                            
10:27:31 AM                                                                                                                   
JEREMY SMITH testified via teleconference  from Fairbanks to urge                                                               
the Committee to reject this resolution.                                                                                        
10:27:46 AM                                                                                                                   
MATTHEW WIEDERHOLT  testified via teleconference  from Fairbanks.                                                               
He was confused about the purpose  of bill. There is no danger in                                                               
allowing same sex  marriages and the fact that that  issue is not                                                               
being  addressed adds  to "the  ambiguity"  of the  bill. In  his                                                               
opinion, if people are worried  about such things as perversions,                                                               
"the institution  of marriage has  been perverted since  the very                                                               
beginning  when   people  began   getting  divorces   and  making                                                               
prenuptial agreements  and getting  married for reasons  that had                                                               
nothing  to do  with love  and raising  a family…  It is  further                                                               
perverted by us discussing this  issue and spending further money                                                               
on  it." He  agreed with  the  comments made  by Reverend  Burke:                                                               
"there are  way more" important  issues to address than  this. He                                                               
was opposed to this bill.                                                                                                       
10:29:13 AM                                                                                                                   
CHERYL HUMME testified via  teleconference from Fairbanks against                                                               
the bill. Instead of working  towards "fairness, equal treatment,                                                               
and equal  rights", this resolution would  further discrimination                                                               
of  people  the supporters  of  the  bill "consider  outside  the                                                               
norm".  Instead  of  expanding  health  care  to  Alaskans,  this                                                               
proposal would "narrow  and restrict health care".  Her sister is                                                               
married   to  a   man  who   has   had  extramarital   relations,                                                               
disrespected her numerous  times and "has taken  advantage of her                                                               
financially".  However,  because  they   are  married,  they  are                                                               
entitled to better rights than  those provided to her brother who                                                               
is in  a long-term, financially stable  heterosexual relationship                                                               
but not married.                                                                                                                
Ms.  Humme, who  was also  "a  strong supporter  of gay  rights",                                                               
stated that  "the essence  of this resolution  is harmful  to all                                                               
Alaskans".  She  was  "skeptical" of  the  committee  substitute,                                                               
particularly  to the  vagueness  of its  language. Supporters  of                                                               
this proposed  amendment bring  the issue of  same sex  unions to                                                               
the  forefront  because this  issue  "can  stir up  indignation".                                                               
"This proposal is against any  individual who does not conform to                                                               
the mandate  of" its  supporters. She  has heard  repeatedly that                                                               
"people  who support  this amendment  are good  people but  it is                                                               
simply a moral  issue for them". She has come  to "loathe the use                                                               
of  the  term 'morals'  because  it  is  usually a  codeword  for                                                               
judgment".  She could  not fathom  how people  "could talk  about                                                               
morals and still be willing to  work to destroy families that are                                                               
simply different from  your own". She urged the  Committee not to                                                               
support  this resolution.  She also  did  not appreciate  Senator                                                               
Seekins's comparing incestuous couples to same sex couples.                                                                     
10:31:30 AM                                                                                                                   
AMY PAGE voiced her opposition  to the resolution. The democratic                                                               
process should not be utilized in  this manner, as this is not an                                                               
issue that  the "wider population" should  decide. The individual                                                               
civil  rights of  minorities  are protected  in  both the  United                                                               
States and  Alaska Constitutions.  Allowing the  wider population                                                               
to vote on  the Marriage Amendment allowed it to  be added to the                                                               
State's  Constitution. Continuing  with this  resolution in  that                                                               
manner would be deplorable.                                                                                                     
Ms. Page viewed  the language in Version "G" as  vague in regards                                                               
to  mutual beneficiary  relationships.  "It would  allow for  any                                                               
kind of  interpretation." Efforts should  be made to  ensure that                                                               
all people could be treated equally  under the law, in regards to                                                               
employer based health care benefits and numerous other rights.                                                                  
10:33:56 AM                                                                                                                   
JUDY  CRONDAHL  addressed  "the   poorly  drafted  and  ambiguous                                                               
amendment" language in both the  original version of the bill and                                                               
Version  "G". While  the passage  of this  legislation would  not                                                               
incur  any financial  impact to  the public  at large,  the State                                                               
would incur  expenses due to  the years of litigation  that would                                                               
result. "Conversely,  failure to pass this  resolution would help                                                               
many  people  to  obtain health  insurance  and  reduce  personal                                                               
medical expenses at no additional  cost to the State." Members of                                                               
the legislature,  especially members "of this  Committee would be                                                               
irresponsible  to  approve  a resolution  "that  would  place  an                                                               
additional financial  burden on the  Department of Law  and serve                                                               
no public  function". Furthermore,  it would  be contrary  to the                                                               
teachings  of  Jesus  who promoted  loving  one's  neighbors  and                                                               
helping  the most  vulnerable among  us. This  would, in  today's                                                               
society, include those who have no health insurance.                                                                            
10:35:17 AM                                                                                                                   
EVE  DILLINGHAM, Representative,  University of  Alaska Southeast                                                               
Faculty  Senate,   read  into   the  record   the  organization's                                                               
resolution [copy on  file], dated March 24,  2006. The resolution                                                               
supported the  University of Alaska  Board of Regents'  policy of                                                               
non-discrimination   and  commended   its  policy   of  providing                                                               
"financially interdependent partner (FIPs) benefits".                                                                           
Ms. Dillingham  also agreed with  the remarks of Margo  Knuth and                                                               
Reverend Burke.                                                                                                                 
10:37:58 AM                                                                                                                   
DANIEL COLLISON,  State of Alaska  Employee, spoke  in opposition                                                               
to SJR 20. This resolution  would, on a "practical level", impact                                                               
his family. For  example, had his partner who is  also a State of                                                               
Alaska  employee been  able to  submit his  recent $1,200  dental                                                               
work  claim  as a  joint  benefit  coverage,  his out  of  pocket                                                               
expense would have been significantly  reduced. Version "G" would                                                               
"allow  public   entities  to   discriminate  against   gays  and                                                               
lesbians". The  citizens of  the State should  have the  right to                                                               
vote on public  policy matters such as sales  taxes; however, "in                                                               
a democracy, neither  the public nor the  legislature should have                                                               
the right  to vote" on minority  or civil rights issues.  This is                                                               
what would be allowed were this resolution to pass.                                                                             
10:40:07 AM                                                                                                                   
KEN SMITH,  State of  Alaska Employee,  stated his  opposition to                                                               
SJR 20. The  intent of both the original  resolution language and                                                               
that of  Version "G" would  be "to  deny benefits to  partners of                                                               
same sex couples".                                                                                                              
10:40:47 AM                                                                                                                   
PAULA TERREL  appreciated hearing Senator Olson's  earlier remark                                                               
that  this  discussion  "is  not  about  marriage,  it  is  about                                                               
employment rights  and benefits". She urged  legislators to focus                                                               
on  that issue  because  that is  the issue.  That  was what  the                                                               
Alaska  Supreme  Court  ruling  addressed.  She  understood  that                                                               
Version "G" would make extending  benefits "permissive". In other                                                               
words, "it  would allow, for  example, the legislature  to either                                                               
grant or not grant employment  benefits to same sex partners". In                                                               
her opinion,  this would "open up  a can of worms".  If the State                                                               
or  the legislature  refused to  grant benefits,  "it would  come                                                               
right  smack back  in front  of the  courts because  again it  is                                                               
discriminatory". The Alaska  Supreme Court could not  be told how                                                               
to  interpret the  State Constitution.  Alaska's Constitution  is                                                               
"very   strong"   on   rights   of   individuals   and   is   not                                                               
discriminatory. It  should not be  compared to  the constitutions                                                               
of other  states. In summary,  this resolution would  create more                                                               
problems. She was opposed to SJR 20.                                                                                            
10:42:54 AM                                                                                                                   
Senator Dyson asked  Ms. Terrel to share her thoughts  as to what                                                               
should  constitute  "a couple  or  a  family, and  therefore  who                                                               
should get the benefits of an employee".                                                                                        
Ms.  Terrel was  unsure  how  to respond,  as  even "a  committed                                                               
relationship"   in  a   marriage  could   end  in   divorce.  She                                                               
communicated  however,   that  the   University  of   Alaska  has                                                               
specified guidelines for its benefits determination.                                                                            
Senator  Dyson  agreed  with  Ms.   Terrel's  use  of  the  words                                                               
"committed relationship".  However, the  fact that he  is "really                                                               
committed to  a quite a  number of people"  would not "make  us a                                                               
couple".  In addition  to being  a  committed relationship,  some                                                               
states require there be "an  intimate relationship, which is code                                                               
word for sexual". Were the  State to expand beyond the formalized                                                               
process  that we  call marriage,  it would  encounter a  slew "of                                                               
subjective  things". Therefore,  he  asked Ms.  Terrel whether  a                                                               
couple must have an intimate  relationship as well as a committed                                                               
Ms. Terrel responded  that identifying "the standards"  as to who                                                               
would  qualify  for  health  care and  other  benefits  would  be                                                               
"overstepping"  her expertise.  However, more  thought should  be                                                               
given  to  SJR  20  as it  "is  really  discriminatory".  Careful                                                               
consideration should be  taken in order to avoid  creating "a lot                                                               
of pain and … legal problems".                                                                                                  
10:45:29 AM                                                                                                                   
GLENN GRAY spoke  in opposition to Version "G"  "because it would                                                               
allow  discrimination".  When his  Irish  ancestors  came to  the                                                               
United  States centuries  ago, they  were discriminated  against.                                                               
When  his mother  married his  father  in 1934,  "the family  was                                                               
scandalized  because  he  was an  Italian  American".  While  his                                                               
father "dealt with  that" by changing the family  name to "Gray",                                                               
such an  easy solution would  not be available to  people dealing                                                               
with  this issue.  The "live  and let  live attitude"  he enjoyed                                                               
when he moved to  the State in 1976 has changed  over time. Now a                                                               
"vocal minority"  is telling us  "that it's okay to  be different                                                               
as long  as you're  just like  them". He  asked the  Committee to                                                               
oppose  the resolution.  The  committee  substitute is  confusing                                                               
and,  rather  than  being  permissive  as  argued,  it  would  be                                                               
permissive in that it would allow and promote discrimination.                                                                   
10:47:10 AM                                                                                                                   
STEVE  HAMILTON,  local businessman,  stated  "that  this is  the                                                               
first time in all  of my 54 years that I  have found it necessary                                                               
to tell  anyone that  I am  gay. I am  disappointed that  you are                                                               
making an  attempt to discriminate  against me simply  because of                                                               
my sexuality." His sexuality "has  never been an issue" in either                                                               
his  work  or  family  life.  He grew  up  in  the  Midwest  with                                                               
"ultraconservative"  parents  who  loved  him  "unconditionally".                                                               
"God created me …  and loves me for who I  am. God simply created                                                               
me a little  different than some of  you. The same as  we have no                                                               
choice in our physical makeup," either  in the color of our skin,                                                               
the color of our eyes or our  statute, "God created us the way he                                                               
chose. Please have  the respect for all of us,  and let this bill                                                               
die. Thank you."                                                                                                                
10:48:51 AM                                                                                                                   
KAREN WOOD,  accompanied by  her and her  partner's six  year old                                                               
daughter, Willa, informed the Committee  that she and her partner                                                               
were two  of the plaintiffs in  the ACLU v. State  & Municipality                                                               
of Anchorage lawsuit which prompted  this resolution. She and her                                                               
partner joined  the lawsuit  because "we  believed we  were being                                                               
discriminated  against by  not being  able to  cover one  another                                                               
under our respective health insurance  policies". They have spent                                                               
tens of thousands of dollars out  of pocket "that our married co-                                                               
workers and  their spouses  did not have  to spend.  This affects                                                               
our family"  financially and  "emotionally as  it is  yet another                                                               
message to us  that we are not  equal or as good  as our straight                                                               
married co-workers."                                                                                                            
Ms. Woods revealed  that she had wanted to stay  home a few years                                                               
with Willa  after she  was adopted because  they believed  it was                                                               
important for a  child to have that time with  a parent. However,                                                               
because she  had medical  issues and could  not be  covered under                                                               
her  partner's health  insurance, she  could not  stay home  with                                                               
Willa.  This situation  affected her  and her  partner's life  as                                                               
well as  Willa's. Were this  resolution adopted and  something to                                                               
happen to either  her or her partner, the  surviving parent could                                                               
not "access benefits or the  deceased partner's health benefits".                                                               
This would place the family at financial risk.                                                                                  
Ms.  Woods continued,  stating  "By  writing discrimination  into                                                               
Alaska's  Constitution,  you  would not  only  be  discriminating                                                               
against   us  as   gay   and  lesbian   people,   you  would   be                                                               
discriminating  against our  children". Parents  want to  provide                                                               
their children  good lives.  Gay and  lesbians are  no exception.                                                               
"Why should their children be offered  less than any child in the                                                               
State whose  parents are married?  Why shouldn't she  be provided                                                               
the  same  financial  security  and  economic  options  as  those                                                               
children? There  are thousands of  children who live  in families                                                               
like ours  in the State. Please  do what you know  in your hearts                                                               
is right, to allow  our kids to be provided for  as equals to the                                                               
other children in our State." She  urged the Committee to "do the                                                               
right thing".                                                                                                                   
10:52:42 AM                                                                                                                   
LAURA MINNE  opposed both  the original version  of the  bill and                                                               
Version  "G".  The  time  is   now  for  Alaska  to  respect  its                                                               
Constitution  and the  people it  protects. Amending  the State's                                                               
Constitution  further   "to  remove,  rather  than   to  enhance,                                                               
protections  is  undeniably  un-American". Families  and  schools                                                               
endeavor  to  teach children  to  welcome  diversity, "to  accept                                                               
differences in  others, and  to be  willing to  take a  stand for                                                               
what we believe is right". As  parents of a ten-year old boy, she                                                               
and  husband  work  diligently  to  teach  him  values  including                                                               
fairness, tolerance  and acceptance  of all  types of  people and                                                               
families,  "both conventional  and unconventional".  Children are                                                               
not borne with discriminating thoughts  or prejudices; they learn                                                               
it  from adults  in their  lives. Parents  and "leaders  like you                                                               
have the  responsibly to all  our children, to all  our families,                                                               
to begin, as a society, to  walk this talk of embracing diversity                                                               
through the demonstration  of equality and justice  for all". She                                                               
pleaded  with  the Committee  not  to  advance legislation  "that                                                               
would  undeniably  discriminate  against   a  minority  group  of                                                               
citizens who have  the same commitments to  their families, their                                                               
churches,  their relationships,  their communities,  and to  this                                                               
state as  you do. Equal protection  of the law means  everyone. I                                                               
ask that you take  a stand for what is truth and  just and do not                                                               
allow this proposed amendment to go any further."                                                                               
10:55:13 AM                                                                                                                   
Senator  Dyson   asked  whether  Ms.  Minne   considered  federal                                                               
congressional  actions in  the 1880s  that refused  a state  that                                                               
condoned  polygamy  to  enter  the  union,  to  be  "improper  or                                                               
Ms.  Minne  could not  comment,  as  the different  philosophical                                                               
reasoning  that  accompanied  that  issue made  it  difficult  to                                                               
compare to the  issue before the Committee. SJR  20 addressed the                                                               
issue of committed relationships.                                                                                               
Senator  Dyson   clarified  that,   rather  than  asking   for  a                                                               
comparison, his  question was whether she  considered it improper                                                               
for the  government to decide that  committed relationships would                                                               
only include two people.                                                                                                        
Ms. Minne could not comment.                                                                                                    
There being no further testifiers,  Co-Chair Green announced that                                                               
public testimony on SJR 20 was concluded.                                                                                       
AT EASE 10:56:14 AM / 10:56:37 AM                                                                                           
Co-Chair Green reminded that the  Committee would reconvene later                                                               
in the day to address the other bills on today's agenda.                                                                        
Co-Chair  Green removed  her  objection to  the  adoption of  the                                                               
Version "G" committee substitute.                                                                                               
Co-Chair  Wilken moved  to report  the committee  substitute from                                                               
Committee  with   individual  recommendations   and  accompanying                                                               
fiscal note.                                                                                                                    
Senator  Bunde objected.  Furthering this  legislation would  not                                                               
accomplish anything.                                                                                                            
Co-Chair Green informed the Committee  that the three page letter                                                               
from  church pastors,  which had  been  distributed earlier,  was                                                               
written to the  original version of the bill.  While that version                                                               
would be  their preference,  they would  extend their  support to                                                               
the committee substitute.                                                                                                       
A  roll call  was taken  on the  motion to  report the  bill from                                                               
IN FAVOR: Senator Dyson, Co-Chair  Wilken, Senator Olson, and Co-                                                               
Chair Green                                                                                                                     
OPPOSED: Senator Stedman, Senator Bunde, and Senator Hoffman                                                                    
The motion PASSED (4-3)                                                                                                         
SRJ 20  (FIN) was  REPORTED from  Committee with  previous $1,500                                                               
fiscal  note #1  from the  Division of  Elections, Office  of the                                                               
Lieutenant Governor.                                                                                                            
RECESS 10:58:28 AM / 3:09:29 PM                                                                                             
     CS FOR SENATE BILL NO. 272(L&C)                                                                                            
     "An Act relating to mortgage lenders, mortgage brokers,                                                                    
     state agents who collect program administration fees, and                                                                  
     other persons who engage in  activities relating to mortgage                                                               
     lending; relating  to mortgage loan activities;  relating to                                                               
     fees for  recorded mortgage loan instruments;  and providing                                                               
     for an effective date."                                                                                                    
This was  the first hearing for  this bill in the  Senate Finance                                                               
Co-Chair  Green moved  to adopt  CS  SB 272  24-LS1644\U, as  the                                                               
working document, and objected to receive an explanation.                                                                       
3:09:59 PM                                                                                                                    
AMY  SEITZ, Staff  to Senator  Tom Wagoner,  the bill's  sponsor,                                                               
informed  the  Committee  this   bill  would  establish  mortgage                                                               
licensing practices. Alaska is the  only state that does not have                                                               
this "consumer  protection" feature in  law, and as a  result the                                                               
Alaska  Division of  Banking  and Securities  does  not have  the                                                               
authority  to  investigate   complaints  received.  The  Division                                                               
receives  approximately 20  legitimate complaints  each week,  in                                                               
addition  to  50  phone   calls  regarding  questionable  lending                                                               
practices. Five  years worth  of efforts  have culminated  in the                                                               
current "U" version of the bill.                                                                                                
Co-Chair Green asked what interests  may lead a person to support                                                               
or oppose this bill.                                                                                                            
3:12:00 PM                                                                                                                    
Ms.  Seitz informed  that support  is the  result of  recognition                                                               
that  consumers  need  protection.  The industry  and  the  State                                                               
support  the bill  for  that reason.  The  opposition comes  from                                                               
people who would rather license the loan originators.                                                                           
Co-Chair Green asked where she might find a loan originator.                                                                    
Ms.  Seitz  replied  that  an   originator  would  meet  with  an                                                               
applicant "face-to-face" to enter into a loan agreement.                                                                        
Ms. Seitz  explained that the proposed  legislation would protect                                                               
consumers  from any  problems caused  by the  originator, as  the                                                               
language applies to employees of  a licensed business. Opposition                                                               
to the bill is based  on "personal preference" rather than issues                                                               
of protection.                                                                                                                  
3:13:42 PM                                                                                                                    
Co-Chair   Green  asked   regarding   certification  or   license                                                               
Ms. Seitz responded  that no licensure requirements  exist in the                                                               
State. Some groups are federally  regulated, such as State banks.                                                               
Small residential mortgage companies, however, are not licensed.                                                                
Senator Olson  understood the bill contained  protections against                                                               
"predatory lenders", and asked how  those provisions would affect                                                               
loans negotiated between private parties.                                                                                       
3:14:48 PM                                                                                                                    
MARK  DAVIS,   Director,  Division   of  Banking   &  Securities,                                                               
Department  of  Commerce,   Community  and  Economic  Development                                                               
testified via  teleconference from Anchorage, and  responded that                                                               
under Sec.  06.60.020(1) added by  Section 2  on page 2  lines 14                                                               
through  17 of  the  bill,  a person  who  makes  fewer than  six                                                               
mortgage loans  in a  12 month  period would  be exempt  from the                                                               
licensing requirements.                                                                                                         
Senator Olson acknowledged.                                                                                                     
Mr.  Davis continued  that while  the proposed  legislation would                                                               
take two  years to fully  implement, it would allow  the Division                                                               
to immediately require licensing of  all new companies wishing to                                                               
enter  the Alaska  mortgage marketplace.  He  indicated that  the                                                               
State's  "strong  housing  market"  had  made  it  attractive  to                                                               
mortgage lenders, and the ability  to license those businesses as                                                               
they enter the  marketplace would be beneficial  to Alaska. State                                                               
banks are  currently regulated by  federal guidelines,  but other                                                               
subsidiary  mortgage companies  operated by  banks are  not. This                                                               
legislation would  create a "more  even playing field".  He urged                                                               
passage of the bill.                                                                                                            
3:18:20 PM                                                                                                                    
Senator Olson asked how the  regulations would apply to the self-                                                               
financed sale of a building.                                                                                                    
3:18:55 PM                                                                                                                    
ROGER  PRINCE, Department  of  Commerce,  Community and  Economic                                                               
Development,  testified via  teleconference  from Anchorage  that                                                               
that type of transaction would be exempt from this bill.                                                                        
Senator Olson asked where the exemption was defined in the bill.                                                                
Mr. Prince  located the language in  Sec.06.60.990 (11)(A), added                                                               
by Section 2 on page 21 lines 25 through 30.                                                                                    
3:19:53 PM                                                                                                                    
Senator Dyson was  "wary" of bills that require  licensing, as he                                                               
considered  them often  an  attempt by  an  established group  to                                                               
control competition.  He asked for  assurance that this  bill was                                                               
truly  aimed  at  protecting  consumers and  not  an  attempt  to                                                               
restrict access to other potential lenders.                                                                                     
3:20:51 PM                                                                                                                    
Co-Chair  Wilken  presided  over  the following  portion  of  the                                                               
Ms.  Seitz relayed  that larger  entities are  already regulated.                                                               
This bill  would address  the smaller  mortgage lenders  that are                                                               
not currently licensed.                                                                                                         
3:21:34 PM                                                                                                                    
Mr.  Davis referred  to a  "payday  lending" bill  that had  been                                                               
passed  the   previous  year.  It   was  anticipated   that  that                                                               
regulatory  bill would  decrease  competition in  the field.  The                                                               
opposite effect  occurred, as 23  additional lenders  entered the                                                               
marketplace and rates decreased. He  concluded that the effect of                                                               
licensure was  to "increase competition  and increase  the number                                                               
of members in the industry",  and surmised the same results could                                                               
be expected  in the field  of mortgage lending. He  stressed that                                                               
the Division  would endeavor  to ensure  the burden  of licensing                                                               
did not have detrimental effects on small businesses.                                                                           
3:23:10 PM                                                                                                                    
Senator Dyson assumed that mortgage  lending companies that chose                                                               
not to conduct  business in Alaska did so due  to the possibility                                                               
of "undercutting" by unreputable,  unlicensed companies. He asked                                                               
for examples of such "horror  stories" as indication of what this                                                               
legislation intended to prevent.                                                                                                
3:23:51 PM                                                                                                                    
Mr.  Davis exampled  one case  currently  under investigation  in                                                               
which  mortgage  lending appeared  to  be  used  as a  method  of                                                               
laundering money.  Another problem  related to lack  of oversight                                                               
is  referred to  as  the "bait  and switch"  tactic,  in which  a                                                               
person is promised one rate by  a mortgage broker, but at closing                                                               
are locked into  a higher rate. Variations  in disclosure letters                                                               
and  "less  than  honest"   prequalification  letters  also  pose                                                               
potential fraud risks  to the consumer. This  bill would preserve                                                               
the Department of Law's ability to address these issues.                                                                        
3:25:50 PM                                                                                                                    
DOUG  ISAACSON, Past  President, Alaska  Association of  Mortgage                                                               
Brokers,   President,   Gold   Coast  Mortgage,   testified   via                                                               
teleconference  from Fairbanks,  that this  bill would  encourage                                                               
accountability.  He addressed  the  "bait and  switch" issue  and                                                               
explained that while  some instances of higher  interest rates at                                                               
closing are in  fact due to dishonest or  fraudulent claims, some                                                               
merely reflect  changes in  the market. If  a person  enters loan                                                               
negotiations without  "locking" the  discussed interest  rate, it                                                               
is common  for rates  to fluctuate  during the  time it  takes to                                                               
finalize a  mortgage loan, which may  result in a higher  rate at                                                               
the  time of  closing. He  understood language  was developed  to                                                               
address this.                                                                                                                   
Mr. Isaacson  was concerned that  the current "U" version  of the                                                               
bill did not include "a person  who is exempt under AS 06.60.020"                                                               
in  the language  of Sec.  06.60.420  Prohibited activities.,  as                                                               
added by  Section 2  as the previous  Labor &  Commerce Committee                                                               
substitute  Version  "R"  had. He  suggested  that  language  was                                                               
necessary  to   protect  consumers  in  all   types  of  mortgage                                                               
transactions,  including those  through  an  "exempt" entity.  He                                                               
also contended that  an exempt person should be  required to file                                                               
for exemption with  the State. He proposed the  provision in Sec.                                                               
06.60.340 of Section  2 which required the  Department to conduct                                                               
examinations of licensees  every 36 months be  modified to allow,                                                               
but not  require, the  examinations. He  encouraged clarification                                                               
of Sec. 06.60.600(b) and recommended  allowing the fee to be paid                                                               
by any party to the transaction.                                                                                                
3:30:39 PM                                                                                                                    
Co-Chair  Green resumed  Chair,  and asked  the  location of  the                                                               
proposed language change.                                                                                                       
Mr. Isaacson  stated the Alaska  Association of  Mortgage Brokers                                                               
support  for the  bill, and  commented  that if  the fiscal  note                                                               
indicated a  profit from the  licensing fees, the cost  of audits                                                               
and regulations should correspondingly be reduced.                                                                              
3:32:44 PM                                                                                                                    
GREG  WILLIAMS, Regional  Director of  State Government  Affairs,                                                               
American  Financial Services  Association  (AFSA), testified  via                                                               
teleconference from  an offnet location  in Denver,  Colorado. He                                                               
informed that AFSA members are  all supervised or regulated under                                                               
state  and federal  law,  and engage  in  auto finance,  personal                                                               
loans, and  mortgage lending. He  appreciated the efforts  of the                                                               
Department and  the Division  of Banking,  and would  support the                                                               
bill as  amended. He  understood that  several concerns  AFSA had                                                               
with the original  bill had been addressed  through the committee                                                               
3:37:29 PM                                                                                                                    
Co-Chair  Green   asked  if  Mr.  Williams'   concerns  had  been                                                               
addressed in the current "U" Version of the bill.                                                                               
Ms.  Seitz  replied  that  an  amendment had  been  sent  to  the                                                               
Legislative Affairs  Agency, Division of Legal  Research Services                                                               
to be drafted but had not yet been completed.                                                                                   
Co-Chair Green removed her objection to adopting Version "U".                                                                   
Without  further  objection,  Version  "U"  was  ADOPTED  as  the                                                               
working document.                                                                                                               
Amendment #1:  This amendment deletes  "Except for  AS06.60.400 -                                                               
06.60.440", from  Sec. 06.60.020  added by Section  2 on  page 2,                                                               
line   14.  The   amended   language   reads,  "Sec.   06.60.020.                                                               
Exemptions. This chapter does not apply to…"                                                                                    
In  addition, this  amendment  deletes "a  record  of" from  Sec.                                                               
06.60.090(4) added  by Section 2  on page  6 line 22;  deletes "a                                                               
conviction" and  inserts "been convicted" in  subparagraph (A) on                                                               
line 23;  and deletes "an  act, an  omission, or a  practice" and                                                               
inserts  "committed an  act, made  an omission,  or engaged  in a                                                               
practice" in  subparagraph (B) on  line 26. The  amended language                                                               
reads as follows.                                                                                                               
               (4) has, within the previous seven years,                                                                        
                    (A) been convicted, including a conviction                                                                  
          based on a  guilty plea or plea of  nolo contendere, of                                                               
          a  crime, including  fraud or  another crime  involving                                                               
          personal dishonesty;                                                                                                  
                    (B) committed an act, made an omission, or                                                                  
          engaged in  a practice that  constitutes a breach  of a                                                               
          fiduciary duty;                                                                                                       
Furthermore,  this   amendment  deletes  the  language   of  Sec.                                                               
06.60.090 (C)  and (D)  added by  Section 2 on  page 6,  line 28,                                                               
through  page 7,  line  1 and  inserts new  language  to read  as                                                               
                    (C) had the person's participation in the                                                                   
          conduct of a business  limited by an administrative act                                                               
          of a federal or  state agency, including the suspension                                                               
         of a license for engaging in an occupation; or                                                                         
                    (D) had a license for engaging in an                                                                        
          occupation  revoked  or  terminated   for  cause  by  a                                                               
          federal or state agency.                                                                                              
The amendment  also inserts  a new  subsection to  Sec. 06.60.120                                                               
added by Section 2 following line 18, page 8 to read as follows.                                                                
          (i)  While a  license is  inactive under  this section,                                                               
     the person  holding the inactive  license shall  continue to                                                               
     maintain  records  as  required  by  AS  06.60.250  for  the                                                               
     business  transactions of  the person  that occurred  before                                                               
     the license became inactive.                                                                                               
          (j)  While a  license is  inactive under  this section,                                                               
     the  department may  take action  against  the license,  the                                                               
     person  holding  the  inactive license,  or  both  under  AS                                                               
     06.60.300  -   06.60.360  and  06.60.500  -   06.60.540  for                                                               
     noncompliance with  this chapter  before the  license became                                                               
     inactive or  for noncompliance with  this section  while the                                                               
     license is inactive.                                                                                                       
          (k) Except  as otherwise  provided in this  section and                                                               
     by regulations adopted by the  department, the provisions of                                                               
     this chapter do not apply to a person holding an inactive                                                                  
     license under this section.                                                                                                
Co-Chair   Green  moved   for  adoption   and  objected   for  an                                                               
3:39:18 PM                                                                                                                    
Ms. Seitz explained that this  amendment would address two issues                                                               
raised  in  a memorandum  from  Division  of Legal  and  Research                                                               
Services, as  well as  make a  technical deletion.  The amendment                                                               
clarified additional  grounds for denial of  license as specified                                                               
in Sec.  06.60.090, added by  Section 2. It also  specified which                                                               
provisions would be applicable to  an inactive license, requiring                                                               
the licensee to retain records  for three years and providing the                                                               
Division the authority to investigate  claims brought against the                                                               
licensee while they were active.                                                                                                
Co-Chair Green remarked that "this is a lot of new law".                                                                        
3:41:23 PM                                                                                                                    
Without further objection, Amendment #1 was ADOPTED.                                                                            
Co-Chair Green  stated that Mr. Williams  had proposed additional                                                               
language changes  for the  bill, which  would be  addressed after                                                               
completion of public testimony.                                                                                                 
3:42:58 PM                                                                                                                    
LAURIE   HOLT,   Officer   of   Residential   Lending,   Mortgage                                                               
Operations,   Alaska   Housing    Finance   Corporation   (AHFC),                                                               
Department  of  Revenue  testified  via  teleconference  from  an                                                               
offnet  location on  behalf of  AHFC. While  she had  not had  an                                                               
opportunity to review the current  committee substitute, AHFC was                                                               
supportive  of  the  "concept"  of  the  legislation.  She  urged                                                               
passage of the bill.                                                                                                            
3:44:07 PM                                                                                                                    
Mr. Prince was available to answer questions.                                                                                   
3:44:48 PM                                                                                                                    
JOE BRAMMER,  Alaska Association  of Mortgage  Brokers, testified                                                               
via teleconference  from Anchorage  in support  of the  intent of                                                               
this legislation.  His Association had been  working closely with                                                               
the Alaska Association of Mortgage  Bankers and others to address                                                               
obstacles  within  the  industry.  Many  members  of  the  Alaska                                                               
Association of  Mortgage Brokers  are small  businesses employing                                                               
only a  few people. Alaska  regulations have been  detrimental to                                                               
these   businesses;   therefore,   they  support   the   proposed                                                               
legislation. He  was concerned about  the nine  exemptions within                                                               
the bill. During a Senate  Labor & Commerce Committee hearing, he                                                               
had  proposed  that  a  person  must apply  for  and  be  granted                                                               
exemption.  This  provision is  not  currently  contained in  the                                                               
bill. He  told of "chatter"  within the industry  indicating that                                                               
many mortgage  brokers have been attempting  to define themselves                                                               
as "exempt" based on the current language.                                                                                      
3:46:51 PM                                                                                                                    
JOHN  MARTIN, testified  via teleconference  from Anchorage,  and                                                               
referred to  his written  testimony [copy  on file].  He informed                                                               
that his suggestions  had not been incorporated  into the current                                                               
committee substitute.  He requested  his submissions  be included                                                               
in the  bill. He stated that  licensing is needed, and  this bill                                                               
is "on the right track".                                                                                                        
3:48:40 PM                                                                                                                    
KEN  GAIN, Secretary/Treasurer,  Independent  Lenders of  Alaska,                                                               
testified via  teleconference from  Anchorage, that  the proposed                                                               
legislation is  "not unduly burdensome" to  small businesses, and                                                               
provides  needed  protection.  He  described  the  amendments  as                                                               
appropriate,  and  noted that  the  bill  is supported  by  three                                                               
regulated trade associations as well as by the Department.                                                                      
3:49:57 PM                                                                                                                    
JOHN   CARMAN,   Past    President,   Alaska   Mortgage   Bankers                                                               
Association,  testified via  teleconference from  Anchorage, that                                                               
he had  been involved in  advancing legislation of this  type for                                                               
approximately five  years. He noted  the efforts  and compromises                                                               
that  have  occurred  to  reach  this  position.  No  regulations                                                               
currently exist, and he offered  anecdotal evidence that the lack                                                               
of regulations make mortgage  lending attractive to untrustworthy                                                               
persons. He urged passage of the bill.                                                                                          
AT EASE 3:53:08 PM / 3:54:58 PM                                                                                             
Amendment #2:  This conceptual amendment  inserts "as  defined in                                                               
15.  U.S.C.A.  1602(a)"  following  "a  mortgage  loan";  deletes                                                               
"best" following "borrower's"; and  inserts "may include, but are                                                               
not limited to" following "interest"  in Sec. 06.60.430, added by                                                               
Section 2 on  page 16, lines 20 through 24.  The amended language                                                               
reads as follows.                                                                                                               
          Sec. 06.60.430. Certain refinancing prohibited. (a) A                                                                 
     mortgage  broker  may  not  refinance  a  mortgage  loan  as                                                               
     defined in 15  U.S.C.A. 1602(aa) within 12  months after the                                                               
     date  the  mortgage loan  is  originated  by the  lender  or                                                               
     broker,  unless   the  refinancing  is  in   the  borrower's                                                               
          (b) The factors to be considered when determining if a                                                                
     mortgage is in the borrower's  interest may include, but are                                                               
     not limited to, whether                                                                                                    
This amendment  also deletes "mortgage  broker" where  it appears                                                               
in  Sec.  06.60.440  and   makes  necessary  conforming  changes;                                                               
deletes "30  days before a  change occurs in the  billing address                                                               
of the mortgage lender or  mortgage broker"; inserts new language                                                               
following "writing" in subsection (c);  and adds a new subsection                                                               
(d). The amended language reads as follows.                                                                                     
          Sec. 06.60.440. Escrow accounts. (a) A mortgage lender                                                                
     and a borrower may agree  that the mortgage lender will keep                                                               
     in  an  escrow  account  all  money  that  the  borrower  is                                                               
     required  to  pay  to  defray   future  taxes  or  insurance                                                               
     premiums or  for other lawful  purposes. The  escrow account                                                               
     must  be  a  trust  account   or  another  account  that  is                                                               
     segregated from  the other accounts of  the mortgage lender.                                                               
     The mortgage  lender may not commingle  the borrower's money                                                               
     with the general funds of the mortgage lender.                                                                             
          (b) A mortgage lender may not require a borrower to                                                                   
     pay  money into  escrow to  defray future  taxes, to  defray                                                               
     insurance premiums,  or for  another purpose,  in connection                                                               
     with a  subordinate mortgage loan, unless  an escrow account                                                               
     for that  purpose is not  being maintained for  the mortgage                                                               
    loan that is superior to the subordinate mortgage loan.                                                                     
          (c) A mortgage lender who is holding money in escrow                                                                  
     for insurance  premiums shall notify the  insurer in writing                                                               
     within 30  days after  the billing  address of  the mortgage                                                               
     lender changes,  or 60 days  before the renewal date  of the                                                               
     insurance policy, whichever is later.                                                                                      
          (d) A mortgage broker who accepts funds belonging to a                                                                
     borrower in  connection with a  mortgage loan  shall deposit                                                               
     all those funds into a  trust fund account maintained by the                                                               
     broker in  a bank  or recognized  depository in  this state.                                                               
     The mortgage  broker may not commingle  the borrower's money                                                               
     with the  general funds  of the  mortgage broker.  All funds                                                               
     deposited by  the broker  in a trust  fund account  shall be                                                               
     maintained   there  until   disbursed  by   the  broker   in                                                               
     accordance with the instructions from the borrower.                                                                        
Co-Chair Green moved the amendment and objected for explanation.                                                                
3:55:23 PM                                                                                                                    
Ms. Seitz  explained that because  no legal definition  of "best"                                                               
is provided  in regard to  the phrase "borrower's  best interest"                                                               
the amendment removes  the word "best" from  Sec. 06.60.430 lines                                                               
28 and 30. It also clarifies  other restrictions that may be used                                                               
to determine what is in the borrower's best interest.                                                                           
Co-Chair Green  read the amended  language, "may include  but are                                                               
not limited to".                                                                                                                
Ms.  Seitz  continued  that  the   amendment  also  modifies  the                                                               
requirements for  escrow accounts  in Sec. 06.60.440,  creating a                                                               
new subsection  (d) in that  section to regulate how  those funds                                                               
shall be managed.                                                                                                               
Co-Chair Green read the language added by the amendment.                                                                        
3:57:31 PM                                                                                                                    
Co-Chair  Green asked  Senator Bunde,  as  Chair of  the Labor  &                                                               
Commerce Committee, if he found the changes acceptable.                                                                         
Senator Bunde affirmed.                                                                                                         
Co-Chair Green removed her objection.                                                                                           
Amendment #2 was ADOPTED without further objection.                                                                             
3:57:57 PM                                                                                                                    
Senator  Bunde  moved  to  report  the  bill,  as  amended,  from                                                               
Committee  with   individual  recommendations   and  accompanying                                                               
fiscal notes.                                                                                                                   
There  being  no objection,  CS  SB  272(FIN) was  REPORTED  from                                                               
Committee with  $259,200 fiscal  note #1  from the  Department of                                                               
Commerce, Community and Economic Development.                                                                                   
AT EASE 3:58:53 PM / 3:59:09 PM                                                                                             
     CS FOR SENATE BILL NO. 309(L&C)                                                                                            
     "An Act  establishing a  construction trades  training grant                                                               
     program for award  by the Department of  Labor and Workforce                                                               
     Development,  providing  for special  employee  unemployment                                                               
     contributions to  fund the program and  an offsetting credit                                                               
     against  the employees'  general unemployment  contribution,                                                               
     and  providing  for  an expiration  date  for  the  program,                                                               
     contributions, and  credit; and  providing for  an effective                                                               
This was  the first hearing for  this bill in the  Senate Finance                                                               
GREG O'CLARAY,  Commissioner, Department  of Labor  and Workforce                                                               
Development, characterized  the bill  as "must  pass legislation"                                                               
necessary  to   meet  the  State's  needs   in  the  construction                                                               
industry,  and to  prepare Alaska's  workforce for  the potential                                                               
formation of a natural gas pipeline in the future.                                                                              
TOM MAHER,  Staff to Senator  Therriault, explained the  bill and                                                               
the sponsor statement [copy on file], which reads as follows.                                                                   
     This  legislation responds  to the  upcoming opportunity  to                                                               
     train  resident  Alaskans  to fill  the  thousands  of  high                                                               
     paying jobs  that will be  created in the construction  of a                                                               
     gas  pipeline  by  providing a  stable  stream  of  revenue,                                                               
     subject  to   legislative  appropriation,  to   Alaska  Work                                                               
     Partnership,  Inc. or  other qualified  nonprofits for  both                                                               
     training   and   increasing   the   capacity   of   training                                                               
     With  a  project  as  large  as the  gas  pipeline  and  the                                                               
     thousands of jobs it will create,  we must start now to make                                                               
     sure  resident Alaskans  are  trained  and employable.  This                                                               
     bill  provides the  multi-year  commitment  necessary to  do                                                               
     that.  This funding  will  leverage  industry investment  in                                                               
     training facilities  and equipment  to build  private sector                                                               
     training  capacity  and  increase  industry  capability  for                                                               
     sustaining training into the future.                                                                                       
     In 2005 there were more  than 20,000 individuals employed in                                                               
     Alaska construction  trades with annual  incomes approaching                                                               
     $60,000.  Unfortunately,  one in  every  five  jobs, or  20%                                                               
     belongs  to individuals,  who  according  to Permanent  Fund                                                               
     Dividend Eligibility  are recent  arrivals to  Alaska. These                                                               
     high  paying  jobs will  continue  to  attract workers  from                                                               
     other  states  and countries.  Also,  with  our 45%  of  our                                                               
     resident  construction workforce  being over  45 years  old,                                                               
     industry  must  renew  it's   workforce  with  thousands  of                                                               
     appropriately training workers.                                                                                            
     Alaska  Works  Partnership,  Inc. has  developed  successful                                                               
     programs that are proven effective  in moving residents into                                                               
     construction jobs.  In the  past five  years AWP  has helped                                                               
     more than  1,000 residents become employed  in construction.                                                               
     More than 85%  of the residents AWP has  served are employed                                                               
     in construction  as a result  of training. More than  90% of                                                               
     the  workers Alaska  Work Partnership,  Inc. trains  are not                                                               
     members of a  union. The majority of workers  placed in jobs                                                               
     work for non-union employers.                                                                                              
     SB 309 will  divert 1/10th of a percent  of current employee                                                               
     contributions to  a new "holding account"  for appropriation                                                               
     by  the  Legislature. Estimated  income  to  the account  is                                                               
     projected to  be over  five million  a year.  With increased                                                               
     payroll  within  the  state, the  Department  of  Labor  has                                                               
     projected  that  it  is  highly  unlikely  that  this  small                                                               
     percentage   diversion   will    cause   any   increase   in                                                               
     unemployment insurance rates.                                                                                              
     The  Senate  Labor  and   Commerce  Committee  amended  this                                                               
     legislation   to    allow   grants   to    other   nonprofit                                                               
     corporations,  as  determined  by the  Commissioner,  to  be                                                               
     qualified and capable of providing this training.                                                                          
     SB 309  is slated  to sunset  in six  years and  requires an                                                               
     annual report on performance.                                                                                              
Mr. Maher  overviewed the  fiscal notes,  and noted  the six-year                                                               
termination date  with annual reporting requirements.  He located                                                               
changes made by  the Senate Labor & Commerce Committee  on page 2                                                               
line  12,  that  allowed  for  grants to  be  made  to  nonprofit                                                               
training entities other than AWP.                                                                                               
4:06:48 PM                                                                                                                    
Mr. Maher referenced numerous letters of support for this bill.                                                                 
AT EASE 4:07:24 PM /4:08:00 PM                                                                                              
4:08:38 PM                                                                                                                    
Senator   Hoffman  requested   further   information  about   the                                                               
construction labor  force's growth of  "15 percent over  the next                                                               
five years" referred to in fiscal note #1.                                                                                      
Commissioner  O'Claray replied  that the  figure was  a statewide                                                               
projection. He  informed that the Alaska  Works Partnership (AWP)                                                               
trains more rural residents than  urban residents, and considered                                                               
the program  a "good  balance". This  funding stream  would allow                                                               
"concerted" training  efforts in both  rural and urban  areas, as                                                               
well as redirecting more than  $3 million from the State Training                                                               
and Employment Program  (STEP) fund back to the State  for use in                                                               
other industries.                                                                                                               
Co-Chair Green inquired as to  the relation between this bill and                                                               
the funding for the proposed King Career Center.                                                                                
Commissioner  O'Claray  responded  that the  King  Career  Center                                                               
would likely  receive funding in the  FY 07 Capital Budget  for a                                                               
pilot  program  and  this  funding  stream  would  sustain  those                                                               
programs beyond the pilot period.                                                                                               
Co-Chair Wilken  had received comments  regarding this bill  as a                                                               
"union/non-union"  issue.  He  had  directed  those  concerns  to                                                               
Senator  Therriault's office,  and hoped  Senator Therriault  had                                                               
addressed those matters.                                                                                                        
4:11:32 PM                                                                                                                    
Senator Bunde reported  that the amendment adopted  in the Senate                                                               
Labor & Commerce  Committee offered the opportunity  for any non-                                                               
profit  corporation to  apply for  funding for  training programs                                                               
under this bill.                                                                                                                
Co-Chair Green asked  if that was the language  specified on page                                                               
2, line 12.                                                                                                                     
Senator Bunde affirmed.                                                                                                         
4:12:24 PM                                                                                                                    
Co-Chair  Wilken  was aware  of  concerns  that this  bill  would                                                               
divert monies away from the  unemployment insurance (UI) fund. He                                                               
asked if UI benefits would be fully funded.                                                                                     
Commissioner O'Claray  predicted 20 years of  continual growth in                                                               
the State's  economy, with new employees'  UI contributions being                                                               
added to the  fund along with existing employees'.  The affect of                                                               
this  bill would  be "minimal",  and  would not  have an  adverse                                                               
affect on employers' rates, as  the fund is supported by employee                                                               
Senator Olson asked regarding training of rural residents.                                                                      
Commissioner  O'Claray speculated  that approximately  40 percent                                                               
of the  participants involved in  pipeline training  in Fairbanks                                                               
in  recent years  were residents  of Rural  Alaska. He  recounted                                                               
that AWP trains primarily in rural areas.                                                                                       
Senator  Olson inquired  where the  training had  occurred, other                                                               
than King Career Center.                                                                                                        
Commissioner O'Claray would provide the requested information.                                                                  
Senator  Olson asked  if dormitory  facilities were  available at                                                               
the training locations.                                                                                                         
Commissioner  O'Claray  informed  that  many  of  the  facilities                                                               
provide housing for the trainees.                                                                                               
4:15:06 PM                                                                                                                    
Co-Chair  Green  asked  online  testifiers  to  abbreviate  their                                                               
testimony in light of the time constraints.                                                                                     
4:15:44 PM                                                                                                                    
MIKE  ANDREWS,  Director,  Alaska  Works  Partnership  Inc.,  had                                                               
provided a map  [copy not provided] indicating  the regions where                                                               
AWP had  conducted training.  He urged support  for the  bill. He                                                               
qualified that  AWP was  formed as another  avenue for  people to                                                               
receive  training outside  of the  traditional union  membership.                                                               
The two  entities are  symbiotic, not  competitive, and  for that                                                               
reason, this  bill should  not be  viewed as  a "union/non-union"                                                               
4:17:37 PM                                                                                                                    
JOHN  BITNEY, Lobbyist,  Alaska  State Homebuilders  Association,                                                               
testified in support of the bill.  The Association is not a union                                                               
group, but  supportive of the bill  as "a rising tide  floats all                                                               
boats". He hoped his Association  would be included in the annual                                                               
reporting requirements contained in the bill.                                                                                   
4:18:59 PM                                                                                                                    
RICHARD   CATTANACH,  Executive   Director,  Associated   General                                                               
Contractors,   testified  via   teleconference  from   an  offnet                                                               
location in support of the bill.                                                                                                
4:19:21 PM                                                                                                                    
JAY  QUAKENBUSH,  President,  Building and  Construction  Trades,                                                               
testified via teleconference from  Fairbanks and urged support of                                                               
the  bill.  He  recognized  the   potential  future  natural  gas                                                               
pipeline as  a monumental construction  project, and  warned that                                                               
"our borders are  open" for out-of-state workers to  fill jobs in                                                               
Alaska. He exampled the thousands  of workers who came from other                                                               
states to work  on the construction of the  Trans Alaska Pipeline                                                               
System (TAPS) and  left the state upon  completion. He understood                                                               
this  bill   as  providing  a   "proactive"  way   of  addressing                                                               
employment issues in Alaska.                                                                                                    
4:20:54 PM                                                                                                                    
JIM  LAITI, Business  Manager, Pipefitters  Local 375,  testified                                                               
via  teleconference from  Fairbanks in  support of  the bill.  He                                                               
identified  demand  for  construction workers  for  the  proposed                                                               
natural gas  pipeline, TAPS maintenance, possible  development of                                                               
the   NPR-A  area,   and  Alpine   development.  These   projects                                                               
illustrate a need for more  trained workers, and he urged support                                                               
of the bill.                                                                                                                    
4:21:56 PM                                                                                                                    
CLICK  BISHOP, testified  via  teleconference  from Fairbanks  in                                                               
support of the bill.                                                                                                            
4:22:26 PM                                                                                                                    
MIKE   SAMSON,   President,   Samson  Electric,   testified   via                                                               
teleconference from Anchorage.  He is a member  of the Associated                                                               
Building  Contractors   (ABC)  and  dedicated  to   the  training                                                               
process, but  was concerned that ABC  may not be included  in the                                                               
program.  Neither  Samson  Electric  nor  ABC  has  received  any                                                               
funding under the  STEP program for their  training practices. He                                                               
would  support an  amendment to  specifically  include ABC  along                                                               
with AWP.                                                                                                                       
4:24:33 PM                                                                                                                    
BILL WATTERSON, President,  Watterson Construction, testified via                                                               
teleconference from Anchorage.  His company employs approximately                                                               
200  people, and  more  than  98 percent  of  payroll checks  are                                                               
written  to  Alaska residents.  He  opined  that trained  Alaskan                                                               
workers  are better  employees than  "boomers" that  come to  the                                                               
state  to  work for  short  periods.  He  informed that  over  35                                                               
percent of  people employed by  his company as craft  workers are                                                               
members of ethnic  minority groups. He would support  the bill if                                                               
the  employer was  allowed to  designate  which training  program                                                               
their contribution would fund.                                                                                                  
4:26:40 PM                                                                                                                    
JULIE   AUNE,   Vice   President,  AAA   Fence,   testified   via                                                               
teleconference  from Anchorage.  She represents  a small,  family                                                               
owned company  with no means to  train employees as there  are no                                                               
specialty training programs.  She would like to be  able to chose                                                               
the training provider if her  company is contributing financially                                                               
in any way.                                                                                                                     
4:28:38 PM                                                                                                                    
MIKE  SEXTON,  Executive   Director,  Mechanical  Contractors  of                                                               
Fairbanks,  testified   via  teleconference  from   Fairbanks  in                                                               
support of the bill, and encouraged its passage.                                                                                
4:29:12 PM                                                                                                                    
WENDY REDMAN, University of  Alaska, testified via teleconference                                                               
from Fairbanks  in support of  the bill. The University  does not                                                               
have  the capacity  to provide  this  type of  training, and  has                                                               
therefore  partnered  with  Alaska   Works  and  ABC  to  develop                                                               
training programs.                                                                                                              
4:30:10 PM                                                                                                                    
REBECCA  LOGAN, President,  Associated  Building and  Contractors                                                               
(ABC)  of Alaska,  testified via  teleconference from  Anchorage.                                                               
She  commented that  ABC supports  the concept  of the  bill, but                                                               
does  not support  the "delivery".  She  considered the  training                                                               
contract that this legislation proposed  to award solely to AWP a                                                               
"procurement" issue that was not  open to the competitive bidding                                                               
process that other State grants are subject to.                                                                                 
4:31:00 PM                                                                                                                    
Co-Chair  Green  asked  if  a  restriction  would  be  placed  on                                                               
awarding funds to a non-profit entity other than Alaska Works.                                                                  
Commissioner   O'Claray   replied   that  there   was   no   such                                                               
prohibition. The  aforementioned amendment adopted in  the Senate                                                               
Labor & Commerce Committee substitute clarified that issue.                                                                     
Co-Chair Green  furthered, asking if  a group of  companies would                                                               
have to form a nonprofit training center to qualify for funding.                                                                
4:31:41 PM                                                                                                                    
Senator   Bunde  responded   that   a   consortium  of   building                                                               
contractors  would need  a non-profit  entity to  receive funding                                                               
monies,  rather than  the State  awarding training  funds to  the                                                               
construction company directly.                                                                                                  
Co-Chair Green informed  that she would support the  bill only if                                                               
she  could be  assured that  private companies  would be  able to                                                               
organize  to  receive  funding   for  their  collective  training                                                               
Commissioner O'Claray  guaranteed this  bill was developed  to be                                                               
non-partisan in regard to the  union/non-union issue. He asserted                                                               
that there  are many people to  train, and the bill  endeavors to                                                               
encompass as many employees as possible.                                                                                        
Co-Chair  Green  appreciated  Commissioner  O'Claray's  "positive                                                               
Co-Chair  Wilken moved  to report  the bill  from Committee  with                                                               
individual recommendations and accompanying fiscal notes.                                                                       
There  being  no  objection,  CSSB  309(L&C)  was  REPORTED  from                                                               
Committee with two fiscal notes  from the Department of Labor and                                                               
Workforce  Development:   fiscal  note   #1  in  the   amount  of                                                               
$5,043,300, and fiscal note #2 for $247,700.                                                                                    
4:33:51 PM                                                                                                                    
     SENATE BILL NO. 317                                                                                                        
     "An  Act relating  to  the purchase  by  the Alaska  Housing                                                               
     Finance  Corporation  of  a  parking  garage  in  Anchorage,                                                               
     Alaska and approving the issuance  of bonds for the purchase                                                               
     of   that  parking   garage;   providing   notice  of,   and                                                               
     authorizing   the   commissioner   of  the   Department   of                                                               
     Administration  to enter  into,  a lease-purchase  agreement                                                               
     with  the  Alaska  Housing   Finance  Corporation  for  that                                                               
     parking garage; and providing for an effective date."                                                                      
This was  the first hearing for  this bill in the  Senate Finance                                                               
SCOTT  NORDSTRAND,  Commissioner, Department  of  Administration,                                                               
introduced the  bill, and explained it  as a proposal to  build a                                                               
parking  garage   to  serve  the  Atwood   Building  in  downtown                                                               
4:34:45 PM                                                                                                                    
Commissioner  Nordstrand   referred  to  a   presentation  titled                                                               
"Atwood  Building Parking  Center" [copy  on file].  He explained                                                               
that the  State purchased  the Atwood  Building and  the adjacent                                                               
"Block 80" lot at  the same time, and had since  used Block 80 as                                                               
a  parking  area  for  State  employees  working  in  the  Atwood                                                               
Building.  He directed  attention to  the map  on page  3 of  the                                                               
presentation.  The  Municipality  of   Anchorage  and  the  State                                                               
recently  concluded   negotiations  to  sell  Block   80  to  the                                                               
Municipality for construction of a convention center.                                                                           
Commissioner Nordstrand continued that  the State was compensated                                                               
in a  "block for block"  trade, and  acquired one half  of "Block                                                               
70" directly  across the street  from the Atwood  Building, where                                                               
the Dimond Center parking lot  is currently located. In addition,                                                               
the  State  was  paid  market   value  of  $2.3  million  by  the                                                               
Municipality of  Anchorage for  the other half  of Block  80. The                                                               
State  is  statutorily required  to  provide  40 visitor  parking                                                               
places as well  as a specified number of  handicap parking places                                                               
within one  half block from the  door of the Atwood  Building, in                                                               
addition to  employee parking, for  a total of  approximately 930                                                               
parking  spaces.  These  parking  needs are  currently  met  with                                                               
multiple parking lots within a 12 square block area.                                                                            
4:38:54 PM                                                                                                                    
This bill proposes a long  term solution to the Atwood Building's                                                               
parking issues in the form of  a parking structure to be built on                                                               
the State's portion of Block 70.  As part of the negotiated terms                                                               
between the  State and the  Municipality, the State  committed to                                                               
build a  parking garage  within seven  years on  Block 70,  or to                                                               
allow the Municipality  the option to buy back the  lot at market                                                               
value to  do so themselves.  The erection of a  parking structure                                                               
would  enable the  State to  sell Block  102, currently  used for                                                               
parking and  valued at  approximately $4  million, and  put those                                                               
funds into the parking facility.                                                                                                
The parking  facility would include  a "skybridge" to  the Atwood                                                               
Building, as the building was  configured to receive that type of                                                               
overpass.  Per request  of  the Mayor  of  Anchorage, the  ground                                                               
level would  be available for  lease by retail  stores, resulting                                                               
in additional income generated by the parking facility.                                                                         
Commissioner Nordstrand reported that  the Alaska Housing Finance                                                               
Corporation   (AHFC)  owns   the  Atwood   Building;  the   State                                                               
Department  of Administration  leases  the space  from AHFC,  and                                                               
charges   the   departments   that  occupy   the   offices.   The                                                               
Municipality  was  once  planning  to build  the  parking  garage                                                               
themselves,  but  found  it financially  burdensome.  Under  this                                                               
proposal,  the   developer  retained   by  the   Municipality  of                                                               
Anchorage would be used by the  State to design and construct the                                                               
facility. The  State would engage  an independent cost  expert to                                                               
determine a fixed price for the  project which would be agreed to                                                               
by both  parties. AHFC would  issue the debt for  construction of                                                               
the facility and  purchase the completed parking  garage from the                                                               
Municipality,  whereby  the  Department of  Administration  would                                                               
lease  the  structure.  Commissioner Nordstrand  anticipated  the                                                               
construction bonds would  be paid off in 21 years,  at which time                                                               
the  deed for  the parking  garage would  be turned  over to  the                                                               
State.  This bill  requested  authority  to bond  for  up to  $44                                                               
million, although  he did not  anticipate the cost would  be that                                                               
high. If,  however, the  project incurred  the maximum  amount of                                                               
debt,  the annual  debt  payment  would be  $3.7  million for  21                                                               
years. The debt would be  issued at the beginning of construction                                                               
to pay for construction expenses.                                                                                               
4:43:12 PM                                                                                                                    
Commissioner Nordstrand estimated  the cost of the  project to be                                                               
approximately $1.22 per square foot,  if the full bond amount was                                                               
issued. The  State currently pays  roughly $1.30 per  square foot                                                               
for the  offices in the  Atwood Building, bringing the  total new                                                               
lease rate  to $2.52 per  square foot.  The market rate  for this                                                               
type   of    office   accommodations   in    Anchorage   averages                                                               
approximately $2.75.                                                                                                            
4:44:12 PM                                                                                                                    
Commissioner Nordstrand  assumed that  the cost to  lease parking                                                               
spaces would  increase with time.  An escalation in  parking fees                                                               
would provide  cost avoidance  savings to the  State, as  well as                                                               
generate  additional  income by  renting  spaces  in the  parking                                                               
structure  for after-hours  and weekend  parking. In  addition to                                                               
retail lease  income and  revenues from  the sale  of surrounding                                                               
parking areas,  including Block  80 and  Block 102,  he projected                                                               
the  parking  facility would  generate  the  equivalent of  $23.5                                                               
million.  He considered  these figures  evidence  of the  State's                                                               
ability to "buy down the debt".                                                                                                 
4:45:59 PM                                                                                                                    
Commissioner Nordstrand  summarized that  the demand  for parking                                                               
would remain  constant, if not  increase, in the future,  and the                                                               
construction of a parking facility  would allow the State and the                                                               
occupants of the  Atwood Building to provide for  their own needs                                                               
rather than paying market price for rented parking.                                                                             
4:46:21 PM                                                                                                                    
Commissioner Nordstrand  added that  the parking  structure would                                                               
provide  "safety  and convenience"  for  visitors  to the  Atwood                                                               
Building, as well as State employees.                                                                                           
4:46:41 PM                                                                                                                    
Senator Hoffman asked how Block 102 would be sold.                                                                              
Commissioner Nordstrand  answered that  the parcel would  be sold                                                               
"competitively".  The lot  was appraised  for approximately  $3.7                                                               
million in  January 2006, and  he expected the value  to increase                                                               
dramatically  with  the  completion   of  the  nearby  convention                                                               
Senator Hoffman assumed the land would be advertised publiclly.                                                                 
Commissioner Nordstrand affirmed.                                                                                               
4:47:33 PM                                                                                                                    
Senator  Olson asked  regarding maintenance  and operating  costs                                                               
related to the facility.                                                                                                        
Commissioner  Nordstrand  replied   that  operating  the  parking                                                               
structure  would incur  costs, such  as management  of the  lease                                                               
space and  employment of a  parking attendant, but he  was unsure                                                               
what the  total cost  would be.  He expected  the costs  would be                                                               
"minimal", and operations  may be handled by  the Atwood Building                                                               
managers or the Anchorage Parking Authority.                                                                                    
4:48:31 PM                                                                                                                    
Co-Chair  Wilken was  frustrated with  the decision  to bond  for                                                               
this project and invest $30  million in debt services. He pointed                                                               
to the  $2.5 billion in  the Constitutional Budget  Reserve (CBR)                                                               
account and $2  billion in the Earnings Reserve  Account (ERA) as                                                               
possible  revenue  sources  to   pay  for  the  parking  facility                                                               
outright, thus  avoiding the $30  million the State would  pay in                                                               
interest under the current proposal.                                                                                            
4:49:46 PM                                                                                                                    
DAN FAUSKE,  CEO, Alaska  Housing Finance  Corporation, testified                                                               
via  teleconference   from  an   offnet  location.   He  directed                                                               
attention to  Sec. 2(b) on  page 2, line  16, and noted  that the                                                               
terms of the  bonds should indicate a 21-year  period rather than                                                               
20 years.                                                                                                                       
4:50:16 PM                                                                                                                    
Commissioner Nordstrand confirmed this.                                                                                         
Co-Chair Green voiced support for the bill.                                                                                     
Co-Chair Wilken moved to report the bill from Committee with                                                                    
individual recommendations and accompanying fiscal notes.                                                                       
There being no objection, SB 317 was REPORTED from Committee                                                                    
with zero fiscal note #1 from the Department of Administration.                                                                 
4:51:21 PM                                                                                                                    
Co-Chair Lyda Green adjourned the meeting at 4:51:42 PM.                                                                      

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